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Featured topic and speakers
Why is value-based care important? What are value-based care payment models? How is value-based care measured? What is an example of value-based care?
Our guest is Narayana Murali, MD, chief medical officer of Medicine Services at Geisinger Health. AMA Chief Experience Officer Todd Unger hosts.
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- Watch Dr. Murali's last episode about the benefits of value-based care.
- Download the PDF about best practices for health care payment models.
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Speaker
- Narayana Murali, MD, chief medical officer, Medicine Services, Geisinger Health
Transcript
Unger: Hello and welcome to the AMA Update video and podcast. Today we're talking about payment arrangements within value-based care, specifically what the landscape looks like today and how practices can navigate it. Our guest today is Dr. Narayana Murali, chief medical officer of medicine services at Geisinger health in Danville, Pennsylvania. I'm Todd Unger, AMA's chief experience officer in Chicago. Dr. Murali, welcome back.
Dr. Murali: Thank you, Todd. It's great to be here with you and with AMA.
Unger: Well, I'd like to start our discussion today by revisiting our last one during the AMA Annual Meeting of the House of Delegates. And we talked at length about the importance of transitioning to value-based care. Dr. Murali, for those who might have missed it, can you give us kind of a quick summary of the key points from our discussion?
Dr. Murali: Certainly, Todd. It's not lost upon any of us that our health care costs are unsustainable, and we all collectively, need to be part of the solution to cure the nation's wild west health care costs, correct? The fix is to accelerate adoption of alternative payment models for value-based care by simplifying and making models that are transparent. We are transitioning from a traditional fee for service model to better outcomes, quality, as well as better patient experience at a lower total cost of care, value-based care, the holy grail for over two decades.
That said, the recent measurements show that 93.5 million Americans are in an ACO arrangement, and 73% of payers believe that alternative payment models will rise and are moving towards value-based care. Alternative payment models have been seeing a hockey stick inflation at a 5% CAGR from 2022, where it was about 2%. The 2023 health care payment learning and action report found that 24.5% of all payments are on a two-sided risk model. Value-based care plans, with respect to Medicare Advantage have doubled compared to 2018, and there is a 50% increase in value-based care on the commercial end of things. So that kind of gives you a snapshot of what we were discussing the last time.
Unger: Now, Dr. Murali, for practices that want to transition to value-based care, one thing they'll have to evaluate is their underlying payment arrangements, and obviously a lot to consider. Why is there still such a wide range of payment methodologies?
Dr. Murali: Great question. There is a substantial heterogeneity in terms of the multiplayer ecosystem, private and public, and their goals and processes have conflicting stakeholder interests to get sufficient alignment or consensus. As a health care sector, which has grown to 20% of GDP, the number of stakeholders to transact with have also grown exponentially, and there's misalignment, even with payment regulations between public and private stakeholders. Be it in quality of reporting, be it in exchanges, private and public, be it in defined benefits and contributions.
Even more importantly is the fear and the threat of antitrust litigation that is a real barrier. There is no safe harbor waivers that allow convening payers, co-design and co-author alternative payment models with practices, discuss negotiated payment rates, and build commitment by payers to invest in infrastructure that is much needed, supporting practice readiness, as well as creating the necessary flexibilities for physicians and clinicians to appropriately address the nuances of chronic care, the needs of rural versus urban geographies, access to data analytics, et cetera. So that really is the key elements that are barriers from that standpoint.
Unger: Now that's going to make it pretty hard to implement value-based care in a sustainable way. Am I wrong there?
Dr. Murali: A vehement yes. Each stakeholder has his own interest, creates their models that takes a bite of the elephant from their vantage point. Each bite addresses value-based care in a piecemeal manner, and therefore has flaws. And given all stakeholders—payers, providers, hospitals—are not sitting at the table to discuss what's working well and what's not working well, we have been less able to refine and create a right fix in a very sustainable manner, faster.
In the last decade alone, there have been at least 50 payment models to expand access and lower cost of care. Each model is different—shared savings, downside risk, capitated payments, bundled payments, direct contracting, quality payments, and on, and on. All of them have their own tracking needs and increasing administrative burdens for practices to deliver, which basically reduces your adoption rate.
Unger: So given that context and those complications, at a high level, what are the key payment domains that practices should evaluate if they are participating in value-based care or considering doing that?
