Top 6 Challenges in the Transition to Value-Based Care

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Aug 09, 2016

One of the most important goals of value-based care (VBC) is making care more patient-centered—and more affordable. This is a tall order, and with the increased payer emphasis on data-based performance metrics as the foundation of payments, many organizations are struggling with the transition.


Focusing your organization on consolidation, convergence and connectivity will help you align your goals with the aim of the healthcare industry at large. Accomplishing that requires understanding and overcoming some key challenges along the path to effective value-based care:

1. Effective data sharing and usage: As organizations pile up more data than ever before, many are left struggling with how to extract value from all of the information. Gartner predicted that through 2017, 60 percent of big data projects will fail to go beyond piloting and experimentation and will be abandoned. Compounding this issue is a growing resource shortage: a recent McKinsey study projects that by 2018, the U.S. alone may face a 50 to 60 percent gap between supply and the requisite demand of deep analytic talent. Finding a more intelligent interoperability solution is key to overcoming the talent shortage to extract maximum value out of collected data.

2. Poorly structured data: While nearly two billion new medical notes are being produced annually, the vast majority of that data is unstructured and prone to errors. ICD-10 codes assigned to cases at the point of care have error rates of 20 to 50 percent before counting data entry and management errors. The present lack of effective technology and skilled staff are not equipped to handle this. James Haight at Blue Hill Research found that approximately two hours wasted per day on inefficient data preparation equates to roughly $22,000 per year, per analyst. Organizations must choose an optimal population health management (PHM) program that uses enterprise data warehouses (EDWs) that aggregate data and puts the right information into the right hands at the right time.

3. Cultural barriers: According to the Journal of the American Medical Informatics Association article, “Managing Change,” the major challenges to system success are often more behavioral than technical. Multidisciplinary teams have the power to drive adoption by garnering broad support for standardization and integrating necessary changes into the workflow. CMS’ new reimbursement systems will lead to more audits and focus on performance metrics. Such changes must start with leadership culture to attain collective goals at a financial and clinical level.

4. Cost control: Bundled payments are expected to play a larger role in healthcare, but many providers have been reluctant to embrace them because of concerns about their ability to manage significant financial risk. Present fee-for-service models won’t be sustainable under new regulations. In the face of changing reimbursement structures, providers will need a better analytics infrastructure.

5. Patient engagement: A recent survey by CDW reveals that 65 percent of patients say they face challenges when trying to engage with their healthcare providers. Patients between the ages of 18 and 49 are 19 percent more likely to say they face challenges when trying to engage with their healthcare providers than those above age 50. Health reform has been increasingly focused on fixing this problem, though there is limited research on whether increasing levels of engagement contribute to better outcomes. Providers can look to strategic initiatives like patient portals, mobile devices and electronic health records to help facilitate better patient engagement, education and empowerment.

6. Effective integration: More than 75 percent of providers participate in at least one value-based payment model today, and 60 percent see them as the dominant model going forward. Many providers, however, are struggling to integrate VBC practices into their workflow and daily operations. Most providers identified the lack of timely data and information sharing as a significant barrier to success. The ability for providers to understand the risk and optimize value-based payment models in their practices would need technology and data integration.


These diverse challenges may seem daunting, but the value of implementing them far outweighs the cost of inaction. Effectively harnessing the power of your data, engaging stakeholders at all levels, and integrating VBC practices into your daily workflow are foundations toward the transition to value-based care and population health management.

About the author

Mason Beard

Mason Beard, 
Chief Solutions Officer, Philips PHM

Mason Beard is Chief Solutions Officer for Philips PHM. He leads the strategic and operational development and programs of the Philips Population Health Management group. He is the co-founder of Philips Wellcentive and has deep experience in developing flagship healthcare IT innovations.

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