A Roadmap for Value-Based Payment in 2030

March 13, 2021
University of Pennsylvania hosts discussion on how lessons learned about alternative payment models from the past decade can be applied

Researchers at the University of Pennsylvania recently published a white paper that proposes a roadmap  for value-based care over the next decade. On March 12, the co-authors gathered virtually to discuss lessons learned over the last decade and their five key recommendations, which include aligning alternative payment models (APMs) across all publicly financed healthcare and giving health equity a central role in APM development.

Other recommendations of the white paper include dramatically simplifying the current value-based payment landscape and accelerating the movement from upside-only shared savings to risk-bearing, population-based alternative payment models while curtailing the ability of providers to opt out of value-based payment altogether. In addition they recommend that CMS must structure incentives to push providers away from fee-for-service payment.

Rachel M. Werner, M.D., Ph.D., executive director of the Penn Leonard Davis Institute of Health Economics, moderated the discussion and led off by noting that people have made the case that alternative payment models haven't yet lived up to their potential. There are few cases of net savings and when they do exist, they're often less than 1 percent, she said. On the quality front, the impacts tend to be small as well when there are quality improvements. “Another challenge for APMs over the past decade has been their lack of impact on improving health disparities, as they've really had no focus on health inequities to speak of and there are ongoing concerns that financial incentives may inadvertently worsen disparities.”

Nevertheless, she said, the panelists remain bullish on APMs. Werner asked the other panelists what the federal government should be doing over the next decade to have a more meaningful impact in value-based payment.

Mai Pham, M.D., M.P.H., president of the Institute for Exceptional Care and former chief innovation officer of the Center for Medicare & Medicaid Innovation (CMMI), said that after 10 years of experimentation, we have an opportunity to take a step back and think about how our priorities should shift. “If you were preparing your retirement portfolio, you wouldn't put money in 16 different places and never look at it again, right? You would track to see where your investments paid off, where they didn't pay off so much, and you would adjust that portfolio over time,” she said. “We think it's just as important to do that here with a clear sense of what the long-term goals and priorities are. If a priority is reducing disparities, then make it reflected in the degree of investment that you put there. If we have more confidence in payment programs that address total cost of care like ACO models, then let's have the portfolio investments reflect that. What we're really recommending here is a pruning and a prioritization process.”

Ezekiel Emanuel, M.D., Ph.D.
, a professor at Penn and co-director at its Healthcare Transformation Institute, spoke about the need to take a whole-of-government approach to value-based care. He noted that if physicians have only a small part of their payment coming from these models, they are not going to change their workflows and their entire approach to how they provide care to patients.

“We have to remember that the federal government spends a lot of money on healthcare,” he said, and it's not all through Medicare. Sixty-plus percent of Medicaid is a federal program and that could be utilized. There's also the federal employee health benefit program that covers millions of federal employees and their family members, and Tri-Care through the Defense Department. So you can begin to think about all of these programs. And we haven't even emphasized the exchanges, where the subsidies give the federal government leverage that they could use to require the payers in those exchanges to adopt the same kind of payment arrangement.” He said increasing the amount of money doctors are seeing in these value-based payment arrangements could increase their motivation to change their practices to be more focused on equity, quality and reducing total cost of care.

Amol Navathe, M.D., Ph.D., assistant professor of medical ethics and health policy and co-director of the Healthcare Transformation Institute, was asked about whether AMP programs should be made mandatory and how to make the programs more attractive through design.

He noted that while we need more stringent financial incentives to get real savings, we also need more participation, so how can we reconcile those two things? “I think that's where mandatory really has to be a part of the portfolio of what we pursue, he said. “Otherwise, I don't see how we reconcile those two things.” We need to have longer-term programs that commit to doing this for five or seven years, so that providers know that they can actually invest in the infrastructure, in changing workflows, he said. “If there's a threat that a certain type of program could go away after a couple of years, it is very hard to get participation, if it requires significant investment.”

Werner also asked how to better incorporate specialists into these alternative payment models.

Navathe said that looking at surgical specialists, something like 20 to 30 percent of surgeons were participating in an ACO toward the end of the last decade. “That's a lot, but if you look at the impact on surgical care, it's actually been pretty much next to nil,” he said. “So I think either we need to figure out how to make ACOs and those types of population management programs much more targeted in the way that they drive care redesign in certain high-cost specialties or we need to more proactively embrace episode-based models as the way to do specialists reform, and perhaps double down on what we've done.”

Navanthe was also asked how we could make fee for service less attractive. “A lot of us have criticized MIPS and perhaps for good reason. But if there's one thing that MIPS may have done inadvertently was to make fee for service a little bit less attractive.” He added that commercial insurers have started signaling that going forward, fee for service will not be prioritized. In other words, they’re going to freeze the fee schedule, for the next five years, and all of those dollars are going to be shifted into the value-based payment models, and they are going to enrich those models in terms of bonuses, in terms of more generous benchmarks, in terms of ways to make it the right thing to do financially.

On the health policy front, Emanuel noted that COVID has upended a lot. “I do think our expectations have to be altered because of COVID,” he said. From a legislative standpoint, he doesn’t see many initiatives passing over the next four years. “Most of the legislative changes that we might have imagined or might have been possible have been put on the back burner. So we are almost entirely reliant on CMMI to focus on cost control. The flip side is I do think that there will be a lot of pressure on CMMI to also focus on using its powers to expand coverage, and do that in some novel ways.”

Looking ahead, Navanthe said that for him, the number one thing to look at is the question of health equity — starting to see gains on health equity through the innovation agenda of the Medicare program. “We need to see every model that's put out in the next decade really have some very directly focused quality metrics or incentive program bonus directed at identifying gaps and directly incentivizing closure of those gaps over time," he said. In addition, he said, we should see participation of every clinician and every beneficiary aligned to some value-based model by 2030. "I think that should be a goal, whether we get to it or not.”

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