More on Accountable Care

Value-based care requires payer and provider collaboration

Employers are demanding better value in their plans and consumers expect that Amazon experience.

Susan Morse, Managing Editor

If value-based care is about aligning what works best for the patient to a hospital's financial incentives, then insurers and providers must work together to create the best outcomes.

"Talking about value-based care, you can't look at it from a siloed perspective. It requires the participation of payers, providers, as well as purchasers and employers," said Dave Briere, senior consulting manager within the strategy practice for Change Healthcare Consulting.

More than a mandate from the Centers for Medicare and Medicaid Services, value is being demanded by employers in their health plan contracts, according to Meredith D. Duncan, regional strategy officer for the Texas/Oklahoma Market at Aetna. Duncan has also worked on the provider side.

"There's a lot of drivers in the move to value-based," Duncan said, ahead of her presentation at the HFMA annual conference this past week. "CMS started the push with the ACO model, but that's been quickly followed by plan sponsors. There's a large customer demand for value, large employers who have said the healthcare trend is unsustainable."

If health plans can't lower costs and give more value in their contracts, employers have said they'll go directly to providers to figure out a different way to deliver care, Duncan said.

"They're expecting better outcomes and more efficient care," she said

Consumers too are expecting more.

"They want an Amazon experience in healthcare," Duncan said.

Duncan and Dan Merino, managing partner of Lumina Health Partners, spoke at HFMA on risk-based contracts and how hospital systems and payers can build collaborations with one another and make their own blueprints.

Over the past five years, Aetna has developed reimbursement models for different types of contracting mechanisms.

"There's quite a bit of customization," Duncan said. "We have a number of product-based relationships. We allow members to choose to purchase a product that's co-branded. In those, they're taking some downside risk. We have a large number of pay-per-performance contracts. If they meet quality metrics, they get paid for performance."

Aetna in the Oklahoma and Texas market has a joint venture relationship with a health system in Dallas in which risk is shared for a population.

"Aetna's philosophy is, 'Let's create innovative models and have a path to help them to grow,'" Duncan said. "We have had really good success for our partnerships in Texas. There's a demonstrated cost reduction for customers."

In Texas and Oklahoma, she's seen some willingness from providers to take on downside risk over the past five years where there was low willingness before. In other parts of the country, over half of providers are in a downside risk arrangement, such as in California and Massachusetts, she said.


"I don't think it's a black or white question, does value-based care pay better. I would contend that many provider organizations are successful in managing the care of populations and managing the financing of that care," said Briere, who works primarily with health plans.

Fee-for-service, unless it is tightly managed, creates adverse incentives to add volume, he said.

"The key to value-based care is it provides freedom for a provider organization to how to improve the overall health status of the population," Briere said. "There is a financial incentive to move to value-based care. They can save money."

Some providers are succeeding in value-based models and others are still getting there, according to Dave Terry, CEO and founder of Archway Health, which has a large focus on bundled payments.

"From where we sit, overall, it's mixed," Terry said. "But I still think we're in the early phases. We're still working with folks who are still figuring it out."

Archway works with 100 or so providers across the country. Some providers are taking value-based models very seriously and are doing well.

There's a middle group for which value-based care is not really driving their business as yet. For instance, in the BPCI model that has significant upside and downside risk, the middle group is picking episodes where they know they can succeed.

A third group is participating, but not embracing the change.

The first incentive to moving to risk is the stick. CMS provides this and has said the goal is to have 100 percent of Medicare providers in some downside risk by 2025.

Providers are expecting to see CMS roll out a dozen or so new programs over the next year or so, Terry said. The thinking is, "'We have no choice. The Medicare trust fund is expected to go bankrupt.' If we just rely on voluntary programs, it will not move the needle fast enough."

For instance, Terry is expecting CMS to launch a mandatory radiation oncology model this summer.

The carrot is the financial incentive, such as the 5% bonus in the advanced alternative payment model under MACRA. There's also the access to Medicare claims data, which gives a better understanding of performance.

"It's hard to get to the 5% APM bonus. They need more programs," Terry said. "There are two ways to get there. One is to create a bunch of new programs. And they need to be a mix of carrots and sticks. And to do more with mandatory activity."

Fee-for-service is no longer working because it doesn't create the collaboration needed to treat episodes of care, he said, not when 70 to 75% of healthcare is spent on specialty episodes.

Terry has been encouraging providers to apply to the BPCI Advanced program, which closed on June 24.

"It's a pretty low risk way to get started, to engage specialists" Terry said. "I work with 1,500 oncologists. When we started working on it, the single biggest reason why patients were admitted to the hospital was for sepsis. None knew this was the biggest reason. We help manage sepsis. The second biggest reason was cardiac-related. There's more focused follow-up."

He also recommends that providers which have a sizeable primary care network participate in Primary Care First and Direct Contracting programs. Enrollment starts later this year.

"While these programs are still voluntary, mandatory is coming," Terry said.


Where value-based care is heading is the holistic care of the patient outside of the hospital or physician's office.

There's no chance of meeting value-based care goals if a patient is continually returning to the emergency room because he or she is homeless, hungry, without a support network, or for other, more solvable reasons.

Briere said his favorite example of this comes from working with the medical director for a provider organization in Arizona that had a large Medicare population.

"We noticed a blimp to nursing homes for risk fractures," Briere said. "It was seasonal, in the spring and fall."

What they found was that seniors were climbing up on their roofs to replace the filters in their evaporative coolers. The hospital put in a program to have handymen replace the filters. The handyman was also able to look around the house for other fall risks.

"If that saved two to three to four hip fractures per year, that's a perfect example of value-based care," Briere said.

Kaiser Permanente, which pretty much led the way for the model of an integrated health system, announced last week that it was building a corporate headquarters in Oakland.

Much of that space is a for a farmer's market that will be open every day of the week and for meeting rooms for sessions and education, Briere said.

"It's really embracing doing a lot more than just physician-patient interaction," Briere said. "Lifestyle has the greatest impact on someone's health status. We have to create aligned incentives and that includes finding ways to engage consumers. To proactively reach out and engage with that consumer and not to give up."

Twitter: @SusanJMorse
Email the writer: