CMS expands benefit enhancements as participant groups face unique challenges.
After finding that only six of its 50 alternative payment models (APMs) "generated statistically significant savings to Medicare and to taxpayers," CMS and the Center for Medicare and Medicaid Innovation (CMMI) hope that 2023 will refresh its value-based care (VBC) efforts.
Here are four updates to its newest VBC model — ACO REACH — as 2023 kicks off.
ACO REACH has launched
January 1, 2023, marks the official start of ACO Realizing Equity, Access, and Community Health (ACO REACH). The program replaces Global and Professional Direct Contracting (GPDC). The model had attracted less interest but greater criticism for allowing commercial health plans to participate as Direct Contracting Entities (DCE).
As a refresher, ACO REACH represents three significant changes from GPDC:
Providers must represent at least 75% of their ACO's governing and voting rights. CMS increased this ratio from 25% to prevent private equity groups and non-physician stakeholders from controlling these new ACOs.
Health equity must be a focus. CMS designed ACO REACH to include more high-needs Medicare beneficiaries and the providers who serve them. CMS has not included these group as intentionally in past CMS ACO models: patients due to chronic inequality and physicians in rural and lower-income areas due to the high cost of ACO startup. All ACO REACH participants must create and execute health equity plans.
CMS will measure and incentivize equity. For the first time, the agency has baked equity into its ACO quality benchmarks, and thus its incentives. HealthLeaders' September interview with Ashley Perry, chief strategy and solutions officer for Socially Determined, revealed two hidden firsts:
CMS added Area Deprivation Index (ADI) and the inclusion of dual-eligible beneficiaries to its post-baseline reimbursement calculations. This ensures providers and vulnerable beneficiaries in underserved areas are represented.
The agency also tied quality payments to the collection of social determinants of health (SDOH) demographic data. As a result, CMS will reward or penalize participants based on how many underserved patients they treat and for making SDOH data part of their operations.
As Perry emphasizes: "It's the first time we've seen the introduction of a zero-sum game, health-equity-driven adjustments to the benchmark."
GPDC participants must be ready — and credible
ACO REACH includes new and existing CMS ACO model players. Among these are GPDC participants who decided to transition and were chosen for ACO REACH. These organizations must demonstrate "a strong compliance record and agree to meet the requirements of the ACO REACH Model by January 1, 2023."
That makes the kickoff of ACO REACH a very different milestone for these participants. If CMS identifies and eliminates those that did not meet these thresholds, this group may include GPDCs suspected of prior fraud and abuse. HealthLeaders reported that House and Senate Democrats want CMS to kick out "any health care insurers with a history of defrauding and abusing Medicare and ripping off taxpayers to further encroach on the Medicare system."
More provider types can participate
ACO REACH includes six Benefit Enhancements, which allow CMS to waive select Medicare payment requirements. ACOs can apply one or all BEs and, per a legal analysis on JDSupra, "have full control over which providers participate in any BE."
This now includes physician assistants (PA), who are "able to certify the need for hospice care; certify the need for diabetic shoes; order and supervise cardiac rehabilitation; establish, review, sign, and date home infusion therapy plans of care; and make referrals for medical nutrition therapy."
PAs join Nurse Practitioners (NP) in this ACO BE, with enhancements including five other provisions:
Allow telehealth to be reimbursed without rural requirements and to include "asynchronous telehealth services" for teledermatology and teleophthalmology. As the Advisory Board notes: "Asynchronous technology allows for remote, non-real-time communication between providers and patients" and includes things like secure messaging and remote monitoring.
Allow personnel other than physicians to provide post-discharge and care management home visits.
Permit reimbursable home health even if the beneficiary is not homebound if they meet certain clinical risk factors.
Provide previously prohibited curative services alongside palliative care for people in hospice.
Waive the skilled nursing facility (SNF) requirement that admission be preceded by a three-day inpatient hospital stay.
SNF changes are included in two additional BE updates
In addition to the PA participation expansion, CMS updated two other ACO REACH BE provisions related to SNFs, including long-term care facilities and newer SNFs (those with less Five-Star Quality Rating System data) to participate in the three-day waiver rule.
The BE provisions and updates may further support ACO REACH's broader equity roles by serving more vulnerable individuals in more locations and with more services. Including non-physicians in beneficiary care also addresses provider shortages, particularly in underserved areas. The BEs also address whole-person health for those needing home care and those who are dying.
All BE updates are effective July 1, 2023, with JDSupra adding: "CMS intends for these updates to further the primary goals of BEs, which are to emphasize high-value services, support care management, and allow REACH ACOs with flexibility in managing care for their beneficiaries."
A key historically popular conference had lower attendance as a mix of stakeholders preferred events offering convenience, innovation, and even a taste of the conceptual.
If conference attendance is a sign of a return to normalcy, we truly did enter a different phase of the pandemic in 2022. But change was still in the air — from stalwart events to the up-and-comers.
Conference loyalty is shifting
Once upon a time, the healthcare conference scene resembled Gen X's TV programming: just a few channels to choose from. This included, and still does, HIMSS. But its impact has changed, including the March 2022 conference.
"At its pinnacle, HIMSS was must-see TV. Fail to attend and you risked the impression of being in trouble or inconsequential. That isn’t the case any longer. At a time when record investment is occurring in health IT, HIMSS is a shadow of itself."
"It’s clear that HIMSS is not the only game in town anymore. Although ViVE is a much smaller event, some attendees said they chose one or the other. The crowds were very different; ViVE seemed to draw more strategic personas, versus more operational attendees at HIMSS."
