Welcome to TIM Talks: 

Care Management – The Build vs Buy Discussion

September 28, 2017
Care Management: 

The Build Vs Buy 

Dilemma

Timothy P. McNeill, RN, MPH
Health Reform’s Impact

The Build Vs Buy Proposition

Care Coordination Opportunities

Negotiation Options for Build Vs Buy

4

3

2

1
Shift Towards Value-Based Purchasing

• Reform Initiatives (ACA, MACRA) have pushed 

healthcare providers to adopt population health strategies 

to achieve improved health outcomes and reduced 

expenditures

• The shift towards value-based purchasing is putting 

increased emphasis on the role of care coordination

• Increasingly an investment in care coordination services 

is seen as essential to success in the health reform 

landscape
Expected Growth in Care Coordination/Care Mgmt

• Organizations that are expanding care coordination efforts

to achieve success in payment reform environment

– Managed Care Organizations (MCOs)

– Health Systems that want to reduce readmissions 

– Accountable Care Organizations (ACOs)

– Patient-Centered Medical Homes (PCMHs)

• Health System-Owned Physician Practices

• Independent Medical Practices

– Physician Groups participating in bundled payment
Quality Measures

• Value-Based Purchasing requires improving costs and 

quality

– MCOs

• STAR Ratings 

• HEDIS

– ACOs

• ACO Quality Measures

– Providers

• MIPS
The Build Vs Buy Proposition

• When tasked with addressing population health 

requirements healthcare executives often seek to control 

care coordination services.

• When faced with limited financial resources, 

organizations must decide:

– Set up an internal team to provide care coordination 

services for high-risk populations (Build)

– Purchase care coordination services from a third party 

(Buy)
Why Did They Decide to “Build” it Themselves

• Potential Reasons Providers may choose the “Build” 

option

– Desire to “control” the delivery of services to ensure that 

predictable outcomes are achieved

– Stable budget line item with perceived cost savings 

obtained by building an internal team vs per person 

payment models

– Lack of awareness of the ROI for buying services from 

CBO

– Ability to rapidly assign resources based on perceived 

population health needs 
Key Decision Drivers

• Outcomes

– Value-Based Payment models require achieving improved 

clinical outcomes for the population that have to be 

documented and proven

• Costs

– Shared savings programs link success to cost savings and 

reduced utilization

• ROI

– Is our investment in care coordination going to achieve 

reduced medical expenditures and improved outcomes 

that exceeds our startup costs
Barriers to the Success with the Build Option

• Rapid acquisition and expansion of health system-owned 

practices limits the reach of facility-based care 

coordination models

• Difficulty in coordinating services outside of acute and 

ambulatory care centers (Post Acute providers)

• Lack of awareness of facility-based care coordination 

teams on how to access programs to address social and 

psycho-social needs
External Factors that influence the Build Vs Buy 

decision timeline

• Adoption of Risk-Based contract models in the market

– Accountable Care Organizations

– Bundled Payment

• Implementation of value-based contracts with managed 

care organizations

• Competitor’s adoption of alternative payment models

• Need of the primary care network to obtain support 

with Quality Payment Program requirements

– MIPS reporting

– APM reporting
Negotiating When a Healthcare Partner Has 

Chosen the Build Option

• Build vs Buy should not be the only two options

– Build, Buy, or Partner

– Present the advantage of the Partner Strategy when faced 

with a Build Vs Buy decision maker

• Most organizations will want some level of internal 

resources providing care coordination services

• The Build Team may be limited in their ability to achieve 

success with ALL populations 

– Low-Income Populations

– Minority Populations

– Rural Populations
Optimal Strategy: Partner is superior to Build or 

Buy

• Extends the reach of internal resources 

• Leverages expertise that is not internal to the organization

• Linkages with community-based organizations can access 

critical community resources to address factors that 

impact health outcomes

• Ability to combine services to address all factors 

impacting outcomes:

