The plan launched three years ago and is showing good results in quality measures.
The Blue Distinction Total Care value-based program is outperforming other care providers in key healthcare quality and patient health metrics since its launch just a few years ago, the Blue Cross Blue Shield Association (BCBSA) announced.
The health plan is the industry's largest national network of value-based care programs, accountable care organizations (ACOs), and patient-centered medical homes (PCMHs). BCBSA says Total Care also is making healthcare better and more affordable through data-sharing that allows it to coordinate, manage, and monitor patient care more effectively.
Total Care was launched in 2015. Since then it has achieved measureable improvements in the management of chronic conditions like diabetes, asthma, and cardiovascular disease.
"In addition, the program is driving a significant increase in preventative medicine, including pediatric health screenings and immunizations," BCBSA reports. "Overall, Total Care doctors, hospitals and clinical care teams are performing better than non-Total Care providers in 96% of the nationally-consistent, industry quality measures tracked."
Total Care also decreased the cost trend by 35% compared to non-Total Care providers, the group reports. BCBSA cites these quality improvements and reductions in cost:
275,000, or 10%, fewer emergency department visits;
7% better HbA1c testing for diabetes patients;
5% better adherence to medications for patients with cardiovascular disease;
15% decline in hospitalizations year-over-year;
"Blue Cross and Blue Shield companies created Total Care to bring the most effective, locally developed programs to a national level to better serve the needs of our members and employers," says Kari Hedges, senior vice president, commercial markets and enterprise data solutions for BCBSA. "BCBS companies' local value-based care programs collectively build strong partnerships with doctors, nurses and hospitals that result in measurable health care improvements that help our members receive the right care in the right setting at the right time, while making health care more affordable."
BCBSA says Total Care is part of its shift to patient-focused, value-based care models. Total Care comprises one-third of BCBS network doctors and hospitals, which have shown a commitment to providing better and more coordinated patient care. More than 19 million BCBS members receive care through the Total Care program, a 50% increase since the program launched in 2015.
Democrats are pushing for a Medicare program that would cover all Americans, a change that would rattle the healthcare industry. Uncertainty over how quickly to proceed may slow their efforts.
The debate over healthcare reform has died down in recent months after the Trump administration systematically dismantled some of the key components of the Affordable Care Act, but legislators are keeping the heat on with Medicare-for-all plans that would amount to a huge shake up in the healthcare industry.
The question for Democrats is when to bring them to the forefront and work for a healthcare change that would rival what happened with Obamacare.
Democrats will promise great benefits to consumers and make healthcare reform the No. 1 topic again, but if Medicare displaces private health plans an alarming number of healthcare professionals are likely to flee for early retirement or change careers, according to an industry thought leader.
There are currently four proposals with variation on the idea of making Medicare available to all Americans, the most prominent from Sen. Bernie Sanders (I-VT), which proposes Medicare for All by transitioning the country to a single-payer health system, which has the support of 15 senators.
Sens. Michael Bennet (D-CO) and Tim Kaine (D-VA) are still proposing their Medicare X plan, which calls for making Medicare available as an option but not the only payer.
The liberal Center for American Progress is proposing Medicare Extra for All, and Sens. Chris Murphy (D-CT) and Jeff Merkley (D-OR) recently offered another new Medicare buy-in plan called the Choose Medicare Act.
In addition, Sen. Brian Schatz (D-HI) and Rep. Ben Ray Luján (D-NM) are still supporting their State Public Option Act, which would create a Medicaid-based public healthcare option on the insurance marketplace.
Democrats see opportunity
With the ACA significantly weakened but no indication that the Republicans will be able to fully repeal and replace it, Democrats are seeing the opportunity to push the single-payer system many of them favored all along, says Sally C. Pipes, president and CEO, Thomas W. Smith Fellow in Health Care Policy at Pacific Research Institute.
The variety in the bills, however, shows that Democrats aren't sure how much they can seek a complete change in how Americans pay for healthcare.
"Some of the Democrats are concerned about pushing for full single-payer when they don't know what it's going to cost or how it's going to be paid for, so they're taking a stepping stone approach," Pipes says. "They're putting the public option back in, which was in the original House bill for the Affordable Care Act, before it went to the Senate."
The likelihood of any version of Medicare-for-all passing in the next two years is dubious, Pipes says.
Major reform is unlikely to happen at the national level under the Trump administration, though there could be movement on the state level while the Democrats keep the federal legislation warm on the back burner, Pipes says.
Impact not understood
Having lived with a single-payer system in her native Canada, Pipes opposes such a wholesale change in the American system. She notes, however, that out of 1,850 adults in the U.S. who were surveyed in a recent poll, 51% supported the idea of a single-payer plan.
