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Payers, providers seek remedies to value-based care challenges

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Insurers join forces to control value-based healthcare delivery

Commercial insurers are key drivers in the transition to value-based care in health systems through joint ventures, analytics and greater control over delivery of patient care.

Beyond government mandates, commercial insurers have become a key driving force in the transition to value-based healthcare delivery.

UnitedHealth Group estimated that, by the end of 2020, it will make $75 billion in medical payments that are tied to value-based care contracts -- up from $64 billion in 2017, nearly half of its medical spend. Anthem, which operates Blue Cross Blue Shield plans in 14 states, had more than 58% of its reimbursements tied to value-based relationships in 2017. And about half of Aetna's medical spend is tied to value-based contracts.

To insulate themselves from competitors and hospital consolidation, insurers have been working to gain more direct control over value-based healthcare delivery, and a number of payers have been seeking direct ownership or investment of provider organizations in recent years. UnitedHealth Group's OptumCare division employs about 30,000 physicians. Assuming the DaVita Medical Group acquisition closes as planned, that number will swell to 47,000.

Blue Cross Blue Shield of Texas announced plans in April to open 10 primary care clinics in partnership with clinic operator Sanitas USA. Under the plans, Sanitas will provide primary care, urgent care, lab and diagnostic imaging, care coordination, and wellness and disease management. Sanitas also operates clinics for other Blues plans, including Florida Blue and Horizon Blue Cross Blue Shield of New Jersey. In addition, Blue Cross and Blue Shield of Nebraska "is an investor in Think-ACO [Accountability Care Organization]," said Debra Esser, M.D., the company's chief medical officer.

Aetna's multiple joint ventures

Since 2013, Aetna has created five joint ventures with health systems as part of its Vision 2020 mission: Banner | Aetna, Innovation Health (with Inova), Texas Health Aetna, Allina Health | Aetna and Sutter Health | Aetna. "[T]hese joint ventures benefit from a co-branding strategy where Aetna has partnered with a large, geographically influential integrated delivery network [IDN]," said Patrice Wolfe, former CEO of Aetna's Medicity division and currently a member of the CareSource board of directors. "Aetna provides membership to populate the new, jointly branded product and enable the new [joint venture] to launch with a critical mass of at-risk patients."

Patrice Wolfe, former CEO of Aetna's Medicity divisionPatrice Wolfe

In addition to lending the joint venture its insurance pricing and claims processing expertise, Aetna provides technology and services as well as marketing strategy and execution to grow member enrollment, assistance with the mechanics of selling insurance, leads on state insurance license procurement, and tips on meeting state insurance requirements. It also provides call center services and analytics to help the new entity monitor at-risk patients. The IDN obviously owns patient care, but for other activities, the parties negotiate which parent organization will provide which services. In some cases, an activity may sit with Aetna for the first few years, eventually transitioning to the IDN as membership grows or a particular skill set matures.

Premara teams with MultiCare Health

Premera Blue Cross -- the largest health plan in the Pacific Northwest, serving more than two million members -- launched Peak Care in January 2019. A joint venture with MultiCare Health System, Peak Care "relies on a narrow network supported primarily by MultiCare's system of clinicians," said Matthew Neidich, Peak's product director. "[W]e looked at all functional areas of the offering, designating an accountable point person from both MultiCare and Premera for each issue."

The program was designed to ensure complete financial alignment between Premera and MultiCare. "[R]isk can be shared up to 50% with MultiCare, and that includes all costs -- not just claims," explained Andrew Smith, Premera's director of innovation development. "Costs include commissions, administrative costs, claims processing costs, as well as the underlying medical loss ratio."

Peak has been focused on how to redesign the patient experience, including providing free transportation to get to appointments, free valet parking at clinics and ensuring digital activation for members. The two organizations created deep bidirectional data integration between their systems, and that interoperability and transparency will be "essential to the program's long-term success," Smith noted.

BCBSMA's cost-control contracts

Faced with year-over-year increases in medical costs topping 10% in 2008, Blue Cross Blue Shield of Massachusetts (BCBSMA), which serves 2.9 million members, created the Alternative Quality Contract (AQC) to control costs. Today, the AQC includes 85% of the physicians and hospitals in the Blue Cross HMO network, more than 50% of the physicians and hospitals in the Blue Cross PPO network and about 80% of primary care and specialty care providers in Massachusetts.

James Colbert, M.D., senior medical director, BCBSMAJames Colbert

Under the contract, BCBSMA establishes a global, multiyear budget for AQC provider organizations, including inpatient, outpatient, pharmacy and behavioral health, according to James Colbert, M.D., senior medical director for delivery system innovation and analytics at BCBSMA. "The initial global budget is based on historical healthcare costs," he said, "and is then adjusted annually for inflation and specific health status of the provider's patients." In addition to the global budget, BCBSMA offers a performance incentive based on ambulatory and hospital quality metrics as well as patient experience measures.

To administer the AQC contracts, BCBSMA built complex internal technology systems. A provider support team uses data analytics to help providers derive actionable opportunities that reduce overall care cost and improve quality. BCBSMA also produces benchmarking and comparative analytics that yield "significant value," Colbert said, adding that the contracts average about three to five years in length, enabling providers to make long-term investments in processes and systems and eliminating concerns over interim contract negotiations.

Anthem tools improve patient outcomes

Anthem has transitioned more than 84,000 physicians providing primary care services to value-based healthcare delivery arrangements, covering upside-only and shared-risk relationships, according to Frank Bordonaro, the company's vice president of payment innovation and ACO strategy. Anthem has also launched a range of bundled payment programs and is investigating behavioral health and chronic care bundles.

Dana Pepper, staff vice president of care delivery transformation, AnthemDana Pepper

Its care delivery transformation team offers several technology tools and services to providers, including a web-based population health tool and an emergency room inpatient admission census report to enable more effective case management. "Members of this team visit the practice on a regular basis, building strong relationships with the practice and the clinicians," explained Dana Pepper, staff vice president of care delivery transformation at Anthem. They then collaborate closely to identify improvement opportunities and create customized action plans for each group, ranking the practice's opportunities for improvement by cost considerations as well as the impact on patient experience, she added.

Healthy outlook for value-based care

As they investigate opportunities to be nimble, share risk and exert more control over care delivery, payers are placing multiple bets in the value-based care arena because there's no one-size-fits-all approach to payer-provider value-based collaborations. In addition to providing adjudicated claims data to participating providers, insurers are working hard to provide tools and services to enable the success of their provider practices.

Payers are using teams of transformation experts to provide analytics, benchmarking capabilities, services to identify improvement opportunities, and coaching to providers through transformations or implementations of action plans. It's early in the lifecycle of most value-based healthcare delivery partnerships, and collaboration structures that progress toward downside risk will continue to evolve at varying speeds. And though not as yet a key component, social determinants will begin playing an ever-increasing role in value-based care collaborations of the future.

This was last published in June 2019

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