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 February 2024 VBC Trends
Though only briefly into the new year, there have been many significant developments in the VBC space. The JP Morgan Healthcare Conference drew many industry leaders to San Francisco to discuss the future of healthcare, and VBC was a recurring theme. Our Thought Leadership section presents a summary of the major talking points from the conference, while presenting the necessary steps organizations need to take to deliver on the promise of VBC, as articulated by the CEO of Thyme Care. Our discussion of Provider Initiatives explores the track record of ACOs (including effective operational strategies) along with the emerging use of AI to detect social determinants of health. The Payor Updates cover innovative “payvider” models in oncology and the use of Amazon’s marketplace to connect patients with payor-sponsored chronic disease management services. We conclude by looking at Tranaction Activity among physicians, retailers (Best Buy), and venture capital (General Catalyst).
Thought Leadership
JPM24: Top trends for payers, providers and health tech companies to watch (Fierce Healthcare)
The reporting team from Fierce Healthcare did an outstanding job of highlighting the key themes at the 2024 JP Morgan Healthcare conference. Of note for those following VBC, key themes involved: (1) an interest among large nonprofit health systems to grow their integrated payor arms, (2) health system investment in the shift from inpatient to outpatient sites of care, (3) payor pathways to improving Medicare Advantage star rating and HEDIS scores, (4) the development of artificial intelligence by payors, providers, and everyone else involved in healthcare, (5) digital health solutions to foster quicker access to specialty care, and (6) the impact of GLP-1s (more on this below). In addition to the JP Morgan conference, the consumer technology-focused CES 2024 included a number of interesting healthcare discussions. Panelists, including Mark Cuban, highlighted the value creation inherent in using AI to automate away tasks that drive the exorbitant administrative costs in the American healthcare industry.
Morgan Health: 3 things employers should focus on to manage GLP-1s (Fierce Healthcare)
One of the central topics of discussion at the 2024 JP Morgan Healthcare conference was the impact of GLP-1 drugs as a cost-effective means to improve health for patients with comorbidities. This article explores guidance around maximizing the potential of these pharmaceuticals. Promising strategies that intersect with VBC include utilizing robust primary care team models to ensure that patients are engaged to make the health and lifestyle changes needed for persistent improvement beyond taking the medication. Also referenced was the enhanced alignment possible through value-based reimbursement contracts with payors that look to include incentives for enhancing the many health outcomes associated with obesity reduction.
Rethinking Healthcare: Navigating the Uncomfortable Path of Value-Based Care (MedCity News)
This newsletter has previously touched on thought leaders critical of VBC and its track record over the past decade. Robin Shah, founder and CEO of Thyme Care (a VBC-focused oncology provider), has authored a clear-eyed look at the status quo and how VBC reimbursement and delivery models can be refined to deliver on their promise. The areas of opportunities he identifies include the value-enhancing potential of addressing health-related social needs (HRSNs), expanding the prevalence of reimbursement models with downside-risk, and the need to develop new approaches to performance benchmarking (e.g., risk-adjustment, condition bundling, and administrative overhead). The piece is a concise look at the continuing need for evolution in VBC reimbursement and delivery models.
Provider Initiatives
Recent updates and emerging best practices for ACOs in the Medicare Shared Savings Program (HFMA)
This article begins with a summary of the performance of ACOs in MSSP since inception: overall, ACOs have yielded modest to no savings to traditional Medicare beneficiaries. As an aside, the studies establishing these findings do not comment on the impact to quality associated with ACOs—thus overlooking a key component of the value of the program. Nevertheless, the article points out the existing room for improvement in care expenditure among MSSP participants. The second part of the article highlights operational efforts that lead to success in ACOs, focusing on clear examples of effective care coordination. The successful ACOs develop practices that including building resources around HRSNs to mitigate high-cost outliers and funding capabilities around robust care navigation to direct patients to the right setting of care at the right time. CMS policy is adapting to these observations, with advance incentive payments serving as an example of a policy designed to facilitate VBC for underserved populations.
