How independent practices can win at value-based care, with Ten Ten Ten's Jenn Block and Bhargav Raman

Fewer than half of U.S. physicians, 47.4 percent, now work in practices of 10 or fewer doctors, down from roughly 80 percent in the early 1980s, a slide the American Medical Association describes as the unraveling of physician-owned private practice. A new open-source playbook argues the way back for independent primary care runs through value-based care, without handing the savings to a middleman.

Jenn Block, PhD, MBA, and Bhargav Raman, MD, MBA, lead the value-based care initiative at Ten Ten Ten, a nonprofit focused on improving U.S. health outcomes while reducing health care spending. The pair joined Physicians Practice to talk through the group's new Value-Based Care Playbook: the contract traps that cost practices their shared savings, where a resource-strapped practice should start and what to do before 2027 reshapes the federal program landscape. The conversation has been edited for length and clarity.

The playbook's first installment is available free on Ten Ten Ten's website, with about 25 deeper-dive companion documents to follow.

What is Ten Ten Ten, and why start with a value-based care playbook?

Bhargav Raman: I just wanted to frame it by saying what Ten Ten Ten is. We're a nonprofit organization focused on reducing health care spend to 10 percent of the GDP, getting us to top 10 in outcomes in the world, and doing it in 10 years. It's a bit of an ambitious initiative, but we're starting with primary care. We decided to go down that route because if we can fix primary care, then we can fix the ingest, basically, of patients to the rest of the health care system, and be able to reduce costs and improve outcomes. So we're starting with this playbook.

Jenn Block: The first thing that we published is basically an overview of everything you need to know in value-based care as an independent, small to medium-sized primary care practice. This is the first installment. There will be about 25 additional deeper dives into that playbook, so that each one is an independent topic that providers, the administration, anybody within the practice can go into and get the information they need from a specific area. Each section of the playbook will have a supporting document behind it.

We did this because there are a lot of physician enablement companies out there, intermediaries that are helping primary care practices be successful in value-based care. Unfortunately, what's happening is that they take a very large portion of the shared savings, so it does not truly help the primary care practice in the end. They're losing out on money they could have had to reinvest in their own practice. We're trying to make that knowledge available so practices can do this on their own, and we can support them in that implementation so they're not having to give up a large portion of their shared savings. That's the purpose behind this.

The AMA says physician-owned practice is unraveling. Why is value-based care the fix rather than another push toward consolidation?

Raman: I get that question, and I used to think like that. I can tell you, like many, many physicians, when they talk about value-based care, they put quotation marks around it. There's a reason for that, because it's been taken advantage of over the past 20 years or so as sort of a cash cow for everyone except the physician or the patient.

Now, you talked about consolidation. Fee-for-service leads to consolidation too. Consolidation, and the physician-owned practice kind of disappearing, is just a general feature of the market and not a feature of value-based care specifically. If you consolidate, you can get better contracts. You can take advantage of 340B. That's why all your oncology practices are disappearing.

I got charged $12,000 for an MRI last year that at my own practice I would have only been able to charge $300 for. At the time, I was running my independent imaging center. Buying an MRI was uneconomical. We were unable to provide our HMO, MA, even commercial patients with cheaper MRIs because we were unable to compete with Stanford, UCSF, Sutter. They're charging tens of thousands of dollars for the same procedures. Now imagine not being able to compete because you charge less.

That's really the promise of value-based care, because the people who really succeed are the people who reduce costs for patients and improve outcomes. When you think about what's going to actually fix health care in general, it is the idea of value-based care, not how it's been implemented in the past 10 years, but how it needs to be implemented going forward. That's what we are trying to change, starting with this, and then we're going to do more initiatives in other places, like surgical bundled payments.

Block: And you know what, Keith, I always say, prove it. Show me the data. There have been several case studies recently that have shown value-based care can work. There was a physician-led ACO out of Delaware, for example, where for the first time ever, shared savings exceeded the fee-for-service side of the business. And just two days ago, there was an article that came out about another set of independent practices that were very successful in ACO REACH.

