Data-Driven Provider Networks: A Game-Changer for ACOs

For Accountable Care Organizations(ACOs), success extends beyond simply delivering quality care - it hinges on the effective coordination of care within a high-value provider network. When patients stay in-network, ACOs can better oversee care pathways, manage costs, achieve shared savings, and improve patient outcomes.

The right network supports seamless care coordination and maximizes financial efficiency by reducing unnecessary overutilization. For ACOs aiming to thrive in a value-based care environment, leveraging data to strengthen and refine their provider network is a crucial driver of long-term success.

Managing a High-Quality Provider Network

Keeping patients in-network, however, poses several key challenges for ACOs.

• ‍Challenge 1: The Right Mix of Specialties & Services One of the biggest hurdles is ensuring the provider network has the right mix of services, specialties, access, and convenient locations to meet the diverse needs of their patient populations. Gaps in specialties, access to certain types of care, or long wait times can lead to patients seeking services outside of a preferred network, driving up costs and disrupting care continuity.  Additionally, due to long-standing referral habits, patients may not always be aware of in-network options or inadvertently be referred to out-of-network providers by primary care physicians (PCPs).

A University of Michigan study found that ACOs with more patients seeing out-of-network primary care physicians had average costs over $43 higher per "leaky" patient.

• ‍Challenge 2: Fragmentation of Care Another challenge is the fragmentation of care, where patients with complex conditions often see multiple providers, increasing the likelihood of out-of-network visits and fragmented care. Inconsistent communication between providers and limited visibility into referral patterns further exacerbates this issue, making it difficult to track and manage patient journeys.

Addressing these challenges requires the strategic and effective use of population health analytics to monitor referral patterns, optimize network coverage, and ensure patients can receive the high-quality care they need within the network. This data-driven approach can help ACOs improve care coordination, control costs, and enhance patient experience.

The Value of Data Analytics in Network Optimization

Data analytics plays a transformative role in enabling ACOs to address the challenges of incenting patients to seek care within their provider network. By leveraging population health analytics, ACOs can gain a comprehensive understanding of their network's performance - from identifying gaps in care coverage to pinpointing referral patterns driving out-of-network visits. This data-driven approach empowers ACOs to make informed decisions about reshaping or expanding their network. With the ability to track cost trends and quality by service line, ACOs can detect inefficiencies or outliers, giving them insight into where services are over- or underutilized. Armed with this intelligence, ACOs can better align provider resources to meet patient needs and ensure the right mix of services and specialists is available.

The impact of a well-optimized provider network is profound, especially when it comes to clinical quality and cost containment. When patients receive care within a coordinated network, providers have better visibility into the patient’s entire care journey, leading to improved continuity of care and better health outcomes. This coordination reduces the likelihood of redundant tests, conflicting treatments, and fragmented or low-value care, all of which can drive up costs. Additionally, by minimizing out-of-network referrals, ACOs can retain more revenue within their integrated network, improving financial sustainability, and delivering better outcomes.

Optimizing ACO Performance

The ability of data analytics to uncover critical gaps in a provider network's services or specialties is one of its most valuable aspects. These gaps can unintentionally drive patients to seek care outside the network, leading to higher costs and fragmented care. By analyzing the services and specialties being utilized, ACOs can identify where their network is lacking, ensuring they have the right providers and care settings to meet patient needs. This is particularly important for specialized care areas where limited in-network options result in more out-of-network (OON) referrals. Identifying and addressing these gaps can help keep patients within the network, improving care coordination and financial outcomes.

Data analytics can uncover opportunities to improve care and reduce costs by analyzing spending patterns and identifying outliers. By tracking service-line expenditures, ACOs can pinpoint areas with higher-than-expected costs or underutilized providers/services. These insights can guide network optimization, enabling ACOs to streamline care, eliminate unnecessary spending, and align services with patient needs. This visibility is essential for making informed decisions to reshape the provider network and ensure optimal performance.

An ACO client monitors network performance with tailored scorecards for their in-network facilities. The scorecards monitor their performance on cost, utilization rates, and quality measures, including readmission rates. These scorecards are shared with the facilities to address areas of improvement collaboratively.

Analyzing Referral Patterns for Network Optimization

Tracking PCP patterns is crucial for keeping patients within the provider network and ensuring seamless, coordinated care. By analyzing how and where PCPs refer their patients, ACOs can identify trends that lead to out-of-network (OON) referrals. For instance, if a PCP consistently refers patients to an OON specialist for certain services, it may reveal a gap in available in-network care, a lack of awareness of existing in-network options, or even uncover hidden bias in the PCP’s perception of the quality of in-network providers. For example, a high number of OON referrals to a specific specialty may indicate the PCP’s perception of lower quality or poor outcomes from in-network providers. By closely monitoring these referral patterns, ACOs can get to the root of the OON referral problem, taking targeted actions to redirect referrals back to their provider network, minimizing costs, and enhancing care continuity for patients.

Reducing OON referrals can also be achieved by strengthening the relationships between PCPs and in-network specialists. This can be accomplished in several ways: First, by creating clear, data-driven referral pathways that encourage PCPs to connect patients with appropriate in-network providers. Additionally, providing PCPs with regular reports on their referral habits, can increase awareness of in-network specialists and lead to more informed referral decisions. Finally, ACOs can facilitate easier communication between PCPs and specialists through integrated care coordination tools, ensuring a smoother handoff for patient care within the network.

