Rich Whitney
Value-based care shift hits inflection point with tech and policy advancements
June 18, 2021
By Rich Whitney
The healthcare industry in the U.S. has spent a whole generation talking about moving from a fee-for-service to a value-based model, focusing more on improved patient outcomes and early interventions rather than disease treatment. This shift has occurred gradually, sometimes purposefully, and sometimes in fits and starts, but overall, it has been slower than expected. Nowhere is this more apparent than in the chronic kidney disease (CKD) patient population. What makes now different?
Since March 2020, the coronavirus pandemic has laid bare fissures in healthcare’s firmament, especially related to its most vulnerable populations. The silver lining is that the crisis has also sped the confluence of multiple factors – such as improved technology, changing federal regulations and increased care coordination – that are helping us smooth the cracks, making this the perfect time to accomplish some of the positive changes we’ve been working toward for decades.
Using tech to manage populations and multiply skills
Today, technology makes it possible for us to manage populations at scale that would have been much more difficult in the past. This momentum will continue with the creation of more big data and artificial intelligence (AI) systems helping to automate tasks that, not long ago, had to be done manually.
AI solutions ingest data on populations and help clinicians make predictions about which patients would benefit most from interventions. The technology acts as a skill multiplier for care providers, helping them monitor patients and identify warning signs sooner than would be possible unassisted.
Tech boosts care coordination
The healthcare system is not set up to coordinate data outside silos, and we are trying to change that across the entire continuum. There are several hurdles, including regulatory constructs, reimbursement incentives and more. A huge part of the solution is using technology to aid in care coordination between normally siloed departments and people, with AI and other technology tools driving insight and actions from data that would otherwise be difficult to recognize, as well as facilitating more seamless communication and critical information sharing.
Care coordination is a broad label for what needs to happen across all of healthcare, especially among acute patient populations that are complex, high risk and costly. This is one of the best places to start.
As an example, we can look at how this inflection point is impacting some of our most vulnerable patients: those suffering from CKD, which impacts 37 million Americans, most of whom are unaware they have it. Many CKD patients are currently receiving care, medications and interventions across multiple different providers, without care being coordinated in a meaningful way.
Regulations are changing to support value-based care
In recent history, little progress has been made toward properly managing the CKD patient population from a cost and quality standpoint. This issue was further complicated by most CKD patients, including end-stage renal disease (ESRD) patients, belonging to Medicare’s fee-for-service plan; a payment program that is notoriously difficult to innovate and adapt quickly.
According to the Kaiser Family Foundation, in 2020, nearly four in 10 (39%) of all Medicare beneficiaries – 24.1 million people out of 62 million Medicare beneficiaries overall – are enrolled in Medicare Advantage plans; this rate has steadily increased over time since the early 2000s. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to about 51 percent by 2030.
Until recently, ESRD patients were forbidden to select coverage under a Medicare Advantage plan. Therefore, these patients missed out on the enormous shift of Medicare beneficiaries from fee-for-service to managed health plans over the last 20 years. Further, non-Medicare commercially insured patients with ESRD, by law, were required to shift to Medicare fee for service 30-33 months following their ESRD diagnosis, regardless of their age and without the option of choosing Medicare Advantage coverage. As a result, few incentives have existed for insurers to bring any innovation to treating ESRD patients: because of these regulatory barriers, they didn’t have many of them and most of the ones they were responsible for would be moved out of their health plans soon enough.
That has changed. Recent shifts in government regulations now allow ESRD patients, like any other Medicare beneficiary, to choose Medicare Advantage as a coverage option. This dramatically changes the incentives for commercial health plans to innovate and experiment with new payment models. Partly because of this, ESRD and CKD Medicare Advantage enrollment has been growing dramatically and in turn we see rising interest in making investments to innovate in the management of these complex patients.
Intersection of changing forces yields opportunity
These policy amendments have changed incentives and at the same time, tech capabilities are improving population management, multiplying caregiver skills and facilitating care coordination. We are now seeing the emergence of several innovators focused only on this space. Without other demands on their capital and talent, these innovators can be nimble and drive change more rapidly than large-scale incumbents.
These changes shine a light on opportunity, and innovators are sharing in this emerging market segment. Payors are hungry to partner on novel approaches. New CMS models, including ESRD Treatment Choices (ETC) and Comprehensive Kidney Care Contracting (CKCC), encourage a shift in treatment approaches that will deliver earlier interventions and better outcomes. Commercial payers are following suit.
The goal is not just to treat the final symptoms of kidney failure, but to drive innovation on the prevention side. Increases in obesity, diabetes and hypertension are placing more people on track for developing kidney problems. These radical changes in incentives mean more patients under the care of Medicare Advantage, and the availability of new tools allows us to go after the prevention side, which could positively impact many people.
A proactive, value-based approach is required for earlier intervention that promotes patient health and well-being. If we can focus on these tenets – incentives that encourage prevention and focus on outcomes; technology that helps foster care coordination and align providers; and AI to better inform care decisions and act as a skill multiplier for caregivers – we should be able to bring about sustainable, meaningful change that will slow disease progression, reduce hospitalizations, lower cost and improve patient experience, quality of life and life span.
