Relentless Health Value - EP277: COVID-19—Is Now the Time When Value-based Payments Overcome a Fierce and Sticky Fee-for-Service Overlord? With Eric Weaver, Executive Director of the Accountable Care Learning Collaborative

EP277: COVID-19—Is Now the Time When Value-based Payments Overcome a Fierce and Sticky Fee-for-Service Overlord? With Eric Weaver, Executive Director of the Accountable Care Learning Collaborative

05/21/20 • 32 min

Look, bottom line, value-based care has to be the future of health care delivery in this country. That’s just inarguable at this point. Nobody disagrees except for health care industry stakeholders trying to reap as much reward as possible while the going is good. And they’ve been really successful with their reaping thus far.

Here’s the thing, though: There’s speculation that health insurance premiums may go up, like, 4% to 40% next year if the status quo remains the status quo. Is this the moment when we all start to get real about value-based care? Not because it would be a nice thing to get up and running, but because we have to. Health care costs are already too high in this country. You can’t just add 40% and think that somebody’s gonna find that kind of change in the bottom of their pocket, which has already been turned inside out. But also because on the provider side of the equation, it’s less risky.

Here’s what I mean by less risky: All of those health systems struggling right now because of the decrease in elective procedures—if they had all had a significant portion of their revenue derived from value-based agreements where they were contracted to take care of populations, they’d all still be getting paid their global/capitated payments right now and actually able to take care of patients who need care instead of sitting on the sidelines watching their bank accounts dwindle.

In this health care podcast, I speak with Eric Weaver, who is the newly minted executive director of the Accountable Care Learning Collaborative based in Utah. We talk about how life could have been a lot different for PCPs and also specialists, by the way, and health systems had we lived in a value-based world instead of an FFS (fee-for-service) one. Considering that this pandemic might consist of waves that extend for months if not years, this might be a call to action for providers to get meetings set up with payers, like, right now to switch up payment terms into value.

But it’s also a call to action for purchasers of health care like employers and commercial carriers. When I was talking to Guy Culpepper, a PCP, in episode 272, he really wants value-based contracts; but he can’t get them alone. Purchasers and payers have to be willing to come to the table and offer them.

So come on, everybody! Let’s belly up to the conference room table—or your little Zoom Brady Bunch box, as the case may be. Now’s the time to really flip the switch to payment models that work for patients and enable physicians at the same time to provide the kind of care that’s in alignment with their values.

One acronym heads-up in this conversation that I have with Eric Weaver coming up: APM stands for advanced payment model, which is, at its simplest level, a kind of value-based payment model.

You can learn more at accountablecarelc.org. You can also connect with Eric on Twitter at @Eric_S_Weaver or on LinkedIn.

Eric Weaver, DHA, MHA, is nationally recognized for his work in payment and delivery transformation. He is the recently appointed executive director of the Accountable Care Learning Collaborative (ACLC), a nonprofit organization founded by former Secretary of Health and Human Services Mike Leavitt and former Administrator of the Centers for Medicare and Medicaid Services Dr. Mark McClellan. With a mission to accelerate the readiness of health care organizations transitioning to value-based payment, the ACLC has defined the standards for high-value organizations and the workforce skills and competencies needed to advance value-based care.

Dr. Weaver has been recognized for his contribution to the health care industry by receiving the ACHE Robert S. Hudgens Award for Young Healthcare Executive of the Year and the Modern Healthcare “Up & Comers” Award in 2016. Prior to assuming his new leadership role with the ACLC earlier this month, Dr. Weaver was a senior vice president for Innovista Health Solutions, a population health MSO, and was the president and CEO of Austin, Texas–based Integrated ACO—one of the more successful physician-led accountable care organizations in the country.

For more information on Dr. Weaver and his vision for the future of the ACLC, you may access this video. If you are a provider organization looking to succeed in value-based care, you can obtain a free membership to the ACLC at accountablecarelc.org/join-us.

...

One acronym heads-up in this conversation that I have with Eric Weaver coming up: APM stands for advanced payment model, which is, at its simplest level, a kind of value-based payment model.

