Tom Sullivan | June 20, 2022
Amid a seemingly endless transition from the traditional fee-for-service to value-based and alternative payment models, experts widely agree that the premise of Medicare Advantage that cost, quality and experience are rewarded is at the very least directionally correct.
“The question for us is how do we shift the overall health system to focus on value-based care across Medicare, Medicaid and the commercial markets?” said Patrick Conway, MD, CEO of Care Solutions, Optum.
To help answer that question, Health Evolution convened an invitation-only meeting of the Work Group on Leveraging Value-based Payments to Increase Health Care Value and Resilience and other Health Evolution Fellows.
During the meeting Conway facilitated a discussion, The Future of Risk: Applying Lessons Learned in MA to Commercial Populations, that also included Christopher Chen, MD, CEO, ChenMed; Krista Hoglund, CEO, Security Health Plan of Wisconsin; and Brian Pieninck, President & CEO, CareFirst BlueCross BlueShield.
The experts discussed the need to align health plans and health systems to succeed in value-based arrangements and barriers to overcome on that journey.
Aligning payers and providers in the transition to value-based care
Conway asked the Fellows: How much market share do payers need to make risk possible in commercial markets and what can health plans without a significant market share do to help providers take risk? That answer depends on whether the organization is a health system or a health plan.
“From a market perspective, it’s clear that density matters because it’s revenue passing through a practice, office or a particular hospital,” Pieninck said. “You have to be able to establish a credible enough base to work from a risk perspective.”
Chen noted that for health care providers such as ChenMed risk-based models can succeed with smaller patient populations — but doing so also creates the need to build a methodology that prevents adverse selection, such as patient dumping or only looking for healthy people to accepts as patients.
Hoglund added that payers can help providers understand where they are on the journey toward value-based care and how best to progress toward taking on more risk.
“Fee for service to full risk is a huge spectrum and you don’t need to go all the way to full risk,” Hoglund said.
Instead, payers can take incremental steps toward risk-based arrangements to support providers, including innovative or alternative care models that are not necessarily expensive for the plans but serve to move providers away from the fee-for-service mentality, Hoglund said.
“It is important to think of it as a partnership. Plans are more sophisticated in dealing with risk than providers are, so it’s a matter of thinking long-term about how to get there and that means we need to be fair and transparent and share information to providers so they can comfortably achieve higher and higher levels of risk over time,” Hoglund added.
Barriers to overcome
During the discussion, Conway surveyed the audience to determine the top barriers to growing two-sided risk. The results: fragmented purchasers, no consistent contract standards, the inability to translate Medicare Advantage models to commercial options and restrictive state or federal policies.
In addition to those, the executives listed the shortage of people experienced in managing risk, a need to retrain staff to move beyond the fee-for-service mentality, lower margins associated with commercial risk, and bringing self-funded employers into risk-based programs.
“A big challenge we’ve had in terms of fragmentation is on the self-funded side of the business because very few self-funded employers have density in the market. So, what they’re looking for is a value-based construct that delivers the same or better results to them individually,” Pieninck said.
Security Health Plan, for its part, is an integrated health system in a competitive market. Because of competition, large commercial groups can play competitors against each other, Hoglund said.
“That’s what they’re doing. If you’re self-funded, you’re managing risk for yourself and you’re really aligned with the plan perspective,” Hoglund added. “The challenge is to get fully-insured commercial group clients to think like self-insured entities and align longer-term.”
Hoglund said that yet another challenge is engaging patients to enroll into programs or clinical models. Tactics for achieving that engagement will vary based on patient populations. Medicare patients, for instance, are likely retired and can be reached or come in for a face-to-face visit during normal working hours, while for younger populations digital tools, such as a text-to-enroll option, may be most effective.
“You cannot be one-size-fits-all for different patient populations because they need different levels of care,” Chen said. “When you’re trying to deliver an outcome, you better be darn good at it, especially in dual-sided risk. The only way to get good at something is to focus.”
Call to action: VBP cohort study
The Health Evolution Work Group on Leveraging Value-based Payments to Increase Health Care Value and Resilience is launching a cohort study for the commercial market and is looking for health plans and health systems to participate. The cohort study will begin in August or September of 2022.
Interested executives can learn more about the VBP Cohort Study here.