JULY 12, 2019

Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
the National Medical Home Summit, and the National MACRA MIPS/APM Summit

Even Doctors Aren't Very Good at Shopping for Health Care
It was a common theory at the beginning of this age of information: just give people the facts, and they'll make the right choice. We all know how that works out, at least sometimes. And a new study suggests that even with physicians, who should know more about health care than the vast majority of the population, better information doesn't always lead to better decisions. The study, from the National Bureau of Economic Research, compared physicians to patients when it comes to making personal health decisions. The study noted that with many health improvement efforts, patient education is considered a decisive factor. "There is a widespread belief in health care that the deficiency in information and medical knowledge among consumers is the key barrier to achieving high-quality health outcomes and lower costs of care," the authors write. "An enormous number of health policies follow from this assumption, including efforts to educate patients about health, both at a population level through large-scale public health campaigns (e.g., campaigns to encourage exercise and healthier diets) and at an individual level through provider-led patient education (e.g., education of patients about the inappropriateness of antibiotics for the common cold, the importance of vaccination, etc.)." The researchers started with the theory that physicians would have much more access to, and familiarity with, high-quality information when it comes to health care. The study aimed to test the upper boundaries of how information plays a role in health care choices, the researchers said, since most members of the general public were not likely to be better informed than physicians. (BenefitsPro, July 10, 2019)

Physicians See More Pay Tied to Patient Satisfaction and Outcomes
Physician practices are seeing more of their pay and bonuses based on "value-based metrics such as patient satisfaction and outcome measures," a new analysis shows (see Resource Section below). The shift away from fee-for-service reimbursement that has historically paid doctors based on the volume of care they deliver is a trend escalating as health insurance companies and the federal government shift to value-based models like bundled payments and accountable care organizations. "Of the 70% of searches offering a production bonus, 56% featured a bonus based in whole or in part on quality metrics such as patient satisfaction, adherence to treatment protocols, etc.," according to Merritt Hawkins' 2019 Review of Physician and Advanced Practitioner Recruiting Incentives. "This is up from 43% in 2018 Review and is the highest percent of contracts offering a quality-based production bonus that Merritt Hawkins has tracked." (Forbes, July 8, 2019)

Study Finds ACOs Need a Balance of PCPs and Specialists to Best Reduce Health Care Costs
Accountable care organizations (ACOs), the health care delivery model created by the Affordable Care Act in an effort to reduce Medicare costs while improving coordination and quality of care, typically rely on primary care providers (PCPs) to steer the boat. "The central message has been that the providers within the ACO need to focus on delivering care through primary care providers," says Vishal Shetty, a University of Massachusetts Amherst Ph.D. student in the School of Public Health and Health Sciences. But an ACO's ability to reduce spending may require a specific balance of involvement from medical specialists, such as a cardiologist, orthopedist or neurologist. That is the central finding of a UMass Amherst study by health service researchers in JAMA Network Open, a monthly open "access medical journal published by the American Medical Association. Health service researchers evaluate health policy and create evidence to inform health policymakers in their efforts to provide value and equity and improve outcomes for patients and society. Shetty and three assistant professors - David Chin, Laura Balzer and Kimberley Geissler - examined data on 620 ACOs from the Centers for Medicare and Medicaid Services' Shared Savings Program to investigate the association between office visits to medical specialists and health care spending. The data covered more than five years, from April 2012 through September 2017. ACOs in which 40 to 45 percent of the patient visits were provided by a specialist had $1,129 lower annual spending per beneficiary than ACOs with a specialist visit proportion of less than 35 percent, and $752 lower annual spending per beneficiary than ACOs with a specialist visit proportion of 60 percent or more. "This study provides an empirical backing to the idea that a balance between primary care providers and specialists in the delivery of care for ACO patients, especially high-risk patients with chronic conditions, appears to provide optimal cost savings, or lower expenditures, for these organizations," Shetty says. "We speculated that would be the case, but I don't think we anticipated $1,000 lower spending per patient in the more balanced ACOs." (EurekAlert, July 10, 2019)