D'Orazio added: "Throw in HLTH (health), held in October, and the competition for travel budgets has increased further. Competition is not a good thing when attendees are questioning the value they receive from traveling to conferences like HIMSS."
Digital dominance
ViVE launched in 2022 and HLTH in 2018, with both representing a new generation of innovation- and tech-focused healthcare conferences.
Anno domini 2022 was also the first year for a dedicated health track at the Consumer Electronics Show (CES). Big tech was abuzz with healthcare's growing strength in the digital consumer space with HealthLeaders' Eric Wicklund and CES attendee noting this in his January conference coverage.
"Digital health has been gradually taking over more and more floor space at CES, as the consumer technology industry takes a liking to healthcare. This year's event … touched on several interesting trends, including wearables, AI, remote patient monitoring, and digital therapeutics."
Wicklund added that CES vendors were "also teasing out integrations with healthcare providers as they try to bridge the gap between consumer-facing and clinical-friendly."
CES 2022 was also the first year for a healthcare keynote, from Abbott Laboratories CEO and board chair Robert Ford. On the payer side, Humana — as in year's past — was the
only health insurer to present and is still the CES organization's only health plan member.
The big ideas
The Aspen Ideas Festival (AIF) is another conference where healthcare is gaining ground. AIF has been around since 2005, adding a separate Health conference in 2013. Next year will mark the event's 10-year anniversary.
Much like AIF, Aspen Ideas: Health is organized around broader cultural and social concepts. In 2022, those themes included: Hope, Disruption, Get Smart, Influence, Pleasure, and Security. The 2023 agenda boasts seven new big ideas: Power of Design, Science of Tomorrow, The Healing Economy, Planet Health, How to Thrive, Spotlight on Women's Health, and The Senses.
Location, location, location
In addition to budget constraints, convenience influenced attendance choices. Comparing HLTH 2022 to the upcoming JPMorgan Healthcare conference in January 2023, Sage's D’Orazio again notes:
"HLTH’s tight Las Vegas layout beats the high cost, complex logistics, and frequently moody Frisco weather at Morgan — literally and figuratively in an economic down year. Work-life balance applies equally to the conference circuit, evidenced by the investment bankers at HLTH who were begging people to bypass JPM so they could too. It’s the first time in two decades that even big-time players are likely steering clear."
While the economy is a big reason, it doesn’t mean 2022 conferences didn't pull out all the stops, including end-of-day happy hours. In addition to holding its own June 2022 summit. Going Digital: Behavioral Health Tech (GDBHT) — the brainchild of innovation dynamo Solome Tibebu — hosted an after-hours network event during AHIP's September Consumer Experience & Digital Health Forum.
Both GDBHT events were in Nashville, a long-time healthcare "it" city before that designation expanded to the entire community, buoyed by a new brand of tourism and rowdy bachelorette parties.
In November, Nashville was also the site of the Emids Healthcare Summit. The conference — which attendees seemed to enjoy even if they couldn't quite remember the name — brought to the city an under-represented but much-desired stakeholder segment: pharma.
The 2023 circuit
So what will healthcare do with its conference moment? Expect the industry to continue demonstrating its growing digital muscle despite an uncertain economy, more panels featuring multi-stakeholder collaboration, and for health equity to advance on healthcare's agenda. All this amidst conference sessions both attended and skipped as networking and deal-making spill from ballrooms into hallways and happy hours.
The first of several payer lookbacks highlights some of the year's biggest moves.
Rebrand: Elevance
Anthem becomes Elevance, highlighting multiple payer efforts to become something else.
In March 2022, Anthem announced it would change its name to Elevance Health to reflect its commitment "to elevating whole health and advancing health beyond healthcare." At the company's annual meeting in May, shareholders approved the rebrand, which did not affect the Anthem Blue Cross Blue Shield health plan name.
In the health plan ecosystem, what's in a name is increasingly not just "health plan."
As HealthLeaders noted upon Anthem's announcement, Anthem's portfolio has expanded over the years to offer more than just health insurance. Between pharmacy, behavioral, clinical, and complex care assets, along with its digital capabilities, the payer offers consumers a wide range of services.
As part of the new branding, Elevance president and CEO Gail Boudreaux stated: "Improving health means more than just treating what ails us … This need has driven our transformation from a health benefits organization to a lifetime, trusted health partner."
Elevance isn't the only health plan seeking transformation. Think of it as healthcare's version of the Impossible Burger, the use of alternative ingredients to deliver an established product. The payer advocacy group America's Health Insurance Plans (AHIP) changed its name in June 2021, with the P in AHIP now designating provider versus plan to mark insurers' broader purpose.
In a release for the rebrand, AHIP CEO Matt Eyles noted: "We are champions of care, guiding greater health. That's our mission and it is central to the work that health insurance providers do every day … we're not just changing how we describe our work, but how people think about the role of health insurance providers in their lives, from making coverage and care more affordable to breaking down barriers to good health."
Pairing new names with existing challenges is also reflected in the distinct branding many payers assign to their health services divisions. Think UnitedHealth Group's Optum, Cigna's Evernorth, and most recently Humana's CenterWell.
Rethink: Humana
Humana restructures for value while health plan startups take a step back.
Humana's CenterWell brand reflects the company's 2022 reorganization into two business units: health services and Insurance Services. The latter includes Humana's retail, group, and specialty segments.
