Value-Based Care Intelligence Digest - September 2018

September 13, 2018

Every month, Evolent rounds up some of the latest value-based care news, spanning policy research, the provider community and how our partners are helping to improve the health of their communities.

Don’t forget to subscribe to our updates to get future newsletters delivered directly to your inbox.

Top Trending Topics

  1. In a proposed rule, CMS wants to take the training wheels off the Medicare Shared Savings Program (MSSP) by moving ACOs to two-sided risk more quickly.
    1. The proposed rule would reduce the amount of time an ACO can remain in an upside-only model to two years. Currently, ACOs may remain in Track 1 (one-sided, shared savings-only model) for two, three-year agreement periods before having to move to a two-sided risk model or drop out of the program.
    2. Data suggests that ACOs in two-sided risk models perform better than those in one-sided models; however, many ACOs have expressed concern about being forced into risk at the proposed pace.
    3. Currently, 82 percent of the 561 ACOs participating in the MSSP are in an upside-only model; the agency estimates 109 ACOs will leave the program by 2028 if these changes become final, underscoring the need for providers to buy, build or outsource risk-taking capabilities if the shift to value-based care is to succeed.
  2. It was a big month for investments in commercial primary care clinics.
    1. Investor-led:
      1. One Medical received a $350 million investment from private equity firm, The Carlyle Group, to help fuel growth beyond its current 72 offices in nine cities. The CEO of One Medical was previously Division CEO over OptumCare, which has aggressively acquired physician groups.
      2. Venture capital firm New Enterprise Associates led a $165 million funding round for Paladina Health, a company focused on employer-sponsored on-site clinics. NEA acquired Paladina for a reported $100 million earlier this year from dialysis provider DaVita Inc; Paladina was the portion of DaVita Medical Group that Optum did not acquire.
    2. Internal investment
      1. Amazon is in internal discussions to start a pilot clinic at its main office in Seattle later this year for a select group of employees, with a plan to expand to more workers in early 2019.
      2. Further along than Amazon, Apple has already hired 40 employees for AC Wellness, its new primary care subsidiary that will manage clinics dedicated to Apple employees. It will initially have two clinics in Santa Clara County, where Apple is headquartered.
  3. Oscar Health announces it is jumping on the Medicare Advantage (MA) bandwagon.
    1. Oscar announced it will pursue MA in 2020, fueled by a recent $375 million investment from Google parent company, Alphabet.
    2. Oscar’s Chief Clinical Officer recently sat down with Gist Healthcare and talked about how the company’s health system partners were pushing it toward Medicare Advantage. He believes Oscar’s current technology for consumer engagement and “feet on the street” care management will also serve them well in MA.
  4. After years of a void in notable direct-to-employer contracting, General Motors (GM) forges a deal with Henry Ford Health System.
    1. GM and Henry Ford Health System entered into a direct-to-employer contract that will offer a new plan option during open enrollment this fall to 24,000 salaried GM employees in Southeast Michigan. Approximately 5,000 employees are expected to enroll in the plan. Interestingly, Blue Cross Blue Shield of Michigan will be the contract's third-party administrator rather than HAP, Henry Ford’s health plan.

Provider Spotlight

Each month, we highlight new or novel steps being taken toward value-based care and population health.

Evolent Partner News

  1. On August 14, Somos Community Care was awarded Value-Based Payment Innovator status. The status enables the culturally sensitive, physician-led Medicaid model to become permanent outside of New York’s temporary Medicaid reform initiative, the Delivery System Reform Incentive Payment (DSRIP) Program. In a totally new structure designed to bring financial stability to the Medicaid model, Somos is also now able to take on patient reimbursement risk without becoming a full-on Medicaid provider, making it a national model of a new value-based payment and risk-taking structure. Somos’ novel health provider collaborations and its use of population health data enable them to tailor health system care hyperlocally: Somos unites nearly 2,500 health care providers dedicated to delivering coordinated behavioral, primary and social services to the Chinese, Turkish, Latino and other hyperlocal communities in New York City in new ways. The initiative being headed up by Somos, in partnership with Evolent, serves Medicaid beneficiaries in New York City through a doctors-first, culturally sensitive and preventive care model, with a strong emphasis on social determinants of health.
  2. Evolent Health is partnering with Torrance Health IPA (THIPA) and Torrance Memorial Integrated Physicians (TMIP) to provide its Identifi platform and Risk Adjustment solution and services. This partnership will help enhance physician and practice productivity across Torrance’s network of 500 providers in the Los Angeles metro area.
  3. Houston Methodist’s direct interventions in social determinants of health were featured in an extensive HealthLeaders Media piece. Read about how their participation in MSSP Track 3 spurred such investments, and how they’re using grants and community partnerships to tackle systemic change.

