Moving from volume to value: takeaways from the 2019 Annual LAN Summit

A clear trend that I and other health care policy wonks have been watching is the movement of states away from paying for volume (e.g. Fee-for-Service or FFS) toward paying for value (e.g. Value-Based Purchasing) in health care. This change is due in large part to rising health care costs, coupled with less than positive health outcomes in the United States. With this shift, states are focused on smarter spending, better care, and healthier people—wins for both consumers and states.

As part of this trend, the Health Care Payment Learning & Action Network (LAN) was created to accelerate the transition in both the public and private health care systems from a FFS model to a model that pays based on quality and value. The LAN is the leading voice on new health care payment models that can improve health care quality and reduce costs. Since its creation in 2015, it has held an annual summit in Washington, DC.

The summit this year, which I attended last month, offered an opportunity for stakeholders who are committed to supporting the value-based payment to come together to “align efforts, capture best practices, disseminate information, and apply lessons learned”.[1] Alex M. Azar II, Secretary of Health and Human Services, was the opening keynote speaker for the event and Amy Bassano, Acting Director of the Center for Medicare & Medicaid Innovation, provided closing remarks. Three themes emerged for me across the various breakout sessions and keynote speeches. 

1. Encouraging Providers to Take on Greater Risk, Faster

At the opening of the Summit, LAN announced a new goal statement: Accelerate the percentage of U.S. health care payments tied to quality and value in each market segment through the adoption of shared accountability alternative payment models (APMs). They also unveiled new metrics by which to measure this goal across the private and public health systems between 2020 and 2025.[2]

 

Medicaid

Commercial

Medicare Advantage

Traditional Medicare

2020

15%

15%

30%

30%

2022

25%

25%

50%

50%

2025

50%

50%

100%

100%

LAN is highly focused on getting providers to assume financial risk and has set some ambitious goals for shifting health care toward risk-based payment models including savings/shared risk, bundled payments, and population-based payments (LAN Categories 3 and 4).

According to updated data from the LAN, only 23.3% of Medicaid payments were tied to value, with only 8.3% of these payments in shared accountability APMs (e.g. LAN APM categories 3B, 4A, 4B, and 4C). Our experience at UnitedHealthcare has been consistent with what LAN’s data shows. It has been our observation that most Medicaid providers are not interested in and/or ready to enter into value-based purchasing (VBP) arrangements that include bearing downside risk. Bearing risk requires substantial investments in tools and capabilities as well as sufficient financial resources to manage the risk. 

2. Using Multi-Payer Initiatives to Increase APM Adoption

There is growing recognition and acknowledgment that improving the U.S. health care system and achieving the Triple Aim requires partnerships and the breaking down of silos. Several of the speakers at the LAN Summit echoed the notion that no single entity is able to make a significant impact on its own. This is true for both payers and providers.

Given this reality, state agencies are actively exploring opportunities to align their public health systems with other purchasers (e.g., state employee purchasers, commercial payers) to accelerate the transition away from paying for volume towards paying for value. States are increasingly leveraging lessons learned from the Comprehensive Primary Care Plus (CPC+) and other national initiatives to align incentives and promote collaboration among various payers. These arrangements are designed to increase efficiencies and decrease both duplication and administrative burden for providers, while simultaneously maximizing health outcomes. We should expect to continue to see states leveraging multi-payer alignment as a tool to encourage providers to move to value-based arrangements and more quickly adopt more advanced APMs. Ohio and Massachusetts were highlighted as states that have made significant progress in advancing multi-payer VBP initiatives.

3. Focusing on Social Determinants of Health

The LAN summit, along with the rest of the health care industry, continues to emphasize the importance of addressing the social determinants of health (SDOH). Many of the LAN Summit speakers reiterated the notion that addressing SDOH is critical to the overall success of VBP programs. 

Both the Centers for Medicare and Medicaid Services (CMS) and our state partners expect for us (and other payers) to develop VBP models that connect the fragmented health care and social services delivery systems to achieve improved outcomes. This will likely include expectations that payers develop community provider networks in addition to their physical health networks. North Carolina and New York were identified as two leading examples of this trend.

We support LAN’s goals of accelerating delivery system reform while increasing system accountability to help improve the health outcomes of the individuals served by Medicaid and to lower the overall cost of care. We see the VBP conversation as an opportunity to improve how we work with Medicaid providers by meeting them where they are in their ability to bear risk and providing them with a path to follow as they navigate the VBP landscape. It is only through true partnership between plans, providers, and state agencies that we will be able to move the health care system from one focused on volume to one that supports and incentivizes value.

 

[1] https://www.lansummit.org/

[2] https://hcp-lan.org/

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