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Five Questions to Consider when Evaluating Readiness for Value-Based Care

Five Questions to Consider when Evaluating Readiness for Value-Based Care

  • June 13, 2019

At-risk payer contracts have penetrated different markets at varying degrees, promoting a greater need for value-based care readiness for some healthcare organizations more than others. Nevertheless, make no mistake, value-based care is happening and will continue to play a greater role in physician reimbursement.

Making a conscious decision to move toward value-based care initiatives can be daunting, but it doesn’t have to be with the right planning. Coker’s ValuePathTM framework can provide the insights necessary to take the appropriate steps and incorporate them into your organizations’ overall strategic planning efforts.

Below we offer five questions to consider when evaluating your organization’s value-based care readiness:

  1. How do we stay financially solvent throughout a transition to value-based care?

It starts with putting a plan into place. Peter Drucker wrote (Drucker, 2002), “Without an action plan, the executive becomes a prisoner of events. And without check-ins to reexamine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise.”

Measure baseline performance as a starting point and establish a strategic plan that puts financial and quality targets in place. Incremental improvement should be expected to achieve those targets. Monitor progress through dashboard reporting, holding appropriate leaders accountable to achieve results.

The improvements made and the outcomes achieved should be marketed to differentiate yourself in the marketplace. This strategy will be important as consumerism advances in healthcare and patients become more mindful of how to spend their healthcare dollars.

  1. What combination of contracts should we be targeting, and how should this evolve as we transition to more value-based contracts?

Understanding payer model requirements can help remove a barrier to entry, and there are likely many for which you already qualify or could qualify for with minimal adjustments. Once the options are determined, establish a coordinated strategy to ensure selection of any new contract achieves synergies with other initiatives in place. Too often, healthcare organizations pursue one-off initiatives without taking advantage of how they may relate to one another.

Plot the expected returns of various contracting options against the required investments on a pro forma for an ongoing multi-year view to understand the financial impact of contracting options vs. baseline revenue performance.

  1. Where are the gaps/opportunities in our current performance that we should be considering as we transition to value-based care? Knowing the operational gaps and subsequent opportunities to close those gaps is a two-pronged approach:
    • Perform quality reviews, coding reviews, and conduct a cost analysis to assess how current performance compares to benchmarks.
    • Once you understand current performance, apply operational knowledge to close those gaps to raise performance scores.

The ability to capture and report data is foundational for performance improvement, and often, a requirement in different payer contracting models. Framing your approach towards analytics is a good starting point for value-based care.

  1. How do the services we currently provide need to change? Which services should be “outsourced” or accomplished via partnerships? Which should we refine/build on our own? There are expansive payer models in place that attribute responsibility of the total cost of care to healthcare entities to achieve shared savings, despite patients having full choice to go to other providers outside of the system. Strategic partnerships will be required to maximize patient use within the system through enhanced coordination across the continuum of care.

Both legal and informal partnerships will need to be assessed across the care setting. Your specialty mix should be reviewed, and physician relationships measured to determine network integrity in a compliant manner. Relationships with post-acute care facilities should be evaluated for opportunities to improve performance on various quality indicators, such as readmission rates as well as enhance coordination and transitions of care.

New modalities will need to be considered, including assessing telehealth capabilities and consideration of launching or bolstering prevention and wellness offerings.

  1. Are there cultural changes to anticipate as we incorporate value-based initiatives within our organization? Moving an initiative forward starts with the leadership crafting a vision in which providers will want to participate, that helps them provide better care.

Once a vision is established and a value-based strategic direction can be articulated, ongoing management will be required to keep progress moving. This process can be a two-way street as the management team will need to provide front-line support to assist providers and remind them of the things necessary to be successful within different initiatives. The arrangement should also leverage physician leadership to champion new efforts and provide clinical guidance.

As your reimbursement structure evolves to include more value-based measures, it is vital for the provider incentives to correlate proportionately to their revenue streams to align behavior with funding sources.

Coker’s ValuePathTM framework tackles these questions and can help your organization create its roadmap to value-based care through a three-phased approach:

  1. Strategic Review. This review begins with a consultative session to determine the directional approach for a value-based strategy that provides educational materials for a market overview to evaluate the changing landscape. The pros and cons of potential payer model strategies are discussed so that a coordinated value-based strategy may be crafted that promotes synergies with other initiatives to be identified or ones that have been contemplated and/or are already in pursuit.
  2. Assessment. Performance data is analyzed and stakeholder interviews are conducted to inform a quantitative and qualitative assessment of current performance. Opportunities and associated investments are incorporated with baseline revenues and performance to model a pro forma view of the low, expected, and high likelihood different strategies present.
  3. Implementation of Recommendations. Operational recommendations may be implemented based on the current status and the necessary steps to achieve newfound value-based strategies. These areas may be inclusive of, but not limited to, risk-adjustment coding changes, clinic workflow optimization, updated analytical processes, and more.

Please contact us if you would like to learn more about our ValuePath services. We would love to show you how Coker can help you navigate through the often-challenging transition from volume to value.


Drucker, P. F. (2002). The Effective Executive. New York: Harper Collins .

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