At a time when many patient care organizations are leaping full-bore into alternative payment models (APMs) such as accountable care organizations (ACOs) and other arrangements, the path forward into provider-sponsored health plans is turning out to be rocky for many. That’s the bottom line in terms of findings from a nationwide survey of patient care organization leaders conducted by the Charlotte-based Premier Inc.
Among the key findings of the survey, whose results were released earlier this month, are the following:
> Interest in provider-owned health plans: 68 percent of C-suite leaders surveyed are interested in starting their own health plan or working with an already-established provider-owned health plan rather than continuing to wait for commercial payers to develop and implement value-based arrangements.
> Providers taking on all risk, payers reaping the rewards: Only 28 percent of healthcare C-suite leaders reported their health systems participate in shared savings contracts with commercial payers, despite the fact that providers are 100-percent accountable for moving the needle on improving quality and reducing costs in order to receive maximum reimbursement through Medicare pay-for-performance plans.
> Limited investment from insurers: Only 13 percent of respondents report shared investment in electronic health record (EHR) infrastructure, even though expanding these systems could help integrate and improve care across the continuum, as well as enhance preventive and chronic care management programs.
> The survey found limited collaboration with commercial payers in terms of regular updates on efficiency and quality performance to increase transparency (30 percent); sharing claims data to better manage the cost, quality and coordination of care (22 percent); and joint goals and measures of success (30 percent) to align the payers and delivery systems.
Shortly after the survey’s findings were released, Healthcare Informatics Editor-in-Chief Mark Hagland spoke with Joe Damore, vice president of population health management at Premier, who is based in the organization’s Washington, D.C. office. Below are excerpts from their interview.
When you look at the main results from the survey, what does the landscape around this look like for you?
This area is really important to health systems for a number of reasons. The first one is that, because of MACRA [the Medicare Access and CHIP Reauthorization Act of 2015]. The MACRA requirements around being able to participate in alternative payment models shift over time. In order to qualify for the 5-percent bonus, 25 percent of revenues have to come from APMs; that shifts in 2021 so that 25 percent of your FFS revenues have to come through APMs. So health systems are trying to plan ahead around what they’re doing on the commercial side as well. The second reason this is important is around spreading out your costs, such as IT implementation and care management, and patient-centered medical homes. All of your costs have to be spread across a larger volume of population, not just Medicare. The third reason is that as you implement value-based payment, what we find the tipping point to be is at 25 percent of your revenues coming from value-based payments, that’s when physicians really change their behaviors.
The fourth reason is that if you don’t shift forward in your commercial contracts, you could be in trouble. If I set up a Medicare ACO and a Medicaid ACO, I’ll end up setting up care management for all my patients, and if I don’t have a value-based contract with my commercial payers, they end up getting 100 percent of the savings, and I end up with zero. So providers are frustrated with commercial payers. Some commercial payers are moving too slowly, which is why providers are developing their own plans. Some are moving faster: Aetna is moving faster than nationally; some Blue Cross plans, as in Massachusetts, are moving forward. But in other markets, where you have a dominant player with 70 percent or more of the market, they’re proving very slow to change. Alabama Blue Cross, which has 80 percent of the commercial market in that state, has been very slow to change. So I’ve found that the dominant players in health insurance markets have been the slowest to implement value-based payment arrangements.
So providers that don’t already have their own health plans are becoming interested, then?
Well, the large health systems are starting their own plans, for two reasons. One, they’re seeing very slow movement from some of the commercial payers. Two, if you own your own health plan, you’re going to get 100 percent of your shared savings, not 50 percent.
So how has the landscape changed around the provider-sponsored plan proposition recently?
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