At the APG Colloquium, a Look at Alternative Payment Models and the Pandemic
On Wednesday, Nov. 18, leaders of the Los Angeles-based medical group association America’s Physician Groups (APG) analyzed the status of alternative payment models (APMs) and their future, in light of the current COVID-19 pandemic and its impact on physician groups, during the second day of the APG Colloquium 2020, which was held virtually on Nov. 17 and 18.
Don Crane, president and CEO of APG, led a discussion entitled “Mid-Pandemic: Should We Be Doubling Down on Value?” with panelists Frederick Isasi, M.P.H., executive director of the Washington, D.C.-based Families USA; Mark McClellan, M.D., Ph.D., director of the Robert J. Margolis Center for Health Policy at Duke University, and former Administrator of the Centers for Medicare & Medicaid Services (CMS); and Andy Slavitt, a senior adviser to the Bipartisan Policy Center, chair Chair of the APG Board and former Acting Administrator of CMS.
Crane opened the discussion by asking, “What has the pandemic taught us about payment and care models?”
“We’re a university-wide program at Duke and also have a presence in DC. Our main areas of focus are on healthcare transformation,” McClellan said. “COVID-19 has exposed some fundamental problems in our healthcare system, because of the fee-for-service payment system, which led to health systems having to scramble financially. And they had to move so quickly on telehealth, which they just weren’t prepared for. And not only through now three surges of COVID, but also the need to contain. Meanwhile, APG member organizations and others involved in value-based payment, were able to focus on care management and transitions, rather than having to scramble so much. And that led to our developing the Resilience Proposal, showing that these transitions can be implemented.” (As explained on the Margolis Center’s website, “A proposal for a COVID-19 Health Care Response and Resilience Program, developed in partnership with Families USA and United States of Care, would provide additional financial relief to health care providers so they may better meet the ongoing challenges of the COVID-19 pandemic, while also facilitating greater provider participation in value-based payment models. The proposal is summarized here. Providers participating in value-based payment models have demonstrated resilience to the negative financial impact of the pandemic and an ability to quickly pivot resources so they may continue safely caring for individuals and their families. This proposal describes how future financial relief offered to health care providers could help health care providers invest in the capabilities (e.g., data and telehealth infrastructure) that can support effective COVID-19 detection and containment strategies as well as facilitate shifts to value-based payment models that will be more resilient to future public health crises. Health care organizations, former health care policy leaders, and key health care stakeholder groups (see here, here, and here) support the continued transition to value-based payment as an approach to relief that enables additional payments to be an investment that will improve access and care, and reduce costs in the future.”)
“And Don, in the months since that original surge,” McClellan continued, “while we’ve taken a lot of short-term steps around flexibilities in telehealth payment and operations, it’s also been challenging as a whole to make the needed shifts, because of the fee-for service system. And your members’ focus on population health has been so important with regard to responding to a situation like this. And how do we make that the norm? That is one of the most urgent challenges, I think, as we move through this pandemic.”
“I think the thing that we all understand as Americans and feel it in this election, is that there’s a pretty big divide in the country in terms of understanding each other and talking to each other, and we’re pretty polarized,” Slavitt said. “We can’t afford to have a healthcare system that reflects that polarization. We need a healthcare system that reflects the needs of the American people. And Frederick and Mark have been pretty involved in important issues: people shouldn’t have to go to bed worrying about whether they’ll have access to healthcare or not. And we shouldn’t have to get our healthcare system ripped up and changed every single time there’s a new administration. We need to create some stability. And The United States of Care is focused on some pretty simple issues, based on premises that somewhere around 80 percent of Americans believe in.” (The United States of Care’s website explains that the collaborative’s mission is as follows: “The mission of United States of Care is to ensure that everyone has access to quality, affordable health care regardless of health status, social need, or income. A non-partisan non-profit, we are building and mobilizing a movement to achieve long-lasting solutions to make health care better for everyone. United States of Care will help make it happen by working with Americans from across the country: patients, caregivers, advocates, clinicians, policymakers, and business, civic, and religious leaders.” Its four core principles are equitable access, affordable source of care, protection from financial devastation, and political and economic viability.)
“And one issue is payment,” Slavitt continued, “not because of payment for payment’s sake, but because we really want to reflect our values in our payment system. And good systems are resilient and support people in terms of stress. And if you had a good healthcare system in this pandemic, it would cushion the blow for people. In many ways, this system exacerbated the problem. First of all, the tie between employment and insurance is still too important: a lot of people lost their health insurance when they lost their jobs. And that’s clearly a problem that needs to be resolved. We can’t say, you deserve HEALTHCARE because you work for a big company that provides health insurance, but you don’t, if you don’t. And what Mark was talking about: when you hit a crisis, the money sits neither with us nor with our care providers, but instead, sits with a middleman. And that’s not an attack on the health insurers, but on the system. We want the care providers to have the resources to care for us. And middlemen can add value, but they shouldn’t be at the center. So, what have we learned here about our healthcare system that we can apply to this situation? So I applaud Mark and Frederick for raising these issues.”
