Even though the healthcare system continues to shift towards a value-based care environment, the implementation of these types of initiatives remains slow and steady, with still a big disparity between those on the leading edge and the laggards. Progress is being made, though. Last year, research from the Health Care Payment Learning & Action Network showed that 36 percent of total U.S. healthcare payments were tied to alternative payment models (APMs) in 2018, while fee-for-service payments have dropped 33 percent since 2015.
So, while the value-based care train is moving, it’s nowhere near its final destination; the Centers of Medicare & Medicaid Services (CMS) has said that they want to have 100 percent of providers taking on some downside financial risk by 2025. In the meantime, it’s important to measure how providers practicing value-based care are faring in terms of lowering costs and improving outcomes compared with those clinicians operating in other payment models. Recently, Humana, the Louisville, Ky.-based health insurance giant, did just that, comparing calendar year 2019 prevention measures for approximately 2.1 million Medicare Advantage members seeking care from providers in a value-based arrangement to approximately 873,800 members who sought care from providers under standard Medicare Advantage settings.
Humana’s report, released earlier this month, and covered by Healthcare Innovation, revealed an array of fascinating findings, most notably that an estimated $4 billion in plan-covered medical expenses would have been incurred by Humana Medicare Advantage (MA) members if they had they been under original Medicare’s fee-for-service model instead of in value-based agreements. The data showed that 2.41 million Humana individual Medicare Advantage beneficiaries who receive care from primary care physicians in value-based payment models experienced, on average, better health outcomes, lower costs and more preventive care, as opposed to fee-for-service models.
A few specific examples of these successes include Humana MA members seeking care from physicians in value-based agreements getting preventative screenings more often than Humana MA members who received care from physicians in MA non-value-based arrangements, as well as the former group spending significantly less time in emergency rooms than the latter cohort.
“The report highlights the notion that we’re continuing in the direction of more deeply collaborating with providers, rolling up our sleeves together, focusing on shared aligned priorities, and aligning the incentives with the outcomes we're trying to produce, which is better care at lower costs,” William Shrank, M.D., Humana’s chief medical and corporate affairs officer, said in a recent interview with Healthcare Innovation. “And as we continue to do this, we continue to get better at it, and we're seeing considerable savings that can be reinvested to deliver richer benefits, to reduce out-of-pocket costs, and to better reward providers for taking better care of our members,” he says.
The report from Humana details how the health insurer has helped its Medicare Advantage members, 85 percent of whom were living with at least two chronic conditions in 2019, and supported its primary care physicians in their efforts to better manage patients’ health. Humana President and CEO Bruce Broussard said in a statement accompanying the report that he believes providers caring for Medicare Advantage members in a value-based care model have reinforced a broader view of caring for people living with multiple chronic conditions. “The premise of human care – where we listen to and address the specific physical health, behavioral health and health-related social needs of our members and their care teams – is amplified in value-based care agreements,” said Broussard. “Our collaboration with primary care physicians and their care teams is helping to deliver simpler and more convenient care and reducing avoidable hospitalizations.”
Nonetheless, one core challenge healthcare stakeholders still need to overcome is that most patient care organizations are still adapting to “a split-screen payment landscape,” in which they will continue to receive a significant portion of their reimbursement in the form of discounted fee-for-service payment, even as they move ahead into value-based reimbursement, via such vehicles as accountable care organizations (ACOs), bundled payments, and other incentive-based forms of payment. This “one foot in the boat, one on the dock” position creates an incredibly challenging situation for providers today, Shrank notes.
“For the providers we work with that are focused entirely on value-based care, and particularly those who focus on a senior population in value-based care, the alignment is so much stronger,” he says. Conversely, in settings where providers are taking on minimal or no risk with Humana—upside-only shared savings, for instance—and are focused primarily on fee-for-service with their other payers, those clinicians and organizations really struggle to make fundamental reforms to care delivery, notes Shrank. “It’s challenging to play and have your toes in both. If you want to be really be successful in value-based care, it requires a bit of a leap of faith and belief that you can do it successfully,” he adds.
The COVID-19 impact
One development that has taken place over the course of the pandemic so far is that the combination of COVID-19 and an economic recession has only accelerated the transition to value-based care as employers and consumers look for ways to manage spending, driving the demand for value. Coming out of the crisis, many industry observers believe that providers will look to diversify their revenue streams beyond fee-for-service.
One thing Shrank says he’s certain of is that Humana’s providers who receive pre-paid global payments for managing the population of members they serve as patients have been in a far better position to withstand or sustain the strain of the pandemic because they haven’t been worried about maintaining RVUs or volume.
Even more importantly, Shrank contends, these providers were also very well-positioned to rapidly transform, and be nimble and flexible about their care delivery models to serve the needs of members. For instance, he offers, “Our pre-paid providers rapidly transformed their care delivery to virtual care, figured out how to be more proactive, and how to make more frequent touch points with our members who are more fragile, frail or more vulnerable, to try to avert adverse outcomes. They adopted a much more progressive stance in terms of how they manage the populations they serve. That was one great piece of evidence suggesting that in this setting of uncertainty, having a global payment and a predictable source of revenue is helpful,” Shrank says. He adds that Humana is seeing a lot of providers beginning to ask new questions and exploring new ways of contracting, with the goal of creating more resilience in their practice’s finances. “That will lead to even more adoption of value-based care,” he predicts.
To that end, COVID-19 has also demonstrated that Humana’s members “have an appetite for more consumer-directed convenient services delivered in the home,” Shrank says, noting that the minuscule amount of care being delivered virtually prior to the pandemic is a thing of the past. “We think that virtual care and more tech-enabled remote monitoring and care in the home will increasingly be part of the solution, and that’s a wonderful way for us to collaborate with providers to help them deliver better and lower cost care for our members.”
