How Analytics Supports Value-Based Healthcare

Value-based healthcare is changing the business model for doctors and hospitals. Here's how analytics is helping these practices change the way they work.

Jessica Davis, Senior Editor

August 16, 2018

7 Min Read
<p>(Image: xijian/iStockphoto)</p>

Industry disruptions and business model changes have become familiar these days. It's almost a cliché that Uber disrupted taxi companies, Netflix disrupted cable television, or the cloud disrupted the traditional technology industry.

Healthcare is no exception. The growth of value-based care is changing how the healthcare industry works. As a patient you maybe notice more attention paid to providing preventative services and lab tests. Perhaps your primary care physician will nag you a little more if you haven't scheduled a recommended diagnostic test.

But for providers, value-based care is changing way the revenues and finances work on the business side. It's a gigantic change on the back end of healthcare that most patients will never see.

Jennifer Carney is at the epicenter of this change in business model and care model. She serves as vice president of finance and analytics at Beth Israel Deacons Care Organization, more commonly known as BIDCO. BIDCO is a value-based physician and hospital network and Accountable Care Organization (ACO) in Westwood, Massachusetts that includes eight hospitals and more than 2,700 physicians across the eastern part of the state. The network serves more than 200,000 patients, including those with private insurance and those with Medicare and Medicaid.

The analytics that her team creates and manages are what enables BIDCO's network members to stay financially viable and successful as their business model pivots.


The Pivot

Before the value-based care movement started, most doctors and hospitals followed a fee-for-service contract with health insurance companies. That means that if you went in for an appointment at your doctor's office, you were billed for that appointment and your doctor was paid for that appointment. You could go for several appointments in the same month and your doctor would be paid for each of those appointments. The more appointments and tests you got, the more your doctors were paid. In the traditional fee-for-service model, physicians were incentivized to see the maximum number of patients.

"The more utilization [of services] that was performed, the more revenue came into your physician organization or into your hospital," Carney told InformationWeek in an interview.

The value-based model puts a greater focus on healthcare outcomes and efficiency. Ideally, you to go to preventative appointments and tests. You don't go to the emergency room unless you have a real emergency, because that's more expensive. If you have an issue that can be managed by your primary care physician, that's where you should go. The goal is for many patients to use all the services they need and end up with better outcomes.

So how do you incentivize healthcare providers to offer that kind of care? In the value-based model, new incentives had to be created.

Carney told InformationWeek that the BIDCO network is set up to let doctors and hospitals share risk against a set budget. The budget encompasses the cost of all the care and medical expenses that your patients incur. The network of doctors and hospitals shares in the financial risk for contracts with health plans such as Blue Cross Blue Shield.

The Incentives

"We benefit if we are able to perform under budget and there is a surplus to be shared with health plans," Carney said. "But at the same time, we take a lot of downside risk as well. If we perform worse than the budget, we have to share that deficit with the health plan."

If BIDCO provides better quality care (and not necessarily greater quantity of healthcare), it gets a greater share of the surplus. Quality metrics, sometimes more than 30 of them, are defined in the contracts with each different healthcare insurance plan provider. For instance, one metric would be this: what percentage of eligible patients in the overall patient population completed their mammogram screening tests this year? Another is, what percentage of diabetic patients completed their A1C test this year? The higher the percentage, the greater share of surplus dollars that BIDCO network members get to share. In this way, the practices are incentivized to close the gaps in care.

Carney said that the network members also receive quality incentive dollars that are tied to performance and quality. These are calculated on a per-member, per-month basis.

The Data and Analytics

To engineer this whole shift in focus and business model, BIDCO needed some serious analytics. The network needed to integrate electronic health record data from all of its physician and hospital members, including their visit notes, test results, and information from each point of service provided.

Then the network needed to make sense of all that data and produce dashboards, reports, and analytics in a way that would engage its physician and provider members to work with the insights.

"That's a key step in the lifecycle of analytics," Carney said. "It's turning data into value. The physicians and practices are going to utilize that data and make headway to improve performance."

The third part of the process is measurement. The population health team works together with the chief medical officer and the analytics group to shape goals and the strategy to achieve them.

"It's really about being able to take data and design programs and share best practices," Carney said.

BIDCO chose an industry specific platform from Arcadia as its comprehensive population health tool. The tool is designed to perform data aggregation and integration, quality improvement recommendations, analytics, and high-risk population identification.  

After the back-end work was completed, BIDCO has been rolling out the tool to its network members and providing recommendations on how to achieve goals. The population health tool is not a replacement for each practice's major platform -- the electronic health record software. And not every person inside the practice will use this tool. But the tool will help physicians prioritize the care gaps to close so that the staff can do outreach to patients to achieve those goals.

The population health tool can also can create a list of all patients scheduled to come in that day along with each of those patient's gaps in care. That gives the staff a list to work with in order to get important tests scheduled.

The practice's EHR for a single patient will contain all the data from that practice for the patient. The population health tool provides the practice comprehensive data about that patient from hospitals inside and outside the network.

Carney said data sources aggregated into the population health tool include claims data, electronic health record data, radiology data, scheduling data, and lab results.

"You can see when their last visit was or when their next visit is scheduled, so that helps in creating lists for priority and outreach," Carney said.

Getting Buy-in

As with any major business or technology change, getting buy-in from the users has presented a challenge. After all, you can give someone a tool, but they can't get the benefit of it unless they use it. And if the practices don't use this tool, they are less likely to share in the quality care incentives.

"We have a varied network of physicians. Some of them are single providers -- onesie or twosie provider groups," Carney said. "Others are groups of employed physicians. We've had varied success in our engagement and that's been a challenge."

After all, BIDCO is a network, not a corporation with a top-down management structure. Education plays a big part. But BIDCO's secret weapon is personal contact.

"Our CMO would say she has found most success in visiting in person the practice and talking with the physician leader," Carney said. For a network of 2,700 physicians, that's not really practical. But it has been the most effective.

Once the physician leader is engaged, it's easier to get the rest of that practice's staff get in line.

"We are asking them to change the way they've done it in the past," Carney said. "We are hoping the outcomes will speak for themselves and then we can take this across the network and have real evidence to prove our strategies."

About the Author(s)

Jessica Davis

Senior Editor

Jessica Davis is a Senior Editor at InformationWeek. She covers enterprise IT leadership, careers, artificial intelligence, data and analytics, and enterprise software. She has spent a career covering the intersection of business and technology. Follow her on twitter: @jessicadavis.

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