What the Pandemic Taught Us About Value-based Care – The Health Care Blog


You’ll recall that we ran a long piece (pt 1, pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year. Here’s a somewhat related piece from the current head of the Permanente Medical Group about what actually happened there and elsewhere during the pandemic–Matthew Holt

The COVID-19 pandemic has provided important lessons regarding the structure and delivery of health care in the United States, and one of the most significant takeaways has been the need to shift to value-based models of care.

The urgency for this transformation was clear from the pandemic’s earliest days, as shelter-in-place orders caused patient visits to brick-and-mortar facilities to plummet. That decline dealt a financial blow to many fee-for-service health care providers, who are paid per patient visit, treatment or test performed — regardless of the patient’s health outcome.

Prepaid, value-based health care systems, on the other hand, have demonstrated that they are better equipped to respond to a continually evolving health care landscape. Because they are integrated, with a focus on seamless care coordination, and they are accountable for both the quality of care and cost, these systems can leverage technologies in different ways to rapidly adapt to major disruptions and other market dynamics. Priorities are in the right place: the patient’s best interests. Value is generated by delivering the right level of care, in the right setting, at the right time.

Because value-based care focuses on avoiding chronic disease and helping patients recover from illnesses and injuries more quickly, it has the promise to significantly reduce overall costs in the United States, where nearly 18% of gross domestic product was spent on health care before the pandemic — significantly more than comparable countries. That figure rose to nearly 20% in 2020 during the pandemic.

While providers may need to spend more time on implementing new, prevention-based services and technologies, they will spend less time on managing chronic diseases. And thanks to the preventive approach of value-based health care organizations, society benefits because less money is spent managing chronic diseases, costly hospitalizations and medical emergencies.

Value-based organizations drive additional societal benefits. They understand that building trust with patients requires cultural competency — tailoring services to an individual’s cultural and language preferences. During the pandemic, building trust was especially important with underserved communities, where mistrust of health care systems is prevalent.

Previous long-term investments in telehealth and remote patient monitoring technologies served value-based organizations well during the early days of the pandemic, when 80% of care delivery occurred via telemedicine. Supported by a relaxation of regulations to help the broader health care system deal with COVID-19 patient surges, doctors delivered more telehealth services via video and telephone appointments; hospitals shifted more care into the home with telemedicine and coordinated care teams; and health care organizations deployed more resources to deliver culturally responsive care.

While the percentage of in-person visits has increased again, patients clearly appreciate the ease and convenience of receiving care via telehealth at home, or wherever and whenever they need it. Many physicians have said they got to know patients better through video visits, because patients are more open to discussing health conditions from the comfort of home. A recent report by McKinsey & Company shows that telehealth utilization is 38 times higher than before the pandemic.

Even before the pandemic, Permanente Medical Groups had explored ways to deliver acute care at home. Both the Northwest Permanente medical group and The Permanente Medical Group in Northern California launched advanced-care-at-home programs that leverage physician-led command centers, community care teams, the organization’s comprehensive electronic health records and remote monitoring to ensure hospital-grade, person-centered care for patients with complex conditions such as sepsis, pneumonia, and coronavirus.

When unprecedented surges led to hospital beds overflowing with COVID-19 patients, value-based health care systems harnessed the power of remote patient monitoring to improve capacity. Building on those efforts, Kaiser Permanente with Mayo Clinic last year announced an unprecedented collaboration to invest about $100 million in a technology company, Medically Home Group, to advance a new health care delivery model that enables more patients to receive acute-level care and recovery services at home. This is part of a movement involving several coalitions of health care systems working to move acute care into the home.

As with telehealth video and phone visits, delivering hospital-level care at home provides another opportunity for health care organizations to gain more visibility into social factors that affect patient health outcomes, such as medication adherence, diet, or food insecurity. The importance of addressing social determinants of health became especially evident during the pandemic as data revealed the disproportionate mortality rate from COVID-19 in Black and Latino communities. Likewise, while value-based health care organizations for years have made non-English-language assistance available to patients, the high death toll in underserved communities underscored the need for even more effective, culturally appropriate communication.

To make sure their messages resonated, these organizations partnered with community leaders who could provide the information and reassurances needed to advance vaccine acceptance. Similar programs included responsive pop-up “vaccine clinics on wheels” that went directly to parks and schools, neighborhood barber shops and beauty salons, and places of worship in underserved urban and rural communities. These efforts offer a window into what the future of value-based care will look like both inside and outside of traditional care settings.

New skills, training and research will be needed by physicians and care teams who will increasingly reflect the diversity of patients and communities served. For example, robust data will be needed to better understand the disparities associated with COVID-19, or for any medical condition. While the U.S. Department of Health and Human Services toward the end of 2020 released guidance that requires labs to include race and ethnicity — along with age, sex and ZIP code — when reporting COVID-19 test results, this data wasn’t required prior to August 2021. To get a better picture of how any disease affects a community, it’s best to collect detailed data from the start.

The health care industry can look to Medicare Advantage, the federal government’s health program that measures and rewards quality coverage and care, as a model for effective, coordinated, managed care. Because Medicare pays a fixed amount per enrollee to providers offering Medicare Advantage plans, care organizations have a powerful incentive to keep patients healthy. The program utilizes the Centers for Medicaid & Medicaid Services Star Ratings system to measure and publicly report plan performance, providing patients with transparency and choice when shopping for quality coverage. In 2022, 89% of all Medicare Advantage enrollees were in plans rated 4 stars or higher.

In addition to improving care quality and patient satisfaction, Medicare Advantage promotes value-based care by reducing health care costs and improving health outcomes for a diverse population of seniors and individuals with disabilities. The program costs U.S. taxpayers 9.5% less per enrollee than traditional Medicare. Medicare Advantage enrollees are 13.4% more likely to be screened for breast cancer compared to those in traditional Medicare, and Medicare Advantage has a 57% lower rate of avoidable hospitalizations for patients with major complex conditions when compared to fee-for-service Medicare.

The pandemic demonstrated the success of value-based models, which take accountability for patient outcomes, and which continue to make necessary, long-term investments to improve care delivery, reduce disparities and focus on population health. Now is the time for a wider range of health care organizations to mobilize by aligning incentives to build a system of care that is more responsive, coordinated, equitable and sustainable.

Richard S. Isaacs, MD, FACS is CEO and executive director of The Permanente Medical Group

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