Anthem's Chris Day Shares Keys to Plan's Value-Based Strategy

"Supporting providers versus just providing them with data is how value-based design has evolved," says Anthem's Chris Day.

When asked about Anthem's five-year strategy to evolve value-based design (VBD), Anthem's Chris Day doesn't hesitate. "We have to do three things: create more meaningful incentives, enable providers with data, and reward providers to do well by doing good."

Day, president of value-based solutions for Anthem, added detail and examples to each of these components in his interview with HealthLeaders.

What providers need

Anthem's VBD approach centers on independent PCPs and those aligned with larger health systems. While some needs differ by market, most providers need the following, says Day:  

• Timely accurate data, available at point of care and at the lowest total cost possible
   
• Real-time referral optimization, from specialist data to digital appointment scheduling
   
• Easier ways to do business, including with payers

"We're getting better at identifying problems and collaborating with providers more closely on their needs and priorities." About referrals, Day adds: "It's surprising how little information PCPs have had to make those decisions." As part of its Vim-designed platform, Anthem provides real-time specialist data including network status, clinical experience, proximity to the patient's home, and historical cost and quality performance. Anthem is also among the growing ranks of plans that are automating prior authorization.

Actionable data meets integrated technology

Day adds that more advanced and integrated technology helps Anthem deliver on provider need while meeting multiple objectives as efficiently as possible. Anthem has deployed the above-referenced Vim platform in its leading market, California, with plans to expand to New York City and to Nevada—the latter as part of a digital HMO pilot with incentives for virtual-first primary care.

"These initiatives help us close the loop, to go from contracting expectations to what providers need for workflow."

The evolution of value-based design

The many names associated with VBD suggest the progress made in the shift from volume to value. What began as value-based contracting and reimbursement is evolving into value-based care and holistic design.

Day's understanding that "you can't stop with the contracting and incentive piece" is echoed by multiple industry stakeholders. Jake Sattelmair, co-founder and CEO of digital health company Wellframe notes that "payment is no longer the primary vector for influencing risk." Marcia Macphearson, partner at Oliver Wyman adds: "If you stick with just aligning financial incentives, outcomes won't come out of that part. You have to look at clinical changes, how do we get better administratively, and what are the opportunities."

Day identifies the way that Anthem thinks about VBD: a model that helps providers do the right things while expecting greater accountability linked to fully implemented measures that matter—and not only cost and quality, but regulatory and customer experience metrics.

Downside risk and market dynamics

Day says that when payers empower independent providers and coach them toward downside risk, both sides benefit. He also understands that a willingness to take on downside risk often depends on the market and requires a collaborative process to help providers get there.

"There are places where more providers have an appetite for risk. Where the dynamics don't translate, we don't ask providers to be ahead of their market," says Day.

For those that want to make the jump, Anthem offers a "multi-year glidepath" based on achievable targets that help providers take increased accountability for managing population health over time." If providers are not making progress, next steps range from corrective action plans to "turning it off" and sending members to higher performers.

Incentivizing through plan design

At Anthem, higher risk leads to higher rewards. One of the highest is identifying the providers who make up their high-performance networks and linking them to the best benefit designs. "We'll use benefit design, marketing, referral steerage—multiple tactics for these providers," says Day.

He adds that it doesn't take long to identify who those providers are.

"For cost, you can see it almost immediately—generally within a year. Quality sometimes takes longer, around 12–18 months," he adds. "But some things we can see even after the first quarter, like the increased primary care use and fewer ER visits that reflect use of lower-cost, higher-impact services."

Even with these strategies, Day acknowledges that the industry "still struggles to do more than create payment policy," adding that "supporting providers versus just providing a contract and data and saying, 'Here you go' is one part of how VBD has evolved."

The proof is in the pudding

Anthem's strategies are yielding strong results. In a press release, the company reports that its fourth quarter operating revenue grew 14.2% to $36 billion (compared to Q4 2020) and that 2021 operating revenue grew to $136.9 billion, a 13.4% year-over-year increase.

As part of the release, Anthem President and CEO Gail K. Boudreaux stated: "2021 was another year of strong growth for Anthem as we continued our transformation from a health benefits company to a lifetime trusted partner in health … We begin 2022 with ongoing momentum across all our businesses."

That momentum includes enrollment growth. Anthem added 2.4 million medical plan members in 2021, putting the company's enrollment at 45.4 million. The company expects that number to grow to between 45.6–46.2 million in 2022, with nearly half of that (19.5–19.9 million) membership being "risk-based." While this presumably includes upside risk given Anthem's Drive to 25 initiative, it's clear that VBD will continue to be essential to its growth strategy.