Value 201: Improving Patient Health & Lowering Costs

By: Aisha T Pittman, MPH, Senior Vice President, Government Affairs, National Association of ACOs (NAACOS); Seth Edwards, MHA, Vice President, Population Health and Value-based Care, Premier Inc.; and Valinda Rutledge, Executive Vice President for Advocacy and Education, America's Physician Groups (APG)

Highlights:

• The Alliance hosted a briefing during Health Care Value Week to educate congressional staff about how value-based care benefits patients, strengthens the health care system, increases flexibility for physicians and other clinicians, and lowers costs.

• The Medicare Access and CHIP Reauthorization Act of 2015 was perhaps Congress’ biggest investment in value-based care to date.

• Congress can support clinicians by extending Medicare’s value-based care incentives, developing solutions to improve physician payments, and supporting the Value in Health Care Act (H.R. 5013/ S.3503).

• Reps. Darin LaHood (R-IL) and Suzan DelBene (D-WA) joined the discussion to highlight how value-based care is transforming patient care and called on lawmakers to support bipartisan efforts to extend Medicare’s advanced alternative payment model (APM) incentive payments that expired at the end of 2023. 

• Check out the Alliance’s website for patient stories and issue briefs on how value transforms patient care.

Value-Based Care Improves the Patient Experience

Value-based care focuses on making sure patients receive the right care, in the right setting, at the right time and holds physicians and other clinicians accountable for quality of patient care and spending. When payment models focus on outcomes, it enables physicians and other clinicians to provide and be reimbursed for services proven to improve health. National Association of ACOs Senior Vice President for Government Affairs, Aisha Pittman, discussed how these payment models improve patient care and expand access by replacing fragmented care with more personalized and coordinated care. This is done by focusing on prevention and disease management and providing financial incentives and regulatory flexibility that allows clinicians to offer enhanced services comparable to Medicare Advantage’s supplemental benefits. Many of these extra patient services are not covered by Medicare, including care coordination, patient outreach, and social support like housing and transportation assistance.

More Than a Decade of Health Care Transformation  

Congress has consistently passed bipartisan legislation to advance the transition toward value. In 2015, Congress passed MACRA and created an incentive payment for qualifying practitioners that encourages movement into advanced APM models where clinicians are held accountable for cost and quality of patient care. The ability for physicians and other clinicians to qualify for these critical incentives expired at the end of 2023, and lawmakers are working to prioritize another short-term extension while longer-term discussions about reforming MACRA begin to take shape on Capitol Hill. While the transition to APMs has been slower than originally envisioned, there are many positive trends that have created a solid foundation for future success and innovation in Medicare payment reforms.  

Today there are nearly 14 million traditional Medicare beneficiaries in value models, with more than 50 percent of the roughly 600,000 clinicians in APMs participating in two-side risk models. In the last decade, ACOs (the largest permanent APM in Medicare) have saved Medicare $22.4 billion in gross savings and $8.8 billion in net savings. Additionally, 84% of ACOs saved Medicare money in 2022 and 100% of ACOs met quality standards with data showing better performance than clinicians not in value models.

Value-based care is also producing a “spillover effect” as payer-provider negotiated payment arrangements are growing in Medicare, Medicare Advantage, Medicaid, and Commercial insurance programs. In fact, the Congressional Budget Office (CBO) issued a report showing that actual 2022 spending in Medicare and Medicaid was 9 percent lower than originally projected. While there are a few factors that resulted in less spending, improved care management and more efficient use of technology, both central components of value-based care models, were identified as key drivers of change in health care spending. The Medicare Innovation Center has also tested numerous total cost of care, bundled payment, primary/specialty care models in the last decade that have shown evidence of enhancing care delivery, tailoring care to local needs, and resulting in care delivery changes that extend beyond models.

Supporting the Health Care Transformation

While the U.S. health system has made significant progress, sustained investment over the long-term is required to realize the full promise of value-based care. Going forward, policymakers and stakeholders need to focus on:

Bolstering Benefits to Patients—by better illustrating how savings generated are reinvested into patient care and how this allows clinicians to offer enhanced benefits for patients in traditional Medicare. Policymakers must also develop additional flexibility to adjust patient cost sharing.

• Elisabeth Stambaugh, MD, MMM, the Chief Medical Officer for Wake Forest Health Network, Atrium Health Wake Forest Baptist, highlighted how value-based care helped reduce chronic hospitalization for a patient with multiple medical conditions.

• Anas Daghestani, MD, the President and CEO of Austin Regional Clinic: ARC, discussed how value-based care payment models help reduce health disparities.

• Seth Edwards, the Vice President for Population Health and Value-based Care at Premier Inc. shared a personal story about how value-based care models helped improve care coordination for his grandmother.

Developing Strong Financial Incentives to Move to Value—by ensuring that financial benchmarks are predictable and reflect the complexity of patient populations, along with recognizing the upfront and ongoing investment needed to succeed in value models.

Creating Stronger Non-Financial Incentives—by removing administrative burdens and increasing flexibility for clinicians that participate in APMs.

Simplifying Quality Measurement—by thoughtfully moving to digital quality measurement and creating pathways for providing more data at the point of care.

How Can Lawmakers Continue to Support This Transition?

1. Extend Medicare’s advanced APM Incentive Payments and ensure qualifying thresholds remain attainable

2. Develop solutions to improve physician payment and continue to encourage the adoption of value-based care models

3. Support value-based care by cosponsoring the Value in Health Care Act