Value-Based Care News Digest - September 2019

Every month, Evolent Health rounds up some of the latest value-based care news from the previous month spanning policy, research, innovations, payers and providers. 

Top Trending Themes

1. Rapid growth continues in new primary care practices.

• ​Cano Health, which operates 36 medical centers and pharmacies for seniors in Florida, was ranked the fastest-growing health care company by Inc. magazine, with three-year revenue growth of 14,000 percent. The company has ambitions to expand nationally; in addition to growing to more than 50 health centers in Florida in the next year, it is in negotiations to expand the business to Texas, according to the company's founder.
• Iora Health and Humana are adding eleven Iora Primary Care practices to Humana's Medicare Advantage network in Phoenix, Atlanta and Houston.
• Walmart is opening a new clinic, called Walmart Health, in Georgia that will offer services such as primary care, dental, counseling, labs and audiology. The new clinic is in a separate building next door to a Walmart store to give patients a sense of privacy. Other clinics that the company has opened in Texas, South Carolina and Georgia have been inside retail locations. Walmart recruited a former Humana executive to lead the company's clinic efforts.
• VillageMD will use $100 million in series B funding to expand its primary care footprint in existing and new markets. The company was founded in 2013 and has grown to serve more than 2,500 physicians across eight markets, while caring for approximately 500,000 lives. It oversees more than $32 billion in total medical spend in value-based contracts

2. Payer new entrants and incumbents launch or expand their Medicare Advantage plans.

• New entrants
  • Health2047, the American Medical Association’s for-profit health care innovation arm, is launching a Medicare Advantage plan for underserved seniors in Cook County, Ill. The plan, called Zing Health, is the third company to spin out of Health2047 since the commercialization enterprise launched in 2016.
• Incumbents
  • Alignment Healthcare, a Medicare Advantage insurer founded in 2013, is doubling its number of territories and plans in the 2020 enrollment cycle. Currently serving eight counties with 10 health maintenance organization plan products, the company is expanding its coverage to 16 counties with 22 HMO and PPO products in 2020, pending regulatory approval.
  • Anthem Blue Cross and Blue Shield in Maine and MaineHealth are forming a joint venture to offer Medicare Advantage plans for 2020. Named AMH Health, LLC, the joint venture will bring together the region's leading health system and health insurer.

3. Payers gain additional influence in medical education

• Dr. J. Mario Molina will be founding dean of the Keck Graduate Institute (KGI) School of Medicine in Southern California. For 20 years, Molina was the CEO of Molina Healthcare, which primarily operates Medicare and Medicaid health plans. Molina's vision for the KGI School of Medicine is to change the approach to health care education He intends the school to focus on "the intersection of multicultural competency, population health research and commercial innovation."
• Other payers—for example, Humana, Kaiser Permanente—have also recently founded schools of medicine to train physicians on what is important to them strategically: concepts such as population health, the importance of social determinants of health and the need to emphasize value over the volume of services provided.

Industry News

Payers and Providers

• Medtronic and Capital District Physicians' Health Plan, Inc. (CDPHP) announced an outcomes-based agreement for individuals with type 1 and type 2 diabetes who use a Medtronic insulin pump. Under the strategic partnership, Medtronic will provide eligible CDPHP members access to technologies, supplies and education and training support services to manage their diabetes. Additionally, a component of Medtronic's reimbursement will be tied to successfully meeting agreed-upon clinical improvement thresholds for enrolled members such as A1c reduction, increased time-in-range and reduced hypoglycemic events.
• Eleanor Health, an addiction and mental health services provider designed to deliver long-term patient recovery outcomes and modeled on value-based care delivery and payments, officially launched with its first outpatient clinic in Mooresville, NC. The opening marks the first of 10 to 15 Eleanor Health sites set to open in the next year, first in North Carolina and then across the country.
• Signify Health, a technology company that supports in-home care and provides care management services, announced that it plans to merge with Remedy Partners, a software company that works with health care organizations to launch bundled payment programs. Both are portfolio companies of New Mountain Capital and have combined revenue of more than $600 million. Terms of the deal were not disclosed. Signify Health was created in December 2017 as the result of a merger between CenseoHealth and Advance Health. and in March the company acquired technology company TAV Health.
• ADVault, an advance care planning platform, and Humana are expanding the MyDirectives Platform so that it is now available to all Humana Medicare Advantage and commercial members via the MyHumana.com portal. Members can easily create and update advance care plans via the portal or upload any paper advance directives into the ADVault global repository. Authorized providers can access the repository and get real-time access to the goals, preferences and priorities of Humana members.
• Health systems like SSM Health, Allina Health and Sentara Healthcare are introducing home-based palliative care programs to close post-acute care gaps. While executives say the programs are key to lowering costs and driving patients to the right type of care sooner, reimbursement currently stands in the way of broader adoption. SSM is testing a home-based palliative gap care program in its Wisconsin market through Dean Health Plan, a member of SSM Health, and its value-based integrated delivery network. "Because of value-based purchasing that is already in place in Wisconsin, they are the perfect world to try this type of programming," said Robert Pritts, president of SSM Health at Home.
• Blue Shield of California has invested in a new company called Altais, which will launch services and tools to help physicians and their practices reduce administrative burden and spend more time with patients. Altais is also in discussions to eventually provide primary and specialty care services. The Altais leadership team has a mix of health care and startup experience, including chief operating officer Matt Miller, M.D., M.B.A., who joined from Landmark Health; chief financial officer Claire Tamo, who joined from a division of Kaiser, and chief human resources officer Ruth Hendrickson, who joined from Blue Shield of California.

