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Medicare Shared Savings ACOs Saved $1 Billion Over Three Years

August 30, 2017
by Heather Landi
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Accountable care organizations (ACOs) participating in the Centers for Medicare & Medicaid Services’ (CMS’) Medicare Shared Savings Program reduced spending by nearly $1 billion in the first three years of the program, according to a report by the U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General.

The report finds that most Shared Savings Program ACOs were able to reduce Medicare spending and improve quality of care in the first three years of the program, and a small subset of these ACOs showed substantial reductions in Medicare spending for key services.

The HHS OIG report says that Medicare spending is expected to grow to $1.4 trillion by 2027. To control this increase and promote quality and healthy populations, the CMS has implemented and is considering a number of alternative payment models that reward providers for the quality and value of services. The Medicare Shared Savings Program is one of the largest alternative payment models. As part of this program, health care providers form ACOs to coordinate care to reduce Medicare costs and improve quality of care.

OIG analyzed beneficiary and provider data from CMS to describe the characteristics of ACOs, and also analyzed spending and quality data to determine the extent to which ACOs reduced Medicare spending and improved quality in the first three years of the program. And, OIG analyzed spending and utilization data to describe how high-performing ACOs reduced spending and made changes to utilization for key services.

Over the first three years of the program, from 2013 to 2015, 428 participating Shared Savings Program ACOs served 9.7 million beneficiaries. The report notes that the number of ACOs grew over time, with 220 ACOs participating in the first year, increasing to 333 in the second year, and 392 in the third year. A total of 36 ACOs dropped out of the program in the first three years. The average number of beneficiaries that each ACO served also increased over time.  Each ACO served an average 18,500 beneficiaries in 2015, compared to 16,700 in 2013.  

During that time, most of these ACOs reduced Medicare spending compared to their benchmarks, achieving a net spending reduction of nearly $1 billion, OIG reports. During the first three years of the program, two-thirds of all ACOs (282 of 428) reduced spending for at least one of the years they participated in the program. The remaining ACOs (146) had spending that exceeded their benchmarks for each of the years they were in the program. These ACOs were not able to reduce spending below their benchmarks. 

In its analysis, OIG found that ACOs that were in the program longer were more likely to reduce spending and by greater amounts.

The report states that 57 percent of ACOs that were in the program for three years were able to reduce spending in 2015, compared to 46 percent of ACOs that were in the program for one year. In addition, ACOs that were in the program for three years reduced spending by an average of $10.1 million per ACO in 2015, compared to $5.4 million per ACO for those that were in the program for one year. “This suggests that more established ACOs are learning how to achieve greater cost savings over time,” the report authors wrote.

In total, ACOs reduced spending by $3.4 billion in the first three years of the program. OIG found that there was significant variation in the reductions achieved by these ACOs. “About half of the spending reductions—$1.7 billion—was generated by just 36 ACOs. Three ACOs in that group generated a quarter of that amount,” the OIG report authors wrote.

At the same time, the ACOs that exceeded their benchmarks increased spending by a total of $2.4 billion in the first three years of the program. About half of that amount was generated by 38 ACOs. OIG reports that the net reduction in spending across all ACOs was nearly $1 billion in savings in the first three years. “Over time, the net spending reductions grew. Overall, ACOs reduced spending by a net amount of $234 million the first year, increasing to $429 million by the third year,” according to the report.

And, 154 ACOs (one-third of all ACOs) reduced spending enough to receive a portion of the savings in at least one year. In total, these ACOs reduced spending by $2.8 billion from 2013 to 2015, and, of that amount, the ACOs received $1.3 billion in shared savings payments.

Improvements in Quality of Care

At the same time, the OIG analysis found that ACOs generally improved the quality of care they provided, based on CMS data on quality measures.

In the first three years of the program, ACOs were required to report to CMS data on 33 quality measures. Each ACO receives an overall quality score based on its performance on the individual quality measures. ACOs’ average overall quality score increased from the second to the third year of the program. In 2014, ACOs had an average overall quality score of 86, which increased to 91 in 2015, the OIG report states.

