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Mr. President, value-based care makes healthcare more affordable

January 20, 2017
President Trump, we urge you to expand value-based care and ACOs.
Chief Executive Officer, Retired

On your first day of work, President Trump, let us first say, “Congratulations. We wish you success. And we must all work together to help you achieve success for the American people.”

As you consider the various options to achieving success for the American people in your healthcare policy, please give serious consideration to the importance of value-based care and population health to lowering the cost of care while increasing the quality of that care. These kind of initiatives preceded the Affordable Care Act (ACA) as patient-centered medical homes and accountable care organizations (ACOs), beginning as far back as 2007. Likewise, the Centers for Medicare & Medicaid Services (CMS) had also begun to embrace these models of healthcare delivery and reimbursement for the Medicare population.

CMS leveraged the success of the early adopters in value-based care and used the impetus of the ACA to accelerate the move from volume of services to value. Commercial health plans across the Health Insurance Mr Presidentcountry have incorporated value-based care and population health provisions in their contracts with healthcare providers in varying degrees. And it makes great sense. In most other service industries, consumers already pay for value and not for volume of services; and we receive better services at lower costs as a result.

As you work to repeal and replace the ACA, we urge you to consider the importance of value-based care programs as a critical element in the effort to substantially and sustainably lower healthcare costs and thereby increase access.

Here’s Why

Value-based care and population health are working. Broadly speaking, these provisions link healthcare payments to patient outcomes and health, creating a meaningful connection between cost and quality. In other words, these provisions help drive a return on investment on the $3.2 trillion, or $9,990 per person, our country spends each year on healthcare.

Value-Based Care is Working

As a successful entrepreneur, we know you are focused on results. So let us share a snapshot of the value-based care success story.

Initial results indicate value-based care is leading to better health, better care and lower costs. Taking better care of patients upfront often reduces the need for emergency department visits, urgent care and hospitalizations. This is especially true for those patients predictive analytics has identified as at-risk or high-risk and estimates suggest account for approximately 75 percent of healthcare spending.  Some examples of these can be readily found through well-designed remote patient monitoring and ACO programs.

Home Monitoring

Remote Patient Monitoring Results

A statistically-significant Geneia study of patients with diagnosed heart failure demonstrated that remote patient monitoring facilitated earlier interventions by the patient’s care team and prevented avoidable hospitalizations and disease progression. In short, the heart failure patients in our study fared much better than the control group:

  • Risk Score Stabilized: A 2 percent increase in the study group compared to a 31 percent increase in the control group – indicating a slowing of disease progression for participants
  • Hospital Admissions: With a net 45 percent reduction in acute hospital admissions, they spent far less time in the hospital
  • Medication Adherence: Increased by 37 percent
  • Financial: Annual savings of $8,375 per monitored patent

ACO Organizations Deliver Results

Since the ACA was enacted in 2010, health plans have created many value-based and risk-based contracts with physicians, hospitals and other providers with the shared goals of improving healthcare quality and lowering cost. And lowering costs while improving quality is what is required to truly deliver more affordable and predictable insurance premiums for the long-term. Access to insurance is simply a function of affordability, as those lower costs translate into lower premiums in the marketplace. 

Estimates suggest there are more than 825 ACOs serving 28 million Americans, and nearly all health plans have some type of value-based arrangements in place.

There is increasing evidence ACOs are working to reduce costs and improve patient health.  But more is needed.

Let’s look at the experience of one of Geneia’s health plan clients.

Data for a recent 12-month period show the health plan’s accountable care partners are outperforming their peers:

  • Acute inpatient hospital admissions are 4.7 percent lower for employer group customers and 7.2 percent lower for Medicare plan customers.
  • Hospital readmissions are 8 percent lower for employer group customers and 14.8 percent lower for Medicare plan customers.
  • Emergency department visits are more than 8 percent lower for employer group and Medicare plan customers.
  • Accountable care partnerships are meeting or exceeding agreed-upon quality goals and are exceeding the regional average for Healthcare Effectiveness Data and Information Set (HEDIS® )1 measures for chronic disease management

Our client’s experience is not unique. Other health plans are having similar success with ACOs and value-based care, including:

  • Anthem reports a 7.8 percent reduction in acute patient admissions, a 9.6 percent improvement on pediatric preventive care, and a monthly savings of $9.51 per participating patient.
  • UnitedHealthcare reports patients have 8 percent fewer emergency department visits and as many as 16 percent fewer hospital admissions. Breast cancer screenings are up 11.4 percent for commercial ACO members and colorectal screenings are up 7.8 percent for Medicare ACO members.

Aggregate results for the Medicare ACOs are also demonstrating success. The Centers for Medicare & Medicaid Services found that over 400 Medicare ACOs generated $466 million in total programValue Based Healthcare savings in 2015; 125 of the ACOs qualified for shared savings payments by meeting quality performance standards and savings thresholds.

At this important juncture, it’s worth remembering why our healthcare system has embraced value-based care and population health. In short, our country has been experiencing an unsustainable dynamic – escalating healthcare costs and declining health and quality. We all need to do more in this area. Value-based programs are a key tool and should be expanded. 

Research by the Commonwealth Fund in the years before the ACA was enacted, showed our country paid more per capita than any other industrialized nation and ranked last on measures of quality, access, equity, efficiency and health status. In other words, their research demonstrated our ROI on healthcare spending was unfavorable compared to our peers.

In the days and weeks ahead, we urge you and your team to review the quality and cost outcomes of value-based care and keep what’s working. There’s much at stake. While our country acknowledges what has not worked, let’s also focus on what is working to move our health systems and country forward.

At Geneia, we believe the successful efforts connecting healthcare quality and cost are the place to start.

1HEDIS® is a comprehensive tool used by most health plans to measure performance on important aspects of care and service.