Dr. Murali: At a high level, there are seven key payment domains and three additional considerations. When you look at them, patient attribution, benchmarking, risk adjustment, quality performance and impact on payment, levels of financial risk, payment timing and accuracy, incentivizing for value-based care practice, participant performance. Right, those are the seven key domains. There are three additional considerations that I think should also be kept in mind, which are multi-payer alignment, which we talked about earlier, rural health and health equity.
In the fall of 2023, AMA, AHIP and ACOs undertook a very significant collaboration and initiative, which they call the Future of Value. It brought several of us together—Geisinger, Kaiser Permanente Medical Group, Henry Ford, UPMC, Mount Sinai, Virginia Mason Common Spirit, independent practice representatives of small practices, private practices and ACOs like Alidade and VillageMD with Aetna, CVS, Horizon, Blue Cross Blue Shield, Onehealth Nebraska, UCare, and Commonwealth Care Alliance, and Lumos—to create a playbook for all practices big and small, urban, rural and safety net providers. I would encourage everyone to read that playbook, just as I shared at the IPPS section. It captures our collective voluntary best practices for consideration.
Unger: Well, that sounds very valuable, and we're going to include a link to that playbook of best practices for value-based care payment and arrangements in the description of this particular episode. So take a look at that. As Dr. Murali suggests. Dr. Murali, within those areas that you mentioned, what do you think are some of the most challenging pain points for practices?
Dr. Murali: Each of the seven payment domains have their own unique challenges and unique pain points. For instance, the process of matching a patient to a physician, an advanced practitioner, or a value-based care entity is called patient attribution. This could be measured in various ways. It could be voluntary patient selection, it could be a claims-based attribution, it could be an automatic new member attribution, or it could be based on the clinician type. APP, a primary care physician covering the entire care of the patient, or a non-primary care specialist providing comprehensive care.
In the case of voluntary patient selection, it is possible that patients select physicians who are no longer accepting patients in their practice, or a physician is retired and the web page has not cleaned that, or the patient forgot to update that they changed their PCP as they were snowbirds, they traveled from, say, Wisconsin to Florida, or from Pennsylvania to Florida in winter. And then they assume that an advanced practitioner within a specialty practice is their primary care provider. So these are common pitfalls.
Or seeing the payment domain of financial risk modeling. Alternative payment models require us to take some degree of responsibility for total cost of care. So how do you know, you, as an organization, are ready to take downside risk? What people process and technology and investments are needed to succeed? How do you use a multiyear agreement and a glide path to increasing risk and reward? So those are some of the areas, but all the domains have their unique challenges, their pain points and we walk people through those elements with respect to pitfalls and solutions.
Unger: Dr. Murali, do you have any kind of insight, or knowledge or advice to help people navigate challenges like that?
Dr. Murali: Yes. It is an extensive list, right. So that said, in patient attribution, which we talked about earlier, in the playbook, we walk you through best practices to proactively address the issue using a multi-year attribution window. We include geographic empanelment with snowbirds who moved to, say, Florida, like we talked about earlier. We talk about resources needed to update, scrub, the attribution, the accuracy and the predictability so that practices are not impacted in terms of payment as a consequence of that.
Or when it comes to, say, financial levels of risk, we share what are the safeguards one needs to build as we move back to the upside only arrangements when population or payment arrangement changes. So plans may have different members, the members may change, and you want organizations to be able to move from risk to upside only. Or how do you address unexpected events, like COVID, outliers and random variation, and the menu of options that are available to mitigate risks, whether it is risk providers, whether it is CAPs, whether it is stop loss agreements.
For instance, when you have a particular new drug like a GLP1 analog, Ozempic or Wegovy or Manjara, that has come into the market, the cost substantially increases. health care systems are seeing $100,000,000, $150,000,000 hits as a consequence of that particular medication. How, at that point, do you basically navigate the system so practices don't go belly up because they don't have stop loss arrangements? So those are some of the things that we discuss in the playbook. We kind of share with them the voluntary best practices and also models of different teams and how they've adopted it to solve these issues.
Unger: Dr. Murali, thank you so much for those insights and for joining us today. We'll look forward to talking with you again soon. In the meantime, to get more insights from Dr. Murali and others, check out the AMA's new playbook of best practices for value-based care payment arrangements. You'll find a link, again, to that playbook in the episode description. To support more work like this, become an AMA member at ama-assn.org/join. That wraps up today's episode and we'll be back soon with another AMA Update. Be sure to subscribe for new episodes and find all our videos and podcasts at ama-assn.org/podcasts. Thanks for joining us today. Please take care.
Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.
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