As the landscape of healthcare changes at lightning speed, stakeholder organizations from every group in the constellation—the public and private purchasers and payers of healthcare, pharmacy benefit management (PBM) companies, providers of all types, and consumers—are being affected by constant disruptions.
One has been unprecedented business deals, such as the announcement Dec. 5 that mega-pharmacy retailer CVS is acquiring the Hartford, Conn.-based Aetna, one of the nation’s largest health plans—deals that are potentially reordering the contracting and operational landscape for employer-purchasers, health insurers, PBMs, retail pharmacies, hospitals, physicians, and consumers, alike—in unanticipated ways.
Meanwhile, organizations like the Berkeley, Calif.-based Catalyst for Payment Reform are working to prod forward the journey towards value in healthcare, as evidenced by an announcement Dec. 4 that the organization had created a new vehicle for understanding accountable care organization (ACO) contracting terms. A press release on that date stated that, “Catalyst for Payment Reform (CPR) today called on employers and other health care purchasers to unite in holding health plans accountable for the performance of their accountable care organizations (ACOs) by asking them to report a consistent set of performance metrics to their employer-purchaser customers—as easy to read as a nutrition label.”
As the Dec. 4 press release explained it, “To drive this change, CPR released a unique set of resources called Standardized Plan ACO Reporting for Customers (SPARC) that employers, state Medicaid, employee and retiree agencies and other health care purchasers can use to assess their health plans’ strategies to use ACOs to improve the delivery of care and make it more affordable. CPR developed SPARC in conjunction with Willis Towers Watson and major health care purchasers to answer growing purchaser demand for greater transparency into ACO design and performance. Purchasers put the onus on health plans because they rely on them as their agents in the market place.”
The press release quoted Suzanne Delbanco, Ph.D., CPR’s executive director, as saying that “Purchasers want better, more affordable care for their employees, and ACOs offer a potential way to bend the cost curve while also addressing patient needs more holistically. Unfortunately, they lack a standard, meaningful way to measure and compare ACO performance, which makes it difficult to justify the additional fees and potential disruption for employees that ACOs can generate,” Delbanco said. “SPARC offers a robust way to dissect and evaluate a health plan’s ACO arrangements so that purchasers know whether they are getting good value for their populations and for their health care spending.”
Suzanne Delbanco, Ph.D.
Dr. Delbanco spoke with Healthcare Informatics Editor-in-Chief Mark Hagland regarding both subjects, following the release of the SPARC announcement on Monday. Below are excerpts from that interview.
Let’s begin by discussing the CVS-Aetna deal. What are your perspectives on it, and on its potential disruption to established patterns of activity among the various healthcare stakeholder groups?
At the heart of it, the question is whether or not this relationship will be good for those who use and who pay for, healthcare. And I always worry on behalf of employers when consolidation occurs, because it rarely leads to lower costs or a better healthcare system. That said, this is not a typical horizontal merger or acquisition within the same space. So it’s possible that there could be better continuity or coordination of care, by bringing together a health plan with a retailer and PBM; only time will tell.
Consolidation has not necessarily led to greater value, then? That is a perspective held by many—when speaking of health plan and provider consolidation.
We know for sure in the healthcare provider space, that when there’s consolidation, that prices go up, and there’s no evidence that quality gets better; in fact, there’s some evidence that it gets worse. In the health plan space, there’s some evidence that consolidated health plans can do a better job at negotiating for lower prices; but what ultimately is a problem for both the employer and consumer, is that there are fewer and fewer choices—when you chose a PCP [primary care physician], specialist, or treatment, that there’s less and less competition involved that can lead better choices and offer lower prices. That’s what I worry about here; hopefully, they’ll create a nirvana of healthcare. But based on past evidence, unfortunately, this is not guaranteed.
One of the aims of Aetna leaders, according to news reports, is the potential for better pharmacy benefit management, based on a closer integration of health plan, pharmacy benefit management, and retail pharmacy operations interactions. What do you think about that potential?
I think we have a mess right now in the pharmacy space. Everyone likes to point fingers: it’s the pharmaceutical companies, it’s the PB managers, it’s direct-to-consumer advertising. But whether or not this creates greater value, will depend on relationships that CVS has with manufacturers, among other factors. So I don’t know that it’s a done deal, that they’ll instantly move to the highest level of value in this context.
Could the CVS-Aetna deal potentially lead to a good kind of disruption on the physician side, compelling physicians to compete on the basis of convenience?
I think there are pros and cons. There’s no question that we need greater access to primary care. And telehealth has introduced competition in some markets by reducing potential over-utilization by offering more immediate access. You could see a doc-in-the-box or nurse-practitioner-in-the-box set-up potentially helping; but will they provide a better service than telemedicine-facilitated care? It depends. And also, per continuity of care, will the relationship with Aetna somehow enhance the communications back to the primary care provider? In theory, but we’ll only know as it plays out.
Do you see this as a harbinger of the future, or might it be a unique business deal?
I think we’re seeing all kinds of consolidation in many sectors of the economy. So, I think this is likely to continue. Disruption is always good, if it keeps incumbents on their toes and provides better service and quality. But sometimes, the benefit goes to the corporations. And there’s still money to be made, and organizations will want to keep a step ahead of the competition.
In other words, the jury’s out on all this?
Yes, that’s what I would say.
Now, please tell me a bit about your organization’s announcement on Monday of your new tool for measurement.
Employers and other healthcare purchasers, whether they have proactively sought it or not, have more and more covered lives covered by ACOs. There are some rare instances of employers forming ACO contracts, but usually, it’s through health plans. And employers have been hopeful that ACOs would pan out, but increasingly, are feeling they’re not getting the full story about how their ACOs are working out. So we’ve put out a template here, for how employers want health plans to report to them on the quality, cost and utilization metrics. We were seeing a few spotty measures reported back to the employers, and almost always, the results were positive, with a rosy light. So we’ve just put out an announcement of employers that have committed to pushing their health plans to use this format, and benefits managers who have committed to using the format also.
So, you believe that standardization of reporting will force value into the system?
Yes, the idea is that if they have to report the whole story by yardstick they can’t change, employers will get a better idea of the success of ACOs. Do they want to partner with health plans to make these ACOs more successful? To contract for their own? To back away? So the idea is to help employers get a better idea of what’s going on.
Would you say that the ACO venture has overall been successful, so far?
Well, it’s certainly moving fast, whether we believe it’s god or not. There’s been some good reporting on the public side, but there’s been very little transparency on the commercial side, where we’re eager to see more results shared. So part of the thinking behind putting out a standardized ACO results report is that it will provide more feedback to employers on whether the strategy is working or not.
What thoughts might you like to share about all of this, with provider leaders?
I think employers are hopeful that the delivery and payment reforms afoot will ultimately benefit employers and patients. But they’re sober about it; they’re not just jumping on the bandwagon; they want proof. So the better the information they can obtain, the more likely they’ll join with health plans to make these changes long-lived and to work to improve them. Those footing the bill need to do what they can to ensure success. And providers need to partner with the health plans to get good information back to employers.
And clearly, data and information will be absolutely critical to making value-based healthcare delivery and payment models work, correct? Data and information will be critical to help providers to be successful in developing ACOs.
Yes, for providers to succeed as ACOs, they need near-real-time information on the cost and quality sides, and IT plays such an important role there, and can provide great results in terms of providing quality, utilization, and cost metrics. So the IT staff at ACOs are a critical piece to these delivery systems providing value.