General Updates

  1. The Accountable Care Learning Collaborative (ACLC) released 10 new Case Study Briefs, each offering a concise, tactical account of a value-based solution successfully implemented. The CSBs were created in partnership with leading provider organizations: Allina Health, Ascension, Hill Physicians Medical Group, Integra Community Care Network, Mayo Clinic, Mission Health, Moffitt Cancer Center, Montefiore Health System, OSF HealthCare and Pioneer Valley ACO.
  2. New health care entrant Amazon is in internal discussions to open primary care clinics at its main office in Seattle. After numerous rounds of discussions with external clinic operators, Amazon ultimately decided to develop its clinics internally. Amazon’s plan is to pilot a clinic later this year for a select group of employees and then expand it to more in early 2019.
  3. Kaiser Permanente will expand to 30 medical centers in Washington state by adding five new medical centers, each with different services, over the next 18 months. Like others in the health care space, Kaiser Permanente also unveiled upgrades earlier this year to its telehealth options to increase patient access.
  4. In conjunction with Teladoc Health, Partners HealthCare deployed a new telehealth option called Partners HealthCare On Demand. Partners HealthCare clinicians will offer urgent care video visits for minor illnesses and injuries. The visit option will first be offered to commercial members of the system's health plan, Neighborhood Health Plan (NHP), which is set to become AllWays Health Partners on January 1, 2019.
  5. Henry Ford Health System in Detroit and General Motors (GM) signed a direct contract, called GM ConnectedCare, to provide health care services to up to 24,000 salaried General Motors employees and their families in Southeast Michigan. GM estimates at least 20 percent of those eligible will choose the plan (approximately 5,000 employees). This is Michigan’s first direct-to-employer contract.  Under the five-year contract, Henry Ford must hit an annual financial budget as well as quality, cost and utilization metrics. This agreement does not include HAP, Henry Ford’s provider-sponsored health plan.
  6. Apple's wellness clinic subsidiary, AC Wellness, has already hired more than 40 people to provide concierge health and wellness services to its employees in Santa Clara County, where Apple is based. Most of the employees hired so far are not doctors; rather, they skew toward wellness professionals like nutritionists, exercise specialists and nurse practitioners. 
  7. While Amazon’s entrance into pharmacy has enchanted executives and investors, Walgreens and CVS Health are stressing their face-to-face connections with patients and developing associated strategies. Walgreens is testing several partnerships to enhance the patient connection, including collaborations with Humana (primary care clinics in Walgreens stores) and New York-Presbyterian (expanded patient access to telemedicine). In July, Walgreens also launched its own digital platform, called Find Care Now, that allows customers to search for local and digital health care services such as urgent care, lab testing and other services at Walgreens stores. The marketplace also includes access to telemedicine with providers from 17 health care organizations. In addition to its 1,100 MinuteClinics, CVS Health is pursuing a digital strategy through its recent partnership with Teladoc Health. Under the partnership, MinuteClinics will offer video visits that can be accessed from a mobile device.
  8. The Carlyle Group is investing up to $350 million into 1Life Healthcare, the technology and management company behind One Medical, to support the company’s growth beyond its current 72 offices in nine cities. One Medical has raised more than $180 million in capital since it launched in 2007 from investors such as JPMorgan, Alphabet, Benchmark and Maverick.
  9. The venture capital firm New Enterprise Associates led a $165 million funding round for Paladina Health, a primary care company with 53 clinics in 10 states. NEA acquired Paladina for a reported $100 million earlier this year from dialysis provider DaVita Inc. Paladina will use the additional funding to branch into new markets. Over time, Paladina will consider caring for Medicare patients as well, said Paladina CEO Chris Miller.

Government, Regulatory & Industry Pulse


  1. A proposed rule issued by CMS reduces the amount of time ACOs can be in an upside-only model (i.e., where ACOs retain a portion of any savings generated but are still paid by CMS if they incur losses) to two years. Currently, 82 percent of ACOs participating in the Medicare Shared Savings Program (MSSP) are in an upside-only model. Also, under the current program, Track 1 ACOs take a 50 percent cut of any savings; in the new rule, those in a Track 1 upside-only model would only be eligible to take in 25 percent. The new program would be called “Pathways to Success.” Further, the proposed rule would require ACOs to notify patients that they are assigned in an ACO. Providers would be allowed to reward patients with gift cards for good health, and ACOs could receive reimbursement for treating patients in their home via telehealth. CMS expects to save $2.24 billion over the next decade because of the changes. 561 ACOs currently participate in the MSSP; the agency estimates 109 ACOs will leave the program by 2028 if the changes are finalized, underscoring the need for providers to buy, build or outsource risk-taking capabilities if the shift to value-based care is to succeed.
  2. CMS released a report stating that Next Generation (NG) ACOs generated $62 million in net savings for Medicare in 2016. The data is based on findings for the 18 ACOs that launched in 2016 under the NG model; these ACOs collectively cared for 477,197 Medicare beneficiaries. Of the 18 active NGACOs in 2016, four accounted for more than half (57 percent) of the reduction in spending. Of the four, two existed before the NGACO program commenced—one as a Pioneer ACO and one as a Medicare Shared Savings Program ACO. The other two were new, suggesting new ACOs are just as able to reduce spending as existing ones. Meanwhile, the National Association of Accountable Care Organizations was quick to point out that 15 of the 18 ACOs had prior experience with the program.
  3. The CMS also made a profit from the Medicare Shared Savings Program last year as more ACOs moved to risk-based contracts and gained experience, new federal data show. About 60 percent of the 472 Medicare ACOs generated a total of $1.1 billion in savings in 2017. The CMS paid $780 million in bonuses to the ACOs, but the agency still scored a $313.7 million gain from the program. The agency lost $39 million to the program in 2016 because it had to pay out more in bonuses than the ACOs generated in savings.
  4. Hospitals will be required to post a list of their standard charges online under a rule finalized by the Trump administration. While hospitals are already required to make this information public on request, the CMS said the new rule will require the information be posted online to "encourage price transparency" and improve "public accessibility." Starting January 1, hospitals will be required to update the information annually. Increasing price transparency has been a priority for the administration to drive down health care costs.