This simplification was part of Humana's "$1 billion value creation initiative." In the company's second quarter 2022 earnings call, president and CEO Bruce Broussard reported that the initiative includes "significant expansion of our health care service businesses and further strengthening our Medicare Advantage [MA] and Medicaid platforms."
The announcement came six months after Humana stock plunged 21%, as the company cut MA enrollment projections roughly in half. Nearly a year later, share prices have not only rebounded but increased 12% from the company's former high.
Rethink: Bright and Oscar
While Humana demonstrated that what goes down can come up, two insurtechs faced headwinds in 2022.
Bright HealthCare will exit the Exchange and MA markets almost entirely in 2023. The company will reduce both its Marketplace and MA footprints to a single state: the former to Texas, where enrollees will also be limited to off-Exchange purchase, and the latter to California.
Even worse news followed, with the New York Stock Exchange warning the company in December that it may be delisted due to share price. Bright's average closing price has been less than $1 per share for more than 30 consecutive days.
Bright went public in June 2021 with a $924 million IPO, record-setting for a health insurance company.
Bright isn't the only insurtech to face challenges. For 2023, Oscar Health will exit two Exchange states and leave the MA market entirely. Oscar also lost its first significant customer for +Oscar, the company's proprietary tech platform for health plans, and announced it will pause any new Oscar+ deals through early 2024.
Like Bright, Oscar went public in 2021 in a $1.4 billion IPO. Its stock price has dropped from an initial $36 to hovering in the $2 range throughout November 2022.
While the pandemic undoubtedly taking its toll, it's worrying for companies to stumble in their core value props—better coverage alternatives through a tech-forward approach—and at a time when both the Exchange and MA markets are expanding.
Re-dominate: United and its tech counterparts
United keeps coming out on top, marking one of many massive M&A deals.
How do you devour an elephant? One bite at a time. But what if you are the elephant? You consume entire patches of the landscape at once. In 2022, United acquired Change Healthcare, beating back the Department of Justice's (DOJ) antitrust suit in a deal valued at $13 billion.
While the DOJ plans to appeal, United has continued to report massive quarterly earnings throughout 2022—from $7 billion in Q1 to $7.5 billion in Q3.
United is to the healthcare world what Amazon and other Big Tech firms hope to be: the dominant player. In July 2022, Amazon acquired primary care startup One Medical for $3.9 billion and has made no secret that it intends to enter healthcare in a big way.
This is happening in billion-dollar fits and starts, something only companies with Amazon's size and scale can weather as they move in what look like conflicting directions.
Haven—Amazon's healthcare cost control co-experiment with JPMorgan Chase and Berkshire Hathaway—shuttered within three years. Alexa—the company's ubiquitous yet "colossal failure" of a voice assistant—largely failed to deliver on the Healthcare Skills that would have embedded the tech giant in multiple healthcare sectors.
In 2022, the company shuttered Amazon Care, its B2B telehealth service, while losing its bid to acquire Signify Health to CVS Health in a deal valued at $8 billion.
Whether positive or negative, moves by Amazon, Google, Microsoft, and Apple show that "Big Tech is coming for healthcare." Insider Intelligencepredicts: "As they penetrate further into healthcare, Big Tech companies are learning important lessons along the way and adjusting their business strategies accordingly … Time will tell if the plan ultimately works out, but it's a sign that Big Tech firms aren't afraid to fail and refocus."
Translation? In the soil of 2022 lookbacks are the seeds of 2023 predictions, including the likelihood that tech will be willing to fail not only fast and often, but big as it seeks to disrupt healthcare.
With 5.5 million sign-ups so far, this year's numbers are already outpacing 2022.
If the expanded Marketplace subsidies end after 2025, what will keep the new pool of pandemic participants cancelling their coverage? A better shopping experience, CMS hopes.
In the past two weeks, the agency has published two bellwethers of Marketplace improvement: an 18% increase in year-over-year (YOY) enrollment and its proposed annual Exchange rule that—in select scenarios—would limit plan choices to make the shopping experience easier.
Another banner year?
For healthcare nerds, this record-breaking performance is like the big streaming wins that Wednesday is delivering for Netflix—not a bad comparison given that the Addams Family daughter and the Exchanges, now in their 12th year, are both navigating puberty.
CMS' second Marketplace snapshot shows 5.5 million plan selections, up from 4.6 million YOY. This includes 1.2 million new enrollees and 4.3 million who have renewed coverage from both Healthcare.gov (through December 3) and the state-based Marketplaces (or SBMs, through November 26).
This continues the faster pace that kicked off the first few weeks of 2023 Open Enrollment Period (OEP)—17% higher YOY as reported by HealthLeaders based on HHS' first data release.
"The numbers prove that our focus is in the right place," stated CMS administrator Chiquita Brooks-LaSure in that release. "In the first weeks of Open Enrollment, we have seen an increase in plan selections and a significant increase in the number of new enrollees over the previous year."
As part of the latest Exchange data release, Brooks-LaSure added: "We are incredibly pleased to see continued strong enrollment numbers in this second snapshot report, especially the increase in new enrollees. We are going to keep our focus on ensuring that all who seek health care coverage get the affordable, quality coverage they need."
Aiding enrollment through regulatory changes
These numbers build on the 2022 plan year (PY), which also saw record growth: nearly 14.5 million enrollees with close to 3 million being first-time exchange customers. As HealthLeaders reported in October, other big moves in PY2022 included Aetna's return to the Marketplace and continued expansion from carriers such as Centene, Cigna, Molina Healthcare, and UnitedHealthcare.
