2022 California Council of Community Behavioral Health Agencies (CBHA) Conference

The Promise and Peril of Value Based Behavioral Health Care

By aligning payment with value, we can achieve the triple aim of better outcomes and better experience of the healthcare system at a lower cost IF we define value in terms of wellness, recovery and improved quality of life. In this case as with almost everything in our healthcare system today, the metrics matter. And if the health care system is going to deliver on the triple aim, it will need to leverage the expertise of, and partner with, the behavioral healthcare system. We serve the clients with the most complex needs. We have a long history of knitting together healthcare with social services. We have, in short, spent the last half century developing the skillsets that the medical system needs most today.

But value-based payment (VBP) is not a panacea, and it will not be without its dangers for community behavioral health agencies. VBP is, simply put, a market solution to a problem occurring in a capitalist healthcare system. VBP will increase competition and empower the invisible hand of the market. This will, inevitably, lead to creative destruction. How creative that destruction proves to be is as yet unknown, but that the destruction will happen is a given.

The American health care system has a problem. We spend much more on healthcare than anywhere else in the industrialized world, but our health outcomes don’t reflect that spending. This stark data has led policymakers at both federal and state levels to propose new ways of purchasing healthcare services based on the theory that our fee-for-service (FFS) driven system has provided the wrong set of incentives to care providers. Rather than being paid to keep people healthy, medical providers have been paid to take care of people when they’re sick. This has caused the system to focus on illness, not health and expensive interventions in place of inexpensive ones. And it has led to greater rates of illness and worse outcomes.

The system needs to be held accountable for maintaining people’s health as much as possible and returning them to health when needed. In order to hold the system accountable, payment has to be based on the value of any intervention to a person, not based on the volume of services regardless of value. In a FFS system, more valuable interventions, those designed to restore people to health and keep them healthy, reduce providers’ margins, rather than increasing them. Whereas a move to VBP can create accountability within the care system for maintaining people’s health, and improve margins for those providers who do the best job.

This restructuring to VBP could be a very good thing for behavioral healthcare providers. After all, lots of research has shown that people’s behaviors have much more to do with their health outcomes than the care that they receive from medical providers. And the same data that show how poorly our health outcomes look when compared with other industrialized countries, also show that when it comes to social services spending, the US is much farther back in the pack. Our poor health outcomes look like they have a lot to do with how well our systems have managed the interaction between health and social services, which is the nexus on which behavioral healthcare lives. Meanwhile, new research has shown that loneliness and social isolation are as unhealthy as grade two obesity. The research base is constantly and continuously shining a light on the importance of behavioral healthcare, not just for people with chronic conditions, but for everyone.

Medical providers tell us that among their biggest challenges are working with their clients to change behavior; providing robust, consistent care management; addressing the social determinants of health like housing, employment and education; providing culturally-competent, patient-centered care; and reaching out and engaging difficult to engage populations. These skills, which provide such huge value, and that are so desperately needed, are precisely those skills that high-quality community behavioral health providers have developed since the passage of the community mental health act. So, community behavioral health agencies, if they are prepared (and that’s a big if), are well-positioned to play a valuable role in a newly emerging organized health and social services system.

And we should want to. Accountable care is quality care. The dis-coordinated, disorganized, siloed service systems is failing to provide the person-centered services that the people we serve deserve. Too many of our clients are dying too young, entangled in the criminal justice system, struggling to maintain housing and under/unemployed. We need to bring our understanding of how to weave medical and social services together to our potential partners in the medical system while positioning ourselves to negotiate a portion of the shared savings that the outcomes we generate achieve.

The current cost-based contract system and FFS reimbursement is not working. Behavioral health providers are failing under the weight of rates that don’t cover costs. Behavioral healthcare spending is a small and shrinking piece of the healthcare pie, and while the people we serve are accessing some of the most expensive services, the vast lion’s share of the money spent on them is spent outside of our programs. And important pieces of the services that community behavioral health providers frequently provide are not compensated at all under current reimbursement structures. Providers routinely provide services for which they know they will not be paid, but do it anyway because it is what the people they serve need. As a result, a large portion of the behavioral health sector’s long-term financial sustainability is currently at risk.

How well things work out for our agencies and the people we serve will, in no small part, depend on how well we meet the critical challenge of defining value as not just a reduction in clinical symptoms and diminished costs. Value must be defined as recovery. The metrics must include improvements in the social determinants of health and quality of life such as housing stability, employment, education, community inclusion and connectivity. This is the value that behavioral health providers have been providing for decades and for which they should be compensated appropriately. The performance metrics to which managed care organizations and accountable care entities will be held will be determined in a contested, complex, political and bureaucratic process. It is absolutely essential that those metrics capture the value that community behavioral health agencies add; otherwise, there will be no way for our community to get our share.

Providers also have a lot of work to do internally. VBP requires that the Board, the agency’s leadership and the staff are all aligned in understanding and rising to the strategic challenges created by the transition. New program models and care pathways will be required, as will new relationships with a wide range of other providers both within and outside the behavioral health sector. In addition, providers will need to implement data capture, analysis, sharing and reporting systems that combine clinical, programmatic and administrative data. Providers will need to update and strengthen financial reporting and analytic systems to better understand and manage the total costs of care and costs per unit of value.

And it’s clear that VBP advantages a certain type of provider. Larger, more sophisticated providers with deep benches and strong, strategic leadership will do better in an environment in which every contract is contested and every relationship is complicated. In addition, VBP requires a robust infrastructure, especially with respect to health information, so a program portfolio large enough to support a significant infrastructure will be essential. VBP also incents risk, so providers who are willing and prepared to enter into contracts with risk elements will have the opportunity to partake in a greater proportion of potential shared savings.

VBP is coming. In some pockets of the system where providers and payers are on the leading edge, it is already here. It will have a profound impact on the community behavioral health sector. As a community, we need to come together to advocate to ensure that metrics are embedded in VBP structures that matter to the people we serve and that measure the impact of the work our sector does. Individual providers also need to start by assessing their own organizational readiness, perhaps by using HMA’s VBP readiness tool, engaging their Boards in conversations about the environmental changes and the organization’s risk tolerance, and developing strategic plans that prepare for these new payment models.

HMA is a national Medicaid consulting firm with a significant behavioral health practice in the New York tri-state region. HMA’s Accountable Care Institute is dedicated to helping providers transition to new payment and practice models.

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