Value-Based Care Solutions for Population Health—Measure What Matters

In today's healthcare landscape, value-based care software solutions like Arine are increasingly being held accountable by payers for delivering measurable outcomes, marking a significant shift towards value-based care models that emphasize quality and efficiency over volume.

Key to the success of these solutions is the ability to meaningfully impact high-risk, high-cost populations, which have an outsized effect on the health outcomes of the population as a whole. Quantifying the success of these solutions through a well-defined framework is crucial to ensuring that there is a measurable return on investment both in outcomes and costs. We introduce a template that health plans can use with their value-based service providers to measure their effectiveness in achieving better outcomes and reducing the cost of care.

Below, we will explore:

• The shift to value-based care for health plans and at-risk providers
• The need for better health outcomes for high-risk, high-cost patients
• Key characteristics of successful value-based care solutions
• The OKR’s of Value-Based Care
• A Value-Based Contract Metrics Framework for Health Plans and At-Risk Providers

The Shift to Value-Based Care for Health Plans and At-Risk Providers

Value-based care (VBC) emerged as a response to the limitations and inefficiencies of the traditional healthcare model, which compensates providers based on the quantity of services delivered rather than the quality of care provided. The fee-for-service healthcare system often led to unnecessary tests, procedures, and hospitalizations, contributing to skyrocketing healthcare costs without necessarily improving patient outcomes. As a case in point, the U.S. spends twice as much on healthcare as the average spent by other wealthy countries and actually performs worse on outcomes measures like life expectancy, unmanaged diabetes, and infant mortality.

Recognizing the need for a more patient-centered and health outcomes-focused approach to care, the Affordable Care Act (ACA) from 2010 to 2015 introduced a number of initiatives that drove value-based care forward, including Accountable Care Organizations (ACOs), bundled payments, and value-based payments based on quality of care provided.

The overarching goal of the value-based care model, driven by some of these initiatives, is to tie healthcare spend to the outcomes being delivered. This translates into the need for health plans to improve health outcomes, reduce healthcare costs, and prioritize patient satisfaction—since they are ultimately the end users. As we will explore below, improving health equity is also an underlying theme to value-based care as race, ethnicity, income level, and other factors are associated with poorer outcomes and higher cost of care.

Value-based care brought a shift towards quality over quantity, cost efficiency, and patient-centered care. Healthcare payers are investing in a range of value-based care solutions, from care coordination platforms to chronic condition management tools, to behavioral health coaching, with the goal of improving care outcomes among the sickest populations which are contributing most to their rising costs.

The Need for Better Outcomes for High-Risk, High-Cost Patients

The financial burden on payers, such as health insurance companies and government programs (e.g., Medicare, Medicaid), is significantly impacted by certain types of patients. Typically, it is those with chronic, complex, or severe health conditions, whose ongoing and extensive care contributes to substantial healthcare expenditures. These include:

• Patients with chronic illnesses . Chronic conditions such as diabetes, heart disease, and chronic obstructive pulmonary disease (COPD) require long-term, continuous care and are often associated with regular medical visits, ongoing medication, and frequent hospitalizations. The CDC reports that chronic diseases account for about 90% of the $3.8 trillion annual healthcare expenditures in the U.S., highlighting their significant financial impact.
• Patients with mental health disorders. It is estimated that only half of people with mental health conditions like depression, anxiety, substance use disorder, and schizophrenia receive treatment. When these conditions are not well-managed, patients can end up having expensive hospitalizations and follow-up care. They can also contribute to or add complexity to chronic conditions, increasing overall healthcare utilization and expenses for these patients. Teletherapy and other digital solutions have improved access to mental health services in recent years, but there is still a huge unmet need for behavioral health.
• Elderly patients. Older adults often have multiple comorbidities, requiring complex care and coordination among various healthcare providers. Long-term care services, including nursing homes and home health care, add to the financial load for a population that is growing and putting increasing strain on Medicare. Medicare accounts for 21% of total national health expenditures (NHE), and with increasing costs and a growing population, spending is expected to increase to $1.8 trillion by 2031.
• Patients with low socioeconomic status. Medicaid, the Affordable Care Act (ACA)/Exchange, and the Children’s Health Insurance Program (CHIP) provide insurance coverage to lower-income members who have unique challenges to getting preventive care. These populations have higher rates of hospital admissions in part because of socioeconomic disparities that lead to delayed diagnoses and treatment, resulting in more severe health issues and higher healthcare costs.

Within and in addition to these high-risk populations, there are other health care disparities that are associated with sub-optimal care, which in turn contribute to more complications and higher costs of care. Whether it be race, gender, sexual orientation, or the previously mentioned age, socioeconomic, or mental health factors, these disparities contribute to an estimated $320 billion in unnecessary healthcare spending. Value-based care solutions can mitigate the financial impact of these high-risk groups by identifying and addressing the barriers that prevent underserved populations from achieving health outcomes. By partnering with organizations that provide these solutions, health plans and government programs like Medicare, Medicaid, and ACA plans can get closer to their goals of improving outcomes, reducing the cost of care, and achieving health equity.

