Exploring the Value Levers of VBC

November 8, 2023

Value-based care is more than a buzzword; it's a transformative approach that is reshaping healthcare. CMS is using a carrot-and-stick approach to expedite the shift to VBC, which they’ve stated they want 100% of beneficiaries to be in VBC arrangements by 2030. By reducing FFS payments by 2-4% annually, they're nudging providers towards VBC options like MCP, which offer enticing fixed monthly per member payments, with expected value being at least 30% and up to 90% higher than what physicians would typically earn in their FFS arrangements.

The disparity in fee adjustments between physicians and hospitals, as well as the concern for rural practices, underlines the complexity of this transition. The CMS’s approach aims to mitigate the churn in FFS and bolster independent practice through VBC, although the journey seems to bear its set of challenges, especially for rural practices. As VBC continues to penetrate the landscape, the need to understand the value levers at an organizations disposal is increasingly important. In this article we will be delving into the value levers that providers can explore implementing to achieve success.

VBC Success: Shifting the Focus From Care Management to Population Health

Success and profitability in VBC can be broken down into a simple equation: 

↑VBC Profit = ↑Attributed Patients ✕ (↑Benchmark Care Spend - ↓Actual Care Spend)

But what does a group have to do to move the needle in each of these buckets? Let’s break down each of the variables in this equation.

Increasing attributed patients

This starts with increasing your acquired patients while decreasing your practice's churn. Practices have historically seen up to 25% YoY churn in their patients attributed to their practice, but this can be solved for in a fairly straightforward manner. 

Reduce patient churn: By ensuring there are frequent touch points with the patient, practices can see massive reductions in the patient churn. This could be as simple as welcoming them to Medicare, sending them their Health-Related Social Needs (HRSN) screening, and inviting them in for their annual wellness visit.

Target patients for voluntary alignment: Leveraging EMRs, healthcare practices can identify patients who would benefit from voluntary alignment with an Accountable Care Organization (ACO) or practice. This approach involves a detailed analysis of patient data to pinpoint individuals, particularly high-utilizers or those with chronic conditions, who are likely to gain from more coordinated care efforts. Following data analysis, a carefully crafted communication strategy is essential to educate these patients about the advantages of aligning with an ACO, ensuring all outreach adheres to stringent patient privacy laws. The effectiveness of these strategies is then closely monitored by tracking improvements in care quality and patient satisfaction, using these insights to continuously refine patient identification, outreach, and care coordination processes.

Increasing Benchmark Care Spend

Increase accuracy and completion of risk coding: The easiest way to increase and improve benchmark care spend is to start with accurate documentation, an area where up to 40% of opportunity is missed. Diagnostic Robotics can surface diagnosis gaps in an app next to your EMR, helping you increase your RAF scores

Negotiate relationships with specialists outside of your ACO: Practices can negotiate relationships with (potentially higher cost) providers who aren’t in their ACO to recognize care costs that happen outside of their four walls. This enables them to expand the number of services offered to your patients, which makes you more attractive, while also providing opportunities to out-perform your projections.

Decrease Actual Spend

The last piece of this equation is multifaceted and highly interconnected, but is crucial for achieving success as a VBC organization. 

Reduce preventable care cost escalations: Most groups focus on closing care gaps, but this is oftentimes just checking a box. Meaningful reduction comes from addressing the actual drivers of risk. DR’s Intelligent Care Journeys Solution assists with this by prioritizing patients with highest preventable care costs predicted in the next 12 months and identifying the clinical next steps that need to be taken to prevent those costs. 

Reduce the referrals to low value care settings: This step is based on a practice’s referral patterns to SNFs, labs, imaging, etc. within your organization. Once you understand your patterns, you can begin the shift to more efficient sites of care. For example, you may see the same, if not more, value in delivering care to sick patients at home rather than a SNF; the same could be said about providing care in a primary care setting as opposed to an ED for non-emergent needs. 

Increase usage of high-value interventions: High quality, cost effective care requires an understanding of the cost/value tradeoff of the interventions at your disposal, and it’s critical for successfully implementing of VBC. A prime example of this would be seen in the difference between providing name-brand vs generic medications, or defaulting to surgery when physical therapy may be the proper intervention for improving outcomes in a non-invasive fashion.

The Cornerstones of Value Creation

With the above equation taken into consideration, there is ongoing pressure for organizations to demonstrate ROI. To meet these grueling demands, there are distinct workflows and capabilities that are becoming almost a requirement for successful value-based care implementation. In the value-based care landscape, analytics are not a 'nice-to-have'; they are a cornerstone for value creation. Within this landscape, there is a sliding scale of capabilities that range from foundational to cutting-edge and moving the ball forward. Below are a few examples:

Foundational: Improving risk adjustment coding accuracy, referral management and network quality

Advanced: Predicting health risks for proactive care, utilization management to drive cost reduction, increase usage of lower cost/efficient sites of care, improving a quality metrics for increased government compensation

Cutting-Edge and Forward Looking: Using analytics to determine interventions that will prevent future health complications, reduce preventable episodes (hospitalizations, ED visits, surgeries, etc.), reduce readmissions following discharge

As healthcare organizations look to move themselves along the scale of capabilities, advanced analytics solutions that employ artificial intelligence and machine learning offer insights that are both predictive and prescriptive, enabling groups to step into the future with their care programs.


The landscape of value-based care is both complex and ripe with opportunities. By leveraging advanced analytics and workflow solutions, providers and health plans can navigate this intricate landscape, achieving financial sustainability while delivering exceptional patient outcomes. As the sector continues to evolve, those equipped with the right tools and insights will be best positioned to capitalize on the opportunities that value-based care presents.

For healthcare organizations looking to navigate the complexities of value-based care, Diagnostic Robotics offers unparalleled solutions. Our services not only recommend optimal care path steps to reduce preventable costs but also streamline patient triage and navigation. 

By embracing VBC models and leveraging advanced solutions like those offered by Diagnostic Robotics, healthcare providers can look forward to a future where quality care is accessible, equitable, and financially sustainable.

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