Value-based care poses unforeseen challenges in fee-for-service models. Organizations like MCOs, CINs, IPAs, PHOs and ACOs struggle to identify, measure and act on the metrics that matter most –to their patients, practitioners and their bottom line. Outcomes aren’t driven by chance; they’re driven by the right operational metrics.
Operationalized efficiency, cost containment, the closure of care gaps and the successful achievement of quality metrics are foundational to success in value-based models. KPIs are the first step to achieving these objectives.
In this article, we’ve outlined three critical operational KPIs to help you, and your organization, reach value-based success. We’ll walk you through why they’re important, what it means to achieve success and how to manage expectations.
KPI #1: TCC and Cost Containment
Total Cost of Care, or TCOC, is the cornerstone KPI for every organization managing downside risk. Whether you’re in a shared savings arrangement or a capitated model, your ability to achieve cost containment and maintain total costs below benchmark targets is the difference between surplus and clawbacks, or worse, contract non-renewal.
Many healthcare organizations still manage TCOC reactively, treating cost overruns as historical findings rather than actionable signals. However, high functioning organizations approach this in a different way – proactively. They’re deconstructing TCOC into component cost drivers such as avoidable ER utilization, post-acute spend and specialist leakage while constantly monitoring the metrics.
This means they move past static claims lag reports and single use, point-in-time dashboards. Their success comes from:
- Integrated claims and eligibility data across all payers, not just Medicare.
- Visibility into early risk signals weeks or months before settlement files.
- Specific access to individual provider, facility or patient segments to pinpoint variation.
For CINs or IPAs, it’s also about contract-specific intelligence. Not all agreements are created equal. You might excel on an ACO REACH or Medicare Advantage contract while running losses on a commercial shared savings arrangement. Knowing precisely where you stand on PMPM or percent-of-premium targets, by contract, is foundational for proactive cost containment.
Operational leaders who excel here can’t depend on periodic, IT-pulled reports. They have payer-agnostic, self-serve environments that let them isolate trends, run “what if” models and intervene prior to costs spiraling.
KPI #2: Time to Close Care Gaps
Many organizations treat care gaps like a compliance checklist, a year-end task to satisfy HEDIS or STAR requirements. But in value-based contracts, care gaps are financial landmines. They drive avoidable utilization, erode risk adjustment accuracy and set off penalties tied to quality metrics.
Operationally mature organizations measure more than closure rates, focusing on the timeliness of closure. They continually monitor how quickly gaps are identified and addressed once they surface.
Critical enablement looks like:
- Daily or weekly refreshed databases that blend claims, EHR and SDOH data.
- Automated attribution updates to account for patients switching providers.
- Precision targeting to surface high-cost at-risk patients and chronic disease prevalence to mitigate avoidable admissions.
Proactive organizations empower care managers and physicians to act without endless administrative hurdles. When you remove the reliance on rudimentary tools such as spreadsheets and dated EMR exports, more sophisticated, embedded tools can be leveraged to prioritize next best actions, by patient, based on contract financial impact.
This KPI isn’t just about improving a quality score. It’s a lever to contain costs by preventing exacerbations that drive high-dollar events. Data savvy healthcare organizations treat the timeliness of gap closure as an operational engine, not a compliance footnote.
KPI #3: Decisioning Speed
Perhaps the most overlooked KPI in value-based care is how fast an organization goes from data to insight to operational decision. Having robust data is important, but the speed at which is actioned separates achieving success from merely maintaining the status quo.
For MCOs managing broad networks, in practice, this means catching rising avoidable readmissions at a specific SNF within days, not months. For IPAs and PHOs, it’s spotting which PCP panels trend toward excessive specialist referrals in near real time.
Organizations able to move quickly typically deploy:
- Unified data environments that blend claims, eligibility, clinical and SDOH data, not fractured silos.
- Role-based, intuitive tools that managers and clinicians use without waiting weeks in the IT queue.
- Self-serve exploration so CFOs, CMOs and contract managers see precisely what drives their portion of value-based risk.
The true operational KPI is time to actionable insight. What is the amount of time required to make a decision from the receipt of data? For healthcare organizations that perform at the top, it’s in the moment. For those still relying on IT-driven static reporting, or automated quarterly reports, it’s top performers, they miss the critical need – it’s often too late to change settlement outcomes.
How to set these KPIs and realize them
These three KPIs are critical, but many organizations struggle with a fundamental question: How do we set meaningful targets?
Here are our best actionable tips for where to start:
- Benchmark against your own contracts.
Each payer has different thresholds. What is your PMPM or percent-of-premium allowance by contract? Use these as your TCOC guardrails. - Layer in historical performance.
Look at your trailing 12-24 months to establish realistic yet aggressive improvements. Is your average care gap closure lag 180 days? Cut it to 90. - Use stratification.
Set goals by line of business or high-impact cohorts. Medicaid populations will differ dramatically from Medicare Advantage in both needs and costs. - Tie speed-to-decision to specific processes.
For example, target a 48-hour turnaround from data load to intervention planning on new inpatient discharge reports.
Finally, keep these targets visible and tied to accountability. Operational analytics should update in in the moment. Equally as important, analysis capabilities should live in the hands of those who can act, not buried in a queue of quarterly reports.
Advanced KPIs demand more
If you look closely at these three operational KPIs, they all demand:
- Timely, multi-source data aggregation.
- Self-serve, payer-agnostic drill-downs without endless technical gatekeeping.
- Operational workflows that push actionable insights directly to frontline teams.
That’s why many organizations outgrow traditional BI. A static dashboard built for generic financials can’t surface care gaps by contract or flag nuanced HCC recapture risks. Dynamic analysis is the backbone of sustainable performance, especially in value-based care.
Conclusion
Value-based care has fundamentally changed what operational excellence means. It’s no longer about broad network reach or historical quality alone. Success is measured in the achievement of cost containment under tight benchmarks, the closure of care gaps before they become costs and the ability of healthcare organizations to pivot strategies at the speed of fresh data.
For value-based healthcare organizations like MCOs, CINs, IPAs, PHOs and ACOs, these three KPIs aren’t optional. They’re critical key indicators of the performance of your organization – whether they are genuinely value-based or simply reactive. The difference between leading and lagging isn’t philosophical, it’s operational.