“Families USA has been around for nearly 40 years, and we’re one of the oldest and best-known advocacy organizations in this area, and our focus is to make sure that every American has the best access to healthcare,” Isasi said. “Every person in this country should be able to achieve their healthiest and best life, period. We’re very well known on the federal level, but also work at the state level in every state. And we work in three core areas, plus a fourth: coverage, healthcare value, and equity; and we also work to elevate the individual experiences of families with health and healthcare, to help drive the discussion. And in terms of this vast and profound experience we have had as a country and across the world, what is this experience we’ve been having, what is the long=term effect of it? 240,000 people have died, and nearly 10 million have been infected; staggering numbers. And you’re almost two-and-a-half times more likely to die as a Black person. And in Arizona, you’re four times as likely to die from COVID if you’re a Native American; in New Mexico, eight times as likely; in Wyoming, 15 times as likely. We must address that.”
Further, Isasi said, “What COVID has uncovered for so many families and providers out there, is, what an insane treadmill that providers are on, in terms of units of care. The providers know this reality; they live it every day. Instead of us allowing our healthcare providers to keep people well and when they get sick, to figure out the best use of resources, the system we have is that, you’re a healthcare professional, and you need to put out as many units of care, to be paid. And so not only do their entire financial underpinnings disappear; it’s remarkable the number of primary care practices that have closed or are at risk of closing. And your primary care provider doesn’t make money by making sure that your family has the supports to stay at home; they actually won’t be paid unless you use their services.”
Isasi added that “A lot of the telehealth innovations have been worthwhile. But we’re hoping that this experience, as Andy and Mark have said so eloquently, is this: how do we get this right? We’re spending so much more on HEALTHCARE than other countries, but our outcomes are so much worse. So how do we actually focus on health, instead of continuing on this absolutely insane treadmill of fee-for-service payment?”
“Mark, tell me about this Resilience Proposal?” Crane asked.
“This proposal put squarely in front of policymakers the consequences of what they do, in terms of how to help providers who are really hurting, get through,” McClellan explained. “We didn’t get this out in May, but at that time, a lot of assistance was going out the door to physician practices and hospitals; but if you look at the way that aid was provided, it was largely tied to past FFS utilization and past Medicare spending. That’s good for managing short-term shortfalls, but it wasn’t so good for helping them to see a path forward, so that’s what we wanted to do. We focused on two things. The first was areas where Congress could provide assistance to healthcare providers; but that it should be done in a way that helps with responding to the pandemic short-term, but longer-term, should help providers move away from FFS payment over time. So on the one hand, there was the need to support providers in the short term. Abd then some commitment or pathway for moving into some alternative payment models. For PC groups, that might be an advanced medical home, or a primary care-led ACO. For specialized care, it would be moving away from FFS towards episode-related payment; for larger organizations, moving towards some kind of APM over time—so that they would all have a path forward.”
McClellan continued, “And that means a focus on primary care, care integration especially behavioral care integration, and a focus on the social drivers of care. And it will take time. And we had some supporting proposals, including continuing more telehealth coverage, as well as APMs. We worked with Families USA on their excellent proposal for data transparency, so that people can access information on outcomes-related information. Those are the core elements. And as Congress is again starting to address whether there should be another stimulus package, there are questions being raised about how we should assist healthcare providers. And we’d like to see a glide path, a transition path that gets us out of the fee-for-service system over time.”
“What is the status of the proposal right now?” Crane asked.
“It’s been endorsed by APG, by the American Association of Family Physicians, and by other organizations focused on person-focused healthcare; Families USA has been terrific,” McClellan said. “And with the legislative focus coming back after the election, there’s another potential live opportunity with Congress. And in the meantime, we’ve seen payers like Blue Cross of North Carolina, Blue Cross Blue Shield of Massachusetts, Blue Cross and Blue Shield of Minnesota, all of which have implemented a version of this, particularly with their primary care providers; the states of Washington and California have been moving forward with proposals as well. And the Health Care Payment Learning & Action Network has made this resilience concept a core element linked to alternative payment models coming out of CMMI, including episode-based models. So there are steps taking place; we’d like to see more progress, though.
“Andy, is $35 billion enough?” Crane asked. “And does it just address pandemics? Is it part of the intent to also correct the system, so that it addresses fragmentation in terms of people with chronic diseases, or does it have broader applications?”
