The road to value-based care (VBC) contracting in the behavioral health sector is slow moving.
In order for VBC to evolve in the behavioral health sector, both payers and providers need a seat at the table. Operators provide clinical expertise and troves of data about the patient experience. And these assets could put providers in the driver’s seat when it comes to the future of VBC in behavioral health, industry stakeholders told Behavioral Health Business.
“Health plans, traditionally, have seen enough data in a member-centric view to have a sense of spend and utilization patterns,” Samir Malik, co-founder and CEO of serious mental illness patient-engagement company firsthand, told BHB.
firsthand is a New York-based startup founded in 2021. It uses peer support networks to engage patients with serious mental illness.
“That’s part of the equation,” Malik continued. “But the other part of the equation is what is clinically appropriate for the patient or the member at a given point in time. I think that’s where providers can be able to define and articulate what types of risk structures make sense for a given condition, a given population and a given problem.”
Behavioral health is complicated
Historically, behavioral health has lagged behind other sectors of health care when it comes to VBC.
“I will say value-based care has moved, … just not in the behavioral health space,” Maks Danilin, senior vice president of growth at addiction treatment provider Aware Recovery Care, told BHB.
North Haven, Connecticut-based Aware Recovery Care offers in-home substance-use disorder treatment programs in nine states.
Primary care is one of the leaders in the VBC conversation – and large insurers have taken note. For example, in 2020, 67,800 primary care providers had value-based care relationships with Humana.
Yet the complexity of the behavioral health sub-sector and its connection to overall health can make the value proposition difficult to parse out. For instance, individuals with serious mental illness are more likely to have physical health comorbidities than those without the condition.
Insurance carve-outs, when a payer separates a specific service such as behavioral health from its plan, can further complicate this.
“The other thing that makes behavioral health risk models tricky is the carve-out,” Malik said. “A lot of the upside for effective behavioral health intervention is on the medical side of things. And unless you can work with plans that can integrate behavioral medical dollars, or you can contract simultaneously with the carve-out and the overarching medical plan, it gets very hard to justify investments.”
Malik puts the cost of serious mental illness at about 80% in medical expenses and 20% in behavioral health expenses.
Danilin echoed those sentiments, while noting that the medical costs and behavioral health costs often coincide.
“You look at some payers where there’s carve out just in the behavioral health of their members, and so they may see the cost of a member as X,” Danilin said. “But if you look at the total cost, including medical costs, it could be substantially higher.”
Despite the carve-out challenges, working with primary care, telehealth and home-based providers could be a path forward in the future, according to Danilin.
What payers want, what providers need
But with all of these complications and potential integrations, providers are well positioned to help payers figure out how to set up a VBC proposition in behavioral health. A VBC contract needs to have both payer and provider buy-in.
“I think we have to think about what’s important to the payers. One is showing that the patients actually get better,” Dr. Ravi Shah, chief medical officer at Geode Health, told BHB. “So that could be things … like showing PHQ-9 or GAD-7 scores are [improving].”
Geode Health was founded in 2021 by global investment firm KKR. The Chicago-based startup provides in-person and virtual outpatient treatment across the country.
Historically, there has been little consensus on what metrics need to be measured to make VBC work. Key outcomes in behavioral health aren’t necessarily one size-fits-all. For example, if a provider isn’t treating depression, the depression PHQ-9 scale wouldn’t be a useful tool, said Danilin.
There are some factors that impact treatment on a broader scale, such as engagement.
“I think engagement is easily measured from both sides and can show efficacy of whatever treatment they’re doing, whether it be CBT or DBT,” Danilin said.
Keeping patients out of the emergency room is a top priority for payers. Providers that have the ability to elevate care for patients without sending them to the hospital are in a good position for VBC, Shah said.
“One piece every payer cares about is how do we keep patients out of the hospital and out of the ER,” Shah said. “One is by offering higher-level intensity treatments, things like spravato, ketamine, TMS, which are FDA approved.”
Providers can also do this through having various outpatient services that include a full spectrum of care, though Shah recognized this could be difficult for small practices.
Still, all providers can have science-backed safety plans in place that could help reduce suicidal behavioral, self injury and ER visits, according to Shah.
The data divide
The ability to collect and share data is key to a VBC relationship.
“I think this is one of the things that platforms like Geode and others can bring to the table,” Shah said. “We’ve got enough scale to actually count things properly and share it [with] the payers. If you’re a tiny practitioner, it’s just difficult to even collect the data and also make meaning out of the data because it may be skewed by just a couple of patients.”
In order to truly have an open dialogue between the payer and provider about VBC, there needs to be data sharing. Traditionally, both payers and providers have kept data close to the vest.
There are few clean sharing agreements between the provider and the payer, Danilin said. Getting unscrubbed datasets from payers requires a very long-term relationship.
“The challenge is, the payer has no way of verifying us,” Danilin said. “So I could say, ‘If you spend nine months at Aware Recovery Care, your depression scale is going to decrease by X, and this is the study that proves it.’ Aetna and Optum can’t actually measure that. The only thing they could see is, was there an increase or a decrease in utilization of their insurance. So I do think that’s one of the challenges.”
Verification isn’t just an issue on the provider’s side. There is also somewhat of a black box on the payer’s end.
“The flip side of it is any of these larger names can come and say, ‘Hey, Maks, if you save us money, we’ll give you a bonus at the end of the year.’ A pay-for-performance-type model, which is great, but how am I going to measure how much I’m going to need?” Danilin said. “So we’re measuring two very specific things that we’re good at measuring, but we can’t verify the other person’s results.”
This lack of data sharing can create distrust between the partners, but transparency could be key for the future.
“What it comes down to saying is, ‘I really believe in my work, I’m going to be transparent and let you see what my work is, what my outcomes are,” Danilin said. “I expect you to do the same in order to help the member or my client.’”
A VBC template
VBC in behavioral health is a tough nut to crack. However, as more companies enter into value arrangements with payers, there could be a template going forward.
“We just hope … [payers] hear that there’s providers out there that have a successful model and they would like to share their experience with another potentially undisclosed payer,” Danilin said. “And say, ‘Hey, look, this model has worked really well. Take a look at our outcomes. Take a look at the model and what the implementation was. I’m giving you not only the model and the incentives. I’m going to show you how to stand this up so we can start sooner, and then you can replicate.’”
There is an emerging group of behavioral health companies that have value-based contracts. This list includes digital addiction care provider Quit Genius and Eleanor Health.
There are also a number of models for value-based care including bundled payments, structured case rates, payment for coordination, pay for performance and others.
“The provider community has not only the ideas of what would make a successful value-based relationship with the payer and the provider,” Danilin said. “But also has models that they would use to actually stand this up.”
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