Value-Based Care News Digest - November 2019

From promising startups to major retailers and even a few celebrities, the quest for value is drawing broad interest. Read this month's news roundup to keep tabs on the action, as well as the latest research and regulatory changes affecting the field.

Top Trending Themes

1. While new clinic entrants (Walmart and CVS) aggressively pursue wholly owned clinics as part of their health care strategy, a veteran (Walgreens) has abandoned that approach.
   • At the HLTH conference in Las Vegas, Walmart gave a virtual tour of its first "health care supercenter" clinic in Georgia while CVS also highlighted its HealthHUBs, which it plans to expand to 1,500 stores in the next two years.
   • Walgreens has owned and operated clinics across the country for years, yet the wholly owned clinics consistently lost money for the company. They will shut down 150 of their clinics this year and will instead rely on third-party partnerships (e.g., with VillageMD) to operate clinics moving forward. The pivot is part of a $1.8 billion savings initiative. Walgreens' exit raises the question: What can CVS and Walmart learn from Walgreens' experience?
2. Major payers are accelerating their pace toward value and making investments in innovation (while also clamping down on fee-for-service).​​​
   • UnitedHealth Group
     • Teaming up with its OptumCare medical care provider business in Southern California to launch a new employer-based health plan, now serving 1.5 million members in value-based arrangements. In addition to UnitedHealth, Aetna/CVS and Humana/Walgreens and other providers are expected to launch similar health insurance products that combine medical care with health insurance.
     • Announced a new policy, effective Nov. 1, that requires prior authorization for outpatient surgeries performed in a hospital setting. The policy is meant to encourage physicians and patients to perform planned surgeries in ambulatory surgery centers, which can cost up to 50% less than the same surgery performed at a hospital.
     • Through Optum, acquired Vivify, a remote patient monitoring startup that provides devices such as wireless weight scales and portable blood pressure cuffs to remotely track at-risk patients.
   • Blue Shield of California​
     • Piloting a fully digital, real-time claims payment system with Dignity Health to eliminate excessive paperwork and allow providers to collect payment immediately. Physicians and members will use a fully digital payment system that will deliver the bill immediately and allow patients to choose whether to pay all at once or in installments. Blue Shield of California hopes to have real-time claims for all members in California by 2023.
     • Partnering with Notable Health to provide physicians with a natural language processing tool to input patient records through a convenient tool such as the Apple Watch. One clinic reported this summer that the tool cut 1-2 hours of EHR time per day.
   • Humana
     • Invested $20 million in Accolade, a data platform that integrates personal health data and health plan information with other insights and tools.
     • Leveraging Microsoft's Azure cloud platform to provide Medicare Advantage beneficiaries with targeted health information and care teams with complete health records, helping them make timely, informed decisions on patients' behalf.
3. The 2018 ACO results from CMS have shown both an increase in ACOs assuming downside risk and overall savings, yet hospital-based ACOs saw varying results.
   • The first year of Pathways to Success saw a larger proportion of ACOs taking on downside risk, with large, physician-led ACOs most likely to take on downside risk.
   • Baylor Scott & White, Ochsner Accountable Care Network and other large, experienced ACOs are continuing to drive increased savings year-over-year through value-based care initiatives such as comprehensive care management, provider and patient outreach and predictive analytics.
   • In large metropolitan markets such as Chicago, there was significant variance in hospital-based ACO performance, demonstrating that many hospital-affiliated groups struggled to control spending. Despite these challenges, investing in value-based care initiatives such as predictive analytics and addressing social determinants of health has paid off for some ACOs in the area.

Industry News

Primary Care

• As part of its partnership with OhioHealth, ChenMed, a primary care-focused provider network, has opened three Dedicated Senior Medical Centers to serve middle-to-low income seniors in underserved Columbus neighborhoods. ChenMed's partnership with OhioHealth is their first partnership with a health system, and they hope to replicate the model with other systems across the country. The Dedicated Senior Medical Center model is personalized and high-touch, promising extended face time between provider and patient along with transportation services, walk-in appointments and onsite cardiology and ancillary services.

• Advanced primary care models are becoming more prominent in North Carolina, with Iora Primary Care, Cityblock and CareMore Health opening practices across the state. The organizations announced their entry into the state earlier this year as part of  an initiative by Blue Cross and Blue Shield of North Carolina (Blue Cross NC) to deliver highly coordinated, patient-centered primary care to its members. In addition to extended time with their primary care physician, members will have access to health coaches, social workers and other specialists.

