Medicare Costs Drop As Humana Shifts Doctors To Value-Based Models
November 13, 2018 | Bruce Japsen
Humana’s shift from fee-for-service medicine to value-based payments for physicians continues to reduce costs and improve quality of care for seniors enrolled in Medicare Advantage plans, the insurer says, citing a new internal study.
Medical costs were nearly 16% lower for seniors enrolled in Humana Medicare Advantage plans that paid physicians via value-based models in 2017 compared to costs of those in traditional fee-for service Medicare, the Louisville-based insurer’s study, released Tuesday showed. Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs.
“Humana MA value-based physicians had better results than their peers in fee-for-service,” Humana corporate medical director of medical market clinical integration Dr. Kathryn Lueken wrote in the report. “The goal of taking costs out of the system and creating more value for the care received is showing results. Thus, value-based care is achieving the goal of creating higher quality medical care for lower cost.”
For the analysis, Humana looked at about 1.5 million Medicare Advantage members who were cared for by medical care providers paid via value-based models, which tied reimbursement to quality measures and outcomes during 2017. They were compared to about 146,000 “Humana members affiliated with physicians under standard MA settings and to original fee-for-service Medicare,” the insurer said in its report.
In the value-based approach, insurers reimburse providers for services plus additional pay if they meet quality measures, control costs and improve health outcomes of their patients. The traditional fee-for-service system pays for the volume of care delivered and can lead to excess costs and the focus isn’t on getting patients their care in the right place, in the right amount and at the right time.
The Humana study is the latest to show that value-based models are unlikely to go away, particularly in the Medicare Advantage space where seniors are flocking to coverage that includes some extra benefits unavailable from traditional Medicare. The number of Medicare Advantage plan choices is increasing nearly 20% to 3,700 in 2019 from about 3,100 in 2018, according to the Centers for Medicare & Medicaid Services (CMS).
Humana and rivals including UnitedHealth Group, Aetna, Cigna, Centene and Anthem are selling in new markets and additional counties during the current open enrollment period that began Oct. 15 and runs to Dec. 7 for seniors signing up for Medicare Advantage or renewing their coverage from this year.
“While we know that all physicians are committed to patient health, those in value-based care agreements have access to additional resources and capabilities to build the infrastructure they need to expand their reach outside the practice,” Dr. Laura Trunk, Humana medical director of provider development wrote in the report. “Focusing on prevention and the whole health of their panel population allows physicians and their care teams to work more strategically to improve the care of their patients, thus keeping them home and out of the hospital and emergency room.”
In some value-based models such as accountable care organizations (ACOs) and other value-based arrangements, providers contract with health insurers like Humana to improve quality and health outcomes, lower costs and keep any money saved from year to year based on the arrangement with the health plan. Humana’s report indicates more physicians are benefitting financially from such arrangements.
“Physicians in Humana (Medicare Advantage) value-based agreements with shared savings performed better in 2017 than in 2016, with 10 percent more physician practices earning shared savings (from 60 to 70 percent),” Humana’s report said.