– Medical

– Social

– Psychosocial 
Getting to “Yes” in the Partner Discussion

• Trust: History and reputation of serving target 

populations

• Clinical Integration: Willingness to clinically integrate 

with healthcare provider sites

• Data tracking: Alignment of program model with risk 

factors impacting the Healthcare provider

• Risk Stratification: Ability to integrate program model 

with healthcare provider Awareness of risk in the market

– Populations

– Areas in the market with greater risk
Clinical Integration Options

• The ability to integrate with the health system or MCO 

operations is critically important

– Culture of the organization

– Health IT integration

– Bi-directional data sharing of outcomes

– Alignment of organizational goals

• Consider embedded care coordinators

– Reinforces the partnership and shows immediate value

– Enhances the referral pattern

– Build the costs of embedded staff into the financial 

model
Implementation of a Partner model

• The ability to integrate with the health system or MCO 

operations is critically important

• Establish a method of risk stratification 

• Target services based on population risks and capacity of 

the partners to reach the need

• Establish a mutually-agreed upon referral process

• Track clinical outcomes that align with value-based 

payment requirements

• Interact with internal care coordination leadership

• Continually reinforce the ROI
Populations that are Impacting Population Health 

Goals

• Partner Model Care Coordination Programs should target 

populations that are most difficult for health systems and 

MCOs to address – based on Risk Stratification:

– Multiple Chronic Conditions

– Social Determinants of health

– Dual-Eligible Status

– Homebound Populations

– Persons with a behavioral health co-morbidity

• Ex. Chronic Depression + 2 or more chronic 

conditions
Risk Stratification Strategy: Multiple Chronic 

Conditions

• Persons with multiple chronic conditions can benefit from 

care coordination programs that include:

• Health Coaching

• Disease Self-Management Education

• Patient Activation

• Support to improve 

• Medication Adherence

• HCBS
CMS Medicare Chartbook: 

https://www.cms.gov/Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/Chronic-Conditions/Downloads/2012Chartbook.pdf
Nearly 70% of FFS Medicare has 2 or more 

chronic conditions
Per Capita Expenditures increase as the 

conditions increase
Risk Stratification Strategy: Social Determinants of 

Health

• Low-Income Status has been proven to have a negative 

impact on achieving defined clinical outcome goals

• Populations impacted by social determinants of health 

need support to address social and psychosocial factors 

impacting health outcomes

• Successful interventions extend beyond the clinical 

setting and into the community
CMS Analysis: Social Determinants of Medicare 

Advantage Plan Performance
CMS Analysis: Social Determinants of Medicare 

Advantage Plan Performance
CMS Analysis: Social Determinants of Medicare 

Advantage Plan Performance
Risk Stratification Strategy: Behavioral Health CoMorbidity

• Multiple studies have shown that the presence of 

depression and social isolation correlate with significantly 

higher costs and poor clinical outcomes for persons with 

heart disease such as congestive heart failure.

• Depression in the older adult population is particularly 

difficult to identify and manage
How to Prepare for a Build Vs Buy Negotiation?

• Research the customer to determine what risk they are 

facing and the demographics of the population in the risk 

model

– STAR / HEDIS

– ACO Measures / MIPS

– Assess the performance of the healthcare provider in addressing 

risk of each segment of the population they serve

• Determine if there are current shared populations or target 

groups that we both serve

• Establish a risk stratification strategy and referral 

pattern
Where Do We Start if “Partner” Option is Selected

• Determine how our teams achieve clinical integration

• Determine the best option for referral management and 

outcome reporting of clinical measures

• Establish mutually agreed upon program goals that align 

with value-based payment contract requirements

• Define how we will track ROI 

– Data tracking

– Outcome measurement

– Continually report on ROI analysis whenever possible
ROI

• Critically Important to continually reinforce ROI

• ROI increases when linked to third-party reimbursement

• Strategies that support covering the cost of the program 

through enhanced reimbursement and collection.

• Budget Neutral options are preferred over programs that 

are fully funded by healthcare provider or health system

• A budget neutral option that can increase performance 

under value-based contracting exponentially increases 

ROI
Pilot the Process

• Identify One Provider within the organization to test the 

process

– Seek out a champion

– Develop a model of sharing clinical data

– Establish a process of targeting the participants

– CBO and Provider gain knowledge of the culture of the business

– Embed a health coach within the practice
Tracking Performance: Establish Mutual 

Expectations

• Financial

– ROI

– Payer Source

• MCO

• Chronic Care Management Contract

• Collaborative Care Management Contract

• LTSS Waiver / MLTSS

– Number of enrolled clients

– Services provided per beneficiary per month