Primary Care

• SSM Health and Paladina Health have created a new joint venture to offer a direct-to-employer primary care offering in the St. Louis, Mo., region. In this new value-based care model, businesses will pay a flat fee for each employee's primary care services. The employee can then access all the primary care they need without co-pays or other additional out-of-pocket costs. The new company plans to open its first clinic in the St. Louis region by the end of this year, and its services will be available to St. Louis-area businesses in early 2020. The new model will also be offered to SSM Health employees and their dependents covered by SSM Health's medical plan. The two organizations will share ownership in the new joint venture, with Paladina Health serving as the operating partner.
• Baylor Scott and White Health is launching a direct primary care model in several North Texas clinics this year. Members will be charged a monthly fee that covers office visits and lab tests; insurance is still needed for hospitalizations and other services. The new model is managed by Accresa, a health care technology company that works with direct primary care practices to connect patients, employers, employees and providers and provides administrative support. The new model is being offered through Baylor's accountable care organization.

Social Determinants of Health

• American Logistics Company and Uber Health announced a partnership, marking Uber Health's first national collaboration with a health care transportation management company. Uber's extensive driver-partner network and American Logistics' full-service transportation solution will together increase access for millions of plan members. The partnership will enable health care plans and organizations to provide smarter patient pickup and drop-off, scheduling, real-time GPS tracking and messaging through one unified platform.
• L.A. Care Health Plan and Blue Shield of California Promise Health Plan will jointly operate 14 new and existing community resource centers throughout Los Angeles County. The effort is part of a $146 million investment from both insurers over a five-year period, with each group investing $73 million. L.A. Care Health Plan already operates six community resource centers and had been looking for ways to expand the services before Blue Shield Promise agreed to help with funding. The centers, which provide free services to the public and members in areas such as nutrition, fitness and childhood development, are part of a larger strategy from both health plans to address social determinants of health.

Government & Regulatory

CMS

• Two CMS decisions are helping to bring down barriers for Medicare patients to access CAR-T therapy, a promising but costly treatment that involves genetically engineering human immune cells to attack proteins on cancer cells. In a National Coverage Decision, CMS announced that Medicare would cover two CAR-T therapies that are FDA-approved to treat different types of lymphoma and leukemia. Previously, CAR-T coverage determinations differed from one CMS region to another, contributing to inconsistency and confusion. Additionally, CMS will increase its reimbursement to hospitals from 50% of the additional costs associated with administering CAR-T therapy to 65%. While the increase was welcomed, the hospital industry pointed out that hospitals could still be left with six-figure shortfalls, given that the therapy itself costs $375,000 to $475,000, and associated hospitalization costs can add hundreds of thousands to that.

States

• After many of the state's hospitals refused to sign contracts to join the new North Carolina State Health Plan Network, the state treasurer has partially retreated on a plan to reimburse providers at a percentage tied to Medicare rates. The plan would have paid providers an average 196% of the Medicare rate for services delivered to teachers and other state employees. The state treasurer said the network will still consist of more than 28,000 providers, including five hospitals, that already signed contracts under the reference-based pricing model; however, it is unclear if providers will ditch the new plan and seek to keep their old rates now that others are allowed to opt out.
• Alaska's Republican Governor Mike Dunleavy, who narrowly won election in November, vetoed $50 million in state Medicaid spending and erased the $27 million in adult dental benefits from next year's budget. The cuts, combined with a legislative cut of $77 million earlier this year, will shrink state Medicaid spending by about 22%. He is one of several Republican governors who have sought to roll back Medicaid this year. Nearly 30% of Alaska's total population is covered by Medicaid, according to state statistics.

Evolent in the News

• Providers have had "surprisingly tepid responses" to CMS' new Direct Contracting payment models, Evolent Vice President of Health Policy Ashley Ridlon told Health Leaders Media. Nevertheless, as the Aug. 5 deadline neared for organizations to notify CMS of its interest in the program, she expected many would submit nonbinding letters of interest "just in case." CMS has launched Direct Contracting models to encourage primary care practices and others to take increasing financial risk—up to 100%—for a population of patients.

Survey Says/Studies Show

• A 2018 survey of 120 U.S. commercial insurers found nearly two-thirds of their payments are tied to some value-based arrangement rather than fee-for-service. By 2021, insurers expect only 26% of their claims to be from fee-for-service. Although the volume of these contracts is only expected to rise, "real" risk arrangements are still hard to come by as providers shy away from taking on downside risk, according to analysts, payers and providers.
• Physician support for the Affordable Care Act (ACA) grew over five years, with 53% of doctors now agreeing it could turn health care "in the right direction." A survey of physicians reported in Health Affairs found that in 2017, 53% of respondents agreed that the ACA, "if fully implemented, would turn United States health care in the right direction." That is an 11-percentage-point increase from a similar survey in 2012 when only 42% of respondents agreed with that positive view of the ACA. Of the 445 physicians who responded to the survey in 2017, a majority (60%) said the ACA had improved access to care and insurance along with improved access to care for patients with preexisting conditions (73%).
• As they shift to value-based payment, primary care practices will need staff with a higher skill mix aimed at keeping patients healthy, according to a white paper from Premier Inc. Practices will need to add new staff members such as behavioral health providers, social workers, nutritionists and pharmacist support.
• After years of M&A activity in other areas such as dental, dermatology and ophthalmology, the orthopedic space is seen by private equity firms as ripe for consolidation. As reimbursement gives way to value-based payments, and commercial payers grow larger, many orthopedists are facing rate pressures and rising administrative and regulatory compliance costs.
• More than 80% of employers said they are planning to increase their health and wellness budgets over the next three years, which is up sharply from 61% last year and more than double the 34% who planned to in 2009, according to an annual workplace study from Optum. However, research has shown that the returns are limited, and experts found that wellness efforts have minimal or no impact on health metrics.

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