The COVID-19 pandemic has intensified the shortcomings of the fee-for-service model of healthcare, as this article from Bloomberg Law illustrates. This article was published in July of 2020, and since then, events have only provided more evidence. The pandemic continues to reduce the volume of health services provided onsite at medical facilities, and fee-for-service based practices and hospital systems continue to feel the effects. It’s past time to move away from provider payment systems that rely on the volume of services rendered.
The article provides a perspective on how policies like Medicare Access and CHIP Reauthorization Act (MACRA) sought to support value-based care (although the mechanics of incentives have actually discouraged alignment of primary care and specialist care). The article further suggests how incentives can be restructured to accelerate the movement from volume to value.
The progression towards value-based care
Before the pandemic, policymakers identified that value-based models could provide a better experience for patients and providers, as well as a more sustainable future for the Medicare Trust Fund. The Centers for Medicare & Medicaid Services (CMS), the largest healthcare payer in the US, has been moving towards value-based payment systems since the early 2000s.
These changes, which began with how hospitals are paid, have since prompted provider groups to join accountable care organizations (ACOs) and advanced payment models (APMs). In these programs, participants take on a mix of risk and reward for the outcomes of their patient populations, earning bonuses if they demonstrate decreased cost and increased quality of care. Regulations require participants to meet a threshold of patients or payments, or specific attribution requirements. The intended goal was to accelerate the shift towards value.
In reality, the transition has not been so simple: these thresholds can serve as a barrier for participants to achieve payment bonuses. The structure of the thresholds can discourage some APM entities from including specialists in the APM network. This structural flaw discourages multi-specialty practices, makes it more difficult to achieve alignment amongst health services, and ultimately reduces the number of physicians and patients participating in APMs.
Although these ACOs and APMs have shown both positive results and shortcomings, the COVID-19 pandemic highlighted opportunities to improve the program structure. The Bloomberg Law article makes some intriguing recommendations for how APMs could be improved: reducing patient-count thresholds, extending the 5% bonus payment to encourage participation, and improving communication between CMS and program participants.
This article sums up an important conversation that needs to be had: how can policymakers rethink incentives to encourage the necessary shift to value-based care? But providers and payers shouldn’t wait for policymakers to create “perfect conditions” for value-based care — the time to switch is already here. And those who lead the transition will be able to provide the best patient outcomes and ultimately emerge in the strongest position.
How value-based care benefits providers
COVID-19 caused both healthy and chronically ill patients to skip essential health visits, leaving provider offices and health systems to contend with enormous revenue shortfalls. Value-based care relieves the pressure to deliver a high volume of services and allows primary care providers to break the cycle of overreliance on specialty care. During the pandemic, providers who participated in these two-sided risk models were able to quickly respond to the virus by offering coordinated care to seniors confined to their homes and telehealth services. The APM infrastructure acted as an important public health resource for communities in need — serving patients even without in-person visits.
And although every provider has experienced some level of exhaustion since the onset of COVID-19, the value-based model has been more effective at alleviating physician burnout as the pandemic continues. It’s the best way forward for providers who want to operate at the top of their license and experience the satisfaction of helping patients achieve better long-term health outcomes.
How payers can invest in value-based primary care
Payers don’t have to wait for policies that provide better incentives, they can move forward immediately. When they partner with Vera to deliver primary care for their members, they balance insurance risk with provider risk. In doing so, they can be in the vanguard of a more cost-effective and more caring approach to health.
Vera is well positioned to be a strategic partner in the risk-bearing ACO and APM environments. Why? Because our advanced primary care (APC) model improves patients’ whole health: through biopsychosocial care, health coaching, care coordination, and analytics that help target population needs. Our model is also designed to offer the flexibility to respond to patients’ needs and meet them wherever they are, whether in a pandemic or post-pandemic world.
Vera’s APC model gives payers the ability to control the total cost of care, offer a better member experience, attract new members, and increase retention.
As the Bloomberg News article signals, public policy relating to value-based care will continue to change as public scrutiny of healthcare increases. Vera will be paying close attention to these changes to ensure that our partners will continue to benefit from a risk-bearing, value-based model that leads to a better member experience.
Do you want to be at the forefront of change in healthcare? To learn more about advanced primary care, download this free eBook.