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The shift to value-based care and what it means for healthcare providers

Brian Bogie Profile picture for user Brian Bogie April 21, 2020
Brian Goldrick of Vera Whole Health and Sage Intacct's Brian Bogie discuss the crucial role of KPIs in the shift to value-based care

Diagnostician with icons representing value-based health care © LeoWolfert - shutterstock
(© LeoWolfert - shutterstock)

Before the COVID-19 pandemic began, I sat down with Brian Goldrick, Director of Accounting at Vera Whole Health, and we discussed the evolving healthcare payment landscape and the keys to successfully implementing alternative payment models into healthcare systems. What I learned from Brian – tracking KPIs and having a clear understanding of both the clinical and operational information of the practice – has become essential to adapting to the rapidly-changing impact and current realities of the pandemic.

What value-based care means for providers

The implementation of value-based care, also known as pay-for-performance (P4P), has increased over the last few years. Currently, 59% of healthcare payments are tied to value-based care or P4P models, according to the US Department of Health and Human Services. P4P provides incentives for reaching individual performance goals with efficiency, while also penalizing providers that have poor patient outcomes, medical errors, and high costs. According to the Centers for Medicare & Medicaid Services:

[O]ur value-based programs are important because they’re helping us move toward paying providers based on the quality, rather than the quantity of care they give to patients.

Vera Whole Health has already taken steps to implement value-based care into their health system. Vera provides advanced primary care, taking what patients have come to expect from standard fee-for-service healthcare — long waits, frustratingly short appointments, shuffle of specialist visits, high costs, and stress — and turning it upside down. The result is a new model with aligned incentives that benefit patients, providers, communities, employers, and insurers — while saving money. Advanced primary care minimizes obstacles to health by emphasizing time-rich appointments, empathetic listening, and behavior change. The results are better outcomes, improved population health and satisfaction, and fewer claims.

Vera provides better insight for the whole patient health — most of the care patients need — including risk identification. They achieve this through informatics, the extended healthcare team, and coaching. To truly provide value, the care needs to align with incentives, then entice members to take ownership of their health, according to Goldrick.

But as providers switch to value-based care, they are challenged to ensure affordability for patients in conjunction with enhancing care quality. This requires a clear understanding of both the clinical and operational information of the practice. Practices can use that information to incorporate new delivery models and measure the success of their programs.

Value-based care poses a financial risk for organizations that are unprepared to change their business. It shifts revenue sources, profit drivers, and profit centers which, in turn, produce fundamental change in an organization's operating economics.

Alternative payment models support the shift from fee-for-service

Alternative payment models are vital to manage ever-increasing healthcare costs. Specifically, healthcare costs are expected to reach nearly $6 trillion, or approximately 20% of GDP by 2027.

Direct contracting is an advanced alternative payment model that aims to reduce expenditures and allow patients, employers, or clinicians to communicate directly to pay out-of-pocket for some or all medical services provided by a practice. Direct patient contracting models include several different arrangements, including direct primary care and concierge care. This is the model that Vera Whole Health employs.

Another model is the patient-centered medical home, a care delivery model where the primary care physician coordinates treatment to ensure patients receive the necessary care when and where they need it, in a manner they can understand. This care is facilitated by registries, information technology, health information exchanges, and other means. One of the biggest takeaways from my conversation with Goldrick, is the importance of understanding the success or failure of value-based contracts. Practices must be able to look at more than just the clinical performance. As Goldrick relayed, “You need to understand the whole operation, and you need to do it in real time.”

Key performance indicators to negotiate and track success

Key performance indicators (KPIs) are crucial to understanding the effectiveness of payment models. Vital KPIs include:

  • Cost per revenue per treatment 

  • Cost or revenue per patient 

  • Revenue expense per location

  • Revenue expense per referral

  • P&L by contract

  • P&L by budget

  • P&L by location

Once you understand which KPIs to measure, you also need to consider how easily you can view them, the ability to monitor them daily, or the speed at which you can generate them when asked by the CEO or Board of Directors. The ability to push a button and track your KPIs is becoming extraordinarily essential in healthcare.

As value-based healthcare continues to rise, KPIs are vital to the success of patient-centered care. Healthcare organizations need to understand and access the KPIs that matter during the negotiation of a value-based contract to determine reimbursement and during the success or failure analysis of the contract. You must be able to understand the numbers and continue to move forward in a way that's beneficial to both the patient and to the company.

Goldrick agrees and added that the benefit of value-based healthcare is that it allows patients to feel more personally connected with care providers and form relationships with them:

The more people you see, the more revenue you have coming in — and we've focused on ensuring that our patients actually get a full caveat, a full program of healthcare options — meeting with providers, healthcare coaching, and continuous follow-up to make sure that you're following some of the guidelines and steps you set up for yourself with your coach.

To learn more about P4P, value-based care, and alternative payment models, watch our on-demand webinar, Evolving Healthcare Payment Landscapes or read our eBook, Transitioning to Value-Based Care in an Evolving Payment Landscape.

In addition, Sage Intacct has created a COVID-19 resource page to support our community during this time. We've gathered information and resources including details on how we are supporting Sage Intacct customers and partners, as well as business advice to help you navigate the current business environment. For more information, please visit

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