Payment & Delivery Models

3 ways health systems can find value-based care success

Andis Robeznieks , Senior News Writer

AMA News Wire

3 ways health systems can find value-based care success

Mar 28, 2024

Two critically important elements of value-based care are patient attribution and benchmarking. This is so you know whose health you are responsible for and how well you’re taking care of your attributed patients.

That’s according to Francis Mercado, MD, the ambulatory associate chief medical officer for Virginia Mason Franciscan Health’s Franciscan Medical Group and executive committee chair for the system’s accountable care organization (ACO), the Tacoma-based Rainier Health Network.

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When Dr. Mercado was asked in 2012 if he wanted to lead an ACO, he had no idea what it would take—but not many did at the time.

Francis Mercado, MD
Francis Mercado, MD

“Being the adventurous guy, I just said: ’Yes,’ and started researching what an ACO was,” Dr. Mercado said during a recent AMA Insight Network webinar on value-based care. The webinar is available on-demand for those who register.

Among other benefits, members of the AMA Health System Program have access to the AMA Insight Network’s Executive Leadership community. This virtual forum provides an opportunity for like-minded leaders from across the country to hear more examples of how leading health systems are finding innovative ways to address value-based care within their health system.

“We started performing well,” Dr. Mercado noted, based on implementing best practices in “care management and really focusing on delivering high quality care.”

Dr. Mercado also contributed to a new AMA publication to be released in April: A playbook on best practices for value-based care. Those who register for the aforementioned webinar will get an email with a link to the playbook when it’s available.

The new playbook discusses value-based care payment methodologies and was developed in collaboration between the AMA, America’s Health Insurance Plans and the National Association of ACOs. It was informed by real-world insights from AMA Health System Program members such as Virginia Mason Franciscan Health.

While the upcoming playbook will touch on numerous effective methods for value-based care, Dr. Mercado discussed three keys health systems should keep in mind.

The Rainier Health Network ACO has saved Medicare $39.9 million since 2013, including $13.6 million in 2021, compared with annual spending targets.

Dr. Mercado discussed his conversations with other health system leaders from which the playbook was developed.

“We talked about what it takes to be successful in value-based care—so we talked about attribution, benchmarking and risk adjustment,” he said. “I had a fairly good understanding on best practices, but my colleagues in those discussion groups were on a different level.

“I wasn't expecting to talk about attribution for almost three hours—but we did,” he added.

Dr. Mercado recommends “voluntary attribution,” in which the health system is responsible for those who select to become that system’s patient, as an ideal attribution mechanism.

“You become responsible for patients who choose you and I think that's fair,” he said, emphasizing “I want to be responsible for patients who chose Virginia Mason Franciscan Health.”

“How do we show where we've been and how far we've come?” Dr. Mercado said. “That's what benchmarking is all about.”

The playbook talks about the best ways to benchmark, such as multiyear measurements to have a smoothing effect and avoid the impacts of utilization ebbs and flows due to significant flu seasons or other factors beyond physicians’ control.

It is also a good practice to adjust incentives over time if the benefits of practice improvements are being maxed out.

“How do we continue to get rewarded for providing great care?” Dr. Mercado said. “There's always this fear that, after we institute all of these great changes, after we invest in team-based care, after we improve access, is there going to be a cliff … a time when we aren't rewarded anymore?”

In value-based care arrangements, Dr. Mercado recommended building a partnership with payers rather than an adversarial relationship.

“We want to focus on what we can do together,” he said. “But we can have frank conversations on data. If they show our performance to be X and our data show it’s Y, then we dive in.”

Transparency with individual physicians proved equally critical to Virginia Mason Franciscan Health’s success.

One benefit of participation in the ACO was that physicians have access to claims data that they don’t always get otherwise, including data from health care encounters patients have outside of the system, group or ACO.

All of the ACO’s physicians are supplied with clinical data that is provided in a “consumable” package, Dr. Mercado said.

“There's a wealth of information, and it's our job to make sure that it's workable and it's actionable,” he added. “That's been part of the ACO movement that we've been going through these past 11 years now.”

Participating physicians are given reports identifying patients with chronic conditions who are likely to require more attention or noting which Medicare beneficiaries haven’t come in for their annual wellness visits.

And when Virginia Mason Franciscan Health initially invested in bringing evidence-based behavioral health to primary care practices, the system made payers aware of exactly what it planned and had open discussions to ensure that everyone understood how services provided by licensed social workers would be embedded in the primary care offices and that payments for those services would be sustained.

“That's the whole spirit and soul of Rainier Health Network: Making sure that we provide team-based care,” Dr. Mercado said.

“We want to make sure that our patients with social determinants of health challenges get the attention that they need,” he added, another critical lesson learned featured in the playbook that “really moves the needle in terms of value-based care.”

Learn with the AMA about ways to improve value-based care data sharing and advance value-based care with alternative payment models in Medicare.