The Medicare Advantage (MA) program, which
allows Medicare beneficiaries to voluntarily enroll in a private plan that administers
health benefits, was established by the Balanced Budget Act (BBA) of 1997 as a
vehicle to bring private-sector competition and innovation to Medicare
beneficiaries. When the program was announced, the goal was to create greater
competition on benefits, care management, and costs, and to offer greater
choice and consumer-centricity to America’s seniors.
At the time, value-based care, where providers
are reimbursed for the health outcomes of their patients as opposed to the
volume of services provided, was not yet the rallying cry of a health system in
need of transformation. The impact of private competition on value-based care
likely was not even contemplated at the time the legislation was passed. A
closer look at the evolution of MA demonstrates that the private sector has
proven to be a remarkable laboratory for innovation and progress in our health
system’s core evolution—to align the payment and care delivery system with
value and the outcomes we care about most for America’s seniors.
A Recent Move Toward
Value
Today, approximately one-third of all
beneficiaries choose MA insurance coverage. A number of private insurers (also
known as payers or health plans) offer MA coverage, resulting in an
increasingly competitive marketplace for consumers.
With competition comes lower costs. The average premium for MA plans that include pharmacy
coverage will be $40 per month in 2019, down from $46 per month in 2018, and MA
plans offer out-of-pocket cost caps to reduce beneficiary exposure to excessive
medical costs. Flexibility in MA benefits allows private health plans to
provide supplemental benefits such as preventive dental care, vision, and
hearing assistance at no additional cost, benefits that are not provided by
traditional Medicare. This helps seniors, many of whom are on a fixed budget,
limit their exposure to high costs.
The move to value-based care was somewhat more
recent and was hastened by the creation of the Center for Medicare and Medicaid
Innovation (the Innovation Center) in 2011. There has been broad, bipartisan
support of the effort to align the incentives of the payer and provider by
rewarding better value and outcomes rather than volume.
Both the Centers for Medicare and Medicaid
Services (CMS) and private payers have enthusiastically endorsed a variety of
payment models to engage primary care providers, specialists, and health
systems in taking accountability for the populations they serve and accepting
financial risk for their performance. Examples of such payment models include
accountable care organizations, bundled payments, and the comprehensive primary
care initiative. Some of these models were initiated by CMS through the
Innovation Center, while others came from the private sector, but all have been
widely implemented in both traditional Medicare and MA.
Organization And
Delivery
There is a stark contrast, however, in how
value-based care is organized and actually delivered in traditional
Medicare—which is administered by CMS—and Medicare Advantage. In traditional
Medicare, the government contracts directly with providers to take risk and
responsibility. This forces the provider organizations (whether a primary care
practice, a specialist, or a health system) to invest in a wide variety of
tools essential for managing population health: analytics infrastructure to
assess risk profiles of patients; prevention and wellness programs; care
coordination and care management teams to support chronically ill and complex
patients; care transition programs; and integration of services delivered in
home, community, and health care settings.
Moreover, the emerging recognition that social
context has a considerable impact on health outcomes and costs has challenged
risk-bearing providers to consider how to systematically address these upstream
social determinants of health, such as social isolation, loneliness, and food
insecurity. In payment models in traditional Medicare, providers are expected
to build or contract for these services themselves to succeed in the mission of
delivering better care and better health outcomes at a lower cost.
In Medicare Advantage, the payment models are
similar in their financial alignment, but the execution is qualitatively
different. Rather than putting that burden on providers alone, private MA
health plans have themselves, for years, delivered the services that
value-based models are demanding. The analytics, care management, and care
coordination programs and efforts around wellness and prevention and quality
improvement have been the mainstay of private payers’ delivery models. Thanks
to the fact that they generally represent large populations, private payers can
execute these services at scale.