Overall, in the first three years, ACOs improved their performance on 82 percent (23 of 28) of the individual quality measures. ACOs also outperformed fee-for-service providers on 81 percent (22 of 27) of the individual quality measures. “Notably, ACOs performed better than 90 percent of all fee-for-service providers in terms of low hospital readmissions,” the report authors wrote.

Further, a small subset of ACOs showed substantial reductions in Medicare spending for key services. “These ACOs, which we refer to as high performing ACOs, had been in the program for all three years and had both reductions in spending and high quality scores (an overall quality score of 90 or above) in 2014, 2015, or in both years,” the report authors wrote.

On average, high-performing ACOs reduced Medicare spending per beneficiary, while other Shared Savings Program ACOs and fee-for-service providers nationally (i.e., the national average) increased average per beneficiary spending.  From 2010 to 2015, high-performing ACOs reduced spending by an average $673 per beneficiary for key services, while other ACOs increased spending by $707 per beneficiary, the report states.

In conclusion, OIG noted that while policy changes may be warranted, ACOs show promise in reducing spending and improving quality. However, OIG also noted that additional information about high-performing ACOs would inform the future direction of the Shared Savings Program as well as other alternative payment models.

“To help in this effort, OIG is conducting an additional evaluation of high-performing ACOs and the different strategies they employ to achieve Medicare spending reductions and quality improvements.  Understanding the success of such ACOs can inform not only the future direction of the Shared Savings Program, but also other alternative payment models that seek to achieve high-quality care for lower costs,” the report authors wrote.

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At UPMC, Turbo-Charging Quality Improvement Efforts through Data Analytics

December 11, 2018
by Mark Hagland, Editor-in-Chief
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At UPMC, Dr. Oscar Marroquin is leading a team of data analysts whose work is facilitating intensive efforts around readmissions

At a time when the leaders of patient care organizations are facing intensifying pressure to shift away from a dependence on volume-based payment and to plunge into value-based care delivery, some U.S. hospitals, medical groups, and health systems are helping to lead the way into a future of continuous clinical improvement and of clinical transformation. That topic—of organized continuous quality improvement—was the subject of the fourth-quarter 2018 Healthcare Informatics cover story. Numerous leaders of pioneering organizations were interviewed for their insights into the health system change focused-quality improvement movement that has been emerging across the U.S. healthcare system.

Among the leaders interviewed for that cover story was Oscar Marroquin, M.D., a practicing cardiologist and epidemiologist, who is helping to lead a team of clinical data experts at the vast, 40-hospital UPMC health system in Pittsburgh. Dr. Marroquin and his colleagues have been busy harnessing the power of creating and nurturing purpose-specific teams focused intensively on the management of data to power performance improvement, particularly in the clinical area. Marroquin’s team, of about 25 data specialists, was first created five years ago. Of those, half are IT- and infrastructure-focused, and, says Dr. Marroquin, “The rest are a team of folks dedicated to data consumption issues. So we have clinical analysts, data visualization specialists, and a team of data scientists who are applying the right tools and methods, spanning from traditional analytical techniques to advanced computational deep learning and everything in between. Our task is to use the clinical data, and derive insights”—and all 12 clinically focused data specialists report to him.

And that work—“allowing people to ask questions to generate opportunities”—has paid off handsomely. Among the advances has been the creation of a data model that predicts the chances of patients who are being discharged, being readmitted. The model, based on the retrospective analysis of one million discharges, is also helping case managers to more effectively prepare patients for discharge, specifically by ensuring that patients being discharged are promptly scheduled for follow-up visits with their primary care physicians. “If those patients are seen within 30 days of discharge,” he notes, “there’s a 50-percent reduction in their 30-day rate of readmission.” The program is now active in six UPMC hospitals.


Oscar Marroquin, M.D.

Below are excerpts from the interview for that cover story that Healthcare Informatics Editor-in-Chief Mark Hagland conducted with Dr. Marroquin this summer.

