Physicians, hospitals and other health care organizations overwhelmingly agree: The current model for financing health care is unsustainable. And it’s not just Medicare that’s in trouble.
The U.S. health system as a whole should transition to value-based care, and quickly. But one of the cornerstones of value-based care—data processing and analytics—is all too often perceived as beyond the reach of smaller physician-led practices.
Fortunately, perception isn’t always reality. “Aggregators” are specialized private entities that can help physician private practices tackle the data requirements—among other potential services—of value-based care without practices’ having to fully invest in requisite solutions.
The AMA has published new guidance for physician practices on contracting with aggregator entities (PDF). Such entities also are called by a variety of other names: enablers, facilitators, contracting organizations or value-based service organizations. This timely resource helps physician leaders—including those at doctor-owned private practices—identify the core business considerations to think through when evaluating potential relationships with a value-based care aggregator.
“Some of the large health systems can work with terabytes of raw data, but many private practices don't have the resources to ingest and analyze so much information,” said Christopher Botts, senior manager of care delivery and payment in the AMA’s Professional Satisfaction and Practice Sustainability unit.
“Smaller practices wonder what they need to know right away to make more informed decisions and meet performance measures,” Botts said. “That’s where the aggregator entities come into play. They can be a go-between for practices and payers. They can leverage their proprietary data systems so practices don’t have to front the cost of development or pay for ongoing maintenance.”
The fuel of change
Data is central to almost every aspect of health care these days, but it’s especially valuable to value-based care.
“It gets to attribution and benchmarking,” said Alexander P. Sun, MD, program manager at the AMA. “Payers want to know patients’ outcomes—that’s what you're being measured against ultimately.”
A practice’s ability to participate in a value-based care arrangement comes down to basic, data-based factors, Dr. Sun noted.
“It's different from traditional fee-for-service, where a patient comes into your office and you bill for the specific services you provided, disconnected from outcomes,” he said. “The question becomes: How do you invest in these operational necessities, especially if you're a private practice. Aggregators can fill some of that void."
This AMA resource on aggregator entities is part of a broader set of value-based care resources, along with the new AMA Business of Medicine education program, which includes additional resources on revenue-cycle management, accountable care organizations (ACOs) and evaluating contractual agreements.
Start by asking these questions
Working with aggregators can have significant implications for your private practice's finances, flexibility, autonomy and relationships with outside partners, so you should start by evaluating your goals within value-based care.
“Step one, you have to understand yourself,” Botts said. “If you don't, it's really hard to evaluate partnering with an aggregator.”
Specifically, the resource suggests asking these questions.
What are your goals in pursuing value-based care arrangements? Some examples include adding financial benefits, moving away from fee-for-service reimbursement, changing practice style, promoting independence and aligning clinical goals with sustainable payment.
Are you looking for help taking part in a specific value-based arrangement? Or are you looking for a partner to build a platform for negotiating arrangements with multiple payers?
What is the scope of business functions that you would like the aggregator to provide? This could mean choosing between discrete, limited advisory services and full-scale practice management services. It might also mean choosing between analytics to inform practice contracting and full delegation of payer contracting functions.
How can you best leverage your practice’s prior experiences? That includes working with vendors, participating in value-based care arrangements and navigating changes to practice infrastructure.
How to choose a dance partner
Step two of working with an aggregator is knowing what to look for in one, Botts said.
“Each one of these entities is organized differently, financed differently. They have their own motivations,” he said. “As with any partners, you want to always understand what they are getting out of the arrangement.”
This then gets to step three, Botts noted: What exactly is the aggregator offering?
“How do their services align with our goals?” he said, citing one of AMA’s playbooks that highlights voluntary best practices to advance data sharing in value-based care (PDF). “Like any business, you're determining: Do I buy or do I rent? Ultimately, practices have to evaluate the risks and rewards and determine: Is this best for where we're trying to take our practice and beneficial to the patient population that we're serving?”
The playbook looks at five categories of best practices, including creating an interoperable data ecosystem and improving data collection and use to advance health equity.
“We want to make the promise of value-based care a reality, especially for physicians who are on the front lines, who are truly working to provide better care for their patients and are struggling to do so because of environmental factors,” Botts said. “We want to make sure we're just not replacing one flawed system with another, because that won’t get us to the goals we're striving for.”
Learn more with the AMA about value-based care and how it can work for private practices.