"My worry is that the American people don't understand what single-payer means when the government is the only payer for your healthcare, what the tax increases would be, and the long waiting lists for healthcare," Pipes says. "The average wait to see a specialist in Canada is 21.2 weeks, over five months, having grown from 9.3 weeks in 1993. When you look at these various bills, the same things would happen in the United States if we go that way."
Those long waiting lists would come partly as the result of a Medicare-for-all plan driving healthcare professionals out of the business, Pipes says.
Physicians will not want to work for Medicare wages, she says, which are about 20% below what they typically get for treating private insurance patients.
Hospitals also will be stressed by the reduced revenue. That will make it difficult to pay nurses and other healthcare workers competitive wages, causing many of them to leave the industry also, Pipes says. Access to care and quality of care would suffer, she says.
"Doctors retiring early, the best and the brightest kids not going into medicine, and care being rationed because the government only has so much to spend even when they keep increasing taxes," Pipes says. "That's what would happen if these plans go through, especially a plan like the Sanders proposal that would go right to single-payer."
No agreement in D.C.
Republicans, particularly Ted Cruz (R-TX), have said they are not giving up on the goal of repealing and replacing Obamacare, but Pipes is doubtful that would happen any time soon because they don't want to stir up that debate before the midterm elections.
That leaves the Democrats an opening to push the issue to the forefront again and at least keep public interest alive until 2020 when they might have a better chance with a new administration, she says.
The fact that there are numerous Medicare-for-all bills indicates the current state of affairs with healthcare, says CEO John Baackes of L.A. Care Health Plan, which covers more than 2 million Medi-Cal members.
Legislators and consumers alike are still grasping for a way to improve a system that everyone seems to agree is not working in its current iteration.
"It is evident our policymakers are still not of one mind on how to organize and pay for healthcare. To a certain extent, these bills are the result of a growing populist movement and a natural reaction to the Republicans' ACA repeal-and-replace efforts," Baackes says. "One could argue they are gaining momentum, but it should not be assumed it is forward movement."
Baackes says there is not sufficient detail from any proposal to determine the impact they would have on healthcare providers.
"I appreciate the ongoing exchange of ideas to make healthcare accessible to everyone as long as they are accompanied by a responsible plan for funding," he says.
The health plan moves into maternity after bundling joint replacements. Five OB-GYN practices will kick off the maternity bundling program.
Humana is launching a national, value-based care maternity bundled payment model for commercial group members with low-to-moderate-risk pregnancies, hoping to improve quality, outcomes, and cost across a member's entire perinatal episode of care.
The maternity payment model is Humana's second specialty-care payment model, following its total joint replacement episode-based model for Humana Medicare Advantage members undergoing total hip or knee joint replacement procedures. That program was launched in 2016 and is now offered at about 40 orthopedic groups in 13 states across America.
Humana says its specialty-care bundled payment programs are part of the company's commitment to value-based care, which emphasizes more personal time with health professionals and personalized care that is tailored to each person's unique health situation; access to proactive health screenings and programs that are focused on preventing illness; and improved care for people living with chronic conditions with a focus on avoiding health complications.
The company also focuses on data analytics to help connect physicians and encourage them to work as a team to coordinate care around the patient. Reimbursement to physicians is linked to the health outcomes of their patients rather than solely to a fee-for-service model.
The maternity model follows that pattern, depending on data and analytics designed to enhance patient care and a more coordinated care experience, Humana reports. Participating physicians and patients should experience fewer duplicative services, readmissions, and complication rates, says Caraline Coats, vice president of Humana's Provider Development Center of Excellence.
"Humana is dedicated to working with OB-GYNs across the country to provide a better patient experience and improve patient outcomes, while also tackling the cost challenges inherent in perinatal care," Coats says.
Humana has an extensive and growing value-based care presence, Coats notes, with 1.9 million individual Medicare Advantage members at the end of 2017. That includes approximately 140,000 commercial members who are cared for by 52,000 primary care physicians in more than 1,000 value-based relationships across 43 states and Puerto Rico.
Humana reached its 2017 calendar year goal of having 66% of Humana's 2.9 million total individual Medicare Advantage members seeing primary care physicians in value-based payment relationships.
A not-for-profit health system in Florida is launching its own Medicare Advantage plan. The local market has plenty of competition but the system sees the health plan as the right move.
With innovation and bold ideas driving boardroom decisions lately, health care provider BayCare Health System in the Tampa Bay area is launching its own Medicare Advantage (MA) plan despite strong competition and potential market saturation.