With growth like this, it may seem counterintuitive to limit Exchange plan options as CMS proposed in its 2024 Notice of Benefit and Payment Parameters (the agency's annual Marketplace rule). CMS' goal, however, is part of the industry's overall effort to improve customer experience.
Attracting customers and making it easy for them to choose a plan are two different things. As such, the proposed rule would limit the number of non-standardized plans that carriers can offer on the Marketplace to two per product type (HMO, PPO) and metal level (gold, silver, bronze) for each of its service areas.
In its press release for the rule, CMS notes: "The average number of plans available to consumers on the Marketplace has increased from 25.9 in PY2019 to 113.6 in PY2023. Such plan choice overload limits consumers’ ability to make a meaningful selection when comparing plan offerings."
The proposed 2024 rule continues CMS efforts to simplify the shopping experience. This includes the new standardized plan listings on HealthCare.gov that the agency required via last year's rule.
Making it easier to choose
Even with these improvements, navigating the Marketplace alone can be daunting. To assist, the Biden-Harris Administration has increased funding for Navigators who help customers find coverage on HealthCare.gov.
In PY2022, 60 organizations received $80 million in grants to hire, certify, and train community-based Navigators. For PY203, the Administration increased funding to $98.9 million.
A press release publicizing the increase touted the program's results: "More than 1,500 certified Navigators held more than 1,800 outreach and education events at accessible areas—such as local libraries, vaccination clinics, food drives, county fairs, and job fairs."
In the release, CMS's Brooks-LaSure added: "Reaching people where they are is a key part of our strategy to connect people to health coverage. Navigators were incredibly effective during the last Open Enrollment period when a historic number of people signed up and now we are doubling down on investing in community Navigators who can help people find the coverage they need."
In addition to these community-based Navigators, HealthCare.gov offers 24/7 telephone assistance and can connect shoppers to local agents/brokers.
Two other ways for HealthCare.gov customer to enroll are through Direct Enrollment (DE) and Enhanced Direct Enrollment (EDE). Through DE, Exchange carriers and third-party web brokers can enroll customers after they complete the eligibility portion of the application on HealthCare.gov. EDE adds the eligibility assistance component, side-stepping customer interaction with the federal exchange website completely.
Catch is one of these web brokers, drawing ACA plan customers in with a "hack your premium" message to "slash your premium payments in two minutes or less." What sounds like a simple discounting or coupon service (think GoodRx) is actually a web broker service that creates its own version of the Marketplace shopping experience, pulling in the premium subsidy eligibility from HealthCare.gov.
Tracking enrollment throughout 2023
CMS will continue to track Marketplace enrollment data as part of its biweekly commitment to enrollment reporting. It issued its first snapshot on November 22 and its second December 7. Expect the third around December 21, just under one week after OEP ends.
CMS will continue to report enrollment updates to include those eligible for a Special Enrollment Period (SEP). Extensive, complete-year data is available here.
Novus Cannabis MedPlan CEO Frank Labrozzi speaks with HealthLeaders in an exclusive interview.
Cannabis. Marijuana. Weed. While we're long way from the "reefer madness" messages of prior decades, we are an equally long way from the federal legalization of cannabis—and having it paid for, in part, by health insurance companies.
Frank Labrozzi wants to change that.
Labrozzi is CEO of Novus Cannabis MedPlan, which the company reports is "the first nationwide, supplemental plan that includes THC plans, and/or CBD plans in your health plan." The plan is a product of Novus Acquisition and Development, Corp. and its wholly owned subsidiary WCIG Insurance Services, Inc.
Labrozzi has been working for six years on a go-to-market strategy that will bring cannabis benefits to employer-sponsored health plans offered by major carriers, with an added focus on veterans and those with opioid addiction. In an exclusive interview with HealthLeaders, Labrozzi details the multiple legal, workforce, and specialized health tailwinds that are getting payers' attention.
Supply and demand
Visual Capitalist reports that approximately 12% of Americans use cannabis, adding that new consumers (nearly 20 million from 2009-2019) "come from all walks of life" and represent a "new cannabis consumer [who] is diverse, rather than just one persona."
Where there are new customers, there are new stakeholders to serve them and traditional healthcare has a host of them, from providers to brokers to health plans. The result? Health plans that offer cannabis benefits—in states where the substance is legal and following specific plan designs that Novus is working to expand.
How it works
Novus offers health plans with cannabis benefits, including THC plans in 38 states and CBD plans in all 50. Per GoodRx, THC (tetrahydrocannabinol) is the cannabis compound that causes marijuana's "high" while CBD (cannabidiol) does not and is known for lowering anxiety, pain, and inflammation among other benefits.
In states where THC and/or CBD are legal, Novus offers either cannabis coverage as either a standalone product or as an embedded benefit in supplemental plans. Labrozzi reports to HealthLeaders that the latter include Careington, VSP vision plans, and Amptify hearing plans. Collectively, the cost of Novus coverage ranges from $19.95 to $38 per month.
Labrozzi also reports that Novus has partnered with PRAM, a pharmacy consulting and underwriting firm. "They have consortia of carriers that include Novus in their plans with 1,200 agents selling nationwide," says Labrozzi.
The tailwinds driving growth
As part of the 2022 midterm elections, Maryland and Missouri became the latest states to legalize recreational marijuana use. Arkansas and the Dakotas voted against. And while there is still a difference between states that permit medical-only versus adult recreational use, some form of cannabis is now legal in more states than not.
