It’s a New Dance in Healthcare: And Time for Providers to Move to a New Beat

One of the enduring conflicts in healthcare, really going back to the early 1970s when the first HMOs were formally recognized under the Health Maintenance Organization Act off 1973, has been the longstanding set of tensions between providers and private health insurers. Of course, there has been tension between providers and the Medicare and Medicaid programs as well, going back to their inception in 1965. Fundamentally, all along, hospitals and physicians have wanted to be paid the maximum amounts possible for what began as fee-for-service payment, and has gradually evolved through generations of discounted fee-for-service, and into value-based payment, and in some cases, capitated or full-risk reimbursement.

To some extent, those tensions will always exist in our endlessly complex healthcare system here in the U.S.—one that is so head-spinningly complex that it is virtually impossible to even explain to non-Americans (and sometimes even to some Americans). We have neither a purely capitalistic system, nor a fully government-run one that has eliminated all capitalistic incentives. Instead, we have a system so intricate and nuanced that making even the tiniest changes to incentives among the stakeholders of the system requires herculean efforts and the expending of massive amounts of political capital.

Still, some things have been learned healthcare system-wide. One of the key collective learnings has been that the first generation of what is now often referred to as “Mother-may-I” managed care, was incredibly stressful for everyone involved. Patients hated the restrictions imposed on them in first-generation managed care plans; providers bristled at the labyrinthine approvals system involved in simply caring for their patients and getting paid; and even health plan leaders were stressed by the constant conflict with providers, and by often being publicly demonized for doing what they were required to do according to the rules established by laws and regulations. What’s more, let’s face it: members of all the stakeholder groups were constantly trying to “game” the system in order to gain maximum advantage in a system filled with negative or counter-productive or counter-intuitive incentives.

Even the earliest forms of capitated contracts tended to be difficult for both providers (primarily physician groups) and health plans to live with; and one really fundamental problem was always a lack of timely, meaningful data to use in order to provide optimal care to patients on a per-member-per-month basis. That data basically either did not exist twenty and twenty-five years ago, or it was hopelessly limited in scope and outdated, or too generalized, by the time that physicians and their care teams were given access to it. What’s more, our current concepts of multidisciplinary team-based care management really only began to emerge in the early 2000s, and particularly after 2010.

Now, however, things have changed dramatically, and the facts on the ground are different. As we as a country and a society race towards a terrible cost cliff, with the Medicare actuaries expecting total U.S. healthcare expenditures to leap from the current $3.6 trillion-ish per year to around $6 trillion per year in the next several years—a truly breathtaking prospect—the planets and stars are all realigning to create rather a different strategic and operational landscape from that of the past. Health plans and providers are finding more and more that both sets of stakeholders indeed do have incentives to bend towards one another, in order to finally come together to collaborate on population health management and care management, for the benefit of patients/plan members.

There is evidence across the nationwide healthcare system for this evolutionary change in the landscape.

For example, Senior Contributing Editor David Raths, in a March 25 report, quoted James Kyle, M.D., the medical director for quality, diversity, equity and inclusion at L.A. Care Health Plan, the mostly-MediCal (Medicaid in California) health plan based in Los Angeles, as stating, during a virtual program held on March 24 and sponsored by WEDI (the Washington, D.C.-based Workgroup for Electronic Data Interchange). Speaking during WEDI’s “Quest for Health Equity” virtual program on March 24, Raths reported that “Kyle described  the features of what he called a ‘next-level health plan.’ As well as meeting NCQA and state regulations and working on its star ratings, plans should focus on being a valued partner with vulnerable populations, communities, public health agencies, and community-based organizations. A health plan has a role to play that goes beyond just writing checks and contracting with doctors and hospitals, he added. “We have the opportunity, because of our size and because of our community position, to function as a community services agency ourselves.”

Indeed, Raths reported that “Next-level health plans need to focus on eliminating health disparities, and partnering for economic development in the communities where their members reside, being a trusted advocate of social change and a convener of community action, and being an advocate for equity and justice, Kyle said. ‘We've created what we call the Equity Council, a steering committee that has three subcommittees underneath it. One is the L.A. Care team, a committee, or council that focuses on our employees. The second one is our provider and vendor council. And the third is our member council of those who were enrolled in L.A. care. We believe that we have an obligation to improve equity, fairness and inclusion in all three of these areas. And the team council becomes the most urgent, because if we can't guarantee equity and inclusion in our own ranks, then we have little standing to advocate for that in the community,’ he said. ‘We have established partnerships with the LA County Commission on Human Rights. And we've participated in the LA vs. Hate campaign. We've empowered L.A. Care’s internal councils to set and prioritize goals and metrics to measure their change efforts in the community.’”