From your perspective, what does it really mean to be data-driven, in the pursuit of continuous quality improvement and clinical transformation?

From my perspective, I’m very passionate in that I feel that you really can’t do any of the things that doing in terms of moving towards value, without having a robust data infrastructure, a robust strategy on how to use data and analyze it, and without then deriving evidence for how you’re going to transform your organization. There are a lot of buzzwords involved in all of this, but the only way to get from a buzzword to a true action of transformation, is if it’s data-driven.

I’m a cardiologist by training and an epidemiologist; I still practice. Over the past five or so years, I’ve been asked to oversee how we’ll derive insights from clinical data in our system; in other words, this work is around anything related to big-data analytics, with those analytics being used to help our clinicians. In order to do that, we’ve had to do many different things, including more intelligently aggregating our data, and focusing on specific analytical purposes. They’ve been structured as databases for transactional systems, but not with the intent of improvement.

So we’ve spent a lot of time creating a purpose-built environment for analytics. That’s involved a lot of technical work, to create tables, what we call our consumable layers, for analytical purposes. And we’ve created a team whose only job is to do analytics. We’ve had folks in the past managing back-end databases, who have generated reports, but that doesn’t lead to a sustainable way of using data. And so we have a team that is dedicated to maintaining the warehouse and consuming the data.

With regard to the team of 25 data analysts, do all of them report to you?

The 12 who do data consumption report directly to me; the others have a dotted-line report to me. They sit on our infrastructure team within our IT Information Services Division. Both teams are part of the Clinical Analytics Team. Data analytics—Health Services Division. Integrated team. Two sides of the same coin.

When did these teams come together?

There have been different phases. The analytics program development started in 2012, and we learned a lot of lessons. A lot of the work early on had to be dedicated to technical issues—identifying data sources, etc. That was a pretty labor-intensive process. We really got enough aggregated data to use it consistently in 2015, so from 2015 on, we’ve had this structure of teams dedicated to doing this as I’ve described.

Can you share a few examples of key advances that your team has made so far?

When asked what our team does, I tell folks we do work at the higher level in three different buckets. The first bucket is the entry point for the majority of projects. Not everybody in the system necessarily knows which questions to ask.

We allow people to ask questions to generate opportunities. Off of that, two things will happen. One, hypotheses can be generated, and so we can do hypothesis testing, we can do comparative effectiveness studies, we can formal testing of hypotheses. Also, when insights get generated, one can say, oh boy, there’s a lot of heterogeneity in this population, why is one group more at risk? So we can identify who is at high risk of a condition, and who within the high-risk category is at high risk of developing specific conditions? And the third level or bucket, we apply machine learning and AI tools to develop models that allow us to do a variety of things, from more precise phenotyping of our populations; we can build predictive models to identify patients at various levels of risk. And we also use these models to do unsupervised learning, where we can start to generate hypotheses. So most people in this space love to talk about the latter part, the predictive modeling, and we have done a fair amount of work there, with things like identifying patients at highest risk of rehospitalization after 7 or 30 days of discharge, and we’re using that in our hospitals to guide clinicians. There are resources everywhere.

So we developed a model derived out of retrospective analysis of one million discharges, and we’ve prospectively verified that the model allows us to identify patients at the highest risk of readmission, so our case managers can help us identify plans to help those patients transition from hospitalization to post-acute care in a more effective way. And we see that if they’re seen within 30 days of discharge, there’s a 50-percent reduction in their 30-day hospitalization if they get in to see a clinician. So we make sure that the patient has an appointment made and is ready to see their doctor once they’re discharged, to address any issues.

When was that program put into place?

We spent a lot of last year validating the data. And then this year, we started rolling this out to our hospitals in a phased approach, so throughout 2018, we’ve been deploying this to our hospitals, and we’ve trained and educated different hospitals to use the model, and we’re actively following patients to measure the impact of the tool. And as an epidemiologist, I’m always cautious about declaring victory too soon. We’re seeing good trends, our smaller hospitals are seeing decreases in patients coming back early.