Beyond Payment
Another example of how large MA plans can
leverage their size to invest in new service models is the partnerships we’re
developing with communities to address the social determinants of health. At
Humana, where we are CEO and chief medical officer, we’ve committed to
investing in the health of seven of the communities we serve: Louisville,
Kentucky; Knoxville, Tennessee; Tampa Bay, Florida; New Orleans/Baton Rouge,
Louisiana; San Antonio, Texas; Broward County, Florida; and Jacksonville,
Florida.
A study of our community-based interventions
to improve health, in what we call these targeted “Bold Goal” communities,
found that the number of mean unhealthy days declined by 3.1 percent in 2016 in communities, and those
improvements have only
increased over time. Recognizing that health care is local and there
is not one simple solution, our approach to address social determinants of
health is driven by the specific market needs within each Bold Goal community.
That means interventions including, but not limited to, investing in meal
deliveries that include a friendly visitor, transportation, social visits,
emergency preparedness to help with anxiety, as well as standardized screening
of social and clinical needs in non-traditional settings such as barber shops.
Our success highlights an emerging strategy
that private payers can apply to positively impact the health of the
communities they serve. For providers that are not participating in large
vertically integrated health systems, such responsibility—to address these
upstream social needs and determinants of health—would be quite onerous.
But not all of our innovation is taking place
upstream. As private payers have learned and improved on how they manage
complex, vulnerable members, the large MA plans have blurred the lines between
payer and provider. In a competitive environment, MA providers have innovated
in a variety of manners. One MA plan is now the largest employer of physicians
in the US, and another has merged with a large retail pharmacy and will deliver
care at retail sites.
At Humana, we’re actively developing
capabilities to deliver, at scale, care in the home by investing in
Kindred-at-Home, the largest provider of home care in the US, and integrating
that care with owned and partnering primary care organizations. We’re doing
this because our members have told us that they want to receive care in their
homes, not in the hospital.
Today, each of the three largest MA plans has
also integrated their pharmacy benefits and can deliver a more cohesive and
coordinated service that does not silo pharmacy and clinical care. Private MA
health plans have also made substantial investments in telehealth and analytics to
support providers in their quest to deliver more patient-centered care.
A number of researchers and health policy
experts have studied and quantified the impact of MA care coordination and
population health management efforts. There is compelling
evidence to suggest that quality of care in Medicare Advantage
is better than or comparable to that of traditional Medicare, while costs are
lower. A 2015 study compared quality of care for MA enrollees
with diabetes or cardiovascular disease, against the care received by
traditional Medicare enrollees with the same conditions; the authors concluded
that quality of care was better in Medicare Advantage, requiring less frequent
health services usage.
MA is also helping to focus on improving
quality and delivering a consumer-centric experience. A 2017 publication sponsored
by CMS included 9.9 million beneficiaries from three states and found that MA
outperformed traditional Medicare on 16 of 16 clinical quality measures
assessed and four of six patient experience measures. These improvements in
quality in MA lead to lower acuity postacute care, which translates to improved
outcomes and lower cost, as demonstrated by another 2017
study in which MA members had fewer hospital readmissions and
more time in the community when compared with traditional Medicare patients.
Medicare beneficiaries are increasingly
choosing with their feet, and enrollment has been growing more rapidly in MA than
traditional Medicare. Moreover, recent evidence suggests that MA reduces
taxpayer outlays for health care. One recent study even
demonstrated a decrease in traditional Medicare spending growth in counties
where MA penetration is highest, suggesting that the benefits of MA spill over
to traditional Medicare.
While the discussions about health care reform
will likely only increase in frequency during this political cycle, both sides
of the political spectrum have offered support for the MA program. As we
continue our journey to value-based care in this country, it is important to
consider the role that Medicare Advantage is playing in delivering improved
health outcomes, greater quality, and lower costs. While best practices have
not been definitively established, MA offers a very rich laboratory of
investment, experimentation, and leadership in value-based care.
https://www.healthaffairs.org/do/10.1377/hblog20190627.482360/full/#.XSOkiVzfZ3U.linkedin
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