Chronic Disease

• Livongo, a digital health company that aids patients with chronic conditions, has expanded its partnership with Blue Cross Blue Shield of Kansas City to provide their diabetes management program to all fully insured members. The Livongo for Diabetes program includes a connected blood glucose meter, unlimited test strips and personalized coaching and insights that have proven to drive changes in behavior. Previously, Livongo was available to Blue KC Administrative Services Only clients, whose members saw a significant decrease in estimated Hemoglobin A1c.
• Verily, Alphabet's life and sciences company, has partnered with Atrius Health and the Palo Alto Veteran's Administration to improve outcomes for patients through increased analytics and population health initiatives. In Palo Alto, Verily will first focus on veterans with high-priority conditions such as knee replacements, heart attacks and alcohol withdrawal. Atrius Health, located in Massachusetts, will work with Verily to target patients with heart failure, identifying opportunities for early intervention.
• RenalytixAI, a clinical diagnostics company focused on kidney disease, has partnered with Capital District Physicians' Health Plan (CDPHP) to provide testing and reporting for qualifying members. CDPHP will use KidneyIntelX, an artificial intelligence-based tool that analyzes blood-based biomarkers and patients’ electronic health records through machine-learning algorithms, to stratify patients with Type 2 diabetes and chronic kidney disease. This will help providers identify high-risk patients and design care programs accordingly, while providing patients with insight into their conditions.

Home Health

• Heal, a home health startup backed by Lionel Richie and Jeb Bush (you read that right), has raised $75 millon in venture capital. The Heal app operates much like a concierge service, where patients can input their medical and insurance information and receive a house call from a primary care physician and medical assistant within two hours. The physician can perform tests such as EKGs, ultrasounds and blood tests, while also assessing a patient's living conditions and access to food or prescriptions. Heal has grown rapidly over the last year, increasing revenue by 310%, and it has attracted partnerships with major commercial and Medicare Advantage payers. Heal anticipates more than 100,000 house calls in 2019, with hopes to expand outside its current metropolitan markets moving forward.

• Papa, a Miami-based technology platform that connects seniors in need of assistance with college and nursing students, raised $10 million in Series A funding. This will allow Papa to expand from 14 to 25 states and add to its partnerships with payers. The "grandkids-on-demand" startup deploys students to elders that need help with transportation, household chores or technology assistance, along with providing non-emergency transportation to doctor's appointments and grocery shopping. Papa serves as a solution to the loneliness and social isolation epidemic among seniors, and it has already been adopted by major payers.

Telehealth

• Amazon has acquired digital health startup Health Navigator to continue to build its telemedicine arm, Amazon Care. Health Navigator largely provides technology and services to telemedicine companies, contributing symptom-checking tools that help with remote diagnoses and triage. The founder of Health Navigator, Dr. David Thompson, is known in the medical field for developing a set of protocols for clinicians to triage and guide patients to the appropriate site of care via call centers. Amazon will offer Health Navigator to employees as part of its Amazon Care clinics, which are being piloted to its employees.
• Cleveland Clinic is forming a joint venture with American Well, a Boston telehealth company, to build a telehealth clinic. Called The Clinic, the digital health company created through this joint venture will be based in Cleveland but offer high-acuity services to patients globally via American Well's digital health platform. This venture builds off the existing partnership between both entities, which have offered non-emergency and specialty telemedicine through Cleveland Clinic Express Care Online since 2014. Cleveland Clinic has already seen a significant increase in virtual care, with a 68% increase in virtual annual visits in 2018 alone. The health system projects that 50% of outpatient visits will be virtual in five years.
• Parsley Health, a membership service that provides extensive time with physicians and health coaches to identify and address root causes of patients' health issues, has raised $26 million in Series B funding. With this additional capital, Parsley Health plans to launch a telemedicine product providing the same services as those included in their brick-and-mortar locations. While currently rolling out the new telemedicine functionality in New York and California, Parsley plans on a national launch within the next six months.

General News

• Jefferson Health is collaborating with Color, a genomics and population health vendor, to provide genetic testing and counseling to its 32,000 employees. Through the partnership with Color and the Sidney Kimmel Cancer Center, Jefferson provides genetic testing and a proactive care plan to help employees with genetic mutations manage their risk for disease. The program has been widely adopted thus far, with 30% of employees opting in during its first year. Louisiana-based Ochsner Health is also leveraging Color in a pilot program that will flag patients at risk for hereditary cancers and heart disease.
• Devoted Health is covering Apple Watch as a fitness benefit to its Medicare Advantage members. Devoted will cover $150 per year as a wellness stipend for "classes, programs, and wearable devices." It's likely that Apple and other companies will be able to capitalize on recent CMS regulations that allow plans more flexibility in the benefits they offer by partnering with multiple insurance companies. Devoted Health, as an early adopter, will be able to differentiate itself in the crowded South Florida Medicare Advantage marketplace.
• United Parcel Service (UPS) Flight Forward drones flew prescription medications to the front lawn of a private home and to a retirement center in North Carolina, the UPS unit's first revenue-generating deliveries for CVS. The packages, roughly the size of small shoeboxes, were lowered from drones hovering about 20 feet above the ground. Earlier this month, UPS signed a letter of intent with CVS to explore drone delivery to CVS customers. Up until now, UPS Flight Forward worked with hospitals and health systems, delivering lab samples to hospitals with fixed drop-off locations. As home delivery is significantly more complicated, UPS is collaborating with government agencies to expand the current regulations around residential drone deliveries.

