3 Takeaways from Cohere’s PT & Value-Based Care White Paper

The fee-for-service model has been the traditional go-to for healthcare reimbursement, however the shift to value-based care models (VBC) has lately been on the rise. Even with this shift though, there are many services for which reimbursement is still stuck in the traditional model. In our latest white paper, Physical Therapy and Value-Based Care: An Opportunity for Innovation, we dive into some of the details of implementing VBC models for physical therapy services. Below are three takeaways from the paper.

Physical therapy is ripe for an innovative VBC model.

Currently there aren’t any major VBC models available for physical therapy, but these services certainly represent an opportunity for implementing one. First, physical therapy has a very high incidence of utilization, which means there’s a large amount of spending in this category. In addition, these services are typically utilized in two different situations: either at the start of a care journey as conservative treatment or at the end of a care journey as rehabilitation after surgery. When compared to other VBC models within specialty care, you typically see two major commonalities: 1) patients experiencing one trigger procedure and clinical services immediately prior or after (usually within 90 days) forming a tight episode, and 2) these episodes tend to be high cost. With these similarities, and knowing that about 41% of healthcare dollars spent in the US already involve alternative payment models, conservative physical therapy treatments fit the mold for innovative VBC models. 

A balance between cost benchmarks and quality standards is necessary for success.

With most innovative VBC approaches, cost benchmarks are typically the primary target, with quality standards as a secondary factor. One of the main differences between the two is the number of metrics used to evaluate each provider. Cost benchmarking often uses only one total cost metric based on either an episode or a time period. Providers whose costs are below the benchmark based on patient mix could share in savings or receive other rewards. 

Quality standards, in contrast, are typically a combination of multiple measurements and metrics. However, identifying them does not come without challenges. With a lack of gold standard quality metrics and complications when considering patient reported outcome measures (PROM), it would not be uncommon for a VBC model to base the quality standard on more than three metrics, or even up to a dozen. When selecting any measures and benchmarks for a VBC model, there needs to be a balance between financial stability for the health plan, understanding risk tolerance and making the metrics achievable so providers will participate. 

A two-staged approach to PT quality standards implementation will lessen provider and patient burden.

When building any VBC model, it’s important to consider additional provider or patient burden that could be involved with further data needs. With this in mind, implementing quality standards in two stages would allow a health plan to take action on a PT VBC arrangement with current data while working towards a more robust data set in phase two. In phase one, health plans could leverage currently available administrative data such as claims that are available at scale, which would help provide insight into patient outcomes vs expectations. Some specific metrics that could be considered in phase one include: 

• Average costs for the same condition within 6 months post physical therapy 
• Patient not needing surgery within 6 months post physical therapy (target conditions only)
• Utilization for the same condition within 3 months post physical therapy 
• Patient seeking care from another provider for the same diagnosis within 6 months 

This approach supports new thinking in VBC innovation while understanding the needs of shorter analytics development and implementation.

In the second phase, quality standards should also include patient outcome (PROM) data, which would include considerations for functional status, pain and quality of life, as reported specifically by the patient. A number of professional associations, including the American Physical Therapy Association (APTA) endorse various outcome assessments to capture this data. The Cohere platform has a number of ways to collect this type of pre-service information and outcomes related data after treatment. Leveraging technology in this way could help lighten any burden felt by providers considering participation in a VBC arrangement.

While VBC hasn’t yet been applied to PT, there’s plenty of opportunity being left on the table. By implementing a new way of thinking about specialty care and VBC, we believe the partnership between health plans and providers will continue to become stronger, leading to better health outcomes in the end.

Learn more about VBC innovation and physical therapy by downloading the complete whitepaper here.