CMS created the Star Ratings system in 2008 to help seniors compare quality and performance among Medicare Advantage (MA) Part C plans and Part D prescription drug plans (PDPs). Insurance companies also benefit, as a plan’s star rating influences patients and directly affects membership growth. In 2012, CMS upped the ante by linking premiums and bonus payments to each plan’s star rating. Roughly, each half-star change in a plan’s rating affects bonus revenue by 25-30%, with the most significant reductions occurring when a plan drops under 4 stars. In real dollars, a plan increasing their star rating from 3.5 to 4.0 would result in double the annual bonus payment (referred to as a “rebate percentage”). Bonus payments are substantial, with an average amount between $700 - $1,000 per patient per year.
Practice transformation is an ongoing process of developing a practice into a Patient-Centered Medical Home (PCMH)—a theoretical model of primary care delivery that is coordinated, team-based, and committed to achieving the Triple Aim of medicine.1 In today’s value-based healthcare environment, the Triple Aim guides practices to provide better care, achieve higher patient satisfaction, and lower healthcare costs per capita.
Patient-Centered Medical Home,
The number of High Deductible Health Plans (HDHPs) and Consumer-Directed Health Plans (CDHPs) in the market continues to increase as patients and employers look for lower monthly premiums and payers aim to place more financial risk on patients.
In 2016, the Kaiser Family Foundation reported that an average of 51 percent of workers were covered by a health plan with an annual deductible over $1,000 for single coverage. This group of individuals had increased by 22 percent since 2009, and this trend continues to rise.1 With high deductible plans, patients are often liable for the entire cost of the payer negotiated rate of their physician visit, and the high out-of-pocket expenses are driving them to make savvier healthcare decisions. Patients desire more financial transparency, access to healthcare costs, and increased communication from their provider. Yet despite patients’ increased financial awareness regarding their obligations, many are still unreliable payers in the market.
Revenue Cycle Management,
high deductible health plans,
2018 is expected to be another tumultuous year for the healthcare industry, even though industry growth is projected to remain mostly stable.1 With the repeal of the Affordable Care Act (ACA)’s individual mandate, uncertain policy efforts to strengthen state marketplaces, and ever-increasing insurance premiums, there will be a broad range of challenges facing the industry this year.
Yet for physicians and clinicians, the industry’s shifting tides will not be the center focus. Physicians will place increased emphasis on alleviating operational challenges, improving the quality of care for their patients, and tracking compliance with care plans to improve patient outcomes. These improvements are expected to aid in the decrease of overall healthcare spend, since industry trends in 2018 will focus on innovative ways to lower costs, increase quality, and reduce unnecessary utilization.
2018 healthcare trends,
quality payment program,
high deductible health plans
Despite the past year of uncertainty surrounding healthcare policy, one objective has remained consistent. As payment models shift from fee-for-service to value based care, physicians are more accountable than ever for providing high quality services, while lowering the overall cost of care.
Yet today’s primary care physician (PCP) is responsible for more than the care he or she provides directly to patients under value based contracts. They are also accountable for a patient’s full continuum of care and all patient-provider encounters. Since quality and cost of care vary drastically across hospitals and providers, how can you ensure that your patients are receiving high-quality/high-value care?
Yes – but only if insurers do their part.
Thousands of primary care providers transformed their practices to patient-centered medical homes in preparation for performance-based payment models. No doubt some groups submitted NCQA application for PCMH recognition status, but little changed in their day-to-day work flow. They just churned through as many patients as possible because their fee-for-service payments remained the key to their economic survival.
However, some of us actually made substantial investments in how we delivered patient care. We believed these new payment models promised to economically align payers, providers and, dare we even say it, patients. We examined and changed everything we did to prepare, with the full understanding that we were going to risk our payment if we missed the mark on quality and cost. We even considered alternative payment models (APMs), where we would pay money back to the payer if we missed the mark. Of course, these opportunities were touted to yield much bigger payments than the best of the fee-for-service contracts, but who would have ever “thunk it” -- doctors leaping head first into a risk-based payment model where they might have to refund payments to the payer for failure to meet cost benchmarks!