Generative AI models can identify social determinants in highly complex visit notes, study finds (Fierce Healthcare)
The identification of social determinants of health (SDoH) for patients is a crucial step to foster the success of VBC. A team at Mass General Brigham has developed an AI model to detect SDoH from physician visit notes. The initial use case highlighted in the article pertains to oncology, a medical specialty where SDoH factors (e.g., access to reliable transportation for chemotherapy) can play a large role in treatment success. Interestingly, the article raises the shortcomings of relying on AI solutions, including the fact that more current generalist AIs with additional training (e.g., Open AI’s GPT-4) perform more poorly than older (and cheaper) models with focused specialty training.
Payor Updates
HCSC unveils effort to link cancer patients with specialists from around the country (Fierce Healthcare)
Staying with oncology, Health Care Service Corporation (the BCBS insurance affiliate for Illinois, Montana, New Mexico, Oklahoma, and Texas) developed a new care team model, called Cancer Services and Support, to serve as a resource for self-funded employers. The model connects patients with a care team including pharmacists and care navigators to facilitate VBC for patients who receive the tough diagnosis of cancer. In addition, specialized physicians are available for consultation regarding rare and complex cancers. This initiative serves as an example of the increasing healthcare provider role payors are adopting in an effort to manage costs and improve outcomes.
Amazon Takes on Health Systems with New Care Management Program (healthleaders)
Premiered at the 2024 JP Morgan Healthcare conference, Amazon launched its Health Conditions Program (HCP). The HCP serves as a tool to connect patients who have certain underlying conditions (the initial tool references prediabetes, diabetes, and high blood pressure) with potential insurer-covered benefits to manage those conditions. HCP seeks to solve a ubiquitous problem in healthcare: many patients are unaware of the benefits they are eligible to receive at low-to-no cost given the potential benefit to insurers to prevent the development of more serious conditions. On top of this, given the widespread use of Amazon to shop for goods, potential patients can be directed to these benefits based on their search history. This presents a new potential pathway for healthcare organizations to grow their patient population. It has potential for enhancing VBC goals through quicker/earlier management of chronic conditions.
Transaction Activity
The race to acquire physicians (Becker’s Healthcare)
As noted in the article, nearly 74% of physicians are now employees of some form or another; the percentage is higher for younger physicians, at 85%. In addition to signing on as employees after completing residency or fellowship training, many physicians are becoming employees through acquisition. Apart from health systems, non-traditional employers like payors, private equity, and technology companies (like Amazon) have recently made some of the largest purchases of practices. The article flags potential risks associated with the loss of independence, including a loss of patient-centered focus in the transition from private practice to employment. Conversely, employment by a large organization can afford physicians the resources needed to practice in a care team model, which can have the effect of reducing burnout. It remains to be seen how the rush to acquire physicians will impact VBC goals, such as patient experience, health outcomes, and costs.
Best Buy Health plans bigger healthcare presence in 2024 (Becker’s Healthcare)
Speaking of non-traditional healthcare entities, Best Buy is seeking to expand its healthcare offerings in 2024. This brief story provides a condensed summary of their various service offerings, including: patient education services (through the Geek Squad), chronic care management, and enabling of hospital-at-home programs. There are a number of significant health system partnerships Best Buy has recently inked, with the focus around leveraging technology to enhance healthcare. We will be sure to follow the potential value of these initiatives.
General Catalyst heads $95.5M investment in clinic chain (Becker’s Healthcare)
Immediately prior to its announced intent to acquire Summa Health, General Catalyst led an investment round into Harbor Health, a chain of primary and specialty care clinics focused on pursuing value-based reimbursement contracts. Harbor Health is a participant in the ACO REACH model, and the article references risk-based contracts recently signed with BCBS of Texas. This investment and the Summa acquisition highlight the significant focus of General Catalyst on the potential returns to a broad tech-led VBC model. It will be interesting to see if these moves presage a larger emphasis on VBC entities by venture capital, private equity and other for-profit entities.
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