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Value-Based Care Monthly Insights: December 2023



InHealth Advisors is pleased to bring you a monthly summary of the latest thought leadership, news, and transaction activity in value-based care (VBC).  To assist busy healthcare executives in following VBC developments in a time-efficient fashion, we have assembled brief descriptions of and links to a curated list of the most insightful developments in VBC and provider alignment.


Summary of December 2023 VBC Trends


As we enter the holiday season, we have been gifted by a wealth of fascinating news around value-based care.  Our Thought Leadership section is stuffed with rewarding content around strategies to address social determinants of health, challenges associated with reducing low-value care, and the impact of AI on medicine.  Our Provider Initiatives section unwraps Intermountain Health’s system-wide desire for a value-based care strategy and research into the potential for reduced burnout in value-based reimbursement models.  In the Payor Updates section, Humana provides some pearls of wisdom around their success with value-based care.  Finally, our Transaction Activity section ends with Amazon, as it seeks to deliver more than presents—Prime members now can pay for discounted access to One Medical.


Thought Leadership


Hospitals and health systems are still trying to figure out their role (HFMA)

This article by Jeni Williams provides a detailed exploration of how various health systems are approaching their strategy to addressing the health-related social needs of patients in their community.  As hospitals are now required to screen for social determinants of health (SDoH) and Medicare is now reimbursing medical groups for this work, the impact of these efforts on patient outcomes remains to be seen.  The article provides a robust discussion of the challenges around using SDoH data to foment positive change.  It also goes further by providing clear case studies of organizations acting on the SDoH data to make a positive impact on patient lives.  For example, Intermountain Health was able to decrease avoidable emergency department admissions by Medicaid patients by over 34% through addressing social needs such as transportation, housing, food insecurity, and medication assistance.  This article provides positive inspiration to healthcare organizations seeking to improve care through addressing social needs.


 

Why It’s So Tough to Reduce Unnecessary Medical Care (KFF Health News)

In contrast to the prior article, this story explores the challenges associated with reducing low-value care.  Defensive medicine and a culture of “more is better” (spurred on by fee-for-service reimbursement) have served as headwinds against efforts to minimize unnecessary care.  In addition, the article supplies compelling instances of patient preferences pushing against reducing low-value care.  For example, directed educational efforts were needed for the parents of pediatric patients presenting to the emergency department with bronchiolitis in order to explain why x-rays, antibiotics, and bronchodilators weren’t always needed to treat their children.  The article also spotlights the central importance of well-designed financial incentives to drive provider efforts at efficient care.  Beyond the potential for overutilization inherent in fee-for-service reimbursement, this payment system can lead to worse outcomes.  The article provides a vivid example by citing the harm associated with excessive wait times caused by unnecessary referrals for specialist visits prior to essential surgeries.

    

 

A year after launching, ChatGPT is already changing medicine (Axios)

Everyone loves talking about AI (InHealth is guilty of this as well).  If you are looking for an efficient summary of the impact of AI on healthcare, this article delivers.  While examples abound of very interesting potential use cases for generative AI, the article notes that cost-effective, scalable solutions have not yet been identified.  While the consensus is that generative AI cannot replace the diagnostic capacities of physicians, there is enormous potential to enhance their work.  Still, as quoted in the story, when it comes to generative AI changing medicine, “the hype right now is, is probably a little more than reality.”  


   

Provider Initiatives

 

Intermountain wants a 'prepaid' model for care (Becker’s Healthcare)

The title of this article says it all.  This summary of a talk by Dan Liljenquist (Chief Strategy Officer of Intermountain Health), explores the openness of the system to taking significant financial risk for patient care in order to redesign the delivery model to proactively address health before issues reach the acute care stage.  He eloquently describes why a different reimbursement model is needed to effect more than marginal change in the industry.  His comments underscore the reality of the economic forces acting on hospitals today: reimbursement rate changes are simply not sufficient to keep up with the cost of acute care delivery, while fee-for-service medicine distracts providers from adopting innovative solutions to improve patient health.  The health systems best able to succeed in risk sharing with payors will gain a significant competitive advantage into the medium- and long-term.  Intermountain appears to have adopted this strategic vision based on his comments.


