Value-based care and risk-based payment are two things on the forefront of everyone's mind in the health care industry, but is the industry ready to move forward toward meaningful risk?

Radio Advisory's Rachel Woods sat down with Advisory Board's Daniel Kuzmanovich and Clare Wirth to talk about what it will take for the health care industry to move towards meaningful risk and the biggest concerns leaders said they have about risk at a recent Advisory Board event.

What your peers said it would take to get to meaningful risk

Read a lightly edited excerpt from the interview below and download the episode for the full conversation.

Rachel Woods: Let's talk about why the way we talk about risk matters. I'm assuming that this is where you're going to get into language.

Daniel Kuzmanovich: The power of language is pretty important. For example, why would someone want to do something that is inherently risky?

Clare Wirth: Or capitation. It doesn't sound all that appealing.

Kuzmanovich: The language here really matters, and sometimes the way we talk about the concept of risk actually disengages people. Put that together with the sense that this is not actually inevitable that some places have found in recent years and, suddenly, the language actually is an impediment to making progress on this industry objective.

Woods: You talked about the word "risk," which definitely is a trigger word especially when I'm having conversations with folks, but I will tell you I have grown to hate the word "value." I recently told somebody that, instead of having a swear jar, we should make a "value jar" because it's become meaningless, right?

Daniel and Clare, you both described a very, very specific definition of meaningful risk, and that is what we mean when we talk about pushing the industry towards value, not this generically happy idea that we are providing the best care for people and saving money in the process, that we're actually getting to 23 to 29% of our payments in global or capitated payments.

Wirth: Yeah, and that's why this meeting was such a mental exercise for folks. We had to put them in a future state where we had value with teeth, real value that they had to put the dollars where they were putting their implementation, and so, that was true, this was a mental exercise. I would assume folks who attended it were tired afterward.

Woods: That mental exercise is even harder when you are forced to have this conversation not just with your competitors, but for people that have different incentives than you do or have different definitions of these things as you do, which brings me to your second takeaway, which is all about partnership. Why is that so important here?

Kuzmanovich: Because you can't grow in value-based care without partnership. I actually think one attendee said it really well. You actually need to have a partnership strategy that enables growth, not a growth strategy in a world that is very value-based care focused and meaningful risk-based focused. It's the partnership that allows you to grow, not growth for your own ambitions.

Wirth: Everyone assumes that the only way to make progress in value-based care is by making it across industry effort, and I think that's a good assumption, but we really wanted to test it in action.

Woods: How did you test it with this group?

Wirth: Well, I think it really was affirmed in the commitments the folks wanted to make on the latter half of the conversation. We talked about how this needed to inspire action, and one of the big pieces of that was people saying, "I need to be a better partner to my health plan, to the community health center down the road." People put it on themselves as their actionable piece they were going to take out of this.

Woods: This is honestly something that we do fairly often in Advisory Board events. We try to push the audience to think through what is going to be different as a result of this conversation, what is going to be different as a result of coming together, but what I like about what the two of you did is you actually forced people to write it down. What kinds of action items did you hear from your attendees?

Wirth: My favorite takeaways were the people who wanted to face their fears. In value-based care, there's a fear of loss, there's a fear of change, there's a fear of giving up your secret sauce because your success is dependent on the partners you're working with in this new world.

Woods: The loss can mean actual financial loss here. Let's not forget that.

Kuzmanovich: You can do so well in value-based care, but, if you miss time to market, you can put yourself out of business.

Woods: That's right. That's exactly right. I applaud the two of you for running at that fear.

I don't want to be the pessimist in the room, but you've done these sessions four or five times now. At the end of your time together with these executives, do they actually believe that we can get to meaningful risk as an industry?

Kuzmanovich: As someone who is naturally pessimistic, I was expecting that many of them would, but, surprisingly, they very much proved me wrong. A lot of folks said, "Yeah, we can do this." There was an overwhelming sense of actual optimism about the ability to push our industry into this new direction.

Woods: As always, I have one last question for you. When it comes to moving the market towards meaningful risk, what is the one thing that you want our listeners to focus on?

Wirth: For me, it's get started. This is a long journey ahead. It is treacherous. As we've discussed, the folks who lived that future state marinated it and said that it was worthwhile the smaller pieces you have to take along the road, but you have to start from somewhere, and that's what we had folks in our session do.

Kuzmanovich: Similarly, my big word for folks is agency. Health care has a cost problem. We don't talk about controlling health care costs anymore. We talk about controlling cost growth. Value-based payment models succeeding in value-based care is one of the ways we cannot just solve this costly equation, but also improve the quality of care that we deliver to patients.

The interesting thing that I think every person in that conversation that we facilitated took out was they actually had the agency to start making change on value-based care themselves rather than waiting for some other actor or stakeholder to be the cause of change. They could do it themselves.

Woods: Name your fear.

Wirth: When it comes to value-based care, I don't think it's value-based care people are afraid of. I think it's the fear of change. It's the fear of changing their role in the industry. It's having to lean on partners and the risk that comes along with that. I think it is to name your fear like any good therapist would tell you and take steps from there.