“If we do it right, we use the pandemic as a teachable moment,” Slavitt responded. “And I think what happens is that we can use this as an educational moment. People in Congress don’t necessarily understand these concepts around value-based care. But they see people hurting in a pandemic, and it’s an enormous educational opportunity. And the opportunity for this to become legislation, could happen in a week, in a month, or could take years. The political dynamics are not always set up the way you want them. But history shows that if something like this is socialized and ready to go, it will be ready for it. And there are twelve pandemics happening in the world right now. We just live in a sort of privilege around that. And there are all sorts of disruptions that will take place; some will be pandemic-based, some science-based, and so on. And we need to learn lessons, such as this linkage of health insurance coverage to employment, and apply them to real-life situations.”
What are the next steps for the value-based movement?
“Frederick, what do we need to do next? How would you accelerate the movement?” Crane asked.
“You’re sort of asking about the mechanics of this,” Isasi said. “But for those involved in policymaking, there’s a real dissonance between the way in which associations address policymakers, and the way in which they live their lives. The top line of these healthcare associations always ends up being asking for more money. But everyone knows that at the bottom of it all, the way we pay for care is a fundamental problem that drives it all. So we’ve got to end the dissonance between the way in which provider associations approach policymakers, and their awareness of the need for change. They want this to be changed, too.”
Isasi went on: “The bottom line is that if you’re making a lot of money in fee-for-service, you don’t want to pursue a different approach. So one of the things we have to do is that risk, allowing providers to take a bonus of payments over time and allowing them to innovate underneath that—a period of time in which they can invest in health and not just little units of healthcare—that’s the first step,” he said. “And you have to allow providers to take on and absorb a lot of risk, so they can really absorb a lot of it. And that’s not 10 percent of your business in MSSP [the Medicare Shared Savings Program], or even 50 percent; it’s 60 percent or more in two-sided risk. And when you get to capitation, the whole world changes. So you’ve got to give providers a large, large percentage of risk-based payment. If you’re saving money and are helping people get healthier, that’s important. And sometimes, people take a boil-the-ocean approach to this. But our research shows that the CEO making a ton of money under fee-for-service, you’re not going to move him or her. Instead, if you can approach the number two or number three in the market, who’s hungry—they’ll move the market. The number-one concern of CEOs is patient stickiness. Let CEOs steal patients and move the market. And shifting to population health-based payment is not a question of doing the right thing or not, it’s a question of opportunity. You need to make the delta around pushing providers into risk-based care significant enough to drive change.”
Is the current moment a teachable moment?
“Andy, how long is this window going to be open, for a teachable moment?” Crane asked, referring to the stresses that healthcare leaders across the healthcare delivery system are facing in the moment, because of the impact of the COVID-19 pandemic.
“It depends on who you win over,” Slavitt said. “I’ve heard that some academic medical centers are talking about prospective payment because they’ve touched the hot stove now. If you could convert them and community and rural hospitals, the natural enemies of change on the Hill, then you can run with it. The people in this group are arguing on one side, but every community hospital is arguing on the other side. But if you can get hospitals to understand why it’s in their best interest, and can get people who are listened to on the Hill, if you can make the argument to them, it starts to become more inevitable. So I don’t think that it’s about taking the argument to the Hill right now; instead, it’s about going to your local hospital CEO and saying, we’ll pay you every month 50 percent capitated payment and the other half, FFS; find some construct that works, so that all of a sudden, they think differently, and they see the benefits, because they know they’ll get that 50 percent, or whatever, and will move towards change.”
“And there are great stories we can share, stories that frankly, Families USA has perfected, that can be used as a lever to help drive change,” McClellan offered. “And I think there are some opportunities with employers as well. Employers are looking at real economic straits and are ready to have a bolder discussion about how, if they are going to continue to provide coverage for their employees, it probably shouldn’t look like fee-for-service with open networks and very high deductibles, whereas in fact, if you can get your employees into systems of care with much lower costs and much lower deductibles, you can succeed. This is an idea that has history on its side, that has medical technology on its side, that has the advantages of addressing social inequities on its side. It’s a great argument to make.”
“And what we’re talking about here, and what all these folks are doing in trying to fundamentally change the healthcare system, we’re talking about my mom, who’s broken her hip and has surgery and has dementia, that she has a care team around her,” Isasi emphasized. “How do we make sure she heals well? And maybe the neighbor down the street, when he ends up having to go for surgery, that he heals well. It’s what every single person in this country wants. We’ve got to tell this story. It’s not about risk-based payments; it’s about, let’s give providers the incentives to focus on health. And there’s a really powerful tool in all this, and it’s about the fact that we have a healthcare budget crisis that’s getting worse every day. And this is the middle path, right? Between abandoning healthcare coverage and moving towards government control. And I was really struck when I really started working with healthcare executives, at how clear they are that they hate the system as it is. So healthcare leaders need to speak out more.”
