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.
The Center for Medicare & Medicaid Innovation (CMMI) will break its own rules to test new models.
New alternative payment models (APM) underperformed during CMMI's first decade. CMMI hopes that a focus on primary-specialty care integration will improve outcomes during its next 10 years.
CMMI's new report includes progress made across five strategic categories and a roadmap to continue advancing each one:
Drive Accountable Care
Advance Health Equity
Support Innovation
Address Affordability
Partner to Achieve System Transformation
Prioritizing integration is a highlight of the CMMI report, which—in addition to PCP-specialist coordination—signals a greater focus on behavioral and maternal health, person-centered innovation, and multi-payer APM designs.
Connected care models for better outcomes
In its report, CMMI states: "Moving forward, the Innovation Center will consider providing ACOs with tools to better engage specialists, test ways to better link primary and specialty care upstream in the patient journey, and continue to incentivize better management of inpatient admissions and transitions back to the community for patients."
This could include the use of e-consults, an example of "the data, supports, and tools needed to connect advanced primary and specialty care—before, during, and after acute episodes."
Other CMMI priorities to strengthen PCP-specialty care coordination include recruiting more safety net and Medicaid providers and the new Initiative to Strengthen Primary Health Care to increase federal support.
Healthcare's pre-existing conditions
Referrals are an abiding operational obstacle within the healthcare delivery system—a kind of "pre-existing condition" that impacts how referrals are made, to whom, and how close to real-time they can begin connecting a patient to their next needed level of care.
These challenges impact both the daily practice of medicine and broader imperatives, such as value-based care, and what is healthcare's now quintuple aim: patient experience, population health, and cost, plus a new emphasis on health equity and workforce demands.
Faster, slower
Government healthcare agencies have been busy this fall, updating their approach to reflect these factors. CMS launched its strategic vision and priorities in September, with CMMI announcing a strategy refresh less than a month ago after finding that only six of its 50 APMs have generated Medicare savings in the past decade.
Ten years is a long time for what's broken to stay broken. Conversely, what's broken is so deeply entrenched, it cannot be fixed overnight. For these reasons, CMMI states it will depart from its typical rules to allow more time to test new advanced primary care models and achieve results.
The agency may take this approach with other models as well, noting the importance of "longitudinal accountable care" as a focus area as well as " testing mechanisms to deliver integrated-whole person care, especially by increasing access to coordinated and high-value specialty care; and supporting providers on the value-based care journey by driving meaningful multi-payer alignment and providing data to support patients at the point of care, and across settings."
"Bringing pre-authorization to the point of care" reduces burden across stakeholders, notes one Regence executive.
Regence—a Blue Cross Blue Shield Association plan offering commercial, exchange, and Medicare Advantage (MA) plans across Idaho, Oregon, Utah, and Washington—has launched a partnership with ACO MultiCare to speed prior authorization (PA) using the FHIR PA Support Standard.
The new standard "will provide an interoperable method for providers to submit prior authorization requests directly from electronic health records at the point of care," said Regence in its press release.
In the release, Regence VP CTO Kirk Anderson states: "Bringing pre-authorization to the point of care reduces the burden on health systems managing patient data and promotes timely, evidence-based care and a more seamless experience for our members."
MultiCare's AVP of population health and value-based care, Anna Taylor, adds: "Embedding pre-authorization in our native EHR system is a gamechanger … Not only will we ease the administrative complexity of health care, but the ability to receive transparent and actionable data at the point of service accelerates care delivery and increases adherence."
PA automation
Other health plans are automating the PA process. But Regence reports that it is the first health plan to do so using a FHIR Application Programming Interface, or API, that will "enable faster determinations, reduced administrative burden and costs, and better outcomes for patients."
PA automation is one of several operational improvements possible by FHIR, definition including APIs. Two others include API-enabled patient data access and provider directory standards, required by CMS' Interoperability and Patient Access final rule. Payers offering MA, Medicaid, or CHIP plans were required to comply with the provider directory rule effective July 2021.
And while X-enabled PAs are not yet required—CMS' Interoperability and Prior Authorization rule was proposed in December 2020 but is not yet final—the Regence-MultiCare implementation reflects stakeholder understanding that FHIR-driven APIs are a key tool for making meaningful digital healthcare transformation a reality.
PA under fire
Health plans use PA to manage health service delivery. Ideally, PA prevents improper utilization and encourages appropriate, evidence-based care. Providers and patients alike, however, see PA's true intent as cost control that restricts access to needed services. Providers site the cumbersome PA process, one that often requires dedicated staff to manage, as a key contributor to the burnout worsened by the pandemic.
