Health Plans, value-based care

Analysis

Journey to value-based care

Insights and implications from Deloitte’s 2015 health plans executive interviews

The shift from volume-to value-based care (VBC) is gaining traction through the US health care industry, challenging health plans to change their traditional, payer-focused role in the ecosystem. To better understand VBC’s growth and its implications for health plans, Deloitte interviewed senior executives at more than a dozen regional plans in late 2014 and early 2015, all of whom are leading players in their respective markets.

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About the Deloitte health plans value-based care interviews

To determine health plans’ views on value-based care (VBC), Deloitte interviewed 15 regional health plans C-suite and senior executives in fall 2014 and winter 2015. Interviews were conducted both face-to-face and by telephone, and all subjects were assured of full confidentiality and the de-identification of responses. The majority of the participating organizations were large, regional health plans. Interviews focused on health plans’ VBC strategies, market conditions, and driving forces. Questions were developed based on insights Deloitte has gained while leading provider and payer-focused VBC engagements across the country.

These questions included VBC-related aspects of the following areas:

  • Market outlook
  • Payment types
  • Challenges/barriers
  • Scale and adoption
  • Required capabilities
  • Capital investments
  • Provider integration
  • Consumer engagement

Responses were catalogued and aggregated to distill trends and insights, which are summarized in this paper.

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Observations and opinions

These dynamic conversations yielded fascinating observations and opinions about VBC’s potential impact on health plans’ future: Given the strong marketplace momentum in the market, interviewed executives believe that enabling VBC will be fundamental to sustainable growth in the future as insurance margins and discount differentials continue diminish. They expect the transition to value to expand, despite concerns about providers’ slow adoption of downside risk and their underestimation of the investment needed to effectively manage risk.

Interviewees highlight a number of factors that may be crucial to the industry’s successful transition to VBC. These include:

  • Increased provider collaboration
  • Enhanced consumer engagement
  • New approaches to care management
  • Level of investments in infrastructure
  • Emergence of disruptive business models

Further, executives posit that, though the ride may be bumpy, in three to five years, VBC will likely produce a more equitable health care market built upon aligned incentives, transparency, and consumer and provider engagement. In the meantime, health plans should use this transition period to select the right high-value providers, invest in capabilities, and enterprise-level business model changes that can help position them favorably in the evolving landscape.

This paper shares insights from the executive interviews and offers perspective on the implications of VBC for health plans and other health care stakeholders along the journey from volume to value.

To learn more, download the paper to read insights and implications from Deloitte’s 2015 health plans executive interview.

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