Things are getting interesting for hospitals, healthcare payers and value-based care. Some new studies, and a major push for value-based care by Aetna and others, claim that this will help reduce costs of care. But the jury is not in yet. We also found a competing study claiming value-based care is not proving out yet.
Earlier this year, Health Payer Intelligence reported that “commercial payers are growing their footprint in the pay-for-performance space by forming new value-based care agreements with providers.” The article further explains that “Payers are participating in collaborative agreements with providers by forming accountable care organizations (ACOs)”, and that these “agreements aim to give beneficiaries a better healthcare experience.”
One of the driving forces behind the ACO and value-based care is Aetna Insurance Co. and in a recent press release, they explained their new program. According to the release, Aetna and UnityPoint Accountable Care, L.C. have announced an accountable care collaboration in Iowa that will offer employers a health care model designed to improve quality of care, reduce health care costs, and improve the patient experience. The company calculates, “the health care savings will be specific to each employer, with the potential to save up to 15 percent over comparable broad network Aetna products.”
The program is fairly large. “The new commercial health care product, Aetna Whole Health℠ — UnityPoint Accountable Care network, will provide Aetna members with highly coordinated care from approximately 3,400 doctors, along with 31 hospitals and 32 urgent care centers.”
Aetna claims their new program will feature a new model of health care delivery designed to offer:
- The percentage of Aetna members who get recommended preventive care and screenings;
- Better management of patients with chronic conditions such as diabetes and heart failure;
- Reductions in avoidable hospital readmission rates; and
- Reductions in emergency room visits.
Competing Studies Report on Healthcare Payers and Value-Based Care
Does it work? One study says yes, and another released the same month says — not yet.
HFMA Study… not yet. RevCycle Intelligence has a recent article telling how The Healthcare Financial Management Association (HMFA), Leavitt Partners, and McManis Consulting conducted a study to determine if early value-based purchasing models impacted the total cost of care. At the HFMA site, the results were stated like this:
“The study found no statistically significant correlation between the penetration of VBP [Value Based Payment] models and growth in the total cost of care for Medicare (2012-2015 data) or commercial payers (2012-2014 data) in over 900 markets throughout the United States. Researchers attributed this finding to the limited prevalence of VBP models in many markets, the lack of strong financial incentives for managing the total cost of care, healthcare organizations’ preference for an incremental approach to risk, and employers’ reluctance to change benefit design, among other factors.”
Change Healthcare Study… yes, it’s working. In “Finding the Value: The State of Value-Based Care in 2018,” a new national study of 120 payers conducted by ORC International and commissioned by Change Healthcare, the findings were different from what HFMA reported. According to their study, “value-based care is bending the healthcare cost curve, reducing unnecessary medical costs 5.6% on average while improving care quality and patient engagement—effectively starting to achieve the long-sought triple aim.”
Some specific findings of the Change Healthcare study relevant for healthcare payers and value-based care include:
- Pure fee-for-service is fading faster than predicted in past studies, now accounting for only 37.2% of reimbursement, and projected to dip below 26% by 2021.
- Payers report success in reducing unnecessary medical costs as a result of their value-based care strategies. Medical cost savings topped 5.6% on average, with almost a quarter of respondents noting savings in excess of 7.5%.
- Almost 80% of payers report improvements in care quality, while 64% report improvements in provider relationships and 73% report patient engagement improved—significant headway toward achieving the elusive “triple aim” of healthcare through value-based care initiatives.
- Payers are struggling to engage providers in episode-of-care programs, with 43% to 58% reporting it is very or extremely difficult to: generate interest among providers to participate; agree on episode definitions; and gain consensus on budgets, risk/gain sharing, and performance metrics.
- Over half of payers are not very satisfied with their current value-based analytics, automation, and reporting capabilities—despite the fact that many of these are designed and developed in-house.
We wondered what might be at the root of such divergent findings and found an article in Healthcare Informatics that perhaps yields a clue. Writing about the “new healthcare” where “payers and providers look to redefine Quality,” the article includes a key insight by Jeff Smith, vice president of public policy for the Bethesda, Md.-based AMIA (the American Medical Informatics Association). Smith believes that quality measures are a microcosm for a much larger issue inside medicine—defining what value is among different physicians. “Let’s say you are asking two different cardiologists what they value. The 80/20 rule is solid in this space; 80 percent of cardiologists would agree on a certain small set of measures that they see as important for most of their patients. But then going from cardiology to another specialty, or certainly in family medicine, measures matter to different people for different reasons. And we have been on this 10-year journey, especially when you think about the electronic environment that is everywhere now, so it’s a large task to figure out if there are measures that can be meaningful across specialties and settings,” Smith says.
What is value in healthcare? Is it cost based or patient outcome based? Payers and providers continue to ponder those questions as healthcare payers and value-based care in hospitals plays out this year. We’ll keep you posted on trends, studies and results for payers, and care models.