Value-Based Care News Digest - October 2019

This month's news roundup highlights major retailers entering the health care market, higher earnings for ACOs taking on downside risk, and the latest research mapping the growth of value-based care. 

Top Trending Themes

1. Established retailers are looking to carve out their own niche in the health care industry.

• Best Buy has made several acquisitions over the past year indicating that it plans to become a major player in the digital health market by selling health monitoring devices for seniors. These acquisitions include GreatCall, a provider of mobile phones and emergency concierge and monitoring services for seniors; Critical Signal Technologies, a remote patient monitoring system; and BioSensics, a predictive health care technology company.
• Amazon continues to build its health care business by piloting a telehealth clinic for its Seattle employees. The Amazon Care offering includes an in-app visit with a doctor, a nurse practitioner or a registered nurse, and it can be used for urgent health care issues such as colds and infections, preventative health consults, sexual health services and vaccines and lab work. Although a launch of Amazon Care to the general public is not expected for some time, it is likely that Amazon sees telemedicine as a market it can disrupt.

• Sam's Club is piloting a discount program with big-name health care companies (Humana, Quest Diagnostics and others) to offer customers bundled health care services ranging in price from $50 to $240 per year. The bundles include free prescriptions for generic medications, prepaid health debit cards, opportunities to save on vision and dental, $1 primary care visits from a smartphone and discounts on alternative medicine services. Called Care Accelerator, the program will be piloted in Michigan, Pennsylvania and North Carolina, with hopes to expand nationwide.

• Walmart launched several new health care initiatives this month, demonstrating its commitment to growing its health care business:
  • Opened its new, 10,000-square-foot health care "supercenter" in Dallas, Georgia, providing everyday health care services such as primary care, dental and behavioral health. The center is positioned as a direct competitor to CVS' and Walgreens' outpatient health care services.
  • Offering Walmart employees the opportunity to earn bachelor's degrees and career diplomas in health-related fields for $1 per day, helping to organically grow its health care workforce. Employees can apply for one of seven bachelor's degrees or two career diplomas through Live Better U, Walmart's education benefit program.
  • Partnering with Embold Health to pilot a program that will identify high-performing and efficient providers and curate a list for Walmart employees to use to select providers based on their location. The pilot will roll out to employees in Orlando and Tampa, the Dallas-Fort Worth area and Northwest Arkansas starting Jan. 1, but Walmart hopes to extend this benefit to employees nationwide.

2. The greater the risk, the greater the reward: ACOs in the Medicare Shared Savings Program saw an increase in savings from 2017, largely due to more ACOs taking on two-sided risk.

• Two-thirds of the 548 Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program produced a combined $1.7 billion in savings in 2018, according to new CMS data. Those savings resulted in a $739 million net gain to CMS, more than double last year’s $314 million. ACOs in downside risk models were more likely to achieve savings, with 59% of ACOs in two-sided risk models earning a bonus, compared to just 32% of upside-only ACOs in Track 1. With significant changes to the MSSP program that went into effect this July, there was a drop in overall participants as risk-averse ACOs left the program.
• How much money did Track 1 ACOs leave on the table by playing it safe? An Evolent analysis discovered that they would have received $219 million more in shared savings had they taken downside risk in a Track 3 option.

3. Payers seek partnerships to support value-based care initiatives for line items and reduce barriers for high-need populations.

• Line-item partnership:
  • Blue Cross Blue Shield of California has partnered with Virta, a digital therapeutics company, to provide value-based care to Type 2 diabetes patients. Virta's program has participants follow a keto-based dietary system and follow up on their progress through an app that provides access to a health coach, an online community of Virta treatment members and other digital support tools housed through Blue Shield's wellness platform, Wellvolution. Virta's value-based payment model is tied to predetermined engagement milestones: If the program fails to reduce patients' blood-sugar levels to within a target range, Virta will not earn the full payment.
• High-need population partnerships:
  • Seeking to reduce missed appointments and improve outcomes, Blue Cross Blue Shield of California has partnered with Hill Physicians and Lyft to offer free transportation to eligible members in the Sacramento market who do not have access to reliable transportation. The rideQ program is also being tested in other cities including Pittsburgh, New Orleans and Chicago, with the intent to scale should it prove effective in improving patient outcomes.
  • Humana and SeniorLink, a population health services company, teamed up to create Virtual Care Teams to connect digitally with members with multiple chronic conditions and their families, enabling them to maintain their independence and receive support at home. By partnering with Seniorlink, Humana hopes to reduce barriers to contact and increase the overall engagement of members' care teams, thereby alleviating caregiver burden, increasing member satisfaction and decreasing overall cost of care. The pilot will last six months, including up to 250 Humana Medicare Advantage members in 34 states.

Industry News

Payers and Providers

• Humana's corporate strategy is shifting away from solely being an insurance company to a more holistic health care delivery system, according to the company's chief strategy and corporate development officer. Visha Agrawal stated that the insurer's mail-order pharmacy, 230 owned or alliance primary care clinics and home health provider (Kindred at Home) all serve as evidence that Humana is moving from being "an insurance company with elements of health care to a health care company with elements of insurance." Last year, Humana also announced it was launching a new digital health and analytics unit, Studio H, in Boston that is focused on three areas of digital health: creating technology designed to manage provider workflow, expanding telehealth into the home health and primary care settings, and bringing voice recognition tools to members in their homes.

• Blue Cross Blue Shield of Texas and Sanitas Medical Center launched the first of ten new medical centers in the Dallas and Houston markets, hoping to provide an innovative primary care model to beneficiaries. The centers will be one-stop shops, with primary care, urgent care, lab and diagnostic services and disease management all under one roof. BCBS Texas and Sanitas ensured that the providers and plan representatives at each of the centers are bilingual, supporting culturally competent care to Dallas and Houston residents.

