Dr Richard Snyder: How Value-Based Agreements Can Benefit All Stakeholders

October 27, 2019

Richard Snyder, MD, executive vice president of Facilitated Health Networks and chief medical officer at Independence Blue Cross, explains how value-based agreements can benefit providers, patients, and payers.

Richard Snyder, MD, executive vice president of Facilitated Health Networks and chief medical officer at Independence Blue Cross, explains how value-based agreements can benefit providers, patients, and payers.

Transcript

How do value-based agreements benefit all stakeholders, including providers, patients, and payers?

If they’re done right, a value-based contract should benefit all 3. So, I’ll give you a couple of examples. First of all, from a patient perspective, we can define the benefits to reward patients with lower out-of-pocket costs if they go to a Blue distinction center or a center of excellence to get their care, and by steering them to such a location, they’re virtually guaranteed to have better clinical outcomes at a lower cost. That is the basis for the Blue Distinction Centers program that the Blue Cross Blue Shield Association has been promulgating in and around things like CAR T and Luxterna and other expensive drugs.

Typically, they reward the payer with lower total cost of care, and often times a warranty in the event the medication does not effectively control the diagnosis, and that obviously is a good thing since a large proportion of the care today is being paid for by employer groups through self-funded arrangements and these very, very costly drugs that are emerging from the pipeline put a significant stress on their PNLs, so from a payer perspective and ultimately our customers, the employer group, it helps to control costs and ensure quality outcomes and reward us with a warranty in the event the outcome is not optimal.

In the case of the provider, a lot of these arrangements do not require the provider to pay out the cost of stocking or storing these medications until a patient is waiting for them. With some of these programs, precertification barriers or limits can be reduced since they’re very unusual circumstances, rare diseases where the medication otherwise wouldn’t be used. So, I think there are plenty of reasons why the member—the patient, the payer—the ultimate customer the employer group or the government, and ultimately the provider delivering the service can benefit from value-based contracts.