About the author: Rich Whitney is a board member with Strive Health.
The healthcare industry in the U.S. has spent a whole generation talking about moving from a fee-for-service to a value-based model, focusing more on improved patient outcomes and early interventions rather than disease treatment. This shift has occurred gradually, sometimes purposefully, and sometimes in fits and starts, but overall, it has been slower than expected. Nowhere is this more apparent than in the chronic kidney disease (CKD) patient population. What makes now different?
Since March 2020, the coronavirus pandemic has laid bare fissures in healthcare’s firmament, especially related to its most vulnerable populations. The silver lining is that the crisis has also sped the confluence of multiple factors – such as improved technology, changing federal regulations and increased care coordination – that are helping us smooth the cracks, making this the perfect time to accomplish some of the positive changes we’ve been working toward for decades.
Using tech to manage populations and multiply skills
Today, technology makes it possible for us to manage populations at scale that would have been much more difficult in the past. This momentum will continue with the creation of more big data and artificial intelligence (AI) systems helping to automate tasks that, not long ago, had to be done manually.
AI solutions ingest data on populations and help clinicians make predictions about which patients would benefit most from interventions. The technology acts as a skill multiplier for care providers, helping them monitor patients and identify warning signs sooner than would be possible unassisted.
Tech boosts care coordination
The healthcare system is not set up to coordinate data outside silos, and we are trying to change that across the entire continuum. There are several hurdles, including regulatory constructs, reimbursement incentives and more. A huge part of the solution is using technology to aid in care coordination between normally siloed departments and people, with AI and other technology tools driving insight and actions from data that would otherwise be difficult to recognize, as well as facilitating more seamless communication and critical information sharing.
Care coordination is a broad label for what needs to happen across all of healthcare, especially among acute patient populations that are complex, high risk and costly. This is one of the best places to start.
As an example, we can look at how this inflection point is impacting some of our most vulnerable patients: those suffering from CKD, which impacts 37 million Americans, most of whom are unaware they have it. Many CKD patients are currently receiving care, medications and interventions across multiple different providers, without care being coordinated in a meaningful way.
Regulations are changing to support value-based care
In recent history, little progress has been made toward properly managing the CKD patient population from a cost and quality standpoint. This issue was further complicated by most CKD patients, including end-stage renal disease (ESRD) patients, belonging to Medicare’s fee-for-service plan; a payment program that is notoriously difficult to innovate and adapt quickly.
According to the Kaiser Family Foundation, in 2020, nearly four in 10 (39%) of all Medicare beneficiaries – 24.1 million people out of 62 million Medicare beneficiaries overall – are enrolled in Medicare Advantage plans; this rate has steadily increased over time since the early 2000s. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to about 51 percent by 2030.
Until recently, ESRD patients were forbidden to select coverage under a Medicare Advantage plan. Therefore, these patients missed out on the enormous shift of Medicare beneficiaries from fee-for-service to managed health plans over the last 20 years. Further, non-Medicare commercially insured patients with ESRD, by law, were required to shift to Medicare fee for service 30-33 months following their ESRD diagnosis, regardless of their age and without the option of choosing Medicare Advantage coverage. As a result, few incentives have existed for insurers to bring any innovation to treating ESRD patients: because of these regulatory barriers, they didn’t have many of them and most of the ones they were responsible for would be moved out of their health plans soon enough.
That has changed. Recent shifts in government regulations now allow ESRD patients, like any other Medicare beneficiary, to choose Medicare Advantage as a coverage option. This dramatically changes the incentives for commercial health plans to innovate and experiment with new payment models. Partly because of this, ESRD and CKD Medicare Advantage enrollment has been growing dramatically and in turn we see rising interest in making investments to innovate in the management of these complex patients.
Intersection of changing forces yields opportunity
These policy amendments have changed incentives and at the same time, tech capabilities are improving population management, multiplying caregiver skills and facilitating care coordination. We are now seeing the emergence of several innovators focused only on this space. Without other demands on their capital and talent, these innovators can be nimble and drive change more rapidly than large-scale incumbents.
These changes shine a light on opportunity, and innovators are sharing in this emerging market segment. Payors are hungry to partner on novel approaches. New CMS models, including ESRD Treatment Choices (ETC) and Comprehensive Kidney Care Contracting (CKCC), encourage a shift in treatment approaches that will deliver earlier interventions and better outcomes. Commercial payers are following suit.
The goal is not just to treat the final symptoms of kidney failure, but to drive innovation on the prevention side. Increases in obesity, diabetes and hypertension are placing more people on track for developing kidney problems. These radical changes in incentives mean more patients under the care of Medicare Advantage, and the availability of new tools allows us to go after the prevention side, which could positively impact many people.
A proactive, value-based approach is required for earlier intervention that promotes patient health and well-being. If we can focus on these tenets – incentives that encourage prevention and focus on outcomes; technology that helps foster care coordination and align providers; and AI to better inform care decisions and act as a skill multiplier for caregivers – we should be able to bring about sustainable, meaningful change that will slow disease progression, reduce hospitalizations, lower cost and improve patient experience, quality of life and life span.
About the author: Rich Whitney is a board member with Strive Health.