It was fascinating to read an analysis published on July 3 in the Health Affairs Blog by Humana CEO Bruce D. Broussard and chief medical officer William H. Shrank, M.D., The two senior Humana executives, in an article entitled “Medicare Advantage And The Future Of Value-Based Care,” looked at the gains in quality and effectiveness being made in the Medicare Advantage program, as the entire U.S. healthcare system begins to shift in earnest towards value.
Now, it needs to be acknowledged at the outset that the article about the gains being made by private health insurance plans in health outcomes and efficiency, by two senior private health plan executives, was and is self-serving, in a literal sense. Of course, Broussard and Shrank would want to promote the successes of private health plans, at a time when there is active discussion in the political sphere about the future of private health insurance in the United States.
Still, as the executives note, while the Medicare Advantage program was originally “established by the Balanced Budget Act (BBA) of 1997 as a vehicle to bring private-sector competition and innovation to Medicare beneficiaries,” and that, “When the program was announced, the goal was to create greater competition on benefits, care management, and costs, and to offer greater choice and consumer-centricity to America’s seniors,” Medicare Advantage has come to mean different things over the course of the past two decades. As the authors note, “At the time, value-based care, where providers are reimbursed for the health outcomes of their patients as opposed to the volume of services provided, was not yet the rallying cry of a health system in need of transformation. The impact of private competition on value-based care likely was not even contemplated at the time the legislation was passed.” Still, they note, “a closer look at the evolution of MA demonstrates that the private sector has proven to be a remarkable laboratory for innovation and progress in our health system’s core evolution—to align the payment and care delivery system with value and the outcomes we care about most for America’s seniors.”
And now, as the U.S. healthcare system is being pushed towards greater value, Broussard and Shrank note, “The average premium for MA plans that include pharmacy coverage will be $40 per month in 2019, down from $46 per month in 2018, and MA plans offer out-of-pocket cost caps to reduce beneficiary exposure to excessive medical costs. Flexibility in MA benefits,” they state, “allows private health plans to provide supplemental benefits such as preventive dental care, vision, and hearing assistance at no additional cost, benefits that are not provided by traditional Medicare. This helps seniors, many of whom are on a fixed budget, limit their exposure to high costs.”
And, again, this is obviously self-serving, but the Humana executives bring up real accomplishments on the private health plan side under Medicare Advantage. “As private payers have learned and improved on how they manage complex, vulnerable members, the large MA plans have blurred the lines between payer and provider. In a competitive environment, MA providers have innovated in a variety of manners,” they write. “One MA plan is now the largest employer of physicians in the US, and another has merged with a large retail pharmacy and will deliver care at retail sites.”
Further, they state, “At Humana, we’re actively developing capabilities to deliver, at scale, care in the home by investing in Kindred-at-Home, the largest provider of home care in the US, and integrating that care with owned and partnering primary care organizations. We’re doing this because our members have told us that they want to receive care in their homes, not in the hospital.” What’s more, they write, “Today, each of the three largest MA plans has also integrated their pharmacy benefits and can deliver a more cohesive and coordinated service that does not silo pharmacy and clinical care. Private MA health plans have also made substantial investments in telehealth and analytics to support providers in their quest to deliver more patient-centered care.”
The fact is that the Medicare Advantage program has indeed proven to be a true test bed for innovation in coordinated care and care management, and offers glimpses into some of the possible trajectories for innovation in healthcare delivery and in alternative payment models (APMs). The question is: will senior federal healthcare officials be able to capitalize on the innovations in and learnings from, MA plans’ initiatives, and apply them to the work being done in provider-sponsored accountable care organizations (ACOs), and in other settings and environments? And how quickly will they be able to help generate and support further innovation in the next few years?
The reality is that the arguments over what’s going on now in MA and in alternative payment models on the provider side, are not evolving forward in a vacuum; instead, they are playing out against the march to the cost cliff that our entire U.S. healthcare system is experiencing—with the Medicare actuaries predicting annual U.S. healthcare expenditures exploding 61 percent in the next several years, from $3.3 trillion currently, to nearly $6 trillion by 2027—and with the entire discussion taking place in the context of the 2020 presidential and congressional elections, in which partisan-political debate over the future path of the entire system, will inevitably be proliferating.
So while it’s clear that the Humana executives’ analysis that’s just been published in the Health Affairs Blog today was and is essentially self-serving, it in no way can be dismissed simply because it promotes the private health plan viewpoint. In fact, given their experience with care management and care coordination, the private health plans have much to share that will be useful in the journey of the next few to several years. And providers participating in ACOs—both federally and private health insurer-sponsored—would do well to listen thoughtfully to the lessons being learned on the health plan side, as those lessons should be incorporated into broad federal healthcare policy thinking going forward. In other words, it takes a village—in the healthcare policy realm as in every sphere of activity.
