Moving to the Future of Healthcare: Value-Based Models

November 12, 2015
Laura Joszt, MA
Laura Joszt, MA

Laura is the editorial director of The American Journal of Managed Care® (AJMC®) and all its brands, including The American Journal of Accountable Care®, Evidence-Based Oncology™, and The Center for Biosimilars®. She has been working on AJMC® since 2014 and has been with AJMC®'s parent company, MJH Life Sciences, since 2011. She has an MA in business and economic reporting from New York University.

The government is leading the charge toward value-based care and no matter how slowly, everyone else will follow, said Jacque Sokolov, MD, chairman and CEO of SSB Solutions, during the opening keynote presentation at the Fall Managed Care Forum 2015.

The government is leading the charge toward value-based care and no matter how slowly, everyone else will follow, said Jacque Sokolov, MD, chairman and CEO of SSB Solutions, during the opening keynote presentation at the Fall Managed Care Forum 2015, presented by the NAMCP Medical Directors Institute, the American Association of Integrated Healthcare Delivery Systems, and the American Association of Managed Care Nurses.

Throughout the presentation, Dr Sokolov kept coming back to what Medicare has been doing, as CMS has been leading the transformation to value-based care, and so goes the government, so goes everything else.

“And the government is moving as much as it can into this value-based sector, specifically using Medicare as the lead,” he said.

From a pricing standpoint, a variety of factors have manifested into the narrow network. Dr Sokolov used the recent announcement by Horizon Blue Cross Blue Shield of New Jersey, which is the dominant commercial payer in the state, of OMNIA, a value-based care narrow network.

He pointed out that Horizon has “taken huge flack” because this narrow network that does not really have a broad array of representation for the underserved population. This means a large number of individuals are not part of the network and there has been controversy over the initiative.

Dr Sokolov then took a look at the transition from fee-for-service to value-based care, with shared incentives being a common way providers and payers start down the road. However, once they cross into models with downside risk, there can be a variety of regulatory burdens that are different state by state, which can cause challenges.

He noted that market transition to value-based care has been tied to the strength of the state health insurance exchanges. While this is not an absolute, it is something he observed.

“States with federal exchange types of defaults … you have much less acceleration than you do in states that have their own state exchange dynamics, which include Massachusetts, Arizona, California, etc,” he said.

While Dr Sokolov took time to look at the Medicare accountable care organizations (ACOs), he purposefully left out the Pioneer ACO program, which is down to 16 participants from the original 32, very few of which have made money.

Instead he focused on Medicare Shared Savings Program (MSSP) ACOs, Next Generation ACOs, and Medicare Advantage. He noted that the trend has been that MSSP ACOs that have learned to do certain types of management activities are moving on to the Next Generation program, while those who are handling things even better almost always move to Medicare Advantage.

He outlined the outcomes of the MSSP so far, which recently reported that 75% of the existing ACOs did not meet the threshold for shared savings distribution.

“If I were to build an ACO and those primary care physicians were really important to me and there’s been no shared savings, I’m asking, ‘What the heck am I doing in this ACO or anything else that is value-based?’”

Moving forward in the Medicare ACO programs, it’s important to note the introduction of prospective beneficiary assignment, Dr Sokolov said. In the track 3, two-tailed risk part of the MSSP, this assignment is similar to enrolling in a Medicare Advantage plan: ACOs will know who those patients are at the beginning of the year, not at the end of the year.

He hammered home the importance of this inclusion because people have asked him why ACOs aren’t doing as well as they need to.

“If you don’t know who you’re managing, you’re really going to have a hard time managing them,” Dr Sokolov said.

The last topic he touched on is the growth of telemedicine, which will be huge since the federal government has accepted payment for these consults for the first time. Overall, there are 4.2 million e-consults happening nationally, and nearly half (2 million) are occurring in the Veterans Affairs (VA) system alone, he said.

There are 3 key factors for the success of a telemedicine company:

  1. Hardware: Is the technology to do these consults state of the art? Will they be able to stream video over slow internet connection?
  2. Software: Do you have the applicability to make diagnostic decisions using the software? The VA can look at 48 diagnostic tools in their telemedicine capability.
  3. Services: Do you have your own doctors do the work instead of the telemedicine companies’ physicians?