Value-based care arrangements present vital opportunities for generating potentially new revenue for physician practices while also promoting improved health for their patient population. But these arrangements can be complex and may require investing in new, highly technical and specialized business functions. They could necessitate, for example, developing expertise in risk-based contracting, enhanced data analytics, and network design and management. They might also call for implementing new technology solutions or modifying referral patterns.
Enter “aggregators”—specialized private entities that can help physicians, particularly those in private practices, address value-based care complexities without having to fully invest in requisite solutions themselves. Aggregators can be useful partners, but working with them can have significant implications for your private practice's finances, flexibility, autonomy and relationships with outside partners.
The AMA has published new guidance for physician practices on contracting with aggregator entities (PDF). This timely resource helps physician practice leaders, particularly those in private practice, identify the core business considerations associated with evaluating potential relationships with a value-based care aggregator.
“This new resource provides a primer on what physician practices should be asking themselves when considering or approached by a potential aggregator partners,” said Alexander P. Sun, MD, program manager in the AMA’s Professional Satisfaction and Practice Sustainability unit.
“It will also help them answer key questions such as: ‘Would engaging with one of these entities help us achieve our value-based care goals? What business goals is the aggregator looking to achieve, and how does that align with our priorities?”
First strategy, then specifics
Aggregators go by countless descriptions—enablers, facilitators, contracting organizations and value-based service organizations, to name a handful. Their business terms vary significantly too, from limited-scope service agreements to full-scale management arrangements. And the same is true for their business structures, which can go from a simple fee structure all the way up to complex reconciliation and risk-shifting.
“The sheer diversity of this sector creates challenges for physicians who are interested in value-based care,” the AMA resource notes. “Although many physicians and practices are curious about working with aggregators, it can be challenging to evaluate the different available arrangements and make informed business decisions for a practice.”
A starting point, then, is to get to know the business issues that commonly arise in value-based care arrangements and to identify key questions for evaluating aggregator opportunities. These questions include:
- What are your goals in pursuing value-based care arrangements?
- Are you interested in assistance participating in a specific value-based arrangement, or are you looking for a partner to build a platform to negotiate arrangements with multiple payers?
- What is the scope of business functions that you would like the aggregator to provide?
- How can you best leverage your practice’s prior experiences, including working with vendors, participating in value-based care arrangements and navigating changes to practice infrastructure?
- What documents and information should you review to understand and evaluate the business terms of value-based care arrangements?
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Then it is time to get into the specifics. The paper covers these three key areas in partnering with aggregators for value-based care.
Evaluating the business goals of aggregators. This explores aggregators’ business models, as well as the legal structures of their relationships with physician practices. It also compares ownership arrangements with contractual relationships.
Physician business considerations in working with an aggregator. This summarizes the advantages and disadvantages of working with an aggregator, the documents you should review and regulatory considerations to keep in mind.
Termination and unwinding of aggregator relationships. This lays out the issues to consider at the beginning of a relationship to allow for eventual dissolution.
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 resources on revenue-cycle management, accountable care organizations and evaluating contractual agreements.
These resources are offered in connection with the self-paced course “Introduction to the Business of Medicine” on AMA Ed Hub™, which helps practicing physicians take a more proactive role in shaping their futures in medicine.
Dive deeper:
- 7 business areas doctors must know for private practice success
- What is value-based care? These are the key elements
- Here is how value-based care can work for private practices
- How three health systems lead on value-based care? Not by slashing costs
It can boost private practice
“A large health system with a dozen hospitals, hundreds of doctors and thousands of employees may not have a need for support from an external entity like an aggregator,” Dr. Sun said. “Such organizations have alternative avenues to invest in the infrastructure, staff and technologies to sustain success in their value-based care contracts.”
Alternatively, working with aggregators can help smaller, less resourced practices remain independent while simultaneously increasing payments, transforming care, and prioritizing clinical and human resources more effectively.
The resource includes a summary of key value-based care terms and structures, key financial and legal considerations in each phase of the aggregator relationship, and questions to ask before signing any agreement.