The move is another example of how players in the healthcare industry are feeling pressure to expand, combine, merge, and evolve.
BayCare Health System will launch BayCare Plus in January 2019, partnering with Lumeris to manage the day-to-day operations.
The health system is located in one of the nation's fastest growing Medicare markets, but that market also is near saturation, says Jim Beermann, president of BayCare Select Health Plans.
Beermann estimates there is 45% market penetration for MA, making the Tampa Bay area one of the more competitive markets in the country. No single plan dominates the market, however.
Despite the substantial competition, BayCare's analysis still indicated that a new MA plan was the right choice.
"The Tampa Bay and Polk County areas we serve have more than 800,000 Medicare-eligibles who live here full time, and that doesn't even count the snowbirds," Beermann says. "For a system of our size, with 15 hospitals and numerous employed physicians, close to half of our services is providing care to the Medicare population."
Beermann notes that BayCare Plus will not be a BayCare narrow network.
It will contract with other significant health systems and hospitals in the area, he says, and the MA plan will not set up tiered benefits to drive volume to its higher-cost facilities in the market.
"We plan for this to be a collaborative effort not only within our health system but with other health systems in the market as well," he says. "We think that will provide us with a fairly broad network that will help us be competitive."
MA outlook good overall
MA plans offer promise for health systems looking to expand into the insurance market, according to a report from KPMG.
The 2018 Healthcare & Life Sciences Investment Outlook concludes from a survey of more than 250 corporate finance executives that they have a favorable outlook for MA plans, though the company cautioned that growth may be tempered by overvaluation.
BayCare's decision to enter the MA market was driven in part because of how the healthcare industry is seeing so much consolidation and blurring of traditional lines, Beermann says.
The recent announcement of a proposed merger of Walmart and Humana is the latest example of a mega-deal, but Beermann says the same reasoning behind such big moves is also motivating decisions like BayCare's entry into the MA market.
Staying in only the traditional line of business for a health system is a sure way to be left behind, Beermann says. BayCare is following the lead of others in the industry and looking for creative ways to extend its reach, he says.
"The lines have been blurring over the past couple of years and they will continue to do so. A lot of managed care plans have been purchasing physician practices, and other provider organizations have been getting into insurance," he says. "It's becoming increasingly difficult to understand."
Building to scale quickly
BayCare's MA plan will help it focus more on wellness and preventive care, he says.
Once that path was chosen, BayCare then had to decide how to launch the health plan. Options included joint venturing with an existing plan in the area, purchasing an insurance plan, building a plan from scratch, or working with a company that assists with the infrastructure and operations.
"We wanted to build to scale quickly, and we understand our limitations as a health system in terms of understanding overall how a health plan is run, so we decided that the best choice was to partner with a company that we're not in competition with from a managed care perspective, and one that had some experience with helping physicians transition from fee-for-service to value-based care," Beermann says.
BayCare has obtained a state insurance license to offer its health plan in four Florida counties, and it has submitted a Medicare Advantage plan application to the Centers for Medicare & Medicaid Services.
Assuming CMS approves the application, BayCare will be actively selling in the MA market by October, Beermann says.
The marketing plan is based on leveraging BayCare's reputation in the community and its relationship with 450 employed physicians, Beermann says.
"CMS restricts how much you can do with these plans, so there aren't a whole lot of tricks you can do with CMS to set your plan apart from the competition," he says. "They've regulated it very tightly to prohibit either startup plans or mature plans from being able to step on the gas and oversell in any one market. We expect to leverage our brand and the fact that people know us in this community, offering a competitive benefit."
Building a broader network
Optimizing relationships with physicians will be a primary goal, says Ross Armstrong, senior vice president and head of market with Lumeris.
The health system is working with Lumeris to broaden its network of physicians and hospitals outside the BayCare system to ensure sufficient access for future Medicare Advantage plan members.
"We plan for the MA plan to work in a highly collaborative way with the physicians to make it easier for them to manage these patient populations," Armstrong says.
Consumers may be abusing an ACA provision that allows them to re-enroll after their coverage was terminated for nonpayment, a government report says. The practice may undermine the stability of the healthcare insurance exchange.
The Affordable Care Act (ACA) normally allows people to enroll only during open enrollment periods each year, but exceptions are made for consumers who lost their employer coverage or experienced other certain setbacks.
But the Government Accountability Office (GAO) says people may be unfairly taking advantage of the rule and the Centers for Medicare & Medicaid Services (CMS) should collect better data to determine the extent of the abuse.
