As more practices and organizations pursue the principles of value-based care (VBC), they look for ways to improve their financial outcomes, the drivers of net revenue. Part 1 of this series focused on some of the main determinants of gross revenue in VBC and how to increase the size of the gross revenue bucket, or pie, depending on how hungry you are. These next installments will speak to the ways of decreasing medical costs, thereby increasing the risked savings to be shared or kept, decreasing the amount of pie eaten by medical expenses, thereby increasing the remainder in the bucket after expenses are paid.

Over the last several weeks, we’ve focused on readiness for joining an Accountable Care Organization, or ACO. We’ve explored what an ACO is, shown how to see if your practice is ready to join an ACO, and shared five key questions to assess before either forming your own ACO or joining an existing ACO.

McKinsey & Company recently released A REPORT detailing the healthcare industry outlook. With inflation rates and LABOR SHORTAGES, the expected growth for healthcare profits dropped from 6% in the 2021 report to 4%. While outlooks aren’t what they were just a couple of years ago, there are certain sectors that may see higher growth–in particular, Medicare Advantage with payers, which is forecasted to see greater than 10% growth in profits.

Quality measures are a key aspect of primary care, not just because value-based care requires satisfaction to receive incentive payments, but because they can impact patient wellness. At a base level, it is common sense to evaluate an individual for early signs of diseases that could evolve into a more serious issue such as cancer or heart disease. Unfortunately, not all insurance payors have the same idea of what quality measures should be tracked or even what the target values should be. For example, one payor may say hypertension is defined as having a blood pressure of greater than 130/80 while another may say 140/90. Uncontrolled diabetes may be defined as an A1C greater than 8 for one payor and greater than 9 for another. A lack of consistency in these expectations causes confusion for primary care practices and can result in unmet quality measures.

The Extreme and Uncontrollable Circumstances (EUC) adjustment from CMS, also known as Covid protection, has now expired, which means that the overall star ratings for health plans will not be adjusted to account for Covid. There was an overall decline in year over year star ratings over the last two years, with the national average star rating declining from 4.37 in calendar year 2021 to 4.15 in 2022, a decline of 0.22.

The Institute of Medicine defines primary care as “the provision of whole-person, integrated, accessible, and equitable health care by interprofessional teams that are accountable for addressing the majority of an individual's health and wellness needs across settings and through sustained relationships with patients, families, and communities”. To align insurance carriers, healthcare providers, and patients’ perception of quality healthcare, the first step is to build relationships among the three entities through more collaborative communication.