The cost and savings analysis show the impact
Value-based care is successfully improving patient health. Better outcomes translate to financial benefits for both patients and physicians.
Value-based Care: Cost And Payments
When it comes to financial impact, Humana’s value-based programs made meaningful progress throughout 2021.
So that brings us to our final topic, which is cost the ever-present cost. And the way I always think about cost is really focusing on really getting the right care for our patients right and minimizing or significantly reducing the lower value care. As you can see from the slide, overall cost savings for our value-based practices compared to traditional Medicare is significantly improved at 20% over original Medicare value base.
Primary care physicians have focused for years on on putting the infrastructure in place to drive efficiencies, to reduce waste, to get our patients who have chronic conditions to the right care at the right time. And physicians don't always like to talk about cost, which is one of the reasons I always think about it, is how do you actually improve efficiency and reduce waste?
But I would really be interested in hearing from you all about how much costs and potential earnings are discussed within your clinics, with your physicians, and how much does that motivate your physician? So maybe Dr. Bhansali, if I could start with you to start the conversation here.
Sure thing. So we are a for profit P backed organization. As such, profitability is a priority, but we deliver some of the best outcomes to the country in terms of utilization, total cost of care, etc. And so not only are we taking any risk, but we've decided to move forward with ACO, reach global cap model and will therefore double our full risk lives.
We decided to move forward with this because we know we can deliver value. Our goal is to shift costs from the acute to the chronic side of management, improve outcomes and save patients and the health care system money and simultaneously be profitable. I mean, this is the foundation of value-based care and we're delivering on that promise as we engage with our clinicians, how we perform in our value-based care models.
There is the right trends, trends for translation of that into the profitability of our clinicians or compensation. And so we've tied back because as clinicians are expected to go above and beyond whatever they're doing, India focused on outcomes, focus on care, coordination, etc. We want to ensure that patients are happier and healthier, that they also are a part of that profit sharing.
Q And, Dr. Suresh, for, you know, health care is obviously a business, right? I'd love for you to talk a little bit about the role of value-based care in sustaining your organization during the pandemic and how that positioned you for success and being able to continue seeing that serving the patients that you do.
Absolutely. So the pandemic was, as we all know, not only significant challenges, but also opened up doors of opportunities. Right. To our physicians. We have we have always included our physicians, rank and file, PCBs and IP in leadership in every financial discussion and how their care impacts the dollars and the surplus sharing that comes through. So physicians are very aware of this and the pain during the pandemic.
Our physicians were the physicians who are in a capitated model structure of fee structure were the best served. So they felt this was a this was a blessing in disguise when they were not able to see patients, when they were not able to have their offices open. Staffing shortages, they still had a contract coming in. So they just really had a movement in some of our physicians who were fee for service to a capitated structure.
So I think one of the I was tying the pandemic to the financial modeling of the organization, right? So that's definitely totally proved beneficial. And the other advantage during COVID was the education and opportunities surrounding telehealth. So that was one of the areas that our physicians had not utilized fully or even close to a significant extent. And sharing those data, the value of telehealth during the pandemic was immensely helpful for our physician.
So I think that that telehealth model has is here to stay, whether we like it or not, and the physicians are utilizing it. And even after the pandemic subsiding a little bit, we are using telehealth in different forms. Right. So they're using for follow up post-discharge or even touchpoint meetings. So what Duncan and Valley mentioned access, but also frequency.
How often do you see your PCP? Some of them mix it with like a hybrid thing in in-person office meetings, office visits combined with a telehealth visit, plus a phone call. So they are using a hybrid structure, which all was a was a result of how they operated during the pandemic. Those are some of the techniques that I think pandemic really helped our IP.
So to wade through the situation, but also some of the practices that are here to stay.
Thank you. So actually, I'd like to end with addressing maybe some of the physicians who may be watching this panel who are much, much earlier in their journey towards value-based care. So you all experienced that journey yourselves. And we know that there's increasing encouragement, incentives for physicians to take on risk of some sort, whether it be from CMS in their models, but also in their other value-based programs or from may payers or commercial payers.
And so it's a big lift to take on. There's a lot that goes into that as we've spent time talking about today. So what I'd love for each of you to do is starting with you, Dr. Feldman, is to talk about, you know, one or two things that practices could start doing that maybe doesn't involve, like having a contract with the payer around taking on risk to start to prepare them for the type of culture, the environment and things that they would need to ultimately be able to enter into value based arrangements.
What advice would you give to practices who are much, much earlier on in their progression towards value-based care? Just starting to think about it.