A GAO report released to the public on April 9 says insurers have expressed concern that some people are misusing the ACA rules by reenrolling after their coverage was terminated for nonpayment of premiums. The law prohibits enrollees from signing up under a special enrollment period citing loss of coverage if the coverage was lost due to nonpayment of premiums.
The GAO's investigation determined that about half (53%) of the 2015 federally facilitated exchange (FFE) enrollees maintained continuous health insurance coverage throughout the year, beginning coverage between January 1 and March 1, 2015, and maintaining it through December 31, 2015. They had an average of 11.6 months of coverage.
The remaining 47% started their coverage later or ended it during the year, averaging five months of coverage.
Enrollees could have voluntarily ended coverage or they could have had it terminated by CMS or the issuers of coverage for valid reasons, including losing eligibility for exchange coverage or for nonpayment of premiums.
CMS does not have reliable data on terminations of coverage for enrollees' nonpayment of premiums, the report notes.
"Officials told us they do not track these data because they are not critical to ensure the accuracy of the federal subsidy amounts—which is the main function of the monthly reconciliation process," the report says.
"Further, CMS lacks a transparent process to ensure the accuracy of these data, as the monthly reconciliation files transmitted between CMS and issuers do not include a place to capture data on termination reasons."
Even when issuers do report termination reason codes, the data often are not accurate.
"Specifically, CMS told us that, historically, issuers may have incorrectly used the nonpayment termination code for other types of terminations, and two issuers we interviewed acknowledged having done so. We compared data on terminations for nonpayment from CMS's centralized enrollment system with data we obtained from three issuers for a small selection of enrollees," the report says.
"We found that for one large issuer operating in multiple states, the CMS data indicated that coverage for 18 of the 26 enrollees that we examined had been terminated for nonpayment of premiums, while the issuer data indicated that coverage had been terminated for other reasons, in most cases because it had expired at the end of the year."
CMS' lack of reliable data on terminations for nonpayment limits its ability to tell whether enrollees applying for coverage under a special enrollment period had lost their coverage for nonpayment of premiums, which would make them ineligible for the special enrollment period, the GAO report says.
"CMS could capitalize on its existing process, already familiar to issuers, by adding a variable that captures data on termination reasons to the monthly reconciliation file," the GAO recommends.
"By taking this step, in addition to requiring issuers to report these data, CMS could help ensure it has reliable and transparent data on terminations of enrollee coverage for nonpayment of premiums, and it could use these data to assess the effects of CMS policies and the overall stability of the exchange."
PBMs, retailers, and providers are getting together to integrate health plans, with Walmart-Humana taking mergers to another level of complexity and transformation, says one healthcare consultant.
The Walmart merger with Humana is another strong sign that the healthcare industry is rapidly merging with disparate parts of the retail world, intermingling so much and so quickly that some traditional parts of healthcare may be absorbed and cease to exist as we now know them.
The purchase would be the biggest acquisition so far for Walmart and marks an aggressive push into the health insurance market. A major component of both deals is combining retail pharmacies with a pharmacy benefit manager (PBM), which promises benefits all around from improved access to customer networks and economies of scale.
Humana is making acquisitions of its own while waiting for its deal with Walmart to be completed.
Humana purchased Kindred Healthcare, a healthcare services company based in Louisville, Kentucky, with annual consolidated revenues of approximately $6 billion in 2017. Kindred Healthcare shareholders recently approved a sale to Humana and two private equity firms.
Humana will take a 40% stake in Kindred Healthcare's home division for about $800 million, as part of a larger deal by private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe to buy Kindred Healthcare for $4 billion.
The CVS-Aetna merger was a watershed moment in healthcare, but the Walmart-Humana deal shows the enormity of the changes underway, says David Friend, MD, chief transformation officer and managing director of the Center for Healthcare Excellence & Innovation with the consulting firm BDO. Friend also sits on the board of Fallon Health, a health plan in Massachusetts, and is the former chief clinical officer of a $2.5 billion postacute healthcare provider.
"Walmart-Humana signifies the beginning of the avalanche that will cause the entire healthcare system to converge. By next year, the traditional PBM model could be extinct," he says. "Everyone is going to get in everyone's business. Traditional healthcare, retail, and technology companies will unite behind a singular goal—survival."
More complex mergers
The Walmart-Humana merger builds on the trends of previous years but takes them to another level of complexity and transformative impact, says Ashraf Shehata, partner at KPMG's Global Healthcare Center of Excellence.
"We used to see combinations of two, with health plans joining PBMs, retail connecting with PBMS, then providers and payers getting together, and providers and retailers. There's a long history of those partnerships," Shehata says.
