Legacy nonprofit behavioral health provider Sheppard Pratt is a veteran of value-based care contracting.
The Baltimore-based organization, which offers everything from inpatient services to special education schools, got into value-based care contracting roughly 25 years ago when the state of Maryland approached the provider. The state acknowledged that it struggled to care for a specific population of patients with behavioral health conditions, who were in and out of state hospitals and prisons, and living with multiple medical conditions.
“The state came to us and said, ‘Look, how can we do something a little different here? What if we pay you to figure it out?’” Jeff Richardson, COO and vice president of Community Services at Sheppard Pratt Health Systems, said at Behavioral Health Business’ VALUE event. “It has essentially evolved into creating [a program for] these folks who are very high need, high touch. We pay for all of their housing, some of their medical services, all of their medications. We also work to provide any kind of treatment that they [need].”
Founded in 1853, Shepard Pratt offers mental health, substance use disorder, special education and social services. According to its latest annual report, the nonprofit provider employs over 5,000 people and brought in $400.5 million in revenue during its fiscal year 2022.
As part of the arrangement with the state of Maryland, Sheppard Pratt is also at-risk for any inpatient hospitalizations that patients need for up to 30 days. Richardson said this helps motivate the care team to keep these patients engaged and actively involved in their treatment.
The arrangement also gives Sheppard Pratt much more flexibility in caring for and engaging this patient population than the traditional fee-for-service model.
“This program was really based on how we help these folks really be successful in the community,” Richardson said. “So traditional services were probably the last thing on the list that we use. Much of what we do is very creative with very interesting partnerships with providers.”
Richardson noted that in the past, Sheppard Pratt has paid for out-of-the-box benefits like acting classes to help patients stay in the community.
The partnership with the state of Maryland was just the first of Sheppard Pratt’s value-based care arrangements. Since then, the organization has partnered with hospital systems and primary care providers.
Each of these value-based care arrangements has a different financial model. But one of the most popular arrangements is incentive-based payments.
“We do get some incentive payments, particularly around our capitation program,” Richardson said. “We’ve also been working closely right now with a couple of hospital systems to develop some crisis programs that will really help them. The incentive payments they’ve given us have literally been able to help us invest in capital, particularly building out crisis beds and other services to help relieve people who are stuck in EDs and ERs.”
For incentive payments to work, there needs to be data and measurement-based outcomes, and this is particularly important when partnering with primary care and hospital systems.
These partnerships typically prioritize their patients being able to get access to behavioral health services and preventing patients from needing to go to the emergency room.
Some of the most critical data points that Sheppard Pratt uses to prove outcomes to its partners are the PHQ-9 to monitor active symptomology and other patient-reported outcome measures.
In the primary care setting, one of the critical data points in value-based care arrangements is the length of the intervention itself.
“Because really, in a primary care setting, you’re not looking [for someone] to see a therapist for a long time,” Richardson said. “It’s a very short, brief intervention.”
Lastly, readmission rates are a significant data point that Shepard Pratt can use to measure value. In turn, these value-based incentive programs have helped the organization re-invest.
“We’ve invested more in our own infrastructure, our technology, and also some of the outcome work that we’ve done,” Richardson said.
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