I think there are two early processes that can be started. The first is a cultural shift towards one of understanding that the reduction of total cost of care is beneficial to the organization. And so that's a bit of a challenge for a fee for service company where every encounter is sort of viewed on its own merit without the sort of long-term goal of total reduction of care throughout the arc, either on the fiscal year or longer than that.
The second is you have to invest in the proper EMR optimization. Just because you have an EMR doesn't mean it's going to deliver either the data or the tools needed to appropriately manage population health. It needs to be customized and fine-tuned, and the key to successful optimizing your EMR is having physician engagement. What we've seen across organizations is that when the service does, the EMR billed and then presents it, it is far from optimized.
The key is to have busy, successful clinicians engage in the process so that it is user friendly. It's clinically meaningful, it's pertinent, and it isn't cumbersome. And I think those are the two early steps that can be done without significant capital expenditure. You don't need to build a whole population health team; you don't need to have a war room with analysts.
But beginning to understand that we're all responsible for bending the cost curve and then providing some of the electronic tools to at least appropriately demonstrate quality capture data and interface with the payer.
Thank you. Dr. Suresh, what would you say?
I will go back to my slogan Education and support. Say physicians who are who are led to join the value-based care model are realizing that they they need to shift their focus now. So education from IPAs, from the leadership, from peer group sharing has definitely moved the needle for those physicians who are slow to adopt. And the second thing is CMS moving its approach from a volume-based care to value based care has really sent a message, a strong message to some of these providers and their offices.
And they are also seeing similar adoption from commercial payers as well as their participation in ACO and now the ACA reach. So all of this a common theme across all of these movements and different groups that there is volume to value. So I think our education has definitely gone a strong way and a long way to moving some of the practices from volume to value.
And we see this when our IPAs are recruiting new physicians, the new physicians want to stay independent. Previously there was a there was a big movement even now from physicians who are just graduating from practices, wanting to be just employed by somebody. However, with this shift in volume to value and the physicians realizing that this is a very viable way of practice, they are recruiting new physicians into their practices or even into their IPA that want to stay independent and adopt the value-based care model.
So I think the drive is moving slowly but definite for surely it's there and support. I can't emphasize enough on support when the physician practices understand that there is support in ways that I listed previously in terms of either an embedded care coordinator or an embedded personnel in their office providing that population health platform and also providing timely and accurate data knows their move, their practice in a positive way that really helps them consider shifting from volume to value.
Excellent. Thank you. Dr. Bhansali, you get the last word.
So across Italy, we care for about 2.5 million lives every year and duly is at its core and or is from its inception has been primarily a fee for service model engine fabric. And so the last year, what I've spent a large portion of my time doing is changing hearts, the value proposition across the entire organization, from operational leaders to clinical leaders to the front staff.
And especially with our PQRS. And I think that true proposition of value saying this is better for patients and better for us, and they're helping us understand or define how that cost shift works, why it's better, etc. That is probably it has been my number one strategy in engaging our organization, especially the clinical workforce, to move towards value.
And once those hearts are changed, then providing tools the next piece. But until those hearts are changed, it doesn't matter what tools, doesn't even matter what compensation are. People just aren't going to deeply do that. Work is this work is really deep work, right? It's rolling up your sleeves and getting the job done. Whatever it takes to take care of people.
And with a fee for service model, there just isn't a productivity compensation model. There just isn't enough time. So number one is that culture shift. Number two is aligning compensation to those outcomes because culture shift by itself with a, a, a misaligned incentive plan won't work because then there'll be a constant discrepancy and dissonance as people are working on this.
So that's the second thing. And then the third thing is figure out how to reduce hospitalizations. That is, if you do that, just that if you don't focus on anything else, then you just figure out how to reduce hospitalizations. That's going to cost such a long way in making people better off and really reducing the total cost of care.
So those are the three initial steps. I would say that an organization should figure out how to do or take changing hearts, aligning incentives on those outcomes, and then focusing on part A specifically hospitalizations to be successful very early on in their value-based care journey.
Well, all extremely wise words, as I think you all know, Humana is relentlessly focused on driving value-based care, getting more and more of our physicians and other clinicians into a value-based arrangements. And our report this year demonstrates that that success is continuing. And I just want to thank all of you for being incredible partners with Humana.
We honestly couldn't do this work without physicians like yourselves, and we genuinely appreciate the partnership. And I very much enjoyed this. Our speaking with all of you. Thank you so much. Thanks to our audience and I hope you all have a terrific day.
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