Evolution of Value-Based Care in CT

As we all know, the federal government via CMS has made long-term changes in how payments are, and will be, delivered to providers, with a focus on an increasing share coming from “value”. Value is defined as Quality/Cost or, per Michael Porter, “health outcomes achieved that matter to patients relative to the cost of achieving those outcomes. The value-based approach is a reaction to fee-for-service medicine which has, historically, rewarded for volume without explicit expectations of quality or cost.

Change has been slow to come in CT, but is accelerating. The CT Move to Value Forum is in its third year with the meeting this spring. Click here for agenda and registration.

It represents the efforts of a coalition comprising the CT Business Group on Health, the state of Connecticut, employers, and brokers to move care in the state towards providers who deliver higher value care.

There are striking disparities in cost for similar care among different providers and healthcare organizations in our community. Below is a comparison provided by the state of CT for a short list of procedures and their costs at local institutions.

Historically, patients would have been shielded from the impact of those cost differences, both because they weren’t paying for it directly and because data about the cost of care was not readily available.  In the era of high deductible plans and other cost-shifting strategies, patients have an increasing stake in knowing and understanding costs for their care. Employers, importantly including the state of Connecticut, are taking a greater interest in disparities in costs and are seeking to direct the venue of care towards high-quality and low-cost locations.

Although discourse is ongoing about the validity of quality data, it is increasingly being used as a metric for evaluation of providers and institutions. Here, too, we see disparities among local institutions:

The data at the top are from CMS, reported by the hospitals themselves as Medicare claims data.  The lower two are nongovernmental evaluations which are generally considered reliable indicators of quality and safety.  We can expect increasing pressures from patients and payers to provide care in a cost-effective manner while maintaining quality.  This will include using the facilities that the data suggest give equivalent or better care at lower cost. 

The state of Connecticut  has just announced that Anthem will be the administrator for all current state employees. Click here for the announcement from the state:

As you can see, they intend to develop a narrow network, which will by design attempt to exclude providers or entities which are considered less desirable due to quality or cost concerns.

Starling is uniformly considered a high-quality, low-cost provider by payers and local organizations, with a few exceptions based on certain venues in which we deliver care which are higher-cost.  To be successful in the future, we need to continue to realize this mission and remain ready to change to assure our patients are not paying more than necessary to receive the excellent care we provide.

Finally, the entry into the CT market of Optum and its ownership of ProHealth has and will continue to have an effect on the move to value. Optum is firmly committed to this movement. Here is a short excerpt from Becker’s Hospital Review:

Optum ‘scaring the crap out of hospitals’

Which business is keeping hospital leaders up at night? Many executives will tell you it’s not Amazon, not CVS, not One Medical — but Optum, the provider services arm of UnitedHealth Group. Optum was a key driver of the 11.7 percent gain UnitedHealth Group’s stock saw in 2018, which made it one of the top performers in the Dow Jones Industrial Average, according to Barron’s. Through its OptumCare branch, Optum employs or is affiliated with more than 30,000 physicians — roughly 8,000 more than Oakland, Calif.-based Kaiser Permanente.

Aside from directly competing for patients, Optum wants to hire or affiliate with the same MD-certified talent. It offers physicians three ways to do so: direct employment, network affiliation or practice acquisition. “OptumCare Medical Group offers recent medical school graduates the opportunity to practice medicine and become a valuable partner in their local community minus the hassles associated with the ever-changing business side of healthcare,” the company writes on its employment website.

It’s not just the physician force that makes Optum a serious concern for hospitals. Part of the challenge is that the $91 billion business has a hand in several healthcare buckets, expanding its presence as either a serious competitor/threat or a potential collaborator in multiple arenas since it is not easily categorized. For instance, consider the mountain of data Optum sits upon, with valuable insights related to utilization, costs and patient behaviors. “Because they are connected to UnitedHealth, they probably have more healthcare data than anyone on the planet,” the CEO of a $2.5 billion health system said. 

Starling has several ongoing collaborations with Optum/ProHealth with more joint projects planned.  Existing ones include Oncology/Breast Cancer and Cardiology.  More are in development including Pain/Spine and broadened Oncology, as ProHealth intends to continue to build programs with Starling in specialty areas as together we realize shared goals of high-quality and low-cost care.

Starling also has longstanding relationships with the Hartford Healthcare institutions. We expect these to continue, as well. In regard to the above data, one must assume that HHC costs and scoring will improve in light of the spotlight now being placed on these metrics. If not, patients will in the future make their own decisions about whether they are willing to potentially pay extra to go to providers or to use institutions which might be Tier II due to cost or quality ratings. One model for which there are proponents, for example, is for payers to cover the average cost of a procedure, and if patients choose to go to a facility at which it costs more, they cover the extra themselves.

Further changes are coming….

Michael