Congress agrees. In September, the House passed the Improving Seniors' Timely Access to Care Act, which requires MA plans to report their PA utilization rates to CMS, including resulting approvals and denials. The bill, also supported by the Senate, requires HHS to establish a "real-time" PA decision process facilitated by automation.
And while it only applies to MA plans, the bill—combined with CMS' proposed interoperability rule—would create a path to PA progress that stakeholders have been calling for.
The Justice Department is intervening in a whistleblower lawsuit, first filed in 2017.
Medicare Advantage (MA) plans have long been accused of upcoding, defined as "systematically assessing enrollees as having more health conditions and being sicker on average than is actually the case." Upcoding results in more patients assessed as higher risk, which draws higher payments from Medicare.
The Department of Justice (DOJ) has now made these claims against Cigna, filing a civil fraud lawsuit on October 17 and joining an existing whistleblower suit first filed in 2017.
In a statement for the suit, the DOJ writes: "The lawsuit seeks damages and penalties under the False Claims Act for CIGNA's submissions to the Government of false and invalid patient diagnosis codes to artificially inflate the payments CIGNA received for providing insurance coverage to its Medicare Advantage plan members."
The 360 assessment
At the center of the suit is the in-home version of Cigna's "360 comprehensive assessment program," an annual member assessment completed by contracted Vendor Health Care Providers (Vendor HCPs)—generally nurse practitioners and, according to the suit, "on occasion by other nonphysician healthcare providers such as registered nurses and physician assistants."
The suit details that the Vendor HCPs would use a "360 form" with a multi-page checklist to document medical conditions that could not be corroborated by other provider documentation during the same year. In addition, the suit alleges, the Vendor HCPs completing the forms "did not perform or order the testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions reported and were prohibited by CIGNA from providing any treatment during the home visit for the medical conditions they purportedly found."
The dollar details
In the DOJ's statement regarding the suit, U.S. Attorney Damian Williams said: "As alleged, CIGNA obtained tens of millions of dollars in Medicare funding by submitting to the Government false and invalid diagnoses for its Medicare Advantage plan members.
The full DOJ suit states that "Cigna carefully tracked the return on investment ('ROI') from the 360 home visits by comparing the total amounts paid to vendors to perform the in-home visits to the additional PMPM payments generated by the resulting increased risk scores for Plan members."
Two examples cited include a projected profit of $61.8 million on 2014 home visits costing $18.8 million and a $38.8 million projected profit versus an $8.7 million spend for the first eight months of 2015.
The suit continues: "Tellingly, the ROI calculations included as a cost only the payments to vendors for conducting home visits—but did not incorporate any additional costs for actually treating the additional medical conditions that the Vendor HCPs had purportedly diagnosed."
The DOJ detailed seven specific instances among the "tens of thousands of false and invalid diagnosis codes" included in the suit.
Three highlights from a future rule that would preserve a focus on approval speed and inter-agency collaboration.
Regulating innovation is a tough gig. Just ask CMS.
The agency withdrew a proposed rule that would have granted four years of automatic Medicare coverage for medical devices approved via the Food and Drug Administration's (FDA) Breakthrough Devices Program for innovative technologies. To be eligible for breakthrough submission, a device must provide more effective treatment and meet one of four additional criteria focused on innovation, advantage, and patient interest.
It was an aggressive proposal that CMS looks to replace in 2023 following stakeholder concerns for patient safety, sufficient evidence including for longer-term outcomes, and that approvals were tied to a more limited population that is covered by Medicare.
The new rule will be informed by existing stakeholder feedback and a September 2022 draft report on evidence-based coverage decisions from the Agency for Healthcare Research and Quality. In an article for the Internal Medicine publication of the Journal of the American Medical Association, CMS officials announced that its new proposed rule will reflect four principles and may include three additional components.
Participation is voluntary and the scope is limited.
Manufacturers are not required to participate and only medical devices that fall within Medicare statute will be included.
The review process will maintain a federal focus on speed and collaboration.
CMS may conduct an early evidence review—before FDA marketing authorization and at the manufacturer's request. This proactive approach would maintain CMS and FDA's intent to work in parallel for faster approvals. It would also alert manufacturers to the "best Medicare coverage pathway" based on the evidence presented and whether stronger evidence might be required.
In its article, the agency added: "If CMS determines that further evidence development is the best coverage pathway, the agency would explore how to reduce the burden on manufacturers, clinicians, and patients while maintaining rigorous evidence requirements."
Possible additional components.
Where evidence is required, other elements of CMS's proposed rule could include:
Clear decision timelines
Whether the device is reasonable, necessary, and improves overall health
Whether its easy for patients and providers to choose a new device
Summing up its intent, the agency writes: "The CMS believes that a rule guided by these principles would strike a balance between promoting access to emerging medical technologies and maintaining the protections and rigorous evidence standards that are essential to the