Health Is Wealth: The Latest on Alternative Payment Models

BY SANJAY DODDAMANI, MD, STEVE NEORR, AND VALINDA RUTLEDGE

“Physician, heal thyself, brings new meaning by embracing payment reform, delivery reform, and digital transformation.”

As Americans emerge from the pandemic, there is heightened awareness of the importance of having adequate healthcare coverage, managing out-of-pocket costs, and recognizing how risk factors play into surviving an illness. It is also vital to preserve access to ongoing care for chronic conditions and acute care for emergencies. Both chronic and acute care were impacted by the pandemic:

• In the early phase, death rates were higher for acute events when patients avoided hospitals for strokes and heart attacks.

• By failing to control chronic conditions, patients who missed testing and preventive care experienced worse health outcomes.

• Primary care physicians whose sole revenue was fee-for-service experienced adverse financial impact in 2020.

• Meanwhile, payers showed record earnings during the same period.

Both patients and physicians can agree that the current payment model does little to provide value or patient experience commensurate to the level of healthcare spending. So what comes next?

As a professional association with more than 350 medical groups, health systems, and independent practice associations accustomed to bearing substantial financial risk, America’s Physician Groups (APG) members have been leading participants in alternative payment models (APMs) for years. APG has a dedicated APM Committee that addresses payment model options and facilitates discussion and sharing of best practices by national experts. The idea is to further the development of APMs—including accountable care organizations (ACOs), medical homes, and bundled payments—across all payers.

The committee’s discussions cover a wide range of topics but mostly revolve around three areas: payment reform, delivery reform, and digital transformation. Below is a look at some of our discussions over the past year with several national experts.

1. PAYMENT REFORM

David Muhlestein, PhD, JD, Chief Research Officer at Leavitt Partners, a leading healthcare consulting firm, spoke at our March 23 committee meeting. Dr. Muhlestein spoke of the coming tsunami of healthcare reform while acknowledging the pandemic’s many unknowns.

Of the known issues, he addressed weaknesses in the system that need to be identified and urgently addressed. These include the disproportionate federal spending on traditional healthcare, which is threatening the solvency of the Medicare trust fund. This traditional approach perpetuates volume-overvalue payments and highest-paid services, rather than building low-priced services that meet patient need. It also focuses on filling capacity instead of preventing high-cost care.

How can we shift from these traditional objectives for growing market share and margin to ones that lower total cost of care and reduce the amount of services? This can be achieved with better aligned incentives that produce greater savings relative to the benchmark—while maintaining higher quality and experience. The biggest example of this alignment has been the profusion of ACOs and improved financial performance with increased years of ACO experience.

2. DELIVERY REFORM

Payers promoting delivery reform at scale began largely at the federal government. Today, delivery reform continues to expand across the private sector, from payers and employers. The Health Care Payment Learning & Action Network (HCP-LAN), an active group of public and private healthcare leaders, promotes accelerating the percentage of U.S. healthcare payments tied to quality and value in each market segment.

Speaking at an APM Committee meeting in January, Marion Couch, MD, PhD, MBA, FACS, a former senior adviser to the Centers for Medicare & Medicaid Services (CMS) administrator, explained that both government and private sector health spending can be better controlled by adopting APMs with two-sided risk. Dr. Couch has participated in HCP-LAN meetings and serves as Senior Vice President and Chief Medical Officer at Cambia Health Solutions, which includes six health plans and related health and life-science companies.

By facilitating an economically accountable relationship between patients and providers through two-sided risk, providers are incented to transform care delivery from one of traditional ”sick care” to one focused on wellness and prevention, she said. Margin can truly be reimagined and created through keeping people well—instead of through admissions, procedures, and testing. The goal is not only to make healthcare more affordable, but to also change care delivery to be better aligned with the well-being of patients.

Cambia adopted a next-generation human services platform with a strong digital backbone to make data more accessible and transparent with providers. This enables Cambia to share quality and encounter data in near real time and help practices become more efficient in care delivery, with better outcomes and financial performance.

Another guest speaker, Mike Palena, Vice President of Network Strategy and Performance at Meridian Health Plan, a Centene company, laid out innovative solutions augmented by actionable data from a quality reporting package and standard reporting suite. Meridian Health Plan reimburses primary care physicians under a capitation model distributing shared savings or provider surplus within a total cost of care model. There is also a “light” version for those who are new to receiving value-based payments. The goal of these new platforms and partnerships with providers is to change the way care is delivered.

APM Committee Co-Chairs Sanjay Doddamani, MD, and Steve Neorr are both part of integrated delivery systems with accountable care or delegation across multiple product lines. They both say that capturing risk adjustment when patients stayed home or avoided seeking medical care has been extremely challenging. In committee discussions over the past year, they described ways to help providers manage risk in the time of COVID-19:

• At Southwestern Health Resources (SWHR), network physicians closed thousands of quality gaps using home vendor services where needed—a preemptive attempt to stem the drop in quality scores seen nationally.

• At Cone Health, one strategy deployed through its ACO, Triad HealthCare Network, has been to go upstream and initiate prospective, not retrospective, reviews to help inform providers of outstanding HCCs (diagnosis codes) prior to a visit.

3. DIGITAL TRANSFORMATION

COVID-19 vaccines hold great promise for giving people much-needed reassurance to resume preventive care and healthy living after they have been vaccinated. But vaccine hesitancy and other factors have held back some of the highest-risk patients.

Using advanced data analytics and artificial intelligence to prioritize high-risk patients is an approach that has been developed and modeled to save more lives and reduce avoidable hospital costs. By applying machine learning algorithms for vaccine prioritization, high-risk patients can receive coordination of care, scheduling, and other services to register, travel, and complete their COVID-19 vaccines.

Andrew Eye, CEO of ClosedLoop.ai, a finalist in the CMS AI Health Outcomes Challenge, spoke to our committee this spring. Eye explained how simply following the Centers for Disease Control and Prevention vaccine rollout guidelines cannot discern who among the 1b population (frontline essential workers and people age 75 or older) has incremental risk for being hospitalized due to COVID-19 beyond simply age and comorbidities. Running an AI analysis on a large population at SWHR’s clinically integrated network revealed that patients in the highest-risk cohort were four times more likely to be hospitalized for COVID-19 over the conventional 1b list. This has great implications for reducing the number of unvaccinated high-risk patients.

With over 1,500 variables in the algorithm— including a frailty index and other variables, like the number of prescription drug classes or social factors—machine learning can explain at the population and individual level which risk factors have the greatest impact on adverse outcomes.

If you look beyond the pandemic, there are vast use cases at the population level to recognize and mitigate risk, especially when there are clear levers for intervention. This can help providers find the right patient who will derive the best outcomes from an intervention and can be applied to frail and sick patients and those with social risk factors.

The future of U.S. healthcare can become secure when better value, health equity, and consumer empowerment become the centerpiece. The APM Committee will continue to discuss and share best practices among various payment model options that liberate physicians from a predominantly fee-for-service model to a brighter and more sustainable future in value-based care.

Physician, heal thyself, brings new meaning by embracing payment reform, delivery reform, and digital transformation. o

Sanjay Doddamani, MD, is Chief Physician Executive and COO, Southwestern Health Resources (sanjayd@southwesternhealth.org), and Steve Neorr is Senior Vice President of Population Health for Cone Health (steve.neorr@conehealth. com). Valinda Rutledge is Executive Vice President, Federal Affairs, for America’s Physician Groups (vrutledge@apg.org).

Sanjay Doddamani, MD

Steve Neorr

Valinda Rutledge