I can say, even in the work I've done over the past several years, the macro environment has been brutal. Everybody is really struggling on the Medicare Advantage side of the business, but my practices, small to medium-sized independent practices, were very successful because we understood, and we were able to reinvest that into our care infrastructure and other programs to help patients be more healthy. There are a lot of instances where there are favorable economics in value-based care.

As we go forward, even the policy design is changing to help reinforce that idea. LEAD is designed specifically for small, rural, independent practices to be successful, and we saw a change to the minimum number of beneficiaries so that it's more accessible for small practices. Everything is coming together to really allow for success in value-based care. But we have to get that information out to the practices.

What contract traps let a practice perform well and still walk away with nothing?

Block: That is such a great question, and I've lived it. I have seen and walked into contracts that really have set practices up for failure, and our playbook says it plainly: a practice can perform extremely well and still not get any shared savings because of the contract terms. There are three main areas that I've seen.

The first one, the one I've seen the most, is quality. They set quality as a gate, and in most Medicare Advantage programs, for example, quality is a gate in the contracts. So you can do exceptionally well at controlling your costs, but if you don't meet those quality standards, you lose all of those shared savings, and it's really unfortunate.

The second one is your benchmark methodology. If you have a flat per capita and you have a very sick panel of patients, it's really not setting you up well. You need to understand what your benchmark methodology is and how you performed the year before against it. But we have what we call a ratchet effect. If you do well, they rebase you, and you're penalized for doing well year over year. The earnings get compressed because you're doing well.

The third one is the quietest, but it's the one I hear about the most from practices and physicians, and that is attribution, the leakage of attribution. You have the patients you're caring for. You're paying attention to them, getting them in on time, addressing all of the concerns, costs are going down. But then you have this magic set of other patients attributed to you that you've never seen. They're getting their care elsewhere, and probably not as well as you could provide in your own practice. You have to be able to understand who those patients are.

So the first thing I would do is ask the payer: Can you show me the methodology for my benchmark? Can you show me the historical data and the math that is bringing you to what my benchmark is? If they won't share that, I would be very cautious about entering into a contract with them, because that sets everything for the future of how you earn your shared savings.

The second is: What happens to my benchmark when my patients are healthier, when I am controlling them very well? Going back to that ratchet effect, are you going to rebase my benchmark?

Then I would ask for the quality performance. If we have not been in a contract with you, take my last year's performance and compare it against your quality thresholds. I want to know how well I would have done had I been in a contract with you.

And the last thing I would ask for is my attribution list. Let me see who you think is attributed to me, so I can calculate how many of those patients I've never seen, or haven't seen in two years. That will give me some insight into what percentage of my panel you are holding me accountable for that I really have little control over.

Raman: I just want to add that we released a version of the contract checklist in the playbook, and there's going to be a much deeper dive into what you need to do going into it. We talked about a few of the high points here; there are a lot of details, and we will be going into that.

If a small practice can only build one side first, documentation or cost control, where should it start?

Block: For small practices, I always recommend they go upside-only first, so that way you're not held financially accountable for the cost side. However, the answer to your question is the documentation is first, because side A, the documentation, sets the benchmark for side B, which is what you're actually measured against. Unfortunately, if you're only able to capture about 80 percent of the diagnoses your panel of patients actually have, then you're already setting yourself up for failure, because you're being held accountable for what would look like a healthier set of patients. You're competing against a target that is based on a healthy set of patients.

Documentation is also the side that a small practice can build with the people they already have in place. And third, there is a lot of AI available to help with this piece, documentation specifically. But if you can't afford the AI, if you can't afford the technology to help you with that, you can still employ things like a pre-visit HCC gap report, or physician chart reviews that tell you what is available based on the clinical data showing for this patient. You can set your annual wellness visit template up to address or recapture all of their diagnoses from the previous year. And then there's provider education: look at the four most commonly missed diagnoses we are seeing in this practice, and educate the providers to that. All of these are workflow issues; they're not staffing issues. It's specifically why in our playbook the first 90 days of our 12-month rollout program is focused on documentation.