Other state actions are moving beyond legalization to discrimination protections. In April 2021, the New Jersey Supreme Court ruled that medical cannabis prescriptions are allowable under New Jersey's state law (the Compassion Use Act) and not preempted by the federal Controlled Substances Act. JS Supra reports that the ruling was "significant because the New Jersey Supreme Court found a way to reconcile the federal illegality of cannabis with New Jersey's medical marijuana law."
The New Jersey case draws attention to the next frontier of cannabis coverage: its inclusion in employer-sponsored, commercial carrier plans. Citing evolving workplace trends, Labrozzi believes that "HR policies regarding cannabis will be the newest metric that companies use to recruit and maintain quality employees."
But even bigger court actions are opening employers' and payers' eyes: the multi-state opioid settlements against manufacturers and pharmacies.
The role of opioid settlements and actions to help veterans
The U.S. opioid crisis has resulted in what will likely total more than $50 billion in settlements paid by the manufacturers and pharmacies that fueled the epidemic. CVS, Walgreens, and Walmart were the latest to settle their claims with government prosecutors. Settlements include multiple ways that governments can use the associated funds to prevent and treat opioid addiction.
One of these is diversion programs. Labrozzi states that Novus Cannabis MedPlans "can put companies compliant with State Attorney Generals," with cannabis serving as an alternative to opioid-based pain management.
With respect to veterans and cannabis use, Labrozzi notes Veterans Affairs (VA) that signal a more favorable environment. On its public health website, the VA notes: "Veteran participation in state marijuana programs does not affect eligibility for VA care and services. VA providers can and do discuss marijuana use with Veterans as part of comprehensive care planning, and adjust treatment plans as necessary."
Bleeding-heart capitalism
Restrictions remain that a flurry of new House bills are designed to address, but none have yet passed. Still, Labrozzi is optimistic. A self-described "bleeding-heart capitalist," the CEO tells HealthLeaders: "We want to help the American worker and veterans. When patients learn cannabis can be part of their health plan, some of them start crying."
Labrozzi also notes the attractiveness of the opioid settlements to insurers and their value as Novus pitches its cannabis plans.
"Payers' eyes light up like saucers when we talk about opioid diversion," he says. While Novus' discussions so far have focused on regional and mid-tier carriers, Labrozzi states they are now working with a Fortune 500 company, "starting conservative with CBD given that these products are now sold at places like CVS and Walgreens."
Speaking the language of healthcare reimbursement
You might think that that there is no intersection point between the vertical integrations of the cannabis industry and those of healthcare. But you'd be wrong.
Vertical integration is very much a part of how the cannabis market operates but differs by state. Where cannabis is legal, some states allow vertical—or "seed to sale"—integration while others don't.
Labrozzi reports that Novus includes 300 cannabis verticals, with the legalization of recreational and medical marijuana collectively adding healthcare providers, insurance brokers, and payers to the integration chain.
In pitching its plans to payers, Labrozzi notes that Novus' "receivable-based business model creates limited overhead, and once the policyholder is procured, they continuously contribute directly to the company's Net Asset Value."
Federal pros and cons
Value proposition and business model in hand, Labrozzi doesn't ignore the elephant in the room.
"Trying to succeed in biz is hard enough, much less when a product is not federally legal."
It might be 5:00 somewhere in all 50 states, but it's not yet 4:20 in all of them. Virtual Capitalist notes that while the roughly $60 billion in cannabis sales from 2020-201 were mostly illicit, it forecasts that "the legal industry's footprint will come to represent the majority of the market."
The federal government will play a big role in turning all that TAM (total addressable market) into legal SAM and SOM (serviceable addressable and obtainable markets). But that level of legalization could be both a blessing and curse to the still-growing cannabis market.
"Once the federal government gets its hands on the industry, the associated tax added to the state tax will collectively be more than the actual cost of product."
This is where innovations like Novus come in, making the rising costs of alternative healthcare treatments like cannabis more affordable.
In a press release, NCQA AVP of external relations Andy Reynolds stated: "NCQA exists to improve health care, and Quality Compass Exchange is a key tool to support that goal. This product can also help health plans, government agencies and health IT firms monitor performance and make smart business decisions."
Here are three fast facts on Quality Compass Exchange Data File, introduced December 1, 2022.
1. The inaugural data file helps stakeholders benchmark and assess Exchange plans.
Payers can use the Quality Compass Exchange Data File to assess competitors and compare their own performance. Health plans, along with government and other organizations, can also use the file for quality improvement.
2. The data includes two sources from the 2021 measurement year.
The Quality Compass Exchange Data File uses measures from the Healthcare Effectiveness Data and Information Set (HEDIS) and Pharmacy Quality Alliance (PQA). The NCQS has long used HEDIS measures for its annual Health Plan Report Cards. The PQA measures are part of the CMS Quality Rating System.
3. The Quality Compass Exchange Data File includes customization.
The Exchange plan data format is a zip folder of CSV files. NCQA reports that users can "generate custom reports by selecting plans, measures, and benchmarks (averages and percentiles) for up to three trended years." Report outputs include tables and graphs to compare individual plan performance against those of other plans established benchmarks.
4. Quality Compass offers advantages compared to existing options.
In a statement to HealthLeaders, NCQA representatives noted that, compared to receiving Exchange plan data from NCQA in custom HEDIS extracts, "Quality Compass is the more efficient, readymade and comprehensive option for most users. The file has national, regional and state benchmarks … and will be especially useful for organizations that purchase Quality Compass for other product lines (commercial, Medicaid, Medicare)."