 

Increases in value-based payment adoption decreased family physician burnout, AAFP study finds (Fierce Healthcare)

This article summarizes a recent small study of 10 practices, which explored the impact of value-based payment models on physician burnout.  The burnout relief was observed in practices where value-based payments crossed the threshold of 75% of reimbursement.  Burnout actually increased for practices where value-based payments comprised 59% to 75% of total revenue.  Capitated (per member per month) prospective payments and high support staff ratios significantly contributed to the reduction in burnout.  For smaller practices, the article cited the importance of leveraging scale in larger networks by gaining access to the know-how and revenue streams (e.g., shared savings) needed to succeed in value-based care.  To further support this point, other research has shown that physicians in ACOs are much more likely to report satisfaction with their compensation relative to their peers who do not participate in ACOs.


 

Payor Updates

 

Humana: How value-based care can improve the patient, provider experience (Fierce Healthcare)

Shifting focus from providers to patients, this article highlights a study from Humana which demonstrated that patients treated under a value-based care model reported high satisfaction scores (CAHPS) than those in a fee-for-service model.  The patients in the value-based care model also experienced fewer hospital admissions and emergency medicine visits.  Notwithstanding, a lack of robust data on the success of these models has inhibited more widespread adoption, according to Humana’s CMO.  We hope this story and the others we highlight in this series help to change this knowledge gap.


 

Humana's CenterWell eyes 'aggressive' growth, tech innovation for senior-focused primary care centers (Fierce Healthcare)

Humana’s CenterWell primary-care business is an example of a value-based care model cited by Humana in the prior article.  Humana seeks to grow this segment of its business and this article provides a more detailed case study into the value proposition associated with a value-focused provider organization.  This article shines in the second half, where it describes the team-based approach used from various service lines (primary care, home health, pharmacy, and data analytics) to improve outcomes and efficiency.  Access to these services, as well as connections to community resources for unmet social needs (the article highlights physical activity and loneliness), enable a “wraparound” delivery model that can close the key gaps that lead to costly and avoidable adverse medical events.


 

Optum now has 90,000 physicians (Becker’s Healthcare)

Apparently, to those who have much, more will be given.  This short and sweet story calls out Optum’s (the subsidiary of UnitedHealth) provider workforce.  Optum has over 90,000 employed or affiliated physicians and 40,000 advanced practice professionals.  Combined, these providers serve tens of millions of people.  Interestingly, the article notes that 4 million Optum patients are in accountable care (i.e., value-based care) arrangements, with the number expected to grow by 25% to 5 million in 2024.  This trend underscores UnitedHealth’s long-term “payvider” strategy to “transition as many people as possible into value-based care” (skip to 23:30 in the UHC investor conference video).


 

Transaction Activity

 

Amazon launches One Medical for Prime (Becker’s Healthcare)

After adding One Medical to its organization, Amazon has now included access to the primary care group as an add-on benefit for Prime members.  For a cost of $9 per month, or $99 per year, Prime members get 24/7 access to One Medical providers.  The visits to these providers are billed through insurance, so the fee essentially covers the access to on-demand services and the One Medical app, which offers convenience in the form of provider messaging, quick assessments for common health concerns, and prescription renewals.  The key word is convenience, as Amazon seeks to be a one-stop shop for primary care and pharmacy services.  From a value-based care perspective, there is a solid thesis to be found in a provider that emphasizes access and convenience, since these characteristics decrease the potential for worsening in illness and increase the likelihood of treatment adherence.


 

Walmart names 1st health system partner (Becker’s Healthcare)

This article from Becker’s dives into Walmart’s first partnership with a health system: Orlando Health.  As Walmart is already provider of primary, behavioral, and dental care services, the collaboration is intended to facilitate care transitions and value-based care with Orlando Health’s specialty care arm.  As noted in the article, this strategy is common: “Amazon’s One Medical and CVS MinuteClinic also partner with health systems in local markets for specialty care referrals.”


 


VBC Monthly Insights - November 2023
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