Value-Based Contracts with Big Payer: A Guide for Health Innovators

In my second go-to-market guide, I outline how to find product-market fit with traditional payers.

Finding the elusive product-market fit in any business? It matters. It's not obvious what it should look like in healthcare, particularly when you're trying to sell something to major third-party payers. Blue Cross, United, CIGNA, Aetna, and to a degree Humana, follow different rules than you might imagine. Getting to Value-Based contracts in behavioral health has been elusive, much less valuable care. Andreessen Horowitz has a guide. It is well beyond the assertion that “this will obviously save money!”

What follows is an article based on what insiders have told me. This, reportedly, is what they're looking for, across a number of major payers. I would love to see more value-based care with actual value existing in the world!¹

I don't actually think building for the sole purpose of pleasing Big Health is a great idea, but plenty of investors think this is a good plan. It gets companies to scale, after all. I prefer to work with bespoke aligned payers with aligned incentives in keeping with my delicate sensibilities… I’m also not fabulously wealthy from creating a wildly successful health company at scale, so what do I know?

AI prompt: “A psychiatrist attempts to part the red sea” attempt 1.

What follows is a list of capabilities. They are of interest to Big Health payers doing Value Based contracting (in mental health). Now, payers don't expect any program to have all of these things. But the answer is probably not none of them, either.

It is, I hope, helpful to understand the scope of things they're actually interested in. Y’all, dear readers, can compare the scope of what they're interested in with the scope of work done by flashy venture-backed companies—maybe even yours! It’s as if Santa had a really demanding Nice list! It is not AI-generated, but it is in bullet points.

Member Identification and Risk Stratification:

1. Screen high-opportunity populations using virtual, on-demand, healthcare and community settings, and EHR integration.

2. Store screening and clinical and social data in a central repository for risk stratification refinement.

3. Utilize data for risk stratification and identifying rising risk populations to anticipate trends.

4. Alert the care team when a patient shows high potential for program benefits.

Assessment and Triage:

1. Alert the care team when a patient is identified as a high opportunity.

2. Ensure assessment accuracy with a goal of X²%.

3. Achieve correct triage with a target of X%.

4. Reach identified patients with the assessment.

5. Generate an initial treatment plan through the assessment.

6. Integrate automatic scheduling with providers into the assessment/triage function.

7. Encourage assessed patients to participate in recommended treatment (also a care coordination function) with a goal of X% engagement.

8. Share assessment information with subsequent care providers. This could also be a care coordination function.

9. Implement a matching function to connect patients with the most suitable site and providers for successful engagement.

10. Facilitate communication between care team members (goal handoff in 48-72 hours).

AI prompt: “Health Tech companies follow Moses out of the desert after wandering for 40 years in search of a value-based contract pilot.”

Measurement-Based Care Throughout the Continuum:

1. ED - diversion is a goal. Replace with:

   1. Facility-based crisis

   2. Behavioral Health urgent care

   3. Mobile crisis units.

2. Inpatient (includes telehealth and Residential Treatment Centers).

3. Outpatient in-person (meds+therapy, Intensive Outpatient Programs and Partial Hospitalization Programs.)

4. Outpatient telehealth (meds+therapy).

5. Self-care: includes

   1. Psychoeducational.

   2. Digital CBT exercises.

   3. Tracking and alerts are sent to providers and families when problems arise.

6. Value-based contracts

   1. Already have these in place If possible.

7. Community integration - for Mental Health

   1. SUD support

      1. AA/NA.

      2. Religious groups.

      3. Other affinity groups.

      4. Address social determinants of health.

8. ECT/TMS (these 6 characters were all that were in my own notes…thus I sprinkle some heavy-handed Owen additional details thusly):

   1. fMRI Integrations to deploy SAINT

   2. rTMS

   3. H-Coil for:

      1. MDD (Major Depressive Disorder)

      2. OCD (Obsessive Compulsive Disorder)

      3. Smoking Cessation

   4. ECT program.

9. Long-term institutional care

   1. cognitive impairment

   2. TBI (traumatic brain injury)

   3. ID (intellectual disability)

Integration with Physical Health Services (PCPs and specialists)

1. Consider virtual consultation.

2. Virtual collaborative care.

Support For Members:

Care coordination, with measurement throughout, including:

1. Supporting members entering into the care system.

2. Care transition tracking and assistance.

3. Track the execution of treatment plans.

4. Ideal systems proactively engage people who fall out of care.

5. Proactively engages patients and providers who are not demonstrating improvements.

   1. Reevaluation of treatment plans that are performing sub-optimally.

Pharmacy - Key Elements Include:

1. Traditional clinical pharmacy with Pharmacy and Therapeutics guided committee best practices.

2. Long-Acting Injectable medication program (detail added by me, the notes just said LAI):

   1. Psychosis addressed with LAI antipsychotics including:

      1. REMS adherence with Zyprexa Relprevv.

      2. Adverse Effects Monitoring.

      3. First Generation LAI

         1. Haldol Decanoate.

         2. Fluphenazine Decanoate.

      4. Second Generation LAI

         1. risperidone

         2. paliperidone

         3. aripiprazole

   2. Vivitrol (Naltrexone LAI).

   3. Sublocade (Bupernorphine LAI) + REMS.

   4. Other general medical injectables.

3. Clozapine program

   1. REMS compliance.

   2. Appropriate Lab Integration.

4. Oral Medication Adherence Program

5. Clinical Decision Support:

   1. EHR with Measurement-Based Care tools and clinical algorithms.

   2. Need a single system.

   3. Include connecting with Epic + AllScripts

      1. Owen’s Note: Healthcomplier, Osmind, Canvas, Avon Health

6. Analytics that can:

   1. Guide interventions.

   2. Proactive outreach.

   3. Risk stratification.

   4. Provider performance stratification.

   5. Incorporates community data.

   6. Info is available to providers at the point of care.

The above is a rough guide. I'm not saying it's going to get you a contract, even if you have it all. It is what was interesting to Big Health when I asked. Keep building, friends. We all need it.

1. A note of caution: what people say they're looking for (when they work at a major healthcare company) and what they're actually allowed to sign a contract for? These can be different things. In many of my colleagues’ companies, and businesses I've run, I've run into serious trouble. The trouble comes when we've had a strong pilot lined up with a Big Health Co, and there's a leadership change. The best predictor of a pilot turning into a contract and subsequently, a major program is the stability of leadership in the company.

2. The ranges on these percentages from various parties were in the 70-85% range, not excessive expectations, honestly.