Civilization's call to caring is the common denominator for access and affordability, value and equity.
"We can't solve problems by using the same kind of thinking we used when we created them."
Attributed to Albert Einstein, the quote raises an important question: Can healthcare solve a problem it helped create?
Affordability innovations exist because the cost of healthcare itself is a social determinants of health (SDOH) risk factor for a growing number of Americans. Kaiser Family Foundation (KFF) reports that nearly half of U.S. adults say they could not afford an unexpected $500 medical bill out of pocket. Rates are higher for black and Hispanic adults.
Additional KFF data shows that the cost of both coverage and care is becoming too high to bear, causing nearly 25% of adults to delay or avoid needed care or ration medication—a number that is also higher for black and Hispanic adults, as well as women. Multiple stories on the cost of prescription drugs note the choices people are forced to make between basic needs—food, clothing, shelter—and medical costs.
The next profit center
There is enough SDOH data for the industry to agree that it has a problem, but somehow not enough to keep talk of elusive business cases from creeping into the health equity conversation. But one thing is certain about healthcare: problems create profit centers and the business of SDOH is shaping up to be one of them.
A 2021 Population Health Management analysis documents the rise of the SDOH industry, which as of July 2021 includes "at least 58 companies with $2.4 billion in funding and a total valuation of $18.5 billion." The authors note that funding and valuation is already concentrated around a select group of these organizations:
Seven companies represent nearly 74% of total funding
Twenty-two companies represent nearly 98% of funding
Eleven companies represent nearly 97% of valuation
The authors add that it seems likely that "these larger, well-funded companies will continue to accumulate the vast majority of capital injections."
Addressing affordability and equity is tough work. So are the business model changes needed to achieve them. The right profit formulas and priorities are integral to success. But so are an organization's mission and vision. In its recent strategy guide, Improve or Transform: Choosing the right business model to deliver health, The Christensen Institute notes that some beliefs about the future may include the following:
Hospitals will become commodities with commodity margins.
Nontraditional competitors will thrive in a consumer-oriented marketplace.
New business models are required to succeed in an environment defined by value-based health.
This suggests a healthcare landscape in which unique players may be best suited to address 21st-century challenges, requiring each stakeholder to focus on what it does best. This may be difficult to tease out in an era when tech companies define themselves as providers and smaller percentages of commercial payer profits come from health insurance products.
The aforementioned Christensen Institute was "founded on the theories of [now deceased] Harvard professor Clayton M. Christensen." More than a decade ago in The Innovator's Prescription, Christensen and his co-authors—Jerome Grossman and Jason Hwang—described how industries develop:
"The products and services offered in nearly every industry, at their outset, are so complicated and expensive that only people with a lot of money can afford them, and only people with a lot of expertise can provide or use them…It's the same with health care. Today, it's very expensive to receive care from highly trained professionals. Without the largesse of well-heeled employers and governments that are willing to pay for much of it, most health care would be inaccessible to most of us."
Healthcare has stayed close to its complex, expensive origins. In his May 2021 blog, Tom Robertson, executive director of Vizient Research Institute, wrote:
"We are fast approaching the point where health care spending will exceed the carrying capacity of the middle-class working family's income. We cannot slow the rate of increase in health care spending sufficiently by curbing utilization. If they haven't already done so, prices are on the verge of eclipsing the middle-class household's ability to pay; the market has failed to rein in health care prices despite forty years of trying."
The link between service and civilization
Just three years of COVID-19 have demonstrated that healthcare can do hard things and that the nation owes an unpayable debt to its front-line providers.
In addition to Einstein's previously cited advice, another popular quote—this one attributed to anthropologist Margaret Mead—identifies caring for the injured as the first sign of human civilization. Not technology, tools, or the rise of an industry.
"To her, evidence of the earliest true civilization was a healed femur, a leg bone, which she held up before us in the lecture hall. She explained that such healings were never found in the remains of competitive, savage societies. There, clues of violence abounded: temples pierced by arrows, skulls crushed by clubs. But the healed femur showed that someone must have cared for the injured person — hunted on his behalf, brought him food, and served him at personal sacrifice."
It will take this same kind of commitment to ensure healthcare remains a service—one that is affordable and accessible to all.
The absence of affordable care will undermine the industry's best efforts to address health equity.
In his 2012 comedy special Mr. Universe, Jim Gaffigan questions whether Domino's should diversify its products. "I'm not sure they've perfected the pizza," he jokes.
The same might be said of healthcare's foray into the social determinants of health (SDOH).
What is it about the data point "80% of health outcomes have nothing to do with clinical care" that has the medical profession rushing toward social risk management when it hasn't perfected its own pizza—the affordability and accessibility of its 20% of the pie?
Rushing may not be the right word, unless you quantify it with the volume of press releases that mention healthcare SDOH initiatives. A growing SDOH industry is emerging but can it succeed? And what do Einstein and Margaret Mead have to teach about where the best solutions are found?
Affordability, where art thou?
Healthcare is perhaps the only industry where not only are many of the core products and services unaffordable, but so is the coverage meant to make them so. Only through a combination of employer and government subsidies, incentives, patient assistance programs, and the equivalent of mobile app-delivered coupons can many individuals afford basic coverage and care.
All healthcare players contribute to this scenario. In 2020, U.S. health spending totaled $4.1 trillion, tripling from $1.4 trillion since 2000. This according to the Health System Tracker, published by the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF).