Now, with that said, Keith, and this is very important, the sequencing comes with a warning. You can do the documentation, but the cost side has a very, very long ramp. I give an example: You have your savings account that you're earning some interest on, and it's immediate, month to month. But then you have your retirement fund, and it compounds over time. The same concept applies to cutting costs. It's a very large ramp, and if you prolong that by a year, you're losing a year of compounded interest, essentially, that you should have thought about initially.

There are small things you can do even today to start addressing cost. You can focus on the documentation first, but each intervention that addresses cost of care takes time to build. You have to build the processes to identify disease states early in the disease trajectory, and not wait until they show with major complications, because at that point it's already progressed and you don't have that ramp to help address the disease state early and bend that cost curve. It's better for the patients as well, because you're able to do things like put them on guideline-directed medical therapy, addressing their disease state early. That's why I always advocate: there are things you can do today, even if documentation is the only rollout. You can still put processes in place that will help you start to build that long ramp for cost containment.

Raman: Jenn made a very important point. Value-based care, over the past couple of decades, has been very focused on improving that top-line revenue. How do you document better? How do you increase your risk adjustment factor? What happens when you focus on that is you don't focus on what's actually growing, which is the cost. Year on year, the medical cost, which represents 75 to 80 percent of value-based care payments, increases, and if you don't control it, that 80 percent becomes something that's unsustainable over time. That's where practices need to focus early, and that's the real thing. When you document better up front, you get the capital required to do what's needed down the line. That's why we have this multiyear timeline where we de-risk the practice's entry into value-based care, so they can get the protocols necessary to reduce cost over time and then succeed at year four, five, six, seven.

What if a practice can't afford a care manager yet?

Raman: With the care manager, the first question to ask is: What is the ROI for the care manager? For example, if the practice is a little bit bigger and the panel includes, say, 200-odd high-risk patients, then a care manager makes sense, because you get the ROI for the care manager even in year one. These high-risk patients, you prevent them from getting into the hospital. You prevent a hospital admission. We say these patients are rehearsing a hospital admission, and if you're able to intervene early and get them into care management early, you get that ROI year one, even in an upside-only contract. Once you have the processes in place, then as the practice grows, the care manager grows with it.

Now, that said, in a small practice, say five physicians or less, there might not be enough money to pay for a care manager year one. What we recommend practices do in that case is actually expand the scope of their existing staff, specifically the nurse practitioner and the medical assistant. The medical assistant can make calls. You can have the nurse practitioner take a smaller, high-risk panel that's very specific for that particular person, so you can really concentrate on those patients. That will then ramp up so you can afford that full-time position down the line.

Block: And the affordability question is exactly what a readiness assessment answers. I call it my value-based care readiness assessment. What staff that exist today can be retrained to expand their scope or expand the services they're doing? What services are the payers making available to you that you can take advantage of? And at what size of your panel will the position pay for itself? I include a business case that shows how that calculates out in the playbook.

Primary care doesn't bill for 80 percent of total cost of care. How does a small practice control it?

Raman: That's a question we get a lot, because there's a question of resources that the practice has right now to be able to put toward something like this. A lot of these practices are also struggling in the current environment, seeing a lot of patients and not making a lot of margin to invest in something like this. The key is concentration and prioritization. Because there are limited resources, if you're not able to concentrate those resources on the highest-value pieces, you might as well not do anything at all. It's very ineffective. Since fewer than 10 percent of patients drive 70 percent of the total cost, that 10 percent is where you need to focus. And again, a general assessment of the practice will help significantly to start with that, and then focus on the piece of the population the practice really needs to focus on.