"The groupings now have become more than twos, with payers, PBM, retail, and providers all getting together in groups of three or four to integrate the health plan product. Combining four variables gives you much more opportunity than when you have one or two," he says.
All large healthcare organizations are looking at the potential for mergers now as they see their competitors growing and acquiring new strengths from PBMs and other access to the market, Shehata says, but making a deal like the Walmart-Humana purchase is only the beginning. The potential benefits will only be realized if the companies execute their plan properly, he says.
"That's going to be the real challenge, because each one of these businesses is run very differently. The insurance business is different from retail, which is different from PBM and providers," Shehata says. "Just because these people sit in the same corporate structure doesn't mean it's going to create a new model that works better than the old one. That innovation needs to somehow come out of the ashes of this integration."
Data reigns supreme
Data analytics also will be key, Shehata says, and the newly combined healthcare-retail entities will be racing to determine the most effective way to leverage the information they have.
"The digital platform is going to be where the real differences lie," he says. "They will be searching for the best way for all these different data capabilities to come together to better serve the consumer, combining data that is now separate in a claims platform or a retail card platform. Building a better 360-degree view of the consumer and being able to approach that consumer in a more meaningful way will be telling for the future of these new entities."
The healthcare organization that can accurately capture and analyze the data of the fast-growing U.S. demographic—seniors—stands to lead the industry of the future, Friend says. That surely was a driving force behind Walmart's decision to acquire Humana, he says.
Ruling the healthcare world
Medicare Advantage (MA) is the future of healthcare, Friend explains, because it has accomplished what the public sector still struggles to do: cut healthcare costs and improve the quality of care. Humana's strength in MA drew the attention of Walmart, he notes.
"CMS has shown support for MA plans by offering insurers … flexibility, and the government has put its support behind them," Friend says. "Humana is a key player in the MA market. So together, Walmart and Humana stand to rule the future healthcare world."
The purchase of a health plan by Walmart could bring more consumer-oriented service to the insurance industry, but only if the company can successfully execute what, for now, seems like a grand and ambitious plan, Shehata says.
"If you asked people how the healthcare industry has done in consumer-centricity, they probably would give the industry a less-than-stellar grade, so if they can revitalize that relationship with the consumer it would be of benefit to the industry overall," Shehata says.
"This also could benefit large employers who are looking for better use of their dollars, because Humana will be working with a retailer that has made a name for itself in offering value to consumers," he says.
Friend agrees, saying consumers are in the driver's seat for the first time in healthcare. Traditional PBMs and retail pharmacies are now just pieces of an incomplete puzzle when it comes to care delivery, he says.
"The healthcare model of the future brings together the best doctors and data and delivers care as close to the consumer's doorstop as possible. Today, Amazon owns the doorstop and is signaling that healthcare is the next move," Friend says. "Walmart knows a thing or two about battling Amazon. In Humana, it certainly finds an interesting bedfellow, but a smart one."
Waiting for prior authorization decisions for some medical care is not only irksome but can be dangerous to patients. Health plans are loosening the reins a bit.
With a strong push from the American Medical Association (AMA), health plans are beginning to relax the prior authorization requirements that have long frustrated consumers. Physicians are united in their concerns that prior authorization can threaten patient care, so insurers are relenting and relying more on doctors' good judgment.
A recent AMA survey found that 92% of physicians say prior authorization programs have a significant (61%) or somewhat (31%) negative impact on patient clinical outcomes. Pre-authorizations have vexed consumers and physicians alike for decades, but the problem has gotten worse in recent years, says AMA Chair-elect Jack Resneck Jr., MD.
"This is a tremendous burden that's taking up a lot of time that we could be spending with patients. But it's not just a burden for us. It's also detrimental to our patients," Resneck says. "In my own practice, it's not just the brand-new, expensive drugs where we would expect to have prior authorization. It's happening for even the generic, inexpensive drugs. It's not always clear it will require a pre-authorization until the patient gets to the pharmacy, and then that can result in several days delay in care."
Some patients even have to go through prior authorization multiple times for the same medication when they try to refill a prescription, Resneck says. The patient may have changed health plans, or the medication protocols within the same health plan might have been updated.
Insurers eventually authorize most requests, Resneck says, but that does not diminish the impact of the required paperwork, phone calls, negotiations, and the delay in a patient's care.
The AMA survey examined the experiences of 1,000 patient care physicians, and 64% of physicians report waiting at least one business day for prior authorization decisions from insurers. Thirty percent said they wait three business days or longer.