The tracker defines total health expenditures as "the amount spent on health care and related activities (such as administration of insurance, health research, and public health), including expenditures from both public and private funds." In 2020, leading contributions to those expenditures broke down as follows:
31% hospitals
27% other health
20% physicians and clinics
8% prescription drugs
The tracker defines "other health" as "spending on durable and non-durable products; residential and personal care; administration; health insurance; and other state, private, and federal expenditures." Additional categories—home health care, dental, nursing care, and other professional services—contribute roughly 3-5% each.
Providers in turn call for cutting out the "middlemen profiteers [PBMs and payers] who detract from care and add to cost." This was recently noted in an MD-penned Medical Economics article that calls for greater physician "pride of ownership" ranging from patient relationships to practice and facility control.
And everyone, in general, points the finger at pharmaceutical companies.
Perhaps that's why decades of VBC have failed to move fee-for-service (FFS) much beyond an enhanced contracting model. Research shows that both Medicare and commercial approaches have largely failed to improve cost and quality—particularly concurrently and in significant, consistent, replicable ways.
Cottage industries and blue-light specials
Multiple cottage industries, buttressed by private equity, have emerged to help healthcare solve its cost, quality, and equity problems. These same efforts perpetuate the tug of war between the industry's service and business imperatives.
In 2016, Inc. accurately predicted that the Affordable Care Act would create a "gazillion-dollar startup machine." In 2020 alone, private equity funded nearly $14 billion in health tech solutions focused on well-being and care delivery, data and platforms, and care enablement.
The machine has created companies aimed at the entire affordability spectrum—from systemic VBC transformation to healthcare's versions of the blue light special.
Today, the GoodRx app is the blue light that makes it cheaper to buy select prescription drugs without your health plan coverage than with it. The Catch app functions similarly, finding premium savings for customers who thought that their careful shopping had already delivered the best deal.
Healthcare is innovating and collaborating in admirable ways. But much of what passes for affordability innovation has been lagging for so long that basics look like breakthroughs. When it comes to affordability, the entire industry is a late adopter.
It is true that the healthcare industry now offers a certain measure of affordability. Medicare Advantage companies offer many $0 premium plans. And in an announcement for 2023 Marketplace enrollment, the Biden-Harris Administration noted that 80% of customers can find plan premiums for "$10 or less after subsidies."
But coverage without care remains a challenge.
Part 2 of the Affordability Innovation explores how healthcare costs create their own SDOH risk category and the growing number of profit-based stakeholders seeking to address this. But can they? Read on for more, including relevant perspectives from Einstein and Margaret Mead.
The Christensen Institute's new guide aims to help leaders make difficult business model transformation decisions.
Many companies still make important decisions without the benefit of not only data but also a strategy—fitted to the best business model for innovation and consistently executed and updated for the best results. To quote the film Apollo 13, it's a bad way to fly, and it happens every day.
"Fail fast, fail often" is the storied mantra of tech startups that has filtered into the innovation arms of major corporations, joining another widely practiced approach: building the plane while flying it. But should healthcare stakeholders address significant transformation this way? A new decision guide from The Christensen Institute delivers a firm 'no' while giving healthcare executives a "three-step strategy guide and decision tool" to address innovation.
Specifically, the guide—Improve or Transform—helps leaders choose the right business model to address value-based care (VBC) and drivers of health (DOH), the institute's term for social determinants of health. And while the guide focuses on integrated health system case studies, it includes a key callout for payviders, with added insight from HealthLeaders' interview with Ann Somers Hogg, the guide's author and the Institute's senior research fellow in healthcare.
First, a breakdown of the guide and decision tool, which Hogg describes as a first-of-its kind "to help leaders determine the right path for their business model redesign."
The first three steps
While business model development is not one-size-fits-all, there is a single question leaders must answer: is the objective to improve or transform? "One strategy is likely to lead to more success in the short run (improve), while the other will lead to greater success in the long run (transform)," per the guide.
The answer depends in part on understanding context, which helps leaders avoid "unknowingly applying a misaligned and misdirected strategic approach to their model." Executives can uncover context via the Institute's three-step strategy guide:
Articulate beliefs about the future, the mission, and the vision.
Executives can complete this step via a "thorough scan of current and emerging market trends, consumer behaviors, competitor dynamics, and futurist predictions" that helps articulate "three to five beliefs about the future."
The guide notes that step one "should also affirm that the existing mission and vision are still
the purpose and desired destination for the company. If this is no longer the case, leaders should dedicate time to articulating these grounding principles."
Map the business model and determine its viability.
Executives can then map their business model using a "four-box framework" consisting of the organization's value proposition and its RPPs:
Resources
Processes
Profit Formula/Priorities
The guide notes: "To assess the business model's continued viability, leaders should look at both current and projected revenues and expenditures to accurately evaluate whether their model has a viable trajectory."
Adding that VBC business model maturity varies, the guide advises leaders to assess where their organizations are and where they want to be before moving to step three.
Determine the strategy for change while accounting for risk.
Whether to improve or transform is a question that doesn't get asked unless an organization believes that its current business model lacks long-term viability, sustainability, or the ability to deliver what the market wants.
As part of completing step three, the guide offers a peek down the improve or transform decision paths. To advance DOH priorities, for example, an organization may be able to choose the improve path. This would mean that "the measures of success of an organization's DOH efforts, how the efforts are funded, and the people and processes needed to carry out the new value proposition are fairly close to those that are currently delivered."