You can learn more at accountablecarelc.org. You can also connect with Eric on Twitter at @Eric_S_Weaver or on LinkedIn.

...

Previous Episode

undefined - EP276: COVID-19—Advice for Self-insured Employers and That Prediction of a 4% to 40% Premium Increase in the Fully Insured Market, With Brian Scott From Point6 Healthcare

EP276: COVID-19—Advice for Self-insured Employers and That Prediction of a 4% to 40% Premium Increase in the Fully Insured Market, With Brian Scott From Point6 Healthcare

In this health care podcast, I talk with Brian Scott. Brian has a background which is perfect for the question of “Will employer health care costs go up or will they go down as a result of this pandemic?” First, Brian was an underwriter at United. Then he was in a dedicated complex claims group for Lockton that managed self-funded plans. And now he’s at Point6 Healthcare, where he works to put together the best-value plan for employers, including getting stop-loss. Brian works with TPAs (third-party administrators) across the country to this end.

So, this conversation that I had with Brian is a two-part affair: The first episode (episode 275) was mostly about the specific additions as a result of this pandemic used in cost models and also what some self-insured employers are doing or considering doing to address the underlying risk factors that might help drive up costs in a plan. This, however, is episode 276; and it includes Brian’s advice for self-insured employers, as well as a look into the fully insured market. Why there have been those estimates that costs will go up 4% to 40% when premiums are re-upped, Brian has some thoughts.

You should definitely listen to both episodes (275 and 276), although you probably don’t need to listen to them in order if you just happened to hit on this show first.

You can learn more at point6healthcare.com and [email protected]. You can also connect with Brian on LinkedIn.

Brian Scott is an assistant vice president at Point6 Healthcare. He joined the team in 2019 to implement and lead a new type of ICU related to self-funded employers focused on implementation, consulting, and underwriting strategies on behalf of self-funded benefits plan sponsors. Point6 is an authority on employer-sponsored self-funded health care financing and risk transfer strategies in the United States and maximizes the value of interactions between those providing, receiving, and financing health care.

Brian has also worked as the strategic consultant for a major consulting firm specializing in employer stop-loss and cost-containment strategies, where he managed administrator and carrier relationships and opportunities, risk transfer strategies, and self-funding overall, while growing a team to ultimately handle stop-loss placements nationwide. Prior to that, Brian worked as a senior underwriting consultant for a BUCA managing stop-loss negotiation and placement, administration, and pharmacy pricing for large and complex self-funded, fully insured, and HMO cases.

Brian works to maximize employer strategies for managing high-cost claimant risk, focusing on opportunities to enhance plan designs, administrator-specific gap avoidance, and cost-containment processes. Brian has assisted with the formation of medical stop-loss captives, merger and acquisition risk coverage strategies, fully insured to self-funded conversion strategies, and reference-based pricing and alternative funding concerns as well.

02:48 What health care costs and revenue look like further out—2021. 06:13 Can and will employers meaningfully impact the price of care? 07:59 “A lot of it has to do with, ‘Who do I receive direction from?’” 10:54 The fully insured market vs the self-insured market. 14:15 The cost of care for COVID-19 cases and the cost of care for cases that turn out not to be COVID-19. 14:41 “Provider billing behavior is going to be impacted well beyond COVID.” 16:02 Covered California in the time of COVID-19. 17:15 Does a fully insured carrier have the incentive to cut costs? 17:40 What will happen to fully insured carriers who can no longer raise premium costs to cover COVID-19 costs. 19:13 What self-insured employers shouldn’t be doing right now. 20:07 Examining cost vs value of care. 23:42 “How can you create the best chance that you’re not going to have really big outlier costs on your plan?” 24:35 Where the name Point6 Healthcare came from.

You can learn more at point6healthcare.com and [email protected]. You can also connect with Brian on LinkedIn.

Check out our newest #healthcarepodcast with Brian Scott of Point6 #Healthcare as he discusses premium increases in the fully insured market during #covid19. #digitalhealth #predatorypricing

What health care costs an...

