More Specialists Should Gravitate Toward Episode-Based Care Models

The role of specialists within VBC arrangements is going to be extremely important as payment models evolve. Given that specialty care accounts for roughly 60% of total care costs in the US, it is clear that tight alignment of primary and specialty care is essential to meeting the goals of VBC:  better outcomes and lower costs. Thus, we should see a greater emphasis on models that encourage patient-centered care and address care coordination.  

For example, episodes of care that focus on a single condition will be expanded upon through the Transforming Episode Accountability Model (TEAM).² TEAM is a mandatory, episode-based alternative payment model from the CMS Innovation Center. Under TEAM, participating acute care hospitals receive a target price to cover all costs associated with the episode of care, including hospital inpatient stay, outpatient procedures, and post-discharge services such as skilled nursing facility stays or provider follow-up visits. By holding participants accountable for spending and quality performance, health care providers have a financial incentive to improve care coordination and quality of care. Similar efforts to leverage new payment models designed to reduce redundant services while improving patient outcomes and experience can also be expected in the commercial and direct-to-employer space. 

Payment models supporting population health initiatives that emphasize patient outreach and navigation will enable proactive care management of high-needs and polychronic patients, who drive the largest share of the nearly $5 trillion in annual US health care spending. Benefit designs will be assessed for their alignment with value-based programs to ensure consistency of approach and effective incentives for both patients and providers in 2025 and beyond.   

Specialists traditionally have been reimbursed on a volume-based, fee-for-service (FFS) basis, so many are reluctant to abandon what has worked for them to gamble on a relatively new and untested VBC payment model. However, this is beginning to change as specialists become more aware of the clinical and cost benefits of collaborative care arrangements based upon the open and easy exchange of data. Indeed, gaining buy-in from specialists to VBC programs is critical to the success of those models designed around the total cost of care. 

Building VBC programs that meet the needs of primary care providers and specialists necessitates an understanding of a specialty’s specific cost structure and care networks. For example, an oncologist’s costs per patient will be dramatically higher than a dermatologist’s. 

To avoid a fragmented care environment that fails polychronic patients and leads to avoidable care costs, VBC networks require a cloud-based digital infrastructure able to support effective communication and collaboration between primary care providers and specialists. By standardizing referral pathways and sharing data in real time, VBC participants can improve outcomes while reducing unnecessary costs. Further, standardizing clinical pathways within specialty care can improve efficiency, optimize patient care, and enhance the ability of specialists to participate in VBC programs. 

Data analytics are also important. Specialists need the right analytics tools to understand their cost drivers and performance metrics under risk-sharing arrangements. By including population health analytics and predictive modeling, VBC contracts are better able to support specialists’ success.

Collaboration between primary care providers and specialists under VBC programs also will be enhanced by the growing adoption of digital health and remote monitoring devices. Wearable technologies that monitor patients in the home enable clinicians to track patient progress, which facilitates timely interventions and proactive care.

Care models based on episodic pricing, such as CMS’s TEAM, will draw more specialists into VBC programs as they improve at aligning financial incentives while maintaining cost control. With the right supporting digital infrastructure, integrated care models can enhance patient outcomes, reduce costs, and improve patient experiences.  

1. Clinical Quality Language and CQL Engines: The Basics. National Committee for Quality Assurance. https://www.ncqa.org/resources/clinical-quality-language-and-cql-engines-the-basics/
2. Transforming Episode Accountability Model (TEAM). Centers for Medicare & Medicaid Services. https://www.cms.gov/priorities/innovation/innovation-models/team-model