Alternatively, transformation is the path "when leaders are seeking to deliver on a new value proposition that is fundamentally different from that of their current core business model"—an approach that requires an independent team (autonomous business unit, or ABU) that can create and execute the new model.
The decision tool
Steps one and two of the guide are the basis of the Institute's innovation strategy decision tool (image below), which leads executives to an improve-or-transform inflection point, with future steps depending on the viability of the organization's current business model.
Source: Improve or Transform: Choosing the right business model to deliver health. The Christensen Institute.
Improve or Transform extends findings from Institute's white paper You Are What You Treat, released in May 2022 to introduce why DOH requires business model transformation.
Specific guidance for payers
The key takeaways section of Improve or Transform notes: "Providers and payviders have a core capability that should be leveraged in their innovation efforts, which payers do not: real-time clinical data. Leaders in these organizations should recognize this critical asset as something to leverage when developing new growth engines."
Speaking with HealthLeaders, Hogg adds: "Payers should seek partnerships with providers who are leveraging clinical data to power value-based solutions. They can also ensure that the providers they own (because they all own at least one now) are leveraging this data to provide higher value care."
As the public health emergency extends (PHE) into 2023, payers dominating both Medicaid and the Exchanges will continue to win big while beneficiaries navigate complex waters.
Since HHS first declared COVID-19 a PHE, government-subsidized health insurance has grown exponentially—Medicaid and Marketplace.
To preserve continuous coverage in an uncertain economy, HHS suspended state Medicaid eligibility checks. With that grace period nearing its end, states are at varying degrees of readiness to resume redeterminations. Multiple stakeholders are reaching out to help, including the health plans whose Medicaid member loses may shift to their marketplace plans.
Medicaid membership grew from 12.7 million to 18.7 million per year between July 2021 and July 2022. The Exchanges reached a record 14.5 million enrollees, with close to three million being first-time customers. As of January 2022, the marketplace number was nearly 17 million per Kaiser Family Foundation (KFF), counting unsubsidized plans and those purchased off-Exchange.
A shifting pandemic deadline
The PHE has been in place since January 31, 2020. HHS' latest renewal on October 13 required a 60-day notice of PHE expiration by November 11, which did not occur. As such, the PHE will remain in place until at least January 11, 2023, further extending state Medicaid determination suspension.
When it does expire, three issues are paramount:
How states will manage redeterminations
How many people will lose Medicaid coverage when that happens
How many will choose—or be able to successfully navigate—a transition to Exchange coverage
"Estimates range from five to 14 million who will experience loss of coverage," says Ashley Perry, chief strategy and solutions officer for Socially Determined, which measures the impacts of the social determinants of health (SDOH) and is also engaging with Medicaid officials to ease redetermination burdens.
"The delta in the projections reflects the uncertainty about those who no longer quality and how they can maybe be brought into the Exchanges," says Perry, adding: "It's interesting to see the variation in state response. Some is politically driven. Some depends on how prepared a state is to manage the redetermination process. There are also a lot of workforce challenges and—from a policy perspective—states have different levers in place. Some already have continuous or presumptive eligibility, which gives them more to work with."
The plans best positioned
In its 2022 analysis, the Robert Wood Johnson Foundation (RWFJ) noted that redeterminations represent "the most likely prospect for enrollment growth" for the Exchange in the short-to-medium term.
Health plans that operate both lines of business—Medicaid managed care and Exchange plans—stand to see the greatest gains. A 2022 KFF analysis shows that six companies dominate both spaces:
Centene – Medicaid plans in 24 states and Exchange plans in 28
UnitedHealth Group — Medicaid plans in 24 states and Exchange plans in 22
Elevance Health (formerly Anthem) — Medicaid plans in 21 states and Exchange plans in 14 states
Aetna, a CVS Health company — Medicaid plans in 14 states and Exchange plans in 12 states
Molina – Medicaid plans in 12 states and Exchange plans in 14
Among these plans, Centene is the stalwart.
"In years when large national plans stayed out of the Exchanges, Centene became the big dog and grew organically across markets and counties," says Bill Melville, principal analyst of Market Access Insights with Clarivate. "They didn't retreat when others did."
Associated challenges
The ability of Centene or any plan to migrate members to the Exchange, however, depends on education and outreach—two abiding challenges for the Medicaid program whose members have frequent contact information changes as well as multiple SDOH challenges.
Socially Determined is working with states to update Medicaid member contact information with these challenges in mind.
"Typically, 25–40% of contact information is out of date," says Perry, adding: "Subsets of people with health literacy and cultural challenges are at greater risk, not only in coverage navigation but access to care. Socially Determined can help plans identify these subsets."
Caught unawares
A Medicaid population aware of upcoming redeterminations would help mitigate these risks, including loss of coverage and the options available on the Exchange.
But that's not the case. Nearly two-thirds (62%) of adults enrolled in Medicaid, or with a family member who is, are unaware their eligibility will be reassessed, according to a new Urban Institute report, funded in part by RWJF. Additional data showed that only 21% of members notified that coverage renewal was needed were educated on how to go about it, with only 29% informed of their other options.
"Our research shows there is low awareness about Medicaid renewals resuming in the future, indicating state programs may face significant information gaps among enrollees about the looming change brought about by the end of the PHE," said Jennifer Haley, senior research associate at the Urban Institute, in a press release accompanying the report.
For HealthLeaders' prior coverage of 2023 Exchange plan developments, read Part 1 — The Growth Trajectory, here.