So you don’t have any metrics to share yet?

We have three hospitals, smaller ones we started the program with first, that different units, have shown that this program has had an impact. The numbers are still small enough that I have reservations about absolute certainty. But already, we’re using the program in 20 of our hospitals.

What would your advice be for CIOs, CMIOs, and other healthcare IT leaders, as they consider these kinds of initiatives?

If we all are serious about transforming the way we care for patients, we need to do it in a data-driven way. There has to be a philosophical belief and commitment to do that. Number two, as a result of the institutional commitment and philosophy, then there has to be a team that’s dedicated to this work. I don’t think this is achievable in an ad hoc way, when people just have time. And three, it’s not for the faint of heart; it takes time and effort, but if you have the philosophical belief and institutional commitment, it’s doable. If I say to myself, I don’t ever want to leave my house and get drenched because I wasn’t prepared for a storm, then I need to check the weather app before I leave my house. In medicine, we haven’t yet taken that approach, but the data and analytics are there to guide us in helping us to make decisions, and making it a part of the everyday decision-making process. And in the same way I use examples of rehospitalization prediction, we also do condition-specific predictive analytics, around patients with asthma, kidney disease, etc., so there’s a lot of work going on there. And the message I give clinicians is, there will be companies that say they don’t’ sell you the predictive models they’ve developed; but in our experience, the models have to be a part of an organic process that leads to the building of the models. Clinicians won’t feel alienated, disenfranchised, or threatened, if you bring them in and engage them from the beginning.

 


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EXCLUSIVE: NAACOS President Foresees “Shrinkage in Accountable Care Movement” Pending MSSP Final Rule

December 5, 2018
by Rajiv Leventhal, Managing Editor
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If CMS doesn’t scale back some of its proposed changes to the MSSP, the government’s largest value-based payment program will be significantly affected, says one ACO leader

When the Centers for Medicare & Medicaid Services (CMS) released its proposals to overhaul the federal Medicare Shared Savings Program (MSSP), it was expected that industry associations, along with the ACOs (accountable care organizations) themselves, would push back strongly.

After all, in the August proposed rule, CMS, which has the core aim to push these organizations into two-sided risk models—so that Medicare isn’t on the hook when ACOs overspend past their financial benchmarks—suggested to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years.

One option, per CMS’ proposal, would be the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk. The second option would be the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.

But where CMS, in its proposals, truly clamped down was through two core recommendations that stakeholders took issue with: shortening the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years; and cutting potential shared savings in half, from 50 percent to 25 percent for one-sided risk ACOs. These proposals, if finalized, will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

One of the trade groups that has done much of the heavy lifting when it comes to pushing back on the government’s proposals, and offering evidence as to why ACOs need more time in one-sided risk models while being able to reap more of the shared savings, is NAACOS (the National Association of ACOs,) an association comprised of more than 360 ACOs across the U.S.

In a recent interview with Healthcare Informatics, Clif Gaus, president and CEO of NAACOS, confirmed that the reduction of shared savings and the shortened time allowed in one-sided models are two of the biggest problems the group has with the proposal. Specifically, Gaus says that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

He explains that after polling NAACOS’ members, asking them if they would hypothetically apply to be an ACO knowing that at first, they would be limited to 25 percent of shared savings at most, “the near universal response was no, they wouldn’t have joined the program.” Gaus adds, “The potential of 25 percent savings just isn’t enough to offset our investment costs of starting and operating the ACOs,” noting that ACOs have to obviously put up money to get going, and sometimes it’s very hard for medical group practice-dominant ACOs to buy IT systems, not to mention the whole clinical transformational aspect of ACOs where they are typically hiring nurse coordinators, and in some cases opening 24/7 call centers.

“There is a real start-up and operational cost that’s involved, and [getting] 25 percent of the shared savings doesn’t return enough income to offset those,” he says.

