The key to accelerating healthcare’s recovery from COVID-19: Accelerating value-based care

When it comes to confronting COVID-19, it has been the work of individuals -- doctors, nurses, social workers,data scientists, administrators and countless others -- who have repeatedly, tirelessly risen to the unprecedented challenges of this public health crisis.  

However, the extraordinary financial pressure put on health systems large and small due to dramatic reductions in utilization has revealed the weaknesses of a predominately fee-for-service system. Many patients have postponed or forgone care altogether, and hospitals and providers have canceled non-emergency visits and procedures.  

The economic effects have been felt far and wide. As of early May, the health sector had lost 1.5 million jobs. According to an analysis from the American Hospital Associations (AHA), America’s hospitals and health systems lost an average of $50.7 billion per month between March 1, 2020 to June 30, 2020. 

These grim challenges are providing new opportunities to reevaluate how we make care more efficient, accelerating our transition to value-based care with an emphasis on improving clinical outcomes and better managing cost. Below are some of my reflections on how COVID-19 has affected care utilization, and why alternative payment models (APMs) are key to reducing the industry’s reliance on volume (FFS) and to helping us be better prepared for future uncertainties. 

How Has COVID-19 Affected Care Utilization?

As the largest convener of episodes of care in Medicare’s Bundled Payment for Care Improvement Initiative-Advanced (BPCI-A), we have unique insight into how national admission volume has been impacted by COVID-19.

The trends in healthcare utilization have been startling, with a tremendous amount of variation across conditions. For example, urgent clinical situations, such as acute myocardial infarctions (AMI), strokes, renal failure, fractures, and gastrointestinal hemorrhage, have largely rebounded back to their pre-COVID levels. In June, AMI and stroke episodes were 6 percent and 9 percent below baseline compared to 25 percent and 26 percent respectively during their lowest points. This is an encouraging sign as these urgent conditions rapidly recover to baseline. 

However, elective or delayable procedures tell a different story. Hip and knee replacements, for example, as well as back and spine surgeries, continue to have dramatically reduced volume and are down by over a third from baseline. This delay in care not only has a major financial impact for healthcare practitioners, but may also have clinical implications as patients continue to delay care and potentially exacerbate their conditions. This reduction in elective procedures have made providers that rely strictly on FFS particularly vulnerable.

Managing Cost of Care

More than a dozen years into the Triple Aim journey, experience tells us that pay for procedure (FFS)  is not a financially viable nor clinically appropriate way to pay for health care. We  have witnessed the consequences to providers of such a payment structure. 

Bundled payments address both issues by guaranteeing a payment for all of the care rendered during an "episode", while providing appropriate incentives to providers to reduce costs and maintain or improve quality. In contrast to FFS, bundled payment programs allow providers to manage a complete budget for patients throughout the year, making them less susceptible to fluctuations in elected services and lost visits.  

Having an established value-based infrastructure has also made physicians and practices more resilient in the face of COVID-19. Data and analytical tools to identify high-risk patients, a sufficient care management team to provide patient outreach and support, and rapid expansion of telemedicine capabilities, has helped practices’ clinical response to COVID-19 by preventing unnecessary and high-cost ED utilization and urgent care visits. 

In a survey of 245 health care organizations conducted by Premier Inc., practices participating in APMs reported being more equipped to effectively manage the COVID-19 crisis. By leveraging these value-based tools and strategies:

• 82% of networks in APMs used care management to support COVID-19 and other patients compared to 51% of practices not in APMs.
• Triage call centers (55% vs 31%)
• Remote patient monitoring (49% vs 30%)
• Population health data to predict cases (43% vs 20%)
• Claims data for increased visibility into care delivered outside the acute setting (29% vs 13%)

Additionally, some important work published in this week’s Proceedings of the National Academy of Sciences shows conclusively that the value of Medicare’s Bundled Payment program extends beyond program participants, creating a positive spillover effect on traditional Medicare and other payers -- especially Medicare Advantage plans. The implications for Participants in the Medicare Bundled Payment for Care Improvement program are clear: 

1. Include as many bundles as you can because you are generating savings and value beyond BPCI, and 
2. Encourage other payers to contract for bundles with you. As we continue to navigate a path forward during these challenging times, we have an important opportunity to support transformational programs like BPCI-A that advance value-based care across the healthcare ecosystem.

Post-pandemic, organizations participating in APMs will be better suited to recover from the financial losses brought on by COVID-19. In addition to regulatory flexibility and government support, these organizations will be better positioned to mitigate the financial impact by focusing on evidence-based therapies, reducing unwarranted and high-cost procedures, and minimizing variations and inefficiencies across their clinical care plans.