J.P. Morgan Payments Global Co-Head of Healthcare Payments Jeff Lin, and agilon health Chief Financial Officer Tim Bensley, told Karen Webster that value-based healthcare has long been a concept — but is finally on the cusp of becoming a reality.
As it stands now, attending to one’s health is a bit like making a New Year’s resolution. We set a goal, maybe show up at the gym a few times a year, and maybe see our doctor once a year.
“The model’s broken,” Bensley said.
But, he added, “The idea of connectivity — between the primary care physician and the patient — and getting continuous feedback is an important element of improving the outcome” of healthcare delivery itself.
Offering the right incentives in delivering value-based care can make all the difference too. Lin and Bensley shed light on the ways that digital data, connected devices and payments can help craft better outcomes for two distinct populations: employees and the elderly.
For Medicare patients, said Bensley, the U.S. healthcare system has disincentivized physicians from focusing on outcomes, where reimbursement models, tied to fee for service, have been predicated on moving as many patients as possible through the system. The value-based mindset for improving care for the elderly population focuses on helping individuals manage chronic conditions and reduces time spent in hospitals and other long-term treatment settings.
Lin explained that employers are slowly warming up to value-based care for many of the same reasons — reducing the cost of providing healthcare while giving employees more of an incentive to invest in their own health.
The concept of value-based healthcare has been around for decades. The American Academy of Pediatrics claims that it introduced the concept in 1967 to improve the coordination of data across providers to deliver better outcomes for sick children. And business guru Michael Porter wrote in 2006 that the way to transform healthcare is to realign competition with value for patients.
The field is decidedly green, barely tapped at present.
“We’re in the first innings of this,” said Lin, who told Webster that the technological tools underpinning the connectivity and data flows via application programming interfaces (APIs) and platforms didn’t exist until just a few years ago. In terms of the market potential, consider the fact that in the employer-focused commercial space, the covered lives touched by value-based care stand at less than 13%, while the 35% covered similarly by Medicare Advantage still leaves two-thirds of an addressable population.
The silos between various stakeholders have traditionally been paper-based, spanning payer claims, managed care organizations, medical records and information offered by the patients themselves.
But digital channels, said Lin and Bensley, along with the continued explosion of the Internet of Things (IoT), are leveling the playing field and ingesting that data, turning it into actionable insights.
“None of that data is perfect,” said Bensley, at least not taken on its own. He added the key to success in value-based care “is all about how you leverage information to drive outcomes.”
The company has determined that the best way to improve the outcome of care is to boost the number of “quality touchpoints” with primary care providers (PCPs), he said.
Its Total Care Model leverages a platform to ingest a broad range of data and identify to the PCP the patient population they should be focusing on for a continuum of care, Bensley said.
“By looking across those different sources of data, we can then actually track longitudinally how well are those patients actually doing,” he added.
The company pays providers a set fee per patient per year and strikes 20-year partnerships with PCP groups that have scale in a given market. It strikes contracts with payers in those given markets, taking on the full risk for all the costs. The economic benefit that’s a “surplus” over the healthcare premium is split between agilon and the practitioners. The company has pacts with 31 partners around the country, more than 2,700 physicians and dozens of payers. agilon uses artificial intelligence (AI) and machine learning techniques to synthesize the information that eventually flows through to the PCPs.
The Total Care Model “aligns the economics with the desire for the PCPs to do what they want to do, which is to practice medicine the right way,” Bensley said.
Advanced technologies take the noise of far-flung data points and translate them into actionable signals, Lin added.
In essence, the PCP becomes the coordinator of the patient’s care, avoiding unnecessary utilization of procedures and visits (and, in turn, follow-up visits can be set up soon after a hospital visit rather than months later). The result is that healthcare costs are driven down, and, say, diabetes care is more effectively managed and the quality of life is improved.
Webster noted that the employee market is a bit different from the Medicare population, given the transient nature of the population itself. The average tenure at a job, per government data, is about four years (in comparison to the 20-year pacts that agilon strikes for Medicare patients).
But even with the shorter stints at employers, when it comes to incentivizing stakeholders in an age where health plans have high deductibles, the onus is more on the consumer, as they are responsible for shouldering more of the healthcare costs than ever before, Lin said. More than three-quarters of large employers offer incentive programs — payments that are geared toward gym memberships and the like — to help encourage healthy living.
“It’s been said that every company is now a healthcare company,” as a healthy workforce winds up being beneficial to the enterprise itself, Lin added.
“They’re at work, and they’re being productive, so that means that connectivity to all the other parts of healthcare is important,” he said. “… [I]nsurers, just like the providers and employers, all need to play a key part in this.”
Beyond the data sharing — which Lin said can be transportable with patients as they move between employers, health plans and providers — payments can tie it all together.
Lin says that while measuring outcomes, it’s imperative that payments reach not just the practitioners, but the consumers who have digital wallets or money to manage a balance and to pay for the services (such as the gym membership) as they manage those balances, using pre-paid cards or other payment conduits.
As value-based care becomes the norm, Lin said there’s the potential to deliver personalized healthcare to all manner of employees and patient populations across their connected devices.
“Money moves from one entity to another, and there’s an exchange of value,” said Lin, who added, “Trust needs to be on both ends in order to deliver the data and the money together. … You want payments to match up to the behaviors that you’re trying to incentivize.”
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