Regarding the proposal to shorten the time in a one-sided risk model from the current six years to two years, Gaus points to CMS’ own data which shows that more experience in a federal ACO model drives more savings, but typically the first few years are not profitable for the ACO.

“We have many examples where an ACO has been in the program and was able to turn the corner by the fifth or sixth year,” he says. “Medicare has to have a long-term view of this. We are investing in a totally new redesign of the healthcare system, so give us time to learn how to transform that care into more efficient and higher-quality care. We are troubled by two years,” Gaus frankly admits. He believes that capping the time in a one-sided risk model at three to four years “is reasonable,” and is what many other associations have proposed.

Indeed, while NAACOS and other industry groups have made their arguments to CMS clear, the federal agency has so far taken a firm stance that upside risk-only ACOs have not been effective. A such, CMS seems to be fine with these ACOs leaving the MSSP— by far the largest federal ACO model, with 561 participants—if they are unwilling to take on more risk.

But Gaus believes that even though CMS did come out of the box with an “aggressive negative message” about one-sided ACOs, the agency has now moderated its views. To this end, a recent study from NAACOS and Dobson Davanzo & Associates, based on a different way of measuring financial success—by comparing actual costs over time in the ACO’s market as opposed to CMS’ method of calculating an initial risk-adjusted spending benchmark for each ACO based on its historical spending, without considering underlying market factors—revealed that MSSP ACOs generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by CMS.

“The whole dialogue has changed,” says Gaus. “We have met with Seema and a number of her staff over the last two months, and the driving factor to this change in dialogue is that the 2017 data, from CMS’ benchmarks, turned the corner and showed that net-net the ACO program was saving Medicare money. You don’t see CMS coming out anymore arguing that the program is losing money,” he says.

What a Final Rule Might Look Like

Gaus acknowledges that a core challenge for CMS is being in the precarious position of pushing down too lightly in its regulations, which could result in the pace of change being too slow, or pushing down too hard, which could result in provider organizations fleeing value-based care initiatives.

“We know the government is wrestling with this issue, and so are we,” Gaus says. “In the crafting of our comments to CMS, as well as the comments from the AHA [American Hospital Association], AMA [American Medical Association], and others, we felt that the balance is the issue here, and there needs to be some movement toward the direction that CMS is pushing. We do respect their concerns, to a degree, but we just thought they were too aggressive in their speed to risk, or speed to remove an ACO from the program,” he says.

Gaus is hopeful that the final rule on the future of the MSSP—which he believes could come by the end of the year, but no later than the end of January—will reflect the industry’s concerns. “History says that this administration, like many others, does listen to input from stakeholders that the rule affects. I believe that they really do understand our positions,” he adds.

At the same time, NAACOS’ position is that the reduction in potential shared savings, as currently proposed, is a “total deal breaker,” and that there is no wiggle room for a number between 25 and 50 percent, Gaus asserts. He adds, “If they don’t go back to 50 percent, we will see a long-term significant shrinkage in the ACO movement and a significant emanation of accountable care.”

Importantly, Gaus also notes that ACO programs are voluntary in nature, a key consideration that he believes CMS often forgets. “Nobody has to be an ACO. [Providers] are making a bet of their capital, that they can invest that capital in cost containment, in care transformation, and [in return], they will get back in the shared savings more than they invested. It’s almost like buying stock—you made the investment and you hope the return is worth it,” he says.

Gaus says that he has told Verma in their many conversations that in many ways “we are at a crossroads, and we have to get the balance right, or we are going to see a denigration of what still remains the largest government value-based payment program.”


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Recent Humana Report Points to Encouraging Progress in the Shift to Value-Based Care

November 26, 2018
by Heather Landi, Associate Editor
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Humana's CMO, Roy Beveridge, M.D., shares his perspective on the cultural shift that is necessary for providers to be successful under value-based care models

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.

The Humana report details results in the areas of prevention and outcomes, quality measures, and cost for Humana MA members affiliated with physician practices in value-based agreements with Humana. This is the fifth year Humana has published a value-based report and the insurer reports ongoing progress in improving health outcomes and lowering costs.

