This week, our In Focus section highlights a new report released on January 25, 2024, Analyzing the Expanded Landscape of Value-Based Entities: Implications and Opportunities of Enablers for the CMS Innovation Center and the Broader Value Movement. The analysis explores the growing ecosystem of new entities designed to assume accountability for the total cost and quality of care in order to understand the growth of this market and consider the role these entities play in advancing accountable care in Medicare, Medicaid, and the broader healthcare sector. The report combines the value-based payment (VBP) policy and market expertise of Health Management Associates (HMA) and Leavitt Partners, an HMA company, with support from Arnold Ventures.
At the start of the movement, value-based arrangements primarily involved traditional providers and payers engaging in relatively straight-forward and limited contractual arrangements. In recent years, the value-based care market has expanded to include a variety of risk-bearing healthcare delivery organizations and provider enablement entities, with capabilities and business models aligned with the functions and aims of accountable care. Despite their prevalence, little formal research has been conducted to determine the role, growth, and impact of these entities to date, and publicly available information is limited.
The report introduces a framework for classifying these entities and estimates the size of this market for the first time. Using insights from 60 interviews with entity leaders, providers, and policymakers, and extensive secondary research into approximately 120 organizations, the report details the common offerings, partnership models, and growth strategies of these entities. The research investigated primary care-focused entities as well as risk-bearing delivery organizations and VBP enablers focused on select specialty areas that align with total cost of care models (i.e., kidney care, oncology, cardiology, behavioral health, and palliative care). Authors examined providers’ experiences selecting and collaborating with enablement partners and the role of these entities within Medicare accountable care models, as well as the broader value movement, to inform a set of guiding principles that help providers and policymakers evaluate the attributes of ideal partners.
Market Landscape
For the past decade, the Centers for Medicare & Medicaid Services (CMS), through its Innovation Center (CMMI), has been leading the movement toward value. Going forward, the agency is focused on scaling accountable care adoption to achieve its 2030 goal, but also seeks to ensure that transformation is equitable and sustainable. These entities are helping providers to engage in accountable care, but our guiding principles and policy recommendations aim to support CMS in ensuring that their growth aligns with provider and patient priorities.
In assessing the value-based care market, the report divided the organizations into three main categories by their core business model: VBP enablers (which are not involved in the direct provision of care, but in assisting others to adopt VBP models); risk-bearing delivery organizations (entities designed to deliver value-based care and assume payment risk for the cost of care); and organizations that are a hybrid of the two (companies that own assets that enable other organizations and those that deliver care).
From risk-bearing delivery organizations with business models that hinge on effective population health management and longitudinal patient relationships, to VBP enablers that provide the population health functions needed to succeed in accountable care while sharing responsibility for those outcomes, these entities are creating more opportunities for clinicians to deliver the type of coordinated, proactive, whole-person care that is unsupported in a fee-for-service system.
A Growing Market
Fueling the growth of value enablers are signals from federal and state policymakers that value-based payment (VBP) is here to stay. The certainty of this approach is already leading to increased focus on underserved populations and safety net providers as CMS places greater focus on expanding VBP contracts in Medicaid and other public insurance programs.
As the market matures and pressure to participate in accountable care mounts, organizations will have several paths forward to implementation of alternative payment models. The growth and availability of enablement entities that are designed with the explicit purpose of helping providers overcome barriers to participation – and whose own financial success hinges on the success of their provider partners – could represent a promising gateway toward achieving accountable care.
The research found several similarities across most entities in this space, demonstrating a highly competitive market, with organizations focused on similar priorities in target providers, geographies, and key populations. Entities often use hybrid, high-touch clinical models to support physicians with patient navigators and other clinical extenders and support staff. They heavily rely on health information technology, and often develop homegrown, proprietary tech assets to better address provider pain points. Finally, most entities depend on outside capital and investment to fuel growth, and investor interest in the space seems to be robust and growing, along with the evolution of value-based care models.
Guiding Principles and Policy Recommendations
The report concludes by proposing a set of guiding principles to describe the optimal attributes of value-based enablement entities aligned with CMS, provider, and patient goals. Authors point to steps CMS can take to best engage with this expanded ecosystem in support of its efforts to scale accountable care while ensuring appropriate guardrails are in place to protect patients and providers.
As CMS works to accelerate adoption of accountable care to achieve its 2030 goal and beyond, the agency must find ways to bring in new providers who have yet to engage meaningfully in these models, while retaining current participants and advancing model designs for the next phase of VBP and delivery reform. The report makes policy recommendations to 1) drive new and sustained provider participation and 2) ensure high-quality partnerships for CMS and providers.
What’s Next
With its acquisition of Leavitt Partners and Wakely Consulting, along with its strong and growing Medicare policy practice, HMA is developing a diverse and robust set of solutions for entities engaging in value-based care and payment. On March 5 and 6, HMA will be devoting its spring event to the topic. The report authors will be featured prominently and will lead a session on the report’s implications. More information about the Spring Workshop, Getting Real about Transforming Healthcare Quality and Value, can be found here.
For details about this research, please contact report authors Kate de Lisle or Amy Bassano.
