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Value-based care has become a buzzword over the past decade with early experiments in Massachusetts followed by the creation of Medicare Accountable Care Organizations (ACOs) as part of the Affordable Care Act. As commercial insurers jumped onto this bandwagon, most providers became familiar with the concepts of gainsharing, upside and downside risk, and bundled payments. 

Much of the activity in this space has focused on primary care, particularly for ACO’s and ACO lookalikes. Even within multi-specialty groups and health systems, most of the accountability for driving both quality metrics and financial results has resided in primary care. While some specialties, such as Orthopedics are noteworthy for their expanding participation in bundled payment arrangements, very few specialists have experienced the disruptive changes that value-based arrangements have had on primary care practices. 

Ironically, primary care accounts for a tiny percentage of overall health cost directly. According to a study published in JAMA in 2018, only 5.4% of total health expenditures in the US are in primary care. In contrast the same study revealed over three times as much paid for Specialist care at 17.9% of the total. 

A Missed Opportunity

While bundled payments have proven to be an effective method to engage specialists in value-based care, it seems there is a missed opportunity when it comes to including them in ACO-type arrangements. A major driver of this disconnect is the fact that patient attribution in value-based contracts is based on their primary care provider. As a result, specialists, even those in multi-specialty group practices, continue to provide care to patients who are attributed to other provider groups. This dynamic leaves them with little or no change in their financial incentives. They can continue to maximize their income by focusing on revenue generation rather than cost control.  

For specialists to be effectively engaged, provider groups must build governance and financial incentives within their organizations that align with a value-based strategy.  Particularly for large multi-specialty groups, they can ill afford to avoid the challenging work of building a compensation model that recognizes and supports the interdependence of providers across specialties. This is a critical underpinning to sustainable success in value-based care. 

Specialists Poised to Influence Guidelines

At the operational level, specialists participating in value-base contracts are well positioned to drive creation and management of clinical guidelines for their most common diagnoses. Even without bundled payments specialists could analyze the pattern of services within their episodes of care compared to benchmark performance. Their insights can serve as the foundation for clarifying expectations throughout the continuum of care. A common understanding of appropriate evaluation, treatment, and criteria for referral from PCP to specialist and back can have a substantive impact on patient satisfaction and clinical outcomes, and at the same time can reduce provider frustration and overall cost trends. 
If we are serious about pursuing the quadruple aim, no single stakeholder in health care can accomplish it alone. Driving alignment and collaboration among the specialties is a critical to a sustainable solution.  

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Dr Lustick
Dr. Martin Lustick
Senior Vice President, NextGen Advisors
Dr. Martin Lustick is a principal and senior vice president with NextGen Healthcare focused on supporting provider organizations in their successful transition from volume to value-based care.

Dr. Lustick earned a BA in History from Cornell and an MD from Columbia. After completing his pediatric residency at Children’s Hospital National Medical Center in Washington, DC, he was...