As of Sept. 30, 2018, Humana’s total Medicare Advantage membership is more than 3.5 million members, which includes members affiliated with providers in value-based and standard Medicare Advantage settings. According to the report, Humana reached its 2017 goal of having 66 percent of its 2.9 million individual MA members affiliated with primary care physicians in value-based agreements.

For the annual study, Humana compared quality metrics and prevention measures for calendar year 2017 for approximately 1.74 million MA members who were affiliated with providers in value-based reimbursement model agreements to approximately 130,000 members who were affiliated with providers under standard MA settings, which doesn’t offer added incentives to providers who meet quality or cost targets.

Humana also compared medical cost and utilization for calendar year 2017 for approximately 1.5 million MA members who were affiliated with providers in value-based reimbursement models to approximately 146,000 members who were affiliated with providers under standard MA settings as well as to original fee-for-service Medicare.

The study found that patients affiliated with physicians in Humana MA value-based agreements had more favorable outcomes in all Healthcare Effectiveness Data and Information Set (HEDIS) Star measures. HEDIS is a measurement tool developed by the National Committee for Quality Assurance (NCQA) to assess health plans’ performance on various dimensions of care and service.

Humana MA members affiliated with physicians in value-based agreements experienced 7 percent fewer emergency room visits and 5 percent fewer hospital admissions per thousand compared with standard MA settings in 2017, and the number of preventive screenings was 11 percent higher for colorectal cancer and 10 percent higher for breast cancer.

Patients with diabetes who are affiliated with value-based physicians had more condition-specific screenings and better adherence to medications, demonstrating tighter control of blood glucose and blood pressure levels. The report indicates similar results for patients with hypertension—better medication adherence rates and better management of their blood pressure.

What’s more, the study found that medical costs for patients who are affiliated with physicians in Humana MA value-based agreements were 15.6 percent lower than original Medicare FFS. In addition, more physician practices in Humana MA value-based arrangements received a shared savings surplus in 2017 compared to 2016, up to 70 percent from 60 percent the prior year, according to the latest report.

“We believe value-based care is essential to achieving improved population health. Thus, we continue to work closely with physician practices to support them in the transition to value-based care—with actionable data, care coordination, clinical programs, predictive models and innovative solutions,” Stanley Crittenden, M.D., a physician and lead medical director, national medical review, at Humana, wrote in the report.

According to the report, citing statistics from MedPAC and the Henry J. Kaiser Family Foundation, about 10,000 people join Medicare daily, and the Medicare population is expected to increase from 56 million in 2015 to 81.5 million in 2030. Eighty-three percent of Humana’s 3.3 million Humana MA members, as of December 31, 2017, are living with at least two chronic diseases. Humana is using a holistic approach, leveraging value-based reimbursement models, to address this challenge, according to company officials.

Speaking with Healthcare Informatics earlier this month, Roy Beveridge, M.D., Humana’s Chief Medical Officer, notes that the important takeaway from the value-based care report is the consistent progress of physician practices in value-based care arrangements to improve quality and reduce health care costs.

Roy Beveridge, M.D.

“Based on the report, there’s continued improvement in breast cancer screening, in cervical cancer screenings, and there’s improvement in hospitalizations and ER visits. We’re five years out, and we’re continuing to improve on those metrics that everyone agrees are really important,” he says, noting in particular the 7 percent fewer ER visits among Humana MA members in value-based arrangements. “If you continue to have a decrease in ER visits, that’s an indication that the patient is more engaged with her primary care physician or her specialist so that when she is sick, she is reaching out to her primary care doctor. I look at those quality metrics and I’m very excited by that progress; that change didn’t happen over a year or so, but it continues to accelerate.”

Practicing value-based care works to address the nation’s chronic disease epidemic by giving physicians the support and data they need to focus more on prevention and reduce acute care episodes, Beveridge says. “This model allows physicians to focus time and energy on those patients who need the most support to stay well at home, and out of the hospital. Physicians are clearly seeing the benefit of improved patient outcomes and more shared savings.”