People on the Move

• Karen DeSalvo, a former health official with the Obama administration, has joined Google as its first Chief Health Officer. This is the most recent of several health care sector hires for Google, including Robert M. Califf, the former Food and Drug Administration Commissioner, and David Feinberg, the former CEO of Geisinger Health System.
• Jennifer Dunphy, formerly Jen Bunney of "The Hills" fame, has left behind her career in reality TV to pursue a career in population health. She currently works as the chief of population health at Heritage and its subsidiary Regal Medical Group and was named one of Modern Healthcare's Top 25 Emerging Leaders.

Government & Regulatory

CMS

• CMS has delayed implementation of both the Primary Care First and Kidney Care Choices models until 2021, but it is still encouraging providers to apply by the January 22, 2020 deadline. Primary Care First is like the existing Comprehensive Primary Care Plus model, but it will put more financial risk on enrolled providers while providing performance-based payments. Kidney Care Choices provides financial incentives for managing Medicare patients with stage 4 or 5 chronic kidney disease and end-stage renal disease, with adjusted performance-based reimbursement and graduated levels of risk for the Comprehensive Kidney Care Contracting option.
• The U.S. Department of Health and Human Services released a pair of regulations overhauling Stark and anti-kickback regulations to support value-based payments and coordinated care. The Stark Law proposed rule seeks to address compliance challenges and create new exceptions for value-based care and limited remuneration to physicians. The Anti-Kickback Statute proposed rule would modify existing safe harbors and create new safe harbors and exceptions. These include payments made under CMS payment models, thereby reducing the need for HHS to issue individualized fraud and abuse waivers for each model. Comments on both regulations are due by Dec. 31.
• The CMS Innovation Center released a Request for Information (RFI) on a new draft payment model called Oncology Care First (OCF), to follow the current Oncology Care Model (OCM). The model is largely built upon OCM but includes larger upfront payments, a revised beneficiary alignment methodology and stronger push to two-sided risk. 

Evolent in the News

• Evolent became the first organization to receive Population Health Program (PHP) Accreditation from the National Committee for Quality Assurance. The PHP program will replace NCQA's longstanding Disease Management program, a transition that reflects the growing emphasis on a more proactive, whole-person approach over a reactive one focused on specific health problems. For perspective on the accreditation and the trajectory of population health in general, read our recent blog post.

Survey Says/Studies Show

• JAMA published a study showing that roughly 20-25% of total health care spending in the US is wasteful, attributing the bulk of the waste to high prices and administrative burden. The total estimated waste is approximately $760 billion, with over 35% due to administrative costs. Price is the second largest area of waste, estimated between $232 and $241 billion. Another related JAMA editorial focused on how the current piecemeal approach, which imposes complexity and additional implementation costs on clinicians, hospitals and health systems, should evolve to a simpler and more holistic approach to value-based payment, while primary care should move toward a capitated pay system.
• After its first year, the Pathways to Success ACO program saw an overall decrease in the number of ACOs, but an increase in the amount of downside risk. Thirty-two percent of physician-led ACOs are taking on downside risk, compared to 27% of hospital-based ACOs—indicating that physician-led ACOs may have an increased appetite for risk despite smaller financial reserves. While the proportion of downside risk decreased among small ACOs (fewer than 10,000 covered lives), ACOs with greater than 25,000 took on more downside risk in 2019, implying that larger organizations are more likely to remain in the program as they are required to take on more risk.
• A survey by the Kaiser Family Foundation indicates that the Medicare Advantage market continues to grow, providing beneficiaries with a greater variety of plans and benefits. In all, 3,148 individual Medicare Advantage plans will be available for enrollment in 2020, an increase of 414 from the previous year. A Medicare beneficiary in 2020 will be able to choose from an average of 28 plans, compared to 24 in 2019. Next year will also show an increase in insurers, with thirteen new insurers entering the market and only one insurer exiting.
• As part of the 19th annual survey of Medicaid directors in all 50 states and the District of Columbia, Kaiser Family Foundation reported that states saw an overall decline in Medicaid enrollment and modest growth in overall spend in fiscal year 2019. The decline in enrollment is largely attributed to a stronger economy, although changes in renewal processes and enhanced verification and data matching are also contributing factors. The modest growth of Medicaid spending is primarily driven by declines in enrollment, yet spending is projected to return to typical rates in fiscal year 2020.

Read the Full Article