A Virtual-First Approach To Employer Value-Based Care
Growing up with a mother who was an employee of the public school system and a father who worked for the federal government, I was always led to believe that we had great health insurance. Little did I know that I’d embark on a career that would cause me to look back on such an exciting topic from my childhood, but here we are. When I reflect on my knowledge of what made great health insurance - taught to me by mom - as a kid vs. the experiences I’ve lived working in this industry over the past two decades, I find myself questioning whether or not real change will ever be achievable. I now believe that a virtual-first approach is the only way to make it happen.
As a teenager in the 90s, I can remember the days when we had an HMO plan. As a rare teen with a cardiovascular disease, I remember insurance requiring referrals for my family and I to get specialty services. And I can distinctly remember at some point along the line a switch occurred and we no longer needed referrals. My experience reflected that of many in the late 90s - early 2000s when the emergence of POS/PPO plans started to become the dominant offering by private insurers.
Early in my career, I would give my mom a hard time for abusing her PPO plan as she proactively managed her own health by seeing every specialist under the sun on an annual basis. Why wouldn’t she - it was all available for a low copay. My argument, of course, was that nothing was free and her employer is picking up that tab and, in turn, shifting costs back to all of the other employees when their renewals increase year after year due to the high utilization. I was right (of course), but so was she. Why shouldn’t she abuse her rich health plan like my kids abuse the soft serve machines at Sweet Frog? It cost her next to nothing and my assessment was a drastic over-simplification of the problems that plague our system and drive cost.
Over the past two decades of learning more about private healthcare and health insurance, I have seen employers flock to cost-savings trend after cost-savings trend designed to get them out of the cycle of annually ballooning healthcare costs. We had a move to higher deductibles, then a move to true high deductible plans, then private exchanges, self-funding, level-funding, captives, Rx discounts, virtual care, wellness, disease management, direct contracting and I’m sure I’m missing quite a few. The point is - not much has worked at scale. Brokers and employers are having the same conversation in 2023 as we were in 2006 - how do we get control of our healthcare costs?
Lately, a topic getting a lot of attention is value-based-care. Since Obamacare, CMS has placed a huge emphasis on this concept. By and large, the initial Accountable Care Organization (ACO) model was a failure. The health system didn’t know how to execute on a program that was set-up to reward outcomes rather than maximize profits. Insurance companies didn’t know how to reimburse properly. Providers struggled to figure out the right recipe for success. Quite frankly, neither of them had much incentive to change the way things.
I’ve always argued that the employer market is where the creativity to solve the healthcare cost problem in America. Nearly half of Americans get their health insurance through their employer. And their costs have been steadily rising for the past 25 years. But the innovation has done little to solve the problem so maybe it’s time to take some guidance from CMS and explore value-based care in the employer setting. But will it work?
Elements of value-based care already exist in the employer market. Many employers have moved towards direct contracting with primary care and hospital networks to negotiate better rates. But a key element of value-based are that is lacking in the employer space is true outcome based reimbursement models. Maybe some large employers are already doing this, but the question is how can we scale a model that creates incentive for the providers to produce better outcomes in order to reduce costs for everybody? I was told recently by a physician who owns a large specialist network that the key to value-based care is actually time to care. In other words, one of the biggest challenges to the execution of value-based care is the fact that it can take weeks, if not months, to receive the specialty care one needs. Even in specialist dense areas - mostly centered around premier teaching hospitals and large cities - the access to timely specialty care is tremendous.
Unlike primary care or urgent care which can largely be delivered in a virtual setting, many specialties require in-person consultations. I predict that we will start to see a real emergence and convergence of virtual value-based care networks. Bundling services and managing the care journey in a more proactive manner will also require speed to consult. The only way to solve this problem is digital. Virtual care programs have already expanded into the specialty market - mostly targeting high cost claims like diabetes and MSK. But these point solutions need to expand by leveraging digital tools for more timely access and ongoing support with a bundled payment model that focuses on improved outcomes. Partnering with primary care and brick and mortar providers for a more holistic care experience will improve outcomes.
