Value-based care in behavioral health involves measuring an organization’s impact on a patient’s health.

How impact is defined and translated into value varies depending on several factors. At the broadest level, the various levels of care acuity require different approaches. They may also have advantages and disadvantages when it comes to value-based care in the first place. A lot of it comes down to attribution.

“Attribution is easy to do when you’re attributing to a particular high-cost episode — an ER visit, an inpatient visit,” Hui Cheng, vice president at the venture capital firm Town Hall Ventures, said during a panel discussion at Behavioral Health Business event VALUE. “You can then say, because I have avoided this particular high cost episode, I’ve saved you X amount, and I want to be rewarded for that.”

This includes care for people with untreated serious mental illness or with substance use disorders (SUD). Care needs, preventable care and improved health are more easily illustrated with data and outcomes, especially with reductions in care recidivism.

Hui added that lower levels of care, where individual episodes of care are not as expensive but necessary to reduce higher levels of care, don’t have this advantage. It’s not always clear what care would have been avoided.

“Where our companies have succeeded is — if you are doing things that result in value and the one-to-one connection is not clear — be maniacal about measuring care along the way,” Hui said.

Payers’ focus on reduced utilization is a natural incentive. So, it’s easier to get on the same page with payers when it comes to questions about reducing high-cost care, Ned Carlson, CEO in residence with the private equity firm Varsity Healthcare Partner, said during the panel. The approach then shifts to tracking care quality. But that comes with challenges as well.

“In some of the lower acuity models, that’s just much harder to track: it’s much harder to gauge the quality of the clinical intervention and the impact it’s having,” Carlson said. “Payers want to see good care. They want to have good clinical outcomes. But they’re also focused on what it costs. “For those higher acuity patient profiles, it’s easier — it’s not easy — to track some of that true dollar impact of the intervention being provided.”

While making the connection between financial value and clinical outcomes can be dicey in lower acuity settings, payers and providers can still find common ground on other measures as the basis for value-based care. These include measures such as the time it takes to get into an appointment, individual patient outcomes, the patient’s consumer experience, post-discharge follow-up practices and the implementation of non-clinical interventions.

Non-clinical interventions or other practices that lend themselves to essential non-health care related services that behavioral health patients require to be successful in care don’t often come with a billable code under the fee-for-service paradigm. This leaves behavioral health providers doing work that does not generate revenue, despite the potential improvements it may make in patient care.

One way to address that challenge is to pay providers more for the health care provided to help cover the added costs through a fee-for-service contract or account for that cost in alternative payment models that incentivize providers to provide those services.

Either way, a premium for taking on additional work is required to make such services sustainable.

“For behavioral health operators to invest in quality providers that are going to be giving that better quality service, the infrastructure to support that and to do the measurements and outcomes tracking and all of that — you need to be able to get reimbursements that are a bit more of a premium than what we’ve seen in the past,” Joshua Baker, senior vice president of strategy and development of Hightop Health, said during the panel.

JLL Partners and SV Health Investors launched Hightop Health in the fall of 2023 with the acquisition of Psych Atlanta, an Atlanta-based mental health practice offering medication management, interventional psychiatry, ketamine, spravato and TMS.

Carlson argues that getting paid more for delivering value shouldn’t get considered a premium. Rather, it’s getting paid what the value-based care is worth and providing care that patients ought to get in the first place. Various types of payers might see it differently, commercial payers, he adds, don’t traditionally have the same exposure to care coordination or connections to wrap-around services that address social determinants of health (SDOH) in the way that some government health plans might.

“I don’t think it’s a question of premium,” Carlson said, “I think it’s a question of determining what value is preferential or advantageous and then making sure that providers are receiving enough reimbursement to invest in creating value.”