Value-Based Reimbursement Reduces Costs 15.6%, Improves Quality

Value-based reimbursement models are moving the needle on quality and cost, a new analysis from Humana shows.

In 2017, medical costs for patients attributed to primary care practices (PCPs) in Humana’s value-based reimbursement models for Medicare Advantage (MA) were 15.6 percent lower compared to Medicare fee-for-service, the insurer reported.

Internally, medical costs were also one percent lower for patients seeing PCPs in value-based payment models compared to patients treated by PCPs in Humana’s Medicare Advantage fee-for-service (FFS) setting.

Humana MA value-based physicians had better results than their peers in FFS,€ Kathryn Lueken, MD, MMM, Humana’s Corporate Medical Director of Medical Market Clinical Integration, wrote in the report. The goal of taking costs out of the system and creating more value for the care received is showing results. Thus, value-based care is achieving the goal of creating higher quality medical care for lower cost.€

The transition to value-based care and payment has been a long and bumpy road for the healthcare industry.

The Affordable Care Act really pushed the value-based care movement, but since then only about one-third of healthcare payments are tied to an alternative payment model with some degree of shared savings or risk, the Health Care Payment Learning & Action Network (LAN) recently reported.

Recent research also questions if value-based reimbursement can truly lower costs while maintaining or improving care quality. For example, a 2018 Healthcare Financial Management Association (HMFA) study of commercial payer and Medicare data from 2007 to 2015 found that the efficacy of alternative payment models reducing costs and improving care quality has yet to be proven.

However, value-based reimbursement at Humana is working to improve not only costs, but also utilization and quality, the insurer reported on Tuesday.

Patients in value-based reimbursement agreements were admitted to the hospital inpatient department 23.4 percent less than patients in traditional Medicare in 2017. And the patients went to the emergency room 15.6 percent less.

Even patients attributed to PCPs in bonus-only arrangements, which had limited upside shared savings, had fewer hospital admissions and emergency room visits. Hospital inpatient admissions and emergency room visits were 19.1 percent and 10.1 percent lower, respectively.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

Humana also linked value-based reimbursement to increased preventive care utilization.

For example, patients attributed to physicians in value-based reimbursement agreements had more breast cancer screenings (78 percent) versus patients in fee-for-service (69 percent) and bonus arrangements (69 percent).

With cost and health outcomes improving, physician Healthcare Effectiveness Data and Information Set (HEDIS) also increased in 2017, Humana reported. HEDIS Star scores for physicians in value-based reimbursement agreements were 4.21 out of 5 stars, on average, from 2014 to 2017. The physicians had higher average scores than providers in all other types of agreements through Humana’s Medicare Advantage business lines.

Physicians who moved from bonus-only arrangements to value-based reimbursement agreements after 2014 also saw the best HEDIS Star scores in 2017, the insurer added.

“While we know that all physicians are committed to patient health, those in value-based care agreements have access to additional resources and capabilities to build the infrastructurethey need to expand their reach outside the practice,” Laura Trunk, MD, MBA, Medical Director of Provider Development at Humana, explained in the report.

READ MORE: What Is Value-Based Care, What It Means for Providers?

“Focusing on prevention and the whole health of their panel population allows physicians and their care teams to work more strategically to improve the care of their patients, thus keeping them home and out of the hospital and emergency room,” she added.

And the home is where Humana sees value-based care going in the future.

“Our experience tells us that, with the evolution of value-based care, PCPs are relying on a team-based approach to stay connected to their patients in their everyday lives. That’s why we, at Humana, believe the future of health care is in the home,” wrote Humana Chief Medical Officer Roy Beveridge, MD.

In-home care is key to reducing readmissions, which impact every fifth hospitalization in the Medicare fee-for-service population.

“We have found it’s essential to augment the reach of the PCP with holistic, in-home care services for their recently discharged patients within the first 24 hours of their homecoming,” Beveridge explained.

According to the CMO, holistic in-home care for a physician in a value-based reimbursement arrangement has six elements: an initial in-home consultation, care coordination, clinical care services, analytics and predictive models, in-home technology, and virtual house calls through telemedicine.

Transitioning care to the home will be vital to lowering costs and improving care quality under value-based reimbursement models.

“Looking ahead, Humana will continue to make investments in accelerating our integrated care delivery strategy, which encompasses supporting physician practices and care providers, making it easier for our members to engage at the intersection of health care and lifestyle, and leveraging technologies and clinical analytics that enhance our holistic health approach,” Beveridge concluded.

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