Key Characteristics of Successful Value-Based Care Solutions

The pressing need to control healthcare costs for high-risk members presents a significant opportunity to develop targeted solutions aimed at improving health outcomes and reducing spend for population health management. Companies that are most successful at driving value-based care share several key characteristics:

• Integration of AI: While early solutions relied on manual processes to target members based on claims data, demographic data, and broad population-level indicators, leading companies now leverage artificial intelligence (AI) to analyze complex datasets in real-time and apply them at scale across entire member populations. An AI-driven approach ensures that interventions are timely, precise, and tailored to each individual's unique health profile, while also addressing disparities in care.
• Streamlined care coordination: Effective coordination among healthcare providers, including primary care physicians, specialists, pharmacists, and the care team, helps ensure continuity of care. Especially when managing complex conditions, tech-enabled care coordination is a keystone to reducing unnecessary care utilization and ensuring that a member’s providers are working from the same set of information.
• Patient-centered care: Involving patients in their care plans and providing them with the tools and knowledge they need to manage their health results in better outcomes. Companies that can successfully engage high-risk patients in their care can achieve reductions in hospitalizations and a lower cost of care.

Arine is one such company that is founded upon the advanced integration of AI, streamlined care coordination, and patient-centered care to achieve value-based care goals. Our AI-powered software platform is constantly updated with the latest member data, which empowers pharmacy care teams to identify the medication interventions that will yield the best outcomes in a highly efficient way. Looking across a population of hundreds of thousands of members, we anticipate high-cost member risk with predictive modeling, provide timely interventions, and prioritize the most impactful tasks and members for the care team. This all contributes to an optimized workflow that drives toward proven cost savings and better population health management.

When evaluating value-based care software and other solutions, the presence of evidence-based results, the technology, and methodologies being used to achieve these results, as well as the ability to integrate with a health plan’s existing workflows should all be considered.

The OKRs of Value-Based Care

When we look at evidence-based results, it is helpful to have a framework to compare solutions. In John Doerr’s book, “Measure What Matters,” he introduced the Objectives and Key Results (OKR) framework as a tool designed to help organizations set and achieve ambitious goals. Objectives are high-level, qualitative goals that provide clear direction, while Key Results are specific, measurable actions that indicate progress toward achieving those objectives. This OKR framework is typically applied in business strategy, but it is equally relevant in healthcare.

With value-based care, our primary objectives are to:

1. Achieve better patient outcomes
2. Reduce cost of care

By focusing on improved patient outcomes and reduced healthcare costs, health plans and at-risk providers can ensure that they are not only providing high-quality care but also optimizing their resources so that dollars spent translate into downstream savings. Progress towards achieving these objectives is measured by key results, many of which are reported on annually by health plans and are associated with:

• Quality measures associated with preventive care and the effective management of chronic conditions, like the NCQA HEDIS measures
• Reduction in hospital readmissions, inpatient admissions, and emergency department visits
• Reduction in total medical spend
• Patient satisfaction

A Value-Based Contract Metrics Framework for Health Plans and At-Risk Providers

A downstream effect of the shift to value-based care for health plans is that service providers are expected to deliver outcomes versus services alone. Whether it’s a reduction in A1c, closed gaps in care, reduction in cost of care, or a combination of metrics, outcomes are an increasingly weighted dependency for healthcare services organizations to be paid the full upside on a contract.

As risk-based contracts become the norm, an OKR framework like the example below will become the foundation for both bonus payments and fees at risk.

Across the value-based service landscape, from care management solutions, quality improvement services, to population health programs, performance guarantees are part of the value-based payment model to ensure that the programs designed to improve the health of their high-risk and high-cost patients are doing just that.

Health plans should expect regular reporting on how the dollars they are spending are helping them achieve their value-based goals. While outcomes and total cost of care take time to assess, tracking progress toward these goals through the predefined key performance indicators (KPIs) is a good proxy.

Conclusion

In summary, value-based care solutions play a key role in the current transition towards a model that emphasizes quality of care and efficiency over volume. These solutions, such as those offered by Arine, are increasingly accountable for delivering measurable outcomes for their health plan and at-risk provider partners — aligning with the overarching goals of improving patient health, reducing healthcare costs, and achieving health equity. In addition, by focusing on high-risk, high-cost patient populations, value-based care initiatives can have a significant impact, driving better outcomes and cost savings overall.

To ensure success, it is crucial to measure the effectiveness of these solutions through a robust OKR framework, with regular reporting on KPIs that provide clear direction and measurable progress toward achieving value-based care objectives. This approach not only reassures health plans and at-risk providers that their efforts are resulting in better outcomes and lower cost of care but also ultimately enhances patient care and satisfaction.

See how Arine can help you improve clinical outcomes, reduce the cost of care, and reach your strategic goals.