A New Perspective on Value-based Payments

Value-based payments

I attended a conference recently on performance-based management. I was swimming in a sea of BIG ($500M+) corporate providers. In comparison, Laura Baker Services Association is a VERY small fish in this sea. At the core of the conference was how we pay for services and supports – for health care, for care for the elderly or for those with special needs. The wave of the future is value-based payments in a managed care environment.

Defining the Terms: Managed Care and Value-based Payments

“Managed care” means, at least in part, that a managing company (an insurance company, typically) tries to create better outcomes for patients or customers while controlling costs of providing care. They may offer incentives to elect lower-cost care options, and customers may agree to receive care from a limited set of providers.

“Value-based payments” generally means that providers are paid by outcomes rather than on a fee-for-service basis. Thankfully, the tenor of this conference defines value by looking at what happens for the customer AND the value to payers, “the system,” in being cost-effective.

Why Now?

Why is this topic so hot? Because the Affordable Care Act provided insurance to a previously uninsured or under-insured population: folks with mental health and addiction issues. Insurers are looking for defined outcomes and the ability to increase their bottom line by managing costs in this arena. (I can’t tell you how many times I’ve heard the phrase “Follow the Money.”)

Oops. That sounds pretty cynical. Except I just finished listening to someone from a payer talk about how intellectual and developmental disability services, particularly for adults who need lifelong care, don’t show much promise for benefiting from managed care.

I imagine they meant that the ongoing needs of these vulnerable people require investment that can’t be managed as easily as incentivizing use of generic drugs or less-invasive surgeries. But I would argue that, actually, intellectual and developmental disability services are the epitome of managed care. In most cases, we provide integrated care for the people we support: we ensure they have primary medical care, behavioral health care and support for daily living. And we do it at a very efficient rate and in a very cost-effective manner.

Speak Up

We need to be the biggest advocates of ensuring that our services are understood and properly funded. Or our funding will be cut – because despite the efficiencies and cost-effective delivery, it is still seen as expensive and unwieldy. In the eyes of people whose major concern is cost, not the people, our services are unsustainable for the future.

We must continue to remind them that every person deserves dignity and respect. We must continue to explore pathways for the future to ensure that people receive the right amount of support in the right setting for the person.

As Congress and the current administration look to shrink health care costs, and to either block-grant Medicaid or create capitated payment rates where providers are paid a set amount to provide care, it’s important that we stay vigilant, and raise our voices to ensure that essential services for people with disabilities are protected.

Write a Letter

You are a vital part of the solution. Send a message to your Congresspeople today to ensure Medicaid is not gutted. Request support from Minnesota legislators for reimbursement increases. The time to act is now.

Write a Letter


About the Author

Sandi Gerdes

Sandi Gerdes, executive director of Laura Baker Services Association, has a 30-year history of leadership in the disabilities community. A longtime advocate for choice, Sandi has developed numerous innovative service programs tailored to the unique needs of the individuals the organization serves.


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