What the Healthcare Industry Needs to Know About Value-Based Agreements
If you work on the business side of healthcare, you’re likely aware of a transformation sweeping across the industry that promises to cut costs, create operational efficiencies, and ensure equality in access to care and health regardless of social status. I’m talking about value-based agreements (VBAs). While VBAs are not new conceptually, their popularity has grown as healthcare providers have become hyperaware of their goals and objectives and increasingly motivated to more effectively create and capture meaningful business and patient value.
If this type of agreement is new to you, VBAs reorient the economics of business relationships within healthcare based on mutually agreed on performance levels for upside and downside risk.
In other words, VBA contracts (and their monetary value) center around the delivery of shared outcomes.
The Challenges of VBAs
While there has been considerable interest in VBAs as an innovative concept, their adoption has often been hamstrung by the fact that they can be difficult to operationalize, administer, and scale.
Some of these challenges are relatively straightforward, but some are more nuanced. They include:
- There is a great deal of manual effort and long delays associated with collecting and sharing the data needed to report on performance against VBAs.
- Proving value delivery is often dependent on data streams from both contract parties, but accessing that data is nearly impossible without a neutral third party.
- Traditional risk/reward trade-offs often cause each party to maximize their own self interest over the collective benefit of the whole.
- There is no space for both parties in a VBA to come together to collaborate on how to achieve the established goals and objectives.
- VBAs are often seen as risky because data collection challenges and delays mean that the performance of the contract isn’t known until after the contract expires.
- Interventions to improve population health outcomes are made without active measurement or understanding by each party in the contract during the performance period.
MetaCX’s Approach to VBAs
All of this is to say that value-based agreements are a great idea in theory, but hard to implement in the real world. That’s where MetaCX can help.
MetaCX helps organizations operationalize and scale value-based agreements to make healthcare relationships highly successful for manufacturers, providers, payers—and most importantly, patients.
When it comes to the data necessary to prove performance, MetaCX not only instruments data points from any system or device necessary, but also eliminates the question and conflict of who manages the data needed to report on VBA performance by providing a trusted third-party platform to efficiently manage and control anonymized, aggregated data shared between parties in a VBA contract.
The platform also provides a co-owned, digital space called a bridge where healthcare providers and their partners can come together to document and collaborate around desired business and patient outcomes and establish step-by-step action plans.
And lastly, MetaCX dramatically improves the predictability and effectiveness of value-based agreements by actively enabling real-time line of sight into the performance metrics that all parties in the contract care about and, often, are beholden to. Everyone is kept apprised of outcome performance and outcome achievement, thus enabling remediation.
Not sure what this looks like in real life? Below is an illustrated story of Pharma Co., a well known pharmaceutical provider by another name, that has a value-based agreement with a buyer that establishes three primary outcomes for the partnership. MetaCX provides a shared space for both parties to define and measure outcomes together.
With value-based agreements, the only way to guarantee partnership longevity is by ensuring both sides share the same definition of success and work together to achieve the outcomes established in the contract.
MetaCX keeps both parties accountable and focused on the goals, milestones, metrics and action plans necessary to create more value for patients and other key players in the healthcare ecosystem.
Not ready to adopt value-based agreements? Check out our white paper, A Stepwise Path Toward Value: Partnering on Collaborative Healthcare Supplier Agreements. It outlines a graduated approach to value co-creation that accrues benefits along the way.