For years, the healthcare ecosystem has been steadily moving toward a value-based system, an evolution expedited by recent regulations written by the Centers for Medicare and Medicaid Services and passed by Congress, ensuring that value-based care is here to stay—and no one wants to be the last to successfully adopt this model.

Successfully enabling value-based care is reliant on physician and payer buy-in, the acceptance of a new financial incentive system along with attitude and behavior changes across the board, but also will also rely in large part on technology. Requirements of the Merit-based Incentive Payment System (MIPS), for example, will force organizations to have proper technology in place to track quality and advance care information requirements, which will determine reimbursement amounts.

And beyond payment reform, technology offers the opportunity to provide better care, identifying opportunities for preventative care and better management of patients proactively, even among those with one or more chronic conditions, before they incur costly medical costs.

The Medicare Access and CHIP Reauthorization Act (MACRA), issued by CMS in 2015 and confirmed into law with overwhelming bipartisan support, presented a radical shift for health plans. By the end of this year, CMS expects 50 percent of Medicare payments will be tied to quality or value through alternative payment models.

But this method of contracting continues to cause significant challenges to the way insurers historically pay claims, ones that could cause headaches for providers and patients alike for years to come—especially in the current environment of legislative uncertainty. And while MACRA only applies to the Medicare population, it is a preview for what is to come across the board, and payers aren’t fully ready.

According to a 2015 Healthcare Financial Management Association executive survey, only 12 percent of senior health system executives reported that their commercial payments incorporated any value-based mechanisms. While respondents expected that percentage to increase dramatically—and according to multiple reports, it has already—40 percent of respondents to the HFMA survey didn’t believe their organizations would have the necessary IT capabilities to succeed in risk-based value arrangements.

It’s clear that payers need to deliver the proper resources for providers to thrive in value-based arrangements. Moreover, they must aim to integrate, scale and increase flexibility within their tech roadmaps to enable these reimbursement models across Medicare and commercial plans in an organized way that does not disrupt care—or alarm or confuse patients or providers.

Health insurance, just like care, is no longer one-size-fits-all; plans must be able to adapt—and do so quickly and efficiently—to offer value-based, personalized arrangements and technology, and make this a reality.

The sicker the population, the more expensive the care. Chronic illnesses now affect more than half of all Americans, and one in four has at least two chronic conditions, with comorbidities increasing with age. The costs associated with treating these chronic conditions historically has represented as much as 86 percent of the entire healthcare spend in the U.S. To lower these costs across the board, and provide more value to patients, bringing together the data and resources for better care coordination will be necessary for all companies on the healthcare continuum.

Healthcare organizations must start looking beyond a patient’s “chart” and better understand the parts of their life outside of the hospital or doctor’s office. Social determinants of health, such as access to healthy food, ZIP code of residence, employment status, educational background and access to transportation, often play a larger role in health outcomes than medical treatment. It isn’t currently difficult to determine whether a patient isn’t taking medications, but social factors often explain the reasons why.

Identifying patients who are most at risk of slipping through the cracks for socioeconomic reasons will be vital in preventing unnecessary spend, and technology is key to enabling this. Technology and digital tools can provide health plans and clinicians with prompts to engage at-risk patients with reminders for screenings or medication refills and information on resources in their communities.

That said, health plans, which typically have a wealth of patient claims data, also often have the most comprehensive picture of a patient’s health and socioeconomic situation. Sharing this data with providers, and creating interoperable technology, will enable better coordination across the system, and provide clinicians the opportunity to engage in valuable preventive care to lower costs and decrease the frequency of expensive patient episodes, particularly those involving chronic conditions. And when this collaboration is extended to community resources, the results can be ground breaking.

One example of successful coordination across payers, providers, and community organizations to identify social risk factors is the Eastern Virginia Care Transitions Partnership, which reduced baseline readmission rates from 23.4 percent to 9.1 percent while lowering costs for Medicare beneficiaries with chronic conditions. Using a combination of technology, data provided by the area health plans and feet on the street to identify and reach those at risk, the partnership employed highly trained “coaches” who made approximately 26,000 in-home visits, and addressed factors such as housing needs, transportation issues, and behavioral health screenings. And this is just the beginning. Telehealth and virtual doctor’s visits are helping to reach remote and underserved communities, reduce unnecessary emergency room visits, and provide better value for patients while requiring fewer provider resources.

As value-based care continues to take hold, there are steps payers can, and should, be taking to prepare for the changes to come. By enabling technology today to improve response to payment reform and better coordinate care, organizations can position themselves for success.

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