Next Episode

undefined - EP278: COVID-19—Will COVID-19 Result in a New Normal for Value-based Pharmaceutical Pricing? With Maura Calsyn From the Center for American Progress

EP278: COVID-19—Will COVID-19 Result in a New Normal for Value-based Pharmaceutical Pricing? With Maura Calsyn From the Center for American Progress

In this health care podcast, I’m speaking with Maura Calsyn from the Center for American Progress—or CAP—and we’re talking about value-based drug pricing and the impact that COVID-19 may have on its definition, operationalism, and broad adoption.

I remember a situation (kind of years ago, actually) where a pharma company decided to lower its price on an infused product. Normal supply and demand would dictate that if you lower your price, you will get more overall business, which will result potentially in more overall revenue—the old supply-and-demand curve at work. In this case, though, that pharmaceutical brand’s business plummeted. The Pharma had to raise their price again to capture the market share that they wound up losing by lowering their price. Why? Because doctors get paid a percentage of the drug cost to administer the product. So, the lower the drug price, the less a physician gets paid. Provider organizations have a big incentive to prescribe the highest-priced product—so, you know, the opposite of whatever you learned in Economics 101.

On the other hand, and possibly more often, we have Pharma pricing products based on what they think the market will bear. And historically, that has meant a really high price point because the market will bear, it turns out, quite a lot. There’s this perception that our national and employer pocketbooks are unlimited when it comes to health care spending. And I can see how the health care industry would get that idea, because it pretty much has always been a true statement. Despite a lot of grousing and complaining, the bill gets paid.

But pain causes change. It is very possible that this pandemic will not only change how medical care is delivered, which we’ve been talking a lot about in the past few episodes; but also it will have an impact on how pharmaceutical drugs are priced and patented. If you think about it, and I started to think about it after this conversation with Maura, the optimal price for a pharmaceutical product would be an amount that enables everyone in a population who needs the drug to be able to get it. What a tragedy it is when there is a drug, when science has produced a drug that can help someone who is suffering but they can’t get it. Maybe this is because a health care middleman is trying to game the system for as much profit as possible, or maybe it’s because the manufacturer set their price high to earn as much money as they can from those who can pay, but at a sacrifice of those who cannot.

Maura and I talk about the emerging “Netflix Model” or the “Australian Model” of paying for drugs in this health care podcast also, which is pretty interesting.

Prior to her role at the Center for American Progress, my guest Maura Calsyn worked at HHS in the general counsel’s office and was lead attorney and/or worked on a number of Medicaid initiatives, including the Medicaid rebate program.

You can learn more at americanprogress.org. You can also connect with Maura on Twitter at @maura_calsyn.

Maura Calsyn is the managing director of health policy at the Center for American Progress. In this capacity, she plays a leading role in American Progress’s health policy development and advocacy efforts. She has authored and coauthored work published in The New England Journal of Medicine, JAMA Internal Medicine, US News & World Report, and The Hill. Her work covers a range of topics, including Medicare and Medicaid payment reform, health care transparency, and trends in employer-sponsored insurance. She has also testified before Congress.

Prior to joining American Progress, Calsyn was an attorney with the US Department of Health and Human Services Office of the General Counsel. During her time there, she served as the department’s lead attorney for several Medicare programs and advised the department on implementation of the Affordable Care Act. Before joining the Office of the General Counsel, Calsyn worked as a health care attorney at two international law firms and represented a wide variety of health care payers, providers, and manufacturers. Calsyn first worked in health policy as a health care legislative assistant for Rep. Anna Eshoo (D-CA) before attending law school.

Calsyn graduated cum laude from Harvard Law School and received her bachelor’s degree summa cum laude from Hamilton College.

03:48 The value of pharmaceutical products. 06:58 “We’re dealing with what might seem like an infinite amount of resources, but it’s really not.” 07:03 The “Netflix” or “Australian” payment models vs value-based pricing. 09:35 “You need a transparent and really replicable process.” 10:41 Considerations of equity and affordability. 11:10 “Everybody wants people to get the d...