• Medica, a nonprofit health plan, and Genevive, a senior-focused medical practice and care management organization, are partnering to offer a new HMO special needs plan in the Minneapolis/St. Paul market. Medica Advantage Solution PartnerCare will be available to approximately 5,500 residents in 78 assisted living communities and skilled nursing facilities, and is believed to be one of the largest institutional special needs plan rollouts in the country. The plan is designed to address the complex health needs of seniors in assisted living, and collaborators hope that this partnership will eventually serve as a national model of care.

• Cano Health, an operator of Florida primary care medical centers and a population health management company, has acquired a portion of the operations of Belen Medical Centers, a community-based health care provider for the South Florida senior population. With this acquisition, Cano Health expands its Florida footprint to 34,000 lives, 40 medical and wellness centers and five pharmacies. Patients of both Cano Health and Belen will have increased access to medical facilities, a wellness-oriented member rewards program, and more comprehensive medical services including vascular care, arthritis management and optical centers.

• Greater Buffalo United Accountable Care Organization and Fidelis Care announced a partnership to provide care for 12,000 Erie County Medicaid recipients. GBUACO, the region's only state-designated ACO, is planning to expand significantly in order to support this effort, hiring dozens of new employees, adding additional infrastructure to support IT and their own pharmacy benefits management system and relocating their ACO operations to downtown Buffalo. Fidelis, a subsidiary of Centene, continues to expand its footprint with over one million members statewide, including 169,000 members in western New York.

• Health Alliance Plan (HAP), a nonprofit health plan owned by Henry Ford Health System, announced that their acquisition of Trusted HP-Michigan, a Detroit-based Medicaid plan, received all regulatory approvals and went into effect as of Sept. 13. This transaction allows HAP to reenter Michigan's Medicaid HMO service area known as Region 10, which represents Wayne, Oakland and Macomb counties.
• Clover Health deepens its footprint in Georgia, New Jersey, Pennsylvania and South Carolina by expanding into eight new counties. These counties were selected based on customer demand, Clover's existing partnerships with local health care providers, and the aim to increase engagement in existing communities. Currently, Clover serves more than 40,000 Medicare beneficiaries nationwide and has grown membership by 31% in the last 12 months.

Social Determinants of Health

• The North Carolina Department of Health and Human Services is leveraging Phreesia, a customized patient intake platform, to screen patients for unmet social needs and help providers statewide identify patients in need of interventions. Phreesia's platform will deliver North Carolina's Standardized Social Determinants of Health Screening Questions as part of the Healthy Opportunities Initiative. In North Carolina, at least 1.2 million people are unable to find affordable housing, and one in 28 children under the age of six is homeless. About 47% of North Carolina women have experienced intimate partner violence, and more than 20% of children live in food-insecure households. Through their partnership with Phreesia, North Carolina health officials hope to address these and other social issues through a whole-person model of care and stronger relationship between patient and provider.

Government & Regulatory

CMS

• The Patient-Driven Payment Model, a new value-based payment model for nursing homes in traditional Medicare, took effect Oct. 1. Akin to bundled payments, the new payment system bases reimbursement on patient assessments and acuity rather than the volume of therapy services delivered—thereby discouraging the use of unnecessary therapy.
• Thousands of physical, occupational and speech therapists have already been laid off as skilled-nursing facilities make the transition to the new model. In 2020, Medicare will move to a similar payment system for home health agencies.

Federal

• The House Energy and Commerce Committee, led by Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR), initiated an investigation into the role of private equity firms' ownership, policies and practices relating to third-party medical providers. According to the committee's press release, the investigation will focus initially on private equity firms with an ownership interest in physician staffing and emergency transport companies to determine if there is a link between these ownership interests and instances of surprise medical bills. The demand letters request sensitive and proprietary operational and financial information, which if leaked, could be detrimental to the parties. There has been a flurry of recent activity regarding surprise billing in both chambers of Congress, with additional action expected this fall. Progress on the issue remains elusive, but political and stakeholder pressure to act continues to mount.

Evolent in the News

• Healthcare Finance News highlighted Evolent's Social Needs Index, a tool that lets physicians know when a patient's health may be harmed by nonmedical problems such as food insecurity, housing instability and lack of transportation. The index scores patients' social needs based on data extracted from electronic health records, census information and multiple other sources.  

Survey Says/Studies Show

• A recent Premier Inc. survey of hospital and health system leaders found that the movement to risk has been slow and market-dependent, with most respondents indicating that less than 20% of their total patient population was covered in a risk-based arrangement. The most significant challenge faced by providers surveyed was inadequate reimbursement, but timeliness and accuracy of data provided by both Medicare and commercial payers was also a major pain point. Other barriers to risk included current legislation related to performance benchmarking, a need for increased flexibility as providers take on greater risk, and existing Stark and anti-kickback laws that limit providers from innovating care.

• A survey conducted by the Healthcare Transformation Task Force found that the movement towards value-based care is growing, but adoption varies widely between members. Forty-two member organizations had 52% of their business in value-based payment models (global budgets, bundled payment or shared savings deals) in 2018, an increase from 47% the previous year. While this growth in value-based business is promising, some organizations have encountered obstacles in negotiating with commercial payers, taking on downside risk and receiving actionable claims and quality data.

• A study conducted by the New England Journal of Medicine found that providers enrolled in a Blue Cross Blue Shield of Massachusetts population-based payment model with two-sided risk were able to more effectively decrease medical spend and utilization while increasing quality. The CEO of Blue Shield stated that the success of the program was largely due to timely and actionable data, inspirational and effective physician leadership and physician autonomy.

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