In addition to 92% of physicians who said that the prior authorization process always (15%), often (39%), or sometimes (38%) delays patient access to necessary care, 78% said prior authorization can always (2%), often (19%), or sometimes (57%) lead to patients abandoning a recommended course of treatment.
Two days per week for authorizations
Eighty-four percent of physicians surveyed said the burdens associated with prior authorization were high or extremely high, and 86% percent said the burdens associated with prior authorization have increased significantly (51%) or increased somewhat (35%) during the past five years.
A medical practice completes an average of 29.1 average total prior authorization requirements per physician every week, which takes an average of 14.6 hours to process—the equivalent of nearly two business days, the survey found. The administrative burden is so high that 34% of physicians said they rely on staff members who work exclusively on the data entry and other manual tasks associated with prior authorization.
In January 2018, the AMA joined the American Hospital Association, America's Health Insurance Plans, American Pharmacists Association, Blue Cross Blue Shield Association, and Medical Group Management Association in a Consensus Statement outlining a shared commitment to industry-wide improvements to prior authorization processes and patient-centered care.
AMA and Anthem recently announced a collaboration to improve access to care that includes eliminating low-value prior authorization requirements. The AMA has been working with several health plans to address the problem.
"There are some medications and tests the insurer ends up approving the majority of the time, so doctors are spending a lot of time filling out paperwork and on the phone, and the health plan on the other end is spending a lot of time reading that paperwork and answering our requests," Resneck says. "One of the things we agreed to was eliminating some of those things from the pre-authorization list that were creating an administrative burden for everyone but for little or no benefit to the insurer."
Health plans also are agreeing to give physicians the benefit of the doubt in more situations, particularly those with good track records of making the right clinical decisions.
"We're trying to come up with a system in which health plans can have sort of a gold card for physicians that acknowledges they have been shown to practice evidence-based medicine and the insurer almost always approves the requested care," Resneck says.
"Then the insurer could waive a lot of the prior authorization requirements for that physician without any adverse results. The insurer still can be confident that the care is appropriate, but they and the physician are both spared the hassle and the patient gets the proper care without delay," he says.
State legislatures have shown some interest in limiting prior authorizations, Resneck says, but the AMA is focusing now on working directly with insurers.
"The legislative remedies for patient protection and access to medications may be a piece of the puzzle, but we are trying to start with a collaborative approach and finding areas of agreement with health plans," he says.
Consumers may spend more and get lower-quality care when trying to navigate the healthcare system on their own. Everyone may benefit when insurers guide them.
Consumers are no match for a healthcare system that can seem complex, inefficient, and expensive, and the employers offering their health insurance often are the ones who pay the price in higher premiums and medical expenses. Some are seeing the benefit in health plans that offer more handholding to guide consumers through the experience.
Concierge-type services have been offered for years, but they often were seen as a perk for top-tier clients, a way to help the lucky few avoid the hassle that the typical consumer experiences in the healthcare system. The outlook is changing now that employers are seeing the potential for better care and reduced costs by offering personalized assistance to the rank and file worker.
Insurers and employers are recognizing the value of providing a consumer advocate who can work directly with a consumer, supported by a team of multidisciplinary professionals, says Tom Meier, vice president of market solutions at Health Care Service Corporation (HCSC), a consumer-owned health insurer in the United States and a licensee of Blue Cross Blue Shield, serving nearly 15 million members.
The increased interest comes partly from the realization that the higher deductibles currently in use don't make consumers more thoughtful and engaged in using healthcare resources wisely, as many employers hoped, according to a recent healthcare industry survey. Instead, they just make them avoid healthcare altogether, including preventive healthcare.
Better utilization, lower costs
Some health plans are developing health advocacy programs, and there are companies such as Accolade that offer services to both employers and health plans. Accolade promises employers savings of up to 15% and says health plans can improve utilization and the member experience while reducing medical claims spend.
HCSC is addressing those goals with a program called Health Advocacy Solutions for large employer customers. It's a personal concierge program to address healthcare issues, answer questions, and encourage members to become advocates for their own health, Meier says. The program launched in January 2018 after a yearlong pilot program with a large client.
Six large employers have adopted the health advocacy solutions program and several more are considering it for the 2019 benefit year. The goal is to improve care and the customer experience, Meier says.
"But it's more than excelling at customer service. It's about moving away from focusing only on resolving customer problems and more toward becoming true advocates for our members, helping them navigate an incredibly complex healthcare landscape in ways that ultimately are going to deliver a substantially improved member experience," he says.
"We're also going to be able to influence the care they receive and reduce or mitigate a lot of waste from the healthcare system, eliminating a lot of the unnecessary medical care that occurs. We believe we're going to be able to achieve some pretty sustainable cost savings for our members and the employers," he says.
