The value-based model of healthcare is gradually transitioning from the pilot phase to implementation, as health insurers and providers strive to offer better care while eliminating unnecessary costs.
Coventry Health Care, an Aetna-owned managed healthcare company, last week announced expanded collaborations with two Midwestern healthcare providers through “Carelink from Coventry,” the company’s plan designed to offer a value-based model of care whose aim is to “focus on keeping each Coventry member healthy rather than just providing care when they are sick.”
Medicare-eligible Coventry members in Des Moines, Iowa, and Lincoln, Neb., already receive coordinated care. The expanded collaboration will bring value-based care to Coventry members under age 65 in each city.
Coventry is working with CHI Heath hospitals and UniNet (a clinically integrated network) in the Lincoln market, while partnering with Mercy Medical Center – Des Moines in Iowa. Both plans will launch on January 1, 2015.
While the U.S. healthcare system has traditionally been reliant on the “fee for service” model, most providers recognize that the old ways are changing.
“In the ‘fee for service’ model, our incentive is to bring patients into the hospitals and the clinics because that’s how we’re paid, to take care of sick people,” says Jeanette Wojtalewicz, chief financial officer of CHI Health. “We’re moving to a model where we actually get paid to take care of well people or keep them well, and that’s the big difference.”
Reducing the cost of care
Flipping the focus of healthcare from acute care of the sick to wellness and prevention might seem radical, but Wojtalewicz says it makes sense for several reasons.
“By realigning the incentive to actually be rewarded financially to keep well, we actually get the benefit of reduced cost for the patient, less hospitalizations, and follow-up if they do need hospital care,” she says. “It’s not necessarily reducing or limiting care, it’s giving them the right care.”
Just as it makes sense to get your car’s oil changed regularly instead of waiting until the engine is damaged, wellness care is all about keeping people healthy, not just treating illnesses.
“The most expensive care is when you’re in the hospital, so if you can prevent some of that or help prevent a readmission or any other follow-up care that’s not necessary, it brings the total cost of care down,” says Wojtalewicz. “And that’s what we’re after; not necessarily the one bill they get at the hospital, but all the other bills that they would otherwise have had if their care wasn’t managed in a more effective way.”
Moving toward risk-sharing
Wojtalewicz says the value-based model still is “in the testing phase for the most part across the country, specifically in the Midwest.”
“We’ve entered into some pilot programs with the Medicare Shared Savings Program and some other pilot programs with our own employees, where we’re managing the care of our own employees,” she says. “Now we’re getting into partnering with insurance companies.”
One of those companies is Aetna, which now has more than 2.3 million members being served by value-based healthcare models, including 81 high-value networks similar to the two announced last week, a company spokesman said. Aetna says its goal is to increase the percentage of its medical costs processed through value-based models to 45 percent in 2017 from the current estimated 20 to 25 percent.
An industrywide transition to the value-based model will require some cultural changes, Wojtalewicz says.
“For a provider who’s always been paid ‘fee for service,’ going to a model where it’s better if the patient doesn’t have so many interventions in a hospital or clinic is a different way [of thinking],” she says.
“We’re still in the early stages, we’re in models where we’re going to share some savings if we can bring costs down,” Wojtalewicz says. “But future models might actually share more risk or even go to a full capitated model. So I would say maybe five or 10 years from now you might see more of that full risk bearing, but we’re kind of getting our feet wet now with these models.”