Diving into a value-based contract (VBC) isn’t easy, but breaking it into key milestones can make it easier. In this blog by CEO, Co-founder, and actuary, Frank Cheung, we’ll walk through 5 milestones you should meet before entering into a VBC.

1. Define Your Program

The first step is to define your program. This means identifying the clinical population and specific conditions your program will manage. Simply stating your program is for "an MSK population" is too broad. You need to narrow it down to specifics, like patients who undergo multiple rounds of back surgery. Your program might offer an alternative, like better physical therapy management, to prevent unnecessary surgeries.

Example: If patients get surgeries from centers that are too expensive or inefficient, your solution could redirect them to centers of excellence that have better outcomes. It’s essential to articulate what the usual care looks like for a particular payer and explain how your clinical model will change that care in a detailed and specific way.

2. Paint the Financial Business Case 

Once you’ve defined your clinical program, the next step is to translate it into a financial business case. This involves explaining the cost implications of your program and how it impacts the payer's bottom line. Are you improving risk scores so payers can receive more revenue from CMS? Are you reducing the cost of care? It’s about connecting your clinical outcome goals with financial metrics.

Example: If your program prevents unnecessary back surgeries, you should detail how this will save costs. It’s crucial to show the payer the business cost implications of implementing your program, using dollars and cents to demonstrate potential savings and revenue benefits.

3. Get the Contract Structure Right

With the clinical and financial cases in place, the next milestone is to prepare for different types of contracts that align with your value proposition. There are various types of contracts, and it’s vital to have a clear perspective on which structures best match your clinical and financial goals. You should be able to justify why these contracts make sense and adapt to adjustments based on the preferences and capabilities of the payer or health plan.

4. Set Up Monitoring and Reporting 

Next, you need to measure and monitor the outcomes defined in your contract. This includes setting up robust data analytics systems that can track clinical outcomes and financial impacts accurately. Having this infrastructure in place is essential for ongoing assessment and demonstrating the value of your program to payers.

5. Tweak the Program

Finally, establish a process for continuous improvement. This involves regular reconciliation and monitoring of your program’s performance. Use the data and analysis from your reporting and monitoring system to tweak and optimize your program over time. This ongoing improvement cycle will help you adapt to changing circumstances and continuously enhance the value your program delivers.

One More Time

If needed, reopen negotiations to modify the program. This step brings you back to step one, allowing for continuous improvement and ensuring the program is up-to-date with the latest trends and needs. 

The Bottom Line

Accorded Acumen empowers you to accelerate your value-based care strategy by combining actuarial expertise and modern data engineering. Acumen transforms claims, eligibility, and engagement data into standardized, actuarially rigorous, and ready-to-use value-based care (VBC) data assets, empowering organizations to perform in-house scalable actuarial and med econ analytics.

Benefits

• Win more contracts by entering value-based care agreements confidently with the right insights, at the right time
• Boost reimbursement rates effectively
• Improve contract retention rates through enhanced analytics and insights

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