A recent value-based care study by Louisville, Ky.-based insurer Humana found that patients treated by physicians in Humana Medicare Advantage (MA) value-based agreements had more preventative care screenings and better health outcomes compared to patients in Humana MA fee-for-service agreements.
That report compared quality metrics and prevention measures for calendar year 2016 for approximately 1.65 million Medicare Advantage members who were affiliated with providers in value-based reimbursement model agreements to 191,000 members who were affiliated with providers under standard Medicare Advantage settings. Humana also compared costs for approximately 1.4 million Medicare Advantage members in VBC model agreements to original fee-for-service Medicare, and also compared outcomes for those 1.4 million to 216,000 members who were affiliated with providers under standard Medicare Advantage settings.
The study found that providers in value-based reimbursement model agreements had 26 percent higher Healthcare Effectiveness Data and Information Set (HEDIS) scores compared to providers in standard Medicare Advantage settings. Humana Medicare Advantage members affiliated with providers in VBC model agreements experienced 6 percent fewer hospital inpatient admissions and 7 percent fewer emergency department visits, and the number of preventive screenings was 8 percent higher for breast cancer and 13 percent higher for colorectal cancer. What’s more, medical costs for Medicare Advantage members affiliated with providers in VBC models were 15 percent lower versus those affiliated with physicians under original FFS Medicare.
Healthcare Informatics Associate Editor Heather Landi recently sat down with Roy Beveridge, M.D., Humana’s chief medical officer, during a recent visit to New York City to discuss the report findings. Beveridge joined Humana in 2013, and is board-certified in medical oncology and internal medicine. He previously was chief medical officer of McKesson Specialty Health, a subsidiary of McKesson Corp. Below are excerpts from that interview.
Humana recently released its inaugural value-based care report. What are a few of the key takeaways from that study?
Basically, what it shows is that value-based care really is an improvement in terms of quality; no matter how you measure it, there’s quality improvement. The thing that’s hard for people to understand, and I practiced medicine for 22 years and I had trouble understanding it, is if you improve quality, the mindset has always been, you must be increasing cost. In medicine, much of the lack of quality comes from over testing, hospital readmissions, or things such as people not getting their breast cancer screenings or colonoscopies. The important takeaway is that quality increases, and what we also found in the report is that there is a 15 percent reduction in cost.
Another important thing is to consider the distribution of health care payments. According to the AAFP (American Academy of Family Physicians), their data has shown that primary care physicians receive 6 percent of the total distribution of health care payments nationally. At Humana, we believe that the family practitioner is the quarterback of the system, so then we ask the question of what percentage of that dollar goes to the family practitioner. Human’s distribution of overall payments to health care providers was higher for value-based PCPs in 2016—PCPs in value-based agreements with Humana received 16.2 percent of the total payments Humana distributed to health care providers in 2016, while PCPs in non-value-based agreements with Humana received 6.9 percent of the total payments Humana distributed. So, we’ve gone from 6 percent to 16 percent; we actually have put the family practitioner in the driver’s seat as they have now become the quarterback. If you believe in value-based medicine, you have to have a quarterback and you have to pay them more.
How would you describe the evolution of value-based care and payment models?
It’s interesting, if we look back at history, the government and everybody tried to do this in the 1990s. People will say, “People tried it in the 1990s, and it didn’t work.” The reason it didn’t work is that the government and payers basically said to providers, I’ll pay you $5 to take care of every single patient. Then you got into these food fights where people said, “This is a complicated patient and I don’t want to take care of them.” Then you had all this shifting of patients back and forth. In this new world, no one can shift. In Medicare Advantage, if somebody signs up, they are yours. The most important thing now is that the government now pays in a risk-adjusted manner, and that’s the key. So, now there is an incentive to take care of that sick patient, and the incentive is to make them healthier, because if we make the patient healthier, then we’re spending less money on hospitalization and drugs. This value-based model aligns exactly with having the patient get healthier, we get paid more, the doctor sees patients to keep them healthy, it aligns everyone. The other thing is that it results is less hospitalization. That’s what this report shows—it shows that if you align incentives correctly then the patient’s health improves, the dollars flow appropriately, the primary care doctors get paid more; I don’t see how anybody loses in this game.
What do physicians need in order to make this transition to value-based care and payment models, and to be successful under these models?
They need technology; they need data from places like Humana and other big payers; they need to be given time so they can transition; they need the educational tools.