An ACO client successfully optimized its provider network by leveraging data insights. By analyzing referral reports that tracked where PCPs were sending patients, the ACO identified opportunities to retain more referrals by connecting PCPs with in-network specialists. As a result, the ACO reduced out-of-network referrals, improved care coordination, and saw a 2-3 % increase in in-network activity over 18 months. This data-driven approach helped strengthen provider relationships and ensure patients received the right care within the network.

Datalyst’s Network Optimization tool and referral reporting analytics have helped to drive strategic decisions around reshaping and strengthening our provider network, helping us improve our overall ACO performance. - Health System ACO Executive

Understanding Network Coverage and Population Needs

Tailoring your provider network to the specific needs of your patient population is crucial for ensuring network optimization. Each patient population has unique healthcare demands based on factors like age, chronic conditions, location, and socioeconomic status, so a one-size-fits-all approach may fall short. By analyzing a patient cohort’s health data, ACOs can gain insights into the most common conditions, procedures, and specialties that patients require. This allows them to assess whether their provider network offers adequate coverage in these areas or if there are gaps that could drive patients to seek out-of-network care. A network lacking key specialists or services not only leads to increased out-of-network spending but also disrupts care continuity, ultimately impacting patient outcomes.

Aligning network services with population health goals is a strategic approach to improve both care quality and cost containment. For instance, if data reveals a high prevalence of chronic conditions like diabetes or heart disease within the patient population, the ACO can ensure an adequate supply of available in-network specialists and care coordinators focused on managing these conditions. By proactively addressing the specific health needs of the population, ACOs can deliver more targeted, effective care that helps prevent costly complications and hospitalizations. Additionally, a well-aligned network can reduce duplication of services, avoid unnecessary referrals, and ensure patients receive the most appropriate care at the right time.

A tailored network that meets the population's needs enables ACOs to maximize care coordination, minimize out-of-network utilization, and reduce overall healthcare costs. By providing patients access to comprehensive care within the network, ACOs can deliver more streamlined care management, improved health outcomes, and greater financial sustainability.

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Preparing for Full-Risk Contracts

When transitioning to full-risk contracts, ACOs must build a comprehensive, high-performing provider network. In a full-risk model, ACOs are financially accountable for their entire patient population's total healthcare costs. Any gaps or inefficiencies in network coverage or access could directly impact the organization's bottom line through expensive out-of-network referrals, fragmented care, and potential financial losses. To effectively manage risk and maintain quality under these contracts, ACOs must ensure their network can fully meet patients' primary and specialty care needs.

To prepare for the shift to full-risk value-based care agreements, ACOs should leverage data analytics to thoroughly evaluate and optimize their provider network. This involves assessing individual provider performance, tracking patient referral patterns, and identifying areas prone to OON leakage. By analyzing cost and utilization data across service lines, ACOs can pinpoint operational inefficiencies or underperforming areas within the network and take proactive corrective actions before assuming full-risk responsibilities.

Tip: ACOs can expand partnerships with high-value specialists or invest in additional services to address care gaps. Additionally, network optimization tools can help ACOs measure the financial and clinical impact of their current network, providing a clearer picture of what adjustments are needed to ensure readiness for full-risk payment models.

Continuously testing and refining their networks using data-driven insights enables ACOs to manage full-risk contracts and succeed. This proactive approach improves cost control, care coordination, and patient outcomes - essential elements for thriving in a full-risk, value-based care environment.

The Role of Data Analytics Tools

In the complex modern healthcare landscape, data analytics tools are essential for ACOs looking to optimize their provider networks. Koan Health’s Datalyst offers powerful solutions to help ACOs better comprehend network performance, understand build/buy partner options, and make data-driven decisions. Two key Koan Health tools - Network Optimization and Provider Master - provide ACOs with accurate data and critical insights needed to keep patients in-network, enhance care coordination, and effectively manage costs.

Koan Health Network Optimization

• ‍Providing insights into out-of-network spending: Datalyst’s Network Optimization provides ACOs with valuable insights into their out-of-network spending. By identifying where and why OON activity occurs, ACOs pinpoint underutilized or unavailable services, allowing them to address network adequacy gaps and improve overall ACO performance.

• Analyzing cost and utilization trends: This analytics tool empowers ACOs to identify cost and utilization inefficiencies across service lines, enabling them to optimize resource allocation. These insights pinpoint areas with unexpectedly high costs or utilization patterns suggesting improvement opportunities thus allowing ACOs to make strategic decisions that better align their networks with patient needs.

Koan Health Provider Master‍

• Tracking provider relationships and network status: Datalyst’s Provider Master provides ACOs with clean, real-time visibility and management into their provider networks. This comprehensive overview allows ACOs to quickly track provider relationships and monitor network status.

• ‍Enabling accurate network data analytics: Datalyst drives the analytics to accurately represent the usage of a client’s provider network at any given time. As changes are made, the dynamic provider roster can show the impact of those changes over time.

Together, these tools empower ACOs to take a data-driven approach to network optimization, ultimately improving patient care, reducing costs, and supporting success in value-based care environments.

To successfully manage a population, ACOs must build and sustain robust, data-driven provider networks. By harnessing data analytics, ACOs can uncover crucial insights to assess network performance, pinpoint care gaps, and curb out-of-network expenditures. Transparent, reliable data empowers ACOs to better tailor their services to patient needs and strategically optimize their networks, leading to enhanced clinical outcomes and cost efficiencies.

To navigate the challenges of full-risk contracts and population health management, ACOs must maintain a well-designed, comprehensive provider network. Data analytics equips ACOs with the insights to make informed decisions about network structure and provider partnerships. By keeping patients within the network and delivering coordinated high-quality care, ACOs can drive improved outcomes for patients and their financial performance.

Contact us to explore data-driven strategies to strengthen and refine your provider network

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