Optum helps independent primary care physicians participate in value-based care

“A stitch in time saves nine” is the adage that reflects the value of primary care physicians (PCPs). PCPs typically ensure people stay healthy and get the correct treatment when sick. The number of PCPs has declined in the US as a share of total physicians (see Exhibit 1), diluting that concept and leading to increased cost of care, reduced access to care, and poor health outcomes for health consumers.

Independent PCPs, including owner practitioners and family practices, have become particularly vulnerable. They cannot compete with larger facilities and participate effectively in value-based contracts (VBC) as pressure to move away from fee-for-service contracts increases and PCPs lose influence over care decisions.

Value-based contracts reward providers for various outcomes, from reducing costs to improving health outcomes, for example, vs. fee-for-service contracts that pay for the volume of service. As such, independent PCPs struggle to address VBC contracts because they lack scale, sufficient technologies, and the right clinical expertise. These trends are driving many out of their vocations, leaving up to 100 million people in the US without a PCP.

Optum launched the Optum Provider Value Network solution in April 2023 to alleviate independent PCP practices’ challenges and set them up to effectively participate in VBCs.

Exhibit 1: Given relatively lower income, high student debt, and lower hospital privileges, it is unlikely the PCP percentage of total physicians will increase any time soon

Source: American Medical Association, Kaiser Family Foundation, HFS Research, 2024

Optum Provider Value Network is a force multiplier

A typical independent PCP practice includes an office manager responsible for tasks like claims submission and follow-up and managing supplies and appointments, a nurse practitioner, and one or two PCPs. This setup does not have sufficient infrastructure, scale, or capacity to effectively participate in VBCs.

The Optum Provider Value Network seeks to address key barriers to PCPs’ participation and success in VBCs. The solution wraps around a PCP practice to alleviate its burdens, and it includes these modules:

1. Practice Extend brings a dedicated, interdisciplinary care team that includes pharmacists, nurses, and care coordinators to drive outcomes.
2. Value Impact Modeler aligns technology and near real-time analytics to help identify and prioritize the next action, enabling the practice to have a line of sight into its VBC performance.
3. Performance Incentives create and facilitate a path to value-based care arrangements, allowing the practice to gradually move up the risk continuum.

The long tail of value-based contracting needs a big push

The catalyst for the resurgence of primary care in the US was the pandemic-driven increase in telehealth adoption. The resurgence created an exciting new class of digital-health-enabled primary care models that are mostly subscription-based, multi-modal, and often include a formulary as part of the service. Yet, there are still around 100,000 independent PCPs that continue to address the needs of their patients despite scale challenges, infrastructure limitations, and reimbursement reductions.

The Centers for Medicare and Medicaid Services (CMS) continues to drive broader adoption of VBCs, and health plans are at the tip of that effort. While health plans have made a lot of progress, there is a long tail of providers where attribution and participation continue to lag. Industry math suggests that only a third of commercial members will translate into attribution to a VBC program. Increasing patient attribution requires independent PCP practices to aggregate their patients. That is exactly what Optum Provider Value Network is designed to do: augment small practices and enable them to participate in VBC programs.

A key to increased PCP participation is incentives. PCPs with access to limited capital are not keen on making capital investments to see returns in 18 to 24 months. Optum leverages its technology assets and services portfolio to extend PCPs’ reach and ensure they are paid incentives for completing qualifying program activities reimbursed on a monthly cycle or, if qualified, an annual cycle.

In its first few months, Optum Value Provider Value Network has already helped reduce medical and prescription costs by approximately 10%, specialist visits by approximately 16% per member per month (PMPM), and ER spending by approximately 5%.

The Bottom Line: Independent PCPs are core to America’s healthcare and community well-being; solutions to help increase their numbers and support them are a national health priority.

The market is flooded with point solutions for care management, revenue cycle (RCM), social determinants of health (SDoH) analytics, and more. While they are all useful tools, they cause noise and friction at independent PCP practices, given their resource and capacity constraints. A more holistic approach program that does not add to to-do lists but instead alleviates burdens will allow independent PCPs to participate effectively in value-based contracts and address the triple aim of care—reducing costs, enhancing experiences, and improving health outcomes.