How Preventing These Missteps Can Position Health Systems for Success
An Honest Perspective from Scott Sears, MD, MBA, Chief Physician Executive, Honest Health
Part 4 of 4 articles guiding readers through the complexities of the transition to value-based care.
In the first three installments of his four-part series, Dr. Scott Sears shared how health systems can assess their VBC readiness, strategies executives can implement to empower teams, and the critical role of technology and actionable data. Now in his conclusion, he provides a cautionary guide to the most common mistakes organizations make and shares practical advice on avoiding pitfalls, overcoming obstacles, and achieving success.
In 2023, 13 million Medicare beneficiaries were enrolled in accountable care organizations or value-based care arrangements1. That number continues to grow, particularly as the Centers for Medicare and Medicaid Services aims to have 100% of Traditional Medicare beneficiaries enrolled in an accountable care relationship by 2030. This accelerating shift to value-based care represents a significant transformative era in healthcare, with much at stake — and much to gain — for health systems, providers, patients, and communities alike.
However, organizations new to this model often underestimate the complexities of implementation or the time required to see tangible rewards. Many face financial strain and operational hurdles before fully grasping the magnitude of the transition.
By recognizing and addressing common pitfalls, health systems can navigate a smoother, more effective path to value-based care.
Here are six frequent missteps organizations encounter during their value-based care journey — and actionable strategies to avoid them.
1. Underestimating the cultural and behavioral shift
Transitioning to value-based care doesn’t simply involve adopting a new payment model; it requires a fundamental shift in mindset and organizational culture. Many health systems underestimate the depth of the cultural and behavioral changes necessary to succeed. This oversight can lead to resistance from providers, misaligned priorities, and missed opportunities to achieve desired outcomes.
Organizations that excel in value-based care prioritize aligning their teams around patient outcomes and take deliberate steps to redefine how success is measured. This often includes shifting the focus from individual productivity metrics, such as the number of patient encounters, to broader measures like patient satisfaction, quality of care, and long-term health outcomes.
To drive this transformation, leaders must actively engage their teams by clearly communicating the “why” behind the shift to value-based care and creating a shared vision for success. Strategies such as those outlined in Empowering Change: Strategies to Drive Behavioral Shifts in Value-Based Care provide a roadmap for fostering these critical changes.
2. Failing to appropriately engage stakeholders
Achieving success in value-based care requires collective efforts from every level of a health system — from executives and administrators to physicians, providers, and care teams. Failing to engage these stakeholders early and effectively can jeopardize an organization’s success. Leaders must be explicit in their communications and emphasize the value of the team and the model’s benefits; resistance to change often stems from a lack of understanding or clear direction.
Leaders play a critical role in fostering engagement by clearly communicating the vision for value-based care and highlighting how it benefits both the team and their patients. Transparent and consistent messaging helps build trust and ensure that all stakeholders feel invested in the process. Successful organizations go a step further by developing a comprehensive playbook that defines expectations, strategies, and measurable outcomes for the transition.
To maintain momentum and accountability, organizations should use tools like comparative scorecards that provide actionable insights into performance. These scorecards, combined with the strategic use of technology and data, help physicians and care teams identify opportunities for improvement and celebrate successes. By actively involving stakeholders, fostering collaboration, and providing the right resources, health systems can overcome resistance and create a unified approach to value-based care.
3. Making costly financial missteps
Transitioning to value-based care requires a delicate balance between embracing new payment models and safeguarding financial stability. Many organizations stumble because they underestimate the financial complexities of these arrangements. Entering poorly negotiated contracts or overlooking the delayed returns inherent in value-based care can lead to financial strain, even when physicians deliver exceptional results.
To prevent these pitfalls, organizations should prioritize creating a detailed financial strategy that accounts for the realities of value-based care. As discussed in Leading Change: Confronting the Challenges of Value-Based Care, this includes anticipating longer timelines for return on investment, aligning contracts with measurable performance goals, and ensuring financial safeguards are in place to weather the transition.
Partnering with an experienced enablement organization is another critical step. Skilled partners bring expertise in negotiating contracts that safeguard revenue streams while aligning incentives for long-term success. They also provide insights into navigating risk-sharing agreements, understanding cost structures, and optimizing payment models. By integrating these strategies into their financial planning, health systems can position themselves for sustainable growth and profitability in value-based care.
4. Choosing inadequate technology
Technology plays a critical role in value-based care, but the wrong choices can derail even the most well-planned transition. Solutions that provide inaccurate or incomplete data to physicians, rather than real-time, actionable information, can hinder your organization’s efforts and erode trust among physicians.
Organizations can avoid this by:
- Selecting and investing in the right technology as early as possible in your transition.
- Embracing a flexible mindset and willingness to adapt to evolving needs.
- Establishing feedback loops to gather input from end users and make ongoing adjustments.
By making informed, strategic technology decisions, health systems can build a strong foundation for success in value-based care.
5. Overestimating your capabilities to navigate the transition alone
Success in a fee-for-service model does not always translate seamlessly to value-based care. Many organizations mistakenly assume their existing strategies and resources will be sufficient, only to find themselves unprepared for the complexities and risks involved. This overconfidence can hinder their ability to adapt and thrive in a value-based environment.
Assessing your organization’s realistic capabilities and seeking a trusted enablement partner whose goals and success are aligned with yours can bolster your success.
To navigate this transition successfully, organizations must conduct a realistic assessment of their internal capabilities, identifying gaps that could impact their progress. Partnering with an experienced enablement organization that shares your goals and values can provide the expertise, resources, and guidance needed to overcome challenges and build a sustainable path forward. A collaboration focused on your organization’s unique needs lays the foundation for long-term success in value-based care.
6. Choosing the wrong partner
Entering into an agreement with the wrong enablement partner may be just as damaging as navigating the transition independently. Inexperienced partners may offer attractive shared savings agreements but lack the expertise to deliver sustainable results. An organization new to value-based care may be drawn to enticing offers without fully realizing the financial implications or challenges of working with an inexperienced partner, which can include:
- Experiencing “first-time mistakes” together, compounding risks
- Incurring higher-than-expected costs
- Prolonged transition timelines, delaying outcomes and rewards
- Frequent and disruptive technology vendor changes
- Breakdown of contracting agreements, leading to setbacks
The stakes in value-based care have never been higher, making the choice of a trusted enablement partner like Honest Health critical to your success.
Avoiding these six critical missteps and planning your transition thoughtfully positions your organization for long-term success. The result? Better care for your patients, enhanced financial performance, and a resilient foundation for the evolving healthcare landscape.
This article is the fourth and final installment of Dr. Sears’ series that guides readers through the complexities of the transition to value-based care. Find all of his articles, along with insights from other experienced Honest Health leaders, here.
[1] “CMS Announces Increase in 2023 in Organizations and Beneficiaries Benefiting from Coordinated Care in Accountable Care Relationship.” Centers for Medicare and Medicaid Services. https://www.cms.gov/newsroom/press-releases/cms-announces-increase-2023-organizations-and-beneficiaries-benefiting-coordinated-care-accountable. Accessed 19 Nov. 2024.