  1. The Trump administration issued a final rule for short-term limited-duration insurance plans. These policies do not have to comply with the Affordable Care Act’s reforms, so they can do things like charge higher premiums based on health status, exclude coverage for pre-existing conditions and opt not to cover categories of benefits (e.g., prescription drugs). Under the current rule issued in 2016 by the Obama administration, short-term insurance policies cannot last for more than three months. Under the new rule, policies can last for 364 days, and insurers would be allowed to extend policies, with the maximum duration being 36 months. The Trump administration expects 600,000 people to buy the new policies next year, with enrollment increasing to 1.6 million by 2022. CMS estimates that premiums for short-term policies would be about half of the average premium for coverage sold in the insurance exchanges, roughly $340 versus $620 next year.
  2. The Justice Department and U.S. Drug Enforcement Administration proposed reducing manufacturing quotas for the six most frequently abused opioids by an average of 10 percent in 2019. The DEA has proposed to reduce more commonly prescribed schedule II opioids including oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine and fentanyl. Since 2016, production quotas for those drugs have dropped by an average of 44 percent, according to the DOJ and DEA.


  1. 12 Democratic attorney generals sued the federal government to block the Trump administration's new rule expanding association health plans (AHP). Some state insurance regulators issued emergency rules and guidance limiting the operation of AHPs. The regulators are also upset that the U.S. Labor Department abruptly discontinued its weekly conference calls with them to discuss how to harmonize the federal AHP rule with state laws. The conference calls were cancelled after the 12 Democratic attorney generals sued the federal government to block the rule. Business groups seeking to launch AHPs are threatening to legally challenge state moves to restrict them.

Evolent in the News

Follow our Knowledge Center for additional insights.

  1. Hospitals have set the stage, and social determinants of health have taken the spotlight. But how to address the ROI concern? Anita Cattrell, Evolent’s Chief Innovation Officer, shares her thoughts in an August cover story in Modern Healthcare.  
  2. Taking on risk is more of a wholesale metamorphosis than a step-by-step process. Evolent Health CEO Frank Williams sat down with Becker’s Hospital Review to talk risk-taking strategies and competency gaps, and to explain what makes provider-driven health plans stand out among commercial competition. Check out the full Q&A here. 

Survey Says/Studies Show

  1. As more health systems throw their weight into direct contracts with employers, some question whether they have the capabilities to succeed. Direct contracts require health systems to perform activities that are typically done by health insurers, like using data to manage costs and quality for large populations and calculating values to set total cost of care targets. Research by Navigant found that health systems, despite having spent millions on electronic health records, have not managed to harness that data toward meaningfully lowering costs or improving quality. Large, self-insured employers like Boeing, Walmart and Intel have been advancing such direct contracts for roughly the past two decades, but the National Business Group on Health's latest survey found just 11 percent of employers will hold such contracts next year, up from 3 percent this year.
  2. 59 percent of hospital executives say that of the tech giants, Amazon will have the biggest impact on health care, according to the survey by Reaction Data. When asked “why Amazon?”, respondents cited resources available to the retail and technology giant, the company’s current influence and name recognition. Comparatively, 14 percent said Apple, with its foray into EHRs, would be the most influential, followed by Google at 8 percent and Microsoft at 7 percent .
  3. According to an analysis by Morgan Stanley of data on more than 6,000 hospitals, nearly 450, or 8 percent, are at risk for closure. An additional 10 percent are performing weakly, meaning close to 20 percent of hospitals are not operating in a “healthy” way.
Previous Article
Value-Based Care Intelligence Digest - October 2018
Value-Based Care Intelligence Digest - October 2018

Evolent Health rounds up some of the latest value-based care news, spanning policy research, the provider c...

Next Article
CMS’ New MSSP Proposal: The Five “So What’s” Every ACO Exec Should Know
CMS’ New MSSP Proposal: The Five “So What’s” Every ACO Exec Should Know

Our Vice President of Health Policy, Ashley Ridlon, discusses key considerations for ACOs in the face of CM...


First Name
Last Name
Company Name
Thank you!
Error - something went wrong!