The key to making such a program work is to meld the clinical and nonclinical needs of consumers, Meier says. The traditional approach to care management has focused exclusively on the clinical issues—facilitating patient access to proper care and applying best practices, he says. Utilization issues were closely related, with insurers focused on issues such as length of stay and how to get patients to a lower-cost setting for care.
"On the nonclinical side, we focused on resolving customer problems like lost ID cards. Insurers wanted to make sure we were easy to do business with, answering questions our members had but not necessarily acting in a proactive way to prevent those problems" Meier says.
"With this program, we're reimagining the clinical side so we're no longer focusing on condition-specific solutions but instead focusing on the whole person and the whole population, looking for the best opportunities to intervene. We're doing that in a more real-time basis, when it is more meaningful for the member as opposed to a month after a situation occurred," he says.
Broader utilization management
Clinical concerns are addressed from a different perspective, Meier says, with a designated clinician looking at utilization management across different conditions, and including outpatient utilization more than in the past because so many more healthcare dollars are going there now.
HCSC also folds its pharmacy benefit management into the mix, because prescription coverage represents an increasingly large portion of medical expenses.
"We are sewing the clinical and nonclinical groups into one multidisciplinary team full of specialists—everyone from physicians, pharmacists, and social workers—to surround the consumer advocate who engages the member in both a reactive and proactive way," Meier says.
"There are ways to help people navigate the healthcare landscape that they may not even realize. We can help them, for instance, when they're in a PPO and need to know where's the best place to go for care, to get the care that is the most appropriate for them according to the literature," he says.
A health advocate may guide a consumer to alternatives to a spinal fusion, for example, that are less invasive, less costly, and that will provide a better quality of life afterward, Meier says. The patient benefits but so does the employer and the health plan.
The health advocacy program requires an investment from both HCSC and the employers choosing this option for their coverage, Meier says. The program is not overlaid on all HCSC plans because the additional expense must be covered by those employers who see the potential benefit, and that is why it appeals mostly to the largest employers.
"We have to look at whether this is something that will fit with their culture and whether the data show us that they're going to get the return that makes this worthwhile for them," Meier says. "If it looks right for them, we'll talk to them about switching over from one of our less intensive models to a solution like this health advocacy model. In those cases, we think there is a substantial yield to be had in managing their healthcare costs and in transforming their employees from passive to active participants in their care."
Insurance claims for urgent care exploded over a nine-year period, rising much faster than claims for emergency care.
Private insurance claim lines for urgent care centers grew 1,725% from 2007 to 2016, more than seven times faster than that of emergency room claims, which grew 229% over the same period.
The increases are described in analysis by FAIR Health, a nonprofit organization that focuses on transparency in healthcare costs. The analysis used data from FAIR Health's database of over 25 billion privately billed healthcare claims.
The report includes trends and patterns in the places where patients receive healthcare, which the group says have undergone dramatic changes in recent years as alternative places of service—including urgent care centers, retail clinics, telehealth and ambulatory surgery centers (ASCs)—have become more widespread.
The urgent care center market has reached 15 billion, according to a report by Kalorama Information. Some of the growth is due to hospital systems starting urgent care centers to reduce the demand at their hospital emergency rooms, aiming to make those areas of their system more profitable, the report notes. Other centers are started by entrepreneurial physicians as a means to expand their income while meeting a market need.
The number of clinic locations has similarly risen strongly, standing at over 10,000 locations in 2017, according to the Kalorama report.
Kalorama estimates that the average urgent care center in 2016 saw 294 patients per week and about 15,300 patients throughout the year. It predicts patient volume will continue to expand through 2021 to about 300 patients per week.
Diagnoses Differ by Location
Different places of service are associated with different diagnoses, the FAIR Health report notes. For example, in retail clinics and urgent care centers in 2016, acute respiratory infections, such as the common cold, were the number one diagnostic category. But in telehealth, mental health-related diagnoses were number one.
Places of service also differ in cost. In 2016, the median charge for a 30-minute new patient office visit ranged from $294 in an office to $242 in an urgent care center to $109 in a retail clinic, the report says.
The average median billed charge for professional evaluation and management services (E&Ms) provided in a hospital setting increased 28% in five years, from an index value of 1.00 in May 2012 to 1.28 in May 2016, according to the FH Medical Price Index, the report says. “The index also shows that five-year growth for allowed amounts for professional E&Ms in a hospital setting—reflecting the maximum amount an insurer will pay for a service—was slightly lower: 26%, from 1.00 in May 2012 to 1.26 in May 2017.