Continuing challenges in the shift to value-based care

While the report points to ongoing progress in the shift to value-based care and successful outcomes for those practices in value-based care arrangements, there continue to be significant barriers for healthcare provider organizations attempting to make that shift. For physicians, moving into value-based care often requires an increase in population health management capabilities and access to accurate, actionable data.

“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,” Beveridge says of physician practices transitioning to value-based care models.

Currently, many healthcare organizations find themselves straddling two different reimbursement models, fee-for-service payment models and value-based payment models, or what’s offered referred to as “having a foot in two canoes,” and that continues to be a significant challenge for physicians, he says. “It’s this in-between time, the transition time, where physicians are struggling, and they continue to struggle as they are moving from traditional fee-for-service to outcomes-based reimbursement,” he notes.

In the past five years that Humana has been measuring and reporting progress, one of the biggest lessons learned has been the pace of change, Beveridge says. “I think we, and the government and the industry, underestimated the time that it takes for there to be cultural change in the movement from fee-for-service to value. I naively thought, five or six years ago, that this would be a faster process,” he says, adding, “We are moving collectively in that direction, and at a good clip, but I thought that it would go faster.”

Data and analytics play an integral role in the transition to value-based care payment models and are foundational to success under these models, Beveridge says, and to this end, Humana supports physicians with actionable data to give them a deeper understanding of their patients. However, there also are cultural and operational shifts that are required to succeed under value-based care, he says.

“We have physicians coming in who say, ‘I want to move to value very quickly because I understand it.’ We will tell them it’s really a three- to five-year process. You want to make sure that your data systems can do this. You need to make sure that, from a cultural standpoint, your physicians and nurses understand this. There is a lot of effort in being successful in value-based care. People who underestimate the complexity often don’t do so well. We try to be the shock absorber, and remind people, this is harder than they may think and that you need data systems, you need analytics, and you need the right mindset,” he says.

He continues, “Someone once explained it to me like this—in the fee-for-service world, in the morning huddle, you sit and talk about the patients that are coming in to the office in the next eight hours. In the value world, you sit down with data and you say, ‘Who hasn’t come in to the office in the last eight weeks or in the past year? What do we need to do to engage those patients so that we can help the people who are not coming in to the office that day?’ It’s a cultural change that has to occur. It’s not about taking care of the patient in front of you, it’s about taking care of the patients who are not in front of you.”

He adds, “Until everyone’s trained and thinking that way and you’ve got the data to know who’s not there and why there are not there, it’s hard to be successful.”

Beveridge also contends that primary care physicians are vital to delivering more integrated care to patients, and, moving forward, healthcare organizations that want to be successful under value-based care payment arrangements need to place primary care physicians at the center, he says.

The American Academy of Family Physicians (AAFP) reports that primary care physicians receive 6 percent of the total distribution of health care payments nationally. According to the Humana report, primary care physician practices in value-based arrangements with Humana received 16.8 percent of every dollar spent on member care in 2017. Non-value-based primary care physician practices contracted with Humana received 6.9 percent of total payments Humana distributed in 2017.

“If you believe in the value model, then primary care is king, it’s the most important part. You have to pay for that. And what you see with the data is that we believe that the PCP is the lead and that she needs to be compensated appropriately, because historically, primary care physicians have been underpaid, undervalued and under respected,” Beveridge says.

Humana’s experience with value-based payment arrangements has indicated that, with the evolution of value-based care, primary care physicians are relying on a team-based approach to stay connected to their patients in their everyday lives. To support this, Humana is increasingly focused on augmenting the reach of primary care providers with in-home care services for recently discharged patients.

Beveridge notes that Humana is accelerating its investments in an integrated care delivery strategy, which encompasses supporting physician practices and care providers and leveraging technologies and clinical analytics to enhance the company’s holistic health approach.


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