Block: And from an operational perspective, this becomes a weekly ritual, not a project. You have a role owner, and every Monday morning you look at your rising-risk patients and the patients that have been discharged from the hospital, and you go through it. Identify your top 15 to 20 patients that need some sort of action, assign an owner to those patients, and put them on a list to talk through at the weekly huddle. It's basically a case review of patients for that week, and you hold yourself accountable for taking the actions you need. This simple weekly ritual, if you do it consistently, will outperform the most sophisticated processes that you do inconsistently. It's all about putting these things into your foundation, into your operations, and repetition. The more you do it, the more accustomed you become to doing it.

Where is the conventional wisdom on value-based care most wrong?

Block: I have heard that VBC is a coding game. I don't know if you've heard that, but the coding, like Bhargav said, sets the benchmark. There's a misnomer there: You cannot code your way to success. It's not possible. Practices that treat value-based care as a documentation project plateau in year two. It goes back to your original question about the two sides, the documentation versus the cost management, and I have seen organizations, really good organizations, fail here. They treat it as a project for documentation.

I also think there is a misconception that you need scale. A lot of intermediaries are selling scale right now, and they're the ones capturing that margin. The data shows that's not accurate.

Third, I've heard people say technology is the answer. I will be the first to advocate for AI; I believe all small practices need to embrace AI. But you don't have to have technology. The morning huddle that I talk about in the playbook is free, and it helps more gap closure than any sophisticated technology you can enforce.

And then there's one last one that I really believe strongly in. You can set the right care team. You can sign the best contract. You can do everything right and still fail if the reimbursement for your physicians is still based on the old fee-for-service productivity. The physicians, even the ones that really believe in value-based care, if you have their reimbursement set for fee-for-service, just based on their productivity, they are going to eventually revert back to what gives them the money. They will not focus on those value-based care actions, and they'll drift back. The reimbursement has to be aligned with what you're asking the physicians to do. I believe strongly in that.

Raman: There's another one that's sort of a pet peeve for me: this idea that physicians are the obstacle to value-based care. The obstacle is actually when you don't give physicians the leadership. If you just force physicians to code better, that's not going to work. All we want to do as physicians is take care of our patients. If you give physician leaders the chance and the incentive to have better outcomes and lower costs, that's the way out of the rat race.

What should a practice do in the next 90 days?

Block: That's another great question. Run your baseline, because every decision is based on numbers that most practices have never pulled, or asked to pull from their payer partners. I can't emphasize enough: Data and analytics are key here. In the first 90 days, a practice should do four things. Pull their quality performance from their EMR and from the payer portals to see what their baseline is: How would you perform against those quality gates they would ask about? Then request your attributed panel so you can assess, from your contracts, and verify against that active panel how many patients you're truly seeing. Then take about 20 or 30 of those patients that are very complex and review the charts to see how accurate or complete your documentation is, so you have some idea where you stand on the documentation side of the contracting. And then request a financial analysis from your payers: What are my admissions? What are my readmissions? What does my risk adjustment factor, my RAF, look like?

By having all of that, that baseline then turns into a menu of options, according to that readiness assessment, of where I need to focus my efforts. You have a deliberate position at that point on where your opportunity is and what programs. MSSP has its newly flexible beneficiary number, like I mentioned; they reduced that for entry into MSSP. We do expect there will be future cycles of LEAD applications you can apply to. There's the ACCESS chronic care model that opened this month. Or even if you're just renegotiating your current contracts, all of these things are really important to do.

2027 is a very consequential year for practices in value-based care. I think this is the most consequential year for them since shared savings began. The ones that are very purposeful in what they're doing, and walk into it with that knowledge, will be the ones that are successful.

Raman: And if a practice doesn't know where to start, that's literally what we exist for. The playbook's free. Our readiness assessment is donor-supported and free for now for practices. That first conversation costs nothing. And like Jenn said, that assessment, that baseline, that's where things start.