Health Plan Leadership Driving Change Across The Delivery System

by Aparna Higgins

October 25, 2016

If you ask consumers what they want out of health care, they’ll tell you “affordable coverage and high-quality care.” That’s what value-based care delivers. Efficient, effective treatment at lower costs. And health plans are leading the way.

A new report by the Health Care Payment Learning and Action Network (LAN) – an HHS initiative that brings together key partners, from health plans and doctors to businesses and consumers – shows that we’re making real progress moving away from fee-for-service payments to alternative payment models (APM) that reward quality and value. This improvement will deliver lower costs and better quality care.

The LAN report looks at commercial, Medicare Advantage, and Medicaid payments being made to doctors and hospitals participating in APMs. For 2016, 25 percent of all payments are made to providers participating in APMs that reward quality and value. The report also shows that 41 percent of Medicare Advantage health care dollars are made to providers participating in APMs.

The results show we are getting closer and closer to meeting – and hopefully exceeding – the goal set by HHS to have at least 50 percent of Medicare fee-for-service payments tied to quality or value through APMs by 2018.

Collaboration is key. That’s why over the past decade, health plans have been working with their provider and purchaser partners to shift incentives away from rewarding volume to a system that rewards quality and affordability.

Plans participating in the Medicare Advantage program use APMs, bundled payment contracts, and other value-based arrangements to promote high quality, coordinated care for Medicare beneficiaries.

The results are clear: fewer inpatient hospitalizations, lower readmission rates, higher quality, and more appropriate use of services when compared to the care received by beneficiaries in the traditional Medicare FFS program.

Similar success is being achieved in the commercial market for privately insured consumers. Plans have implemented APMs such as accountable care organizations (ACOs), patient-centered medical homes (PCMHs), and bundled or global payments to promote quality, affordable care.

Health plans have been adept at tailoring payment arrangements to the readiness of their provider partners to take on the risks and responsibilities associated with managing the quality and costs of the health care services delivered to their patient populations. As a result, these plan-provider partnerships are carefully designed to be flexible – with payment methods, quality targets, and technical support that is customized to the readiness and specific needs of the providers involved.

Plans and providers have also partnered on new, innovative ways to improve the delivery of care. From sharing data like ER admissions, missed opportunities for preventive care, and high risk patients who could benefit from care management. Data and technology improve doctors and nurses’ ability to deliver more efficient, more effective care. That in turn results in better individual health for patients – at lower costs.

We’ve made real progress so far, but we have much more to achieve. But with effective partnerships we can succeed. When plans, providers, and patients work together we can deliver better value, better care, and better health for every American.

This report uses data from the LAN, AHIP, and the Blue Cross Blue Shield Association.

Aparna Higgins is Senior Vice President of Private Market Innovations and Director of the Center for Policy and Research at AHIP.