Surgery Charges Almost Steady
By contrast, the index for professional billed charges for surgery shows growth of only three percent in the five-year period, and the surgery allowed amount index shows growth of two percent, FAIR Health President Robin Gelburd said in a statement accompanying the report. The relative flatness of the surgery indices compared to those for professional E&Ms in a hospital setting may be due to a number of factors, including hospitals buying physician practices, new technologies that lower prices and hospital surgeons needing to keep their prices competitive with ASCs.
"In a time when healthcare spending accounts for almost 18% of the nation’s gross domestic product, and the healthcare ecosystem is undergoing rapid evolution, we hope that these new tools will inform decision making by all healthcare stakeholders, including payors, providers, government officials, policy makers and others," Gelburd said.
Even as insurers see improvements and cost savings from value-based arrangements, they have to look for new ways to implement the strategy.
The shift to a value-based healthcare system is showing positive results but the low hanging fruit has already been grabbed, says a health plan leader. Insurers and other healthcare entities will have to get creative and find more complex ways to draw value from the system.
That's the challenge facing UnitedHealthcare, which is seeing significant advances in people's health behaviors, better coordination of care among physicians and facilities, and cost savings with care providers who have implemented value-based arrangements, according to a recent report from the insurer.
Approximately $64 billion of the total annual payments UnitedHealthcare makes to care providers is tied to value-based arrangements, and the company expects that figure to rise to $75 billion by the end of 2020, says Gyasi Chisley, vice president for payment strategy at UnitedHealthcare.
"You get good results and you challenge yourself even more," he says. "We're committed to reaching that $75 billion mark but that's something that is going to be pretty hard to do because we've pretty much exhausted the low-hanging fruit. We've eaten that and seen the results, so now we're going to aim higher with partnerships with providers."
One strategy involves ensuring that physician incentives are appropriately distributed, he says.
"We want to make sure that incentives are not going only or primarily to a subset of urban physicians or physicians tied to a health system," Chisley says. "The challenge is how to take our products and incentives and proliferate them to a more rural setting or to physicians who operate in a more independent fashion. Expanding more into the rural setting will let us engage physicians that we might not otherwise reach. "
Physicians like to work with other professionals they trust, Chisley says, so UnitedHealthcare is looking for ways to incorporate not only primary care physicians but also specialists in the mix for value-based care programs.
"We want to get as many members as we can into a value-based care program and track those metrics accordingly," he says. "We can't optimize those numbers without reaching out more to their physicians, their specialists, and others who aren't involved in value-based care right now."
Real-time data
Part of UnitedHealthcare's value-based care strategy involves utilizing data in real time, Chisley says. The health plan integrates its own data with provider information to create more of a real-time snapshot of the patient experience than has previously been available.
"We want to get that current snapshot of what the member is going through so we can make sure we're designing programs and value-based care products that match not only the provider's needs but also what the member is going through," he says.
Accountable care organizations (ACO) serving employer-sponsored plan participants perform better than non-ACOs on 87% of the quality metrics tracked, the report says, with hospital admission rates that are 17% lower for ACOs serving employer-sponsored and individual plan participants compared to non-ACOs.
"We know we're making an impact, making a dent, but we still have a long way to go to leverage everything we have in the entire enterprise," Chisley says. "That includes driving not only the results, but changing the mindset and the culture as well."
UnitedHealthcare has about 15 million people enrolled in value-based plans, and Chisley says clear patterns have begun to emerge illustrating the benefit of that enhanced care coordination.
Providers are embracing the concept more in recent years, he says. Twenty percent of Medicare ACOs working with UnitedHealthcare are sharing a greater portion of the responsibility for patients' total care, including quality and healthcare costs, compared to a year earlier.
Some of the early adopters in the provider community are starting to see their Triple Aim goals come to fruition, Chisley says. The Triple Aim calls for providers to improve the patient experience of care (including quality and satisfaction), improve the health of populations, and reduce the per capita cost of healthcare.
The UnitedHealthcare report cites the example of Arizona Care Network, which reduced its healthcare costs by millions of dollars within the first two years of its ACO with UnitedHealthcare. According to the report, patients requiring a hospital admission spent 25% less time in the hospital. Arizona Care Network also saw a 30% increase in the number of UnitedHealthcare patients it serves, says Chisley.
"We know there is still more opportunity to partner with providers and bring them the benefits of value-based care, so we're looking at more ways to reach out to those providers," Chisley says. "That is what is propelling us for the next several years, through 2020 and we're setting goals even into 2025."