At first, it worked. High-performing practicesimprove patient outcomes and experience and lower the overall costs of care. But in many markets, the APMs that would provide long-term economic sustainability to these high-performing groups never materialized.
Patient-Centered Medical Home,
McKinsey & Company recently published the results and analysis of a global survey on IT’s future value proposition. While many expect IT, and CIOs for that matter, to play a growing role in improving business results, IT still suffers from performance issues and unfulfilled promise. The survey suggests that CIOs must raise their skills and influence within their respective organizations. Of the 709 respondents, many felt IT will contribute most through innovation and integration – that is, better integrating solutions that support business results. As I read this and applied it to the healthcare industry, I couldn’t help but think about how these issues related to the current malaise – an ambivalent sense that we’re not sure whether technology is advancing progress, or further complicating it. There are more than a couple of general conclusions from the survey that apply explicitly to healthcare.
First, integration seems to be even more important in industries with legacy technologies, and the healthcare business is full of proprietary, siloed, premise-based technologies. One explicit use case in today’s migration to value-based medicine is the challenge of providing relevant, timely information to caregivers operating in delivery environments with multiple electronic health records. There is no easy way to build sustainable integration today, but this must be solved in the future.
IT and analytics,
Role of CIO
There’s been a lot of discussion about reforming our health care system over many generations and presidential administrations, and most recently in the run-up to and immediate period after the election of Donald Trump. Republicans promised for 7 years to repeal and replace Obamacare only to (so-far) fail miserably at walking-the-walk. I believe the political milieu, is at best a red herring, innocuous and really noise. The fact is the value movement that we’re talking about in health care is really a market movement. The proverbial train has left the station and market principals are already starting to disrupt the industry.
I was participating in a recent panel about innovation in healthcare, and the moderator asked the panelists, “what one thing would you do to change the status quo, to drive
?”. My colleagues, all experts, but all practioners in the “old health economy” shared all the conventional wisdom; all the responses were, at best, representative of incrementalism. I had the luxury of answering last, and used the time to my benefit for once. I suggested that completely privatizing Medicare would be my choice. Privatizing or “Marketizing” Medicare would expose one of the world’s biggest monopolies (short of true single payer government plans) to market forces. From a budgetary perspective, privatizing Medicare from its current defined-benefit approach to a defined budget, or defined-contribution model would allow
to more predictably budget for growth in the program, and leverage the market of many willing sellers of insurance and services.
I recently attended a great health care industry “futures” conference, a chance to get the pulse of the industry through discussion with key thought leaders. Despite all the noise around ACA, “repeal and replace”, “skinny repeal”, etc., there were two take-aways that reinforced what I’ve already been feeling.
The first is the need for much better, much deeper, much more transparent payer and provider collaboration. Call this “joining the dark side”, coopetition, etc. – the demands of new health care consumers and their surrogates will demand more seamless collaboration. Collaboration is a vague, over used phrase; in my estimation, both those paying for and financing care (purchasers and their payer representatives; often health insurers) and those delivering and (increasingly – see high deductibles and higher co-pays) financing care (providers) must be more willing to work together to solve problems. This requires compromise, and a long-view. One of my favorite sayings is, “Pigs go to feed, hogs go to slaughter”; we have too many hogs and not enough pigs.
Payer Provider Collaboration,
Community Based Physicians
Though telemedicine has been a segment of the healthcare industry for years, the use of telehealth technology has not expanded to meet its full potential. Telemedicine still has a few challenges to overcome, the biggest being the lack of strong financial incentives for implementation and utilization—despite telehealth’s capacity to lower overall healthcare usage and save time for providers.
The healthcare industry lacks a unifying drive to incorporate telemedicine into physicians’ day to day routines, since in many states providers are not reimbursed for tele-visits at the same rate as in-person visits. Continuum Health's CMO, Dr. Michael Renzi, recently wrote on his difficulty embracing telemedicine due to a continuing need for fee-for-service payments. Though telemedicine offers great opportunities for practices, it is stymied by the lack of proper reimbursement.
Yet with the volatility surrounding healthcare policy under the Trump administration, there is hope that new or further developed healthcare legislation could incentivize telemedicine for providers, helping them to achieve the Triple Aim.