And while the leaders at L.A. Care have for years now been trail-blazers, health plans from across the country are moving forward as well. As Raths noted, “On the same panel, Catherine Anderson, senior vice president for policy and strategic engagement at UnitedHealthcare, discussed the importance of gathering and integrating actionable data to address those disparities.  Anderson said United Healthcare is putting considerable effort into bolstering its data infrastructure, particularly as it relates to some of the most complex populations that it serves. ‘That work is really focused on how we take disparate data elements into our organization in such a way as to make an impact on the populations that we serve,’ she said. ‘And one of the things that we are faced with is the reality that sometimes a wealth of data actually is problematic as we start to think about how we use data in a way that is meaningful and impactful. Having a lot of data doesn't mean that we have sufficient data or the right data or data that can be used to inform our thinking about how we would have a meaningful impact in the communities and on the members themselves.’ UnitedHealthcare has a ton of claims data, but that data has time lags and is incomplete. ‘If you are, a physician in an exam room with a member and you identify homelessness, and that member walks out the door, and it takes 12 days for the claim to hit our system, that lag becomes pretty significant in our ability to meet an immediate need,’” Raths quoted her as saying.

Another example: As Managing Editor Rajiv Leventhal reported on April 8, “Aetna, a CVS Health company, and Fresenius Medical Care North America (FMCNA) have announced they have enhanced their value-based care agreement to support Aetna Medicare Advantage members with end-stage renal disease (ESRD). FMCNA provides support services that focus on the full continuum of care for approximately 4,500 Aetna ESRD members, with the end goal of reducing hospitalizations and improved patient outcomes. According to officials, the enhanced value-based agreement includes additional incentives that align healthcare reimbursement with quality performance and reduction of total cost of care to deliver greater value to Aetna Medicare Advantage members. Quality performance measures in this arrangement support Aetna with the Centers for Medicare & Medicaid Services (CMS) Star Ratings initiative, with measures of quality of health and drug services,” Leventhal noted in his report. “The companies say they are also developing unique ESRD performance metrics tied to CMS quality measures for this population.  Aetna Medicare Advantage members with ESRD will continue to have access to FMCNA’s more than 2,600 dialysis centers and home dialysis options, officials stated.” Further, as he noted, “[T]his agreement also aligns with the 21st Century Cures Act, which opens the door for previously ineligible ESRD patients to enroll in a Medicare Advantage plan beginning in January. This has been considered by many industry groups as a welcomed change, as while most Medicare beneficiaries have an array of coverage options, individuals with kidney failure have historically faced fewer choices and potentially large out-of-pocket costs due to the expensive nature of kidney dialysis.”

And, as I noted in a report published in August of last year, “The leaders of the Hartford, Conn.-based Aetna and the Cleveland Clinic on Aug. 19 announced the creation of a potentially groundbreaking new accountable care organization (ACO) model that will advance health plan/provider collaboration in the Cleveland, Ohio healthcare marketplace.” The leaders of the two organizations posted in a press release on that date that “Cleveland Clinic announced today a new multi-faceted collaboration with Aetna, a CVS Health Company (NYSE: CVS), to form an ACO model and offer new plans and programs featuring Cleveland Clinic providers. The collaboration includes the launch of a co-branded insurance plan, which could reduce healthcare costs for participating employers, an expanded relationship nationwide to provide members enrolled in Aetna commercial plans access to second opinions by Cleveland Clinic for certain conditions, and the deployment of Cleveland Clinic’s Cardiac Center of Excellence (COE) program to Aetna plan sponsors.” Steven C. Glass, Cleveland Clinic’s CFO, said in a statement carried in that press release that, “Given the current economic climate, employers are looking for a cost-effective, high quality insurance plan that also provides access for their employees to coordinated care and advanced medical expertise. Cleveland Clinic is committed to improving the health and wellbeing of Aetna members, and we look forward to working together to deliver value-based health care to an expanded patient population.” And Angie Meoli, senior vice president, network strategy and provider experience at Aetna, was quoted in the press release as saying that, “As part of CVS Health’s goal of becoming the most consumer-centric health company, we are facilitating access to high-quality health care where and when consumers need it. Cleveland Clinic is renowned for delivering exceptional health care, and our new collaboration will enable our members to receive the personalized and coordinated care they need to get and stay healthy.”