Data and analytics capabilities are increasingly becoming the differentiating factor between successful and struggling value-based care (VBC) partnerships. This post covers how providers can gain a competitive edge through proactive analytics.

Why Analytics Matter in Value-Based Care

According to Fennel, health plans often operate on legacy data infrastructure with stretched resources, making timely analytics a significant challenge. This creates an opportunity for healthcare providers to take the lead in data-driven decision making rather than waiting for health plans to deliver performance insights.

As Fennel explained in the webinar, "Many plans are clamping down on administrative costs... creating competing priorities for teams that are really needed, like the analytics and actuarial teams that can help plans figure out how to move these partnerships forward."

Fennel also highlighted how health plans face difficulties analyzing new care models: "Many health plans don't yet have years of repetitions working with these VBC models or understanding how to assess the potential impact... One of the places where resource constraints runs up against this is the situation where a provider will come and say, 'This is my VBC model,' and then the health plan has to figure out how to use its resources, tools, and approaches to size the model and set a target price, but the health plan doesn't necessarily have a roadmap for doing that.”

Building Your Medical Economics Capabilities

1. Taking Ownership of Performance Analytics

One of the standout examples Fennel shared was a specialty care provider who completely transformed the typical analytics dynamic:

"There was this one great example of a provider approaching the payer partner and saying, 'Look, we've been working towards a solution for this problem for several years now. We've done the modeling. We know how the math should work. We know how you should do the analysis. Send us the claims data, allow us to do the analysis ourselves. We will document our methodology, and we will give it all back to you transparently to validate. But let us take the burden off of your shoulders and let us provide the expertise that we've developed over these last three years.'"

This approach was "such a welcome conversation," according to Fennel, because it helped him "avoid some of those internal health plan resource conflicts, but it also allowed [him] to fully leverage the expertise that they had developed over a couple of years looking at a problem that [they] hadn't been looking at."

For providers entering value-based care agreements, building internal capabilities to analyze performance is increasingly essential. This includes:

• Building a competency in medical economics data and analytics
• Tracking key performance indicators as close to real-time as possible
• Identifying high-risk patients and appropriately intervening before costly utilization occurs
• Monitoring referral patterns and leakage to non-network providers
• Assessing provider performance against established care pathways

2. Creating a Compelling Data Narrative

Raw data alone rarely drives action, particularly with diverse stakeholders across a health plan organization. Successful providers combine analytics with storytelling by:

• Connecting data points to patient outcomes
• Visualizing trends in accessible formats for health plan stakeholders
• Explaining methodology and assumptions transparently
• Linking financial outcomes to specific patient interventions

Fennel emphasized the importance of patient stories alongside data: "Patient stories are also really important - it’s about communicating the real patient impact of your model, including testimonials and anecdotes about the patient experience."

He added, "The danger of not telling the stories is that by default where you'll end up is in an apples-to-apples comparison about base metrics. When at the end of the day, you want to be an orange, right? You need to reinforce how you're different from other providers in the network."

3. Navigating Data Challenges Strategically

Common analytics challenges in VBC partnerships require proactive solutions:

Attribution discrepancies: Different methodologies for assigning patients to your program can significantly impact results. Fennel noted how attribution becomes "particularly complex when multiple value-based programs overlap. In these situations, 'You end up having to carve out patients already attributed to a full-risk primary care group and make them ineligible for another model that might be clinically beneficial.'" Addressing these challenges upfront prevents conflicts later.

Claims lag: Delays in claims processing affect timely performance assessment, making it essential to develop leading indicators that don't rely solely on claims data.

Risk adjustment: Ensuring accurate risk scoring for your patient population is critical for performance evaluation. Sophisticated providers develop their own risk adjustment methodologies rather than relying solely on health plan calculations.

Benchmark selection: Identifying appropriate comparison groups is challenging but essential. As Fennel explained, "The plans don't necessarily have a ready benchmark for what is the right engagement rate for a specialty model in cardiology or GI... The important thing is just to try to come to some agreement about what seems reasonable, based on the evidence that you both have."

Analytics Applications for VBC Success

Root Cause Analysis for Performance Challenges

Fennel highlighted how analytics enables more productive conversations when performance doesn't meet expectations: "It becomes a very different conversation if you have a very clear explanation and root cause as to the drivers of that miss - is it things that the partnership could be doing better, or is it just things like case mix, unit cost changes from the health plan contracting? What are the components of that miss?"

He continued, "When you do have that steering committee meeting and present, you can say, 'Here are the things that were within our control, and here's how we perform versus these are the aspects outside of our control.'"

Demonstrating Specific Clinical Impacts

Effective analytics helps demonstrate clear links between your interventions and outcomes that matter to health plans. Fennel shared examples of successful models that used analytics to show: "One of the key features in both of those examples was that ability to get quickly to a patient, to get them to care and avoid escalation, avoid downstream complications... They went out of their way to make it clear to us that these are specific impacts they will have if they execute their model. And they measured those things, and they made that part of the conversation."

Proving Return on Investment

As VBC agreements mature, health plans increasingly focus on concrete evidence of ROI. Sophisticated analytics enables providers to:

• Develop robust methodologies that account for regression to the mean and seasonal variation
• Quantify both direct medical cost savings and indirect benefits
• Present longitudinal data demonstrating consistent improvement
• Compare performance to market benchmarks with appropriate risk adjustment

The Road Forward: Building Analytics Infrastructure

For healthcare organizations serious about VBC success, investments in analytics infrastructure are becoming non-negotiable. This includes:

1. Investing in data integration capabilities that can combine claims, clinical, and operational data
2. Developing an in-house competency and partnering with specialized vendors like Accorded to build medical economics expertise
3. Establishing data sharing agreements with health plans early in the partnership to enable timely analysis
4. Creating standardized reporting templates that effectively communicate your value story
5. Regularly validating your methodologies with health plan actuarial teams to build credibility

Conclusion

As Fennel's experiences illustrate, analytics capabilities are increasingly becoming the differentiating factor in VBC success. Providers who develop sophisticated medical economics infrastructure can bypass health plan resource constraints, demonstrate their value more effectively, and build stronger partnerships with payers.

In an environment where health plans are increasing scrutiny on VBC agreements, the ability to independently analyze performance, identify improvement opportunities, and present compelling evidence of impact will separate the most successful value-based care organizations from the rest.

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This is part of our Value-Based Care Success series. Read our other posts to learn about preparing for VBC implementation, navigating the critical first 90 days, and sustaining long-term partnerships.

Are you a healthcare organization involved in risk-bearing or VBC arrangements?
Connect with Frank at hello@accorded.com to learn how Accorded's tech-enabled actuarial products and services can help you optimize for success, or contact Eric at eric@valuestrategies.health to learn more about Value Strategies, LLC.