Blue Shield's Bryce Williams: Giving People Choices Is the Key to Lifestyle Medicine
While the idea of worksite wellness programs sounds great, giving employees incentives to get healthier and be more active, the sad truth is that they don't actually work very well; studies have shown that, while it's true that people do lose weight, they have not resulted in other numbers going down, nor in lower healthcare costs. What does work, according to Blue Shield of California, is getting people to change their over lifestyle, rather than simply focusing on wellness, and the best way to do that is by giving people a choice in how they get to do it. That's why the company announced earlier this week that it revamped its Wellvolution platform, first launched back in 2008, in order to help people improve their lifestyle in a way that fits their specific needs and preferences, making it more likely for it to have an overall effect on their health. The program works like this: Blue Shield members are given survey questions to answer about things like their lifestyle and their health goals, as well how they would like to achieve goals. After that, they are matched with a personalized approach to their specific issue, which can include accessing mobile apps or online applications, as well as in-person resources and lifestyle-program resources, such as local gyms and community centers. Right now, there are more than 30,000 brick-and-mortar services on the platform, and nearly 70 digital health programs. The new platform was created with digital healthcare marketplace Solera Health, which Blue Shield had previously worked with on a diabetes prevention platform. Bryce Williams, vice president of Lifestyle Medicine at Blue Shield, spoke to VatorNews about the new program, the benefits of giving people choices in their lifestyle changes, and why he thinks traditional wellness programs are "zombies." (VatorNews, June 27, 2019)

Blue Shield Launches Digital Therapeutics Marketplace
San Francisco-based Blue Shield has created a new marketplace for burgeoning digital health companies looking to help people manage their health and chronic diseases through a variety of diet, lifestyle and other wellness interventions. The extensive platform, dubbed "Wellvolution," went live two weeks ago and houses north of 40 digital health apps -- including San Francisco-based Virta Health and Better Therapeutics -- as well as partnerships with about 30,000 local brick-and-mortar options nationwide, such as YMCAs, Planet Fitness and weight loss clinics. Already, Wellvolution has almost 7,000 enrollees and is averaging about 3,000 sign-ups per week. The nonprofit health insurer has 6,800 employees, more than $20 billion in annual revenue and 4.3 million members nationwide. (San Francisco Business Times, June 26, 2019)

Medicare for All Finances Healthcare Problems Instead of Fixing Them
Healthcare is again front stage as the presidential election campaigns are underway. Democratic proposals range from a single payer completely government run program such as "Medicare for all", to hybrids of federal and employer-based insurance. Although no specific Republican plan has been identified, historically proposals have involved state block grants, assistance for low income families to purchase private insurance, insurance premium tax credits, and health savings accounts. As health care costs continue to rise, however, both sides would do well worry about to fixing rather than just financing the problem. Annual US healthcare costs exceeded $3.65 trillion dollars in 2018, and is growing faster than the US economy. The cost increases are attributed to increasing costs of inpatient/outpatient care (59% of total spending), prescription drugs, and administration among others. One third of total healthcare costs was for insurance premiums. Cost increases are also attributed to an aging population and increases in chronic illness. "Medicare was set up to ensure our seniors 65 and older and those with disabilities have covered care, a 'Medicare for all' plan would take focus away from seniors and result in long wait times to initially see a doctor and even longer wait times for those needing subsequent follow up or specialty care -- effectively ending Medicare as we know it," said Representative Larry Bucshon, M.D. (IN-08). Government expansion of care is based on the faulty assumption that their administrative costs are far less expensive. The Centers for Medicare and Medicaid Services (CMS) costs appear to be less, but do not include costs of collecting funds (Social Security and IRS), the costs to states and private insurance to administer the programs and compliance costs by providers. CMS also does not have marketing expenses needed by private insurance. The additional costs of congressional over site must be factored in as it acts as a board of directors over CMS offering over site and changes in coverage. Looking at the true costs, promises that "Medicare for all" provides coverage without premiums, deductibles or co-pays is misleading. Full implementation of would cost $32 trillion over 10 years, more than double all federal discretionary appropriations including department of defense, and domestic discretionary spending. (Forbes, July 10, 2019)

2019 Review of Physician and Advanced Practitioner Recruiting Incentives

Pay for Performance Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, comparative effectiveness, patient safety, bundled payment, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

Keynote: Health Policy Dialogue on the State of Value-based Care

Michael Leavitt
Founder and Chairman, Leavitt Partners; Former Secretary, US Department of Health and Human Services; Former Governor of Utah, Salt Lake City, UT

Mark McClellan, MD, PhD
Director, Robert J Margolis Center for Health Policy and Margolis, Professor of Business, Medicine and Health Policy, Duke University, Washington, DC

Kavita Patel, MD
Nonresident Senior Fellow Brookings Institution, Washington, DC

Donald H. Crane, JD
President and Chief Executive Officer, APG, Los Angeles, CA (Moderator)