In the last section, I ended with the thought: Reducing medical expense in the next generation of VBC will be the ultimate driver of success. The largest chunk of this medical expense lives in specialty care, where risk-bearing entities have the following options to collaborate with specialists: sub-capitate, own, network navigate, and partner. Each of these four options come with their pros and cons across each type of risk-bearing entity (payers, medical groups, enablers, and health systems), but this piece speaks more-so from the perspective of a medical group / risk-bearing primary care provider.
The primary care group will issue a capitated rate to the specialist group, which serves as guaranteed income from the primary care provider (PCP). Like the partnership option, sub-capitation ‘passes off’ the risk to another entity, allowing the PCP to ‘wipe their hands’ from the downstream costs associated with the specialty care.
A successful sub-capitation must involve a deeply integrated relationship between the PCP and the specialist, with geographic proximity. If there is not solidified buy-in from specialists, performance measurement and patient engagement all fall to the wayside.
Maximal clinical and financial value can be captured by keeping everything in-house, either by hiring specialists or buying specialist groups to care for patients. This option falls squarely into the ‘build’ category where large amounts of capital are required.
Strong commitment from the employed specialists and robust coordination between the PCP and specialist can lead to impressive results if executed correctly; however, owning is expensive and can lead to culture clashes in the shift from wholly financial metrics to clinical and utilization management metrics. Other significant challenges with owning stem from scaling the operation across geographies and cultural / operational differences across groups.
PCPs can build tools to coordinate with specialists, surfacing insights to support PCPs, such as referral management analytics and navigation programs (like CareJourney and Garner) or real-time clinical decision support, referral, and care coordination (like RubiconMD).
The technology, performance measurement, and care coordination investments here are significant but there is often no deep integration with the downstream specialists to advance the clinical model.
By partnering with an organization that is already focused on value-based care and constantly iterating their clinical model, partnership is most likely to be successful in reducing costs and improving outcomes. Like sub-capitation, this option also allows the PCP to ‘pass off’ risk while sharing in the upside gains.
Partnership offers a comprehensive, value-based approach across the patient journey, from engagement professionals to the specialists themselves.