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The New Normal: How Value-Based Care Is Reaching More Patients at One Insurer


While Congress debates the fate of the Affordable Care Act, healthcare transformation continues, as seen in an update released this week at Horizon Blue Cross Blue Shield of New Jersey.

While Congress has spent much of the year debating the fate of “Obamacare,” healthcare transformation continues among payers and in practices. The quest for “patient-centered” care—which focuses on prevention, involves patients in decisions, and rewards physicians for keeping people healthy instead of paying them for every test or procedure—is far from over. But signs abound that no matter what happens in Washington, we’re past the point of no return.

Such was the case in New Jersey this week when the state’s largest insurer, Horizon Blue Cross Blue Shield, shared 2016 results for its top-performing patient-centered programs, which include those participating in the OMNIA Alliance. Horizon announced that 1.5 million of its 3.8 million members are participating in patient-centered programs. That share is up 50% from the prior year, to 39.4%. The share of primary care physicians grew 10%, and payments increased 43%, to $100 million, from 2015.

This shift is significant, since physicians who treat Medicare patients but fail to move toward value-based payment structures will face financial penalties under the Medicare Access and CHIP Reauthorization Act (MACRA). Right now, practices are transitioning, as some patients are covered by value-based structures and others are still under fee-for-service contracts. Experts say that the more commercial payers do to move everyone toward value-based, patient-centered payment models, the better.

Patient-Centered Medical Home and Beyond

Thomas McCarrick, MD, chief medical officer of the Vanguard Medical Group based in Verona, New Jersey, began working with Horizon in 2011 on a pilot program to become a patient-centered medical home (PCMH) which would lead to Vanguard receiving recognition from the National Committee for Quality Assurance. From an initial group of 33 practices, McCarrick said, the initiative narrowed its focus to 8 practices working with consultants on best practices for chronic disease management, better patient monitoring, and improved care coordination that targets resources to the highest risk patients.

Over time, primary care has regained its place as the hub of care for the patient with diabetes, and that’s been very rewarding. The focus is truly on helping the patient manage the disease between visits. “We’re not just thinking about, ‘Come in for the visit today,’” McCarrick said.

The practice now has resources like a psychiatric nurse practitioner and a certified diabetes educator. “A big part of the medical cost is the behavioral health part,” he said.

It takes buy-in from multiple payers to make the strategy work, McCarrick said. Besides CMS programs, other payers in New Jersey have “piggy backed” on what Horizon has been doing. “This has been become their core thinking in primary care,” he said.

Quality and Savings

Horizon said that, compared with practices operating with traditional payment structures, the patient-centered practices produced better quality measures than traditional practices in 2016, including:

  • a 3% lower rate of emergency department visits
  • a 3% lower rate of hospital inpatient admissions (including readmission)
  • a 5% higher rate of colorectal screenings
  • a 3% higher rate of breast cancer screenings
  • a 3% improved rate of diabetes control, as measured by glycated hemoglobin (A1C)

Along with providing better quality, the patient-centered models are saving money: overall, Horizon said that these practices experienced a 3% lower total cost of care than traditional practices and 4% improved control of diabetes costs.

Making Models Work Financially

McCarrick and others say that, while quality measures show that patients enrolled in value-based programs are staying healthier, there’s work to be done on the financial side of the equation. “Financially, the models are still a little bit stuck,” he said.

Geography may matter, especially in Medicaid. A recent commentary from a North Carolina primary care physician published in JAMA Internal Medicine outlined the disconnect between the promise of the PCMH and the incentives in some states.

More work needs to be done to update regulations to promote flexibility, according to speakers at yesterday’s Value-Based Insurance-Design Summit (VBID) in Washington, D.C. Take CMS’ attempt to offer a $42 per-patient per-month chronic care management (CCM) fee, which practices were to bill to Medicare to coordinate care for seniors with more than 1 chronic condition. It was designed to give practices revenue for staff time on matters outside of the office visit. But the requirements—and especially a co-payment that could not be waived—made administering the fee burdensome, McCarrick and other practices have reported. A speaker at yesterday’s VBID Summit said collecting the co-payment has led to some curious explanations to seniors, and getting rid of it “makes sense.”

By contrast, McCarrick said, taking part in the Comprehensive Primary Care Plus model, an initiative of the Center for Medicare and Medicaid Innovation, offers “much more flexibility.”

The sticking points McCarrick mentions are the same ones that come up elsewhere. How can primary care practices make use of data analytics? What is the role of telemedicine? And what can be done to improve “hand-offs” with specialists?

“How do primary care practices engage with the medical neighborhood? he asked, describing the fact that he’d seen patients that morning who had been to specialist with whom he’d had “zero communication.”

“That shouldn’t be,” he said. While technology can fill these gaps, it will take investment. “There’s no easy solution,” McCarrick said. “It’s going to take a lot of work.”

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