Want To Bend The Cost Curve? Let’s Look At Specialty Care


Amid spikes in utilization and rising medical costs, payers are turning to specialty value-based care partners.

Brad Diephuis, MD

4 min read

Healthcare costs appear to have no ceiling. High inflation, clinical workforce shortages, and expensive new treatments have put medical expenses on a 7% growth curve, driving employer premiums to nearly $24,000 per year. Healthcare payers are also facing the squeeze. An aging population, resumption of procedures postponed by COVID, and rises in home health care have produced sky-high utilization rates, market warnings, and stock sell-offs across the board.

In an attempt to get a handle on things, insurers are exploring the use of value-based care (VBC) models in specialty care. VBC programs have reduced costs and improved patient health outcomes in primary care, but specialty medicine is where most spending goes due to frequent appointments, complex imaging, expensive drugs, and high rates of hospital stays. Meanwhile, patients with complex conditions often experience disjointed care, split across multiple specialist providers, inpatient physicians, and primary care doctors.

These costs and complexities accrue to make it incredibly difficult for the average specialty provider to develop and execute value-based care programs that meet patients’ needs and reduce costs. Few specialty practices have the resources and the risk tolerance required.

That’s why innovative payers are beginning to embrace third-party organizations, working in tandem with physician groups, to provide support services and share risk. These specialty care partners bring a fresh approach to healthcare, one less encumbered by the constraints of fee-for-service billing infrastructure. And people are starting to wonder: Is this finally the change that we need?

Building value-based care infrastructure remains a challenge

Making physicians accountable for VBC initiatives is logical. Nobody is in a better position to look after patients’ needs than doctors.

But let’s not confuse logical with practical. Improving patient health while reducing costs requires significant administrative resources. During my time at Harvard Vanguard Medical Associates — now Atrius Health — our success with value-based programs was the result of an enormous investment of time, money, and talent. Atrius is an organization of more than 400 doctors across specialty areas, with a large administrative staff and the financial resources to build scalable infrastructure for value-based care. That just would not be possible for the average practice group.

And then there is the risk factor. Giving providers a fighting chance at success with value-based care models requires accurate benchmarking. But we’re talking about a dynamic, high-stakes landscape where benchmarks are still very much a work in progress, where expensive new treatments and peculiarities of patient populations can throw a wrench in the financial works of any practice, and where mitigation of those challenges can typically only be done in retrospect.

Later, I had the opportunity to serve as a Senior Advisor at the Centers for Medicare and Medicaid Services Innovation Center, where I had a front-row view of what worked and did not work in value-based care programs. The largest participants in these models were often aggregators of practices, with enough depth of internal resources and breadth of the patient population to accommodate the high risks and administrative demands of value-based care. In today’s predominantly fee-for-service environment, that is more than most physician groups can manage. We have to be realistic about how much risk and distraction specialty providers can handle. If we want value-based care initiatives to work, we need to give practitioners a little support.

Specialty care enablers are emerging as agents of change

To meet this challenge, third-party partners have emerged in specialty medicine to facilitate value-based change models. Companies like Strive and Monogram (nephrology), Novocardia (cardiology), Vori Health (MSK), and Thyme Care (oncology), where I work, enable the proactive support that specialty patients need in between visits, before conditions emerge or worsen.

Forward-thinking organizations have long recognized the importance of coordination for patients managing complex conditions. During my medical training at Boston’s Brigham and Women’s Hospital, for example, I was impressed by the work of Commonwealth Care Alliance (CCA), whose clinical teams would proactively reach out to me when one of their patients was hospitalized. The context they provided on my patients’ lives outside of the four walls of the hospital was frequently critical in driving diagnoses and facilitating safe discharges.

In my observation, this kind of wraparound support eases physician burnout, improves patient well-being, and reduces hospitalizations, which accounts for 30% of total US medical spending.

Specialty care partners enable doctors to provide superior care by:

  • serving as bridges between care providers, to make sure that patient care is coordinated and seamless;
  • following up to ensure that patients schedule and attend their appointments;
  • educating patients on disease progression, medication, and treatment options, minimizing overtreatment, and improving patient-doctor relationships;
  • helping patients overcome SDOH barriers like transportation, childcare, and financial burdens;
  • providing emotional support and stress reduction, which helps drive patient adherence to treatment plans;

Specialty care partners also enable the transition to value-based care by:

  • taking on aggregated risk across physician practices and patient pools, so that individual providers can afford to lean into VBC programs;
  • deploying data analysis tools and generating insights that support continuous improvement of VBC benchmarks;
  • finding business models and incentives that allow wraparound services to happen outside of the fee-for-service compensation model.

Asking healthcare professionals to simultaneously be experts at healing patients and transforming an industry has proven challenging. Change at this scale requires an agile, tech-savvy, and entrepreneurial approach that is not (and probably should not be) typical of most medical practices. Instead, it makes sense to work with philosophically-aligned partners who already have those characteristics in their DNA, and who are motivated to make the desired change happen. That is the promise of specialty value-based care.

It’s time to try a different approach. And the place where we can make the biggest impact on both quality and cost of care is in specialty medicine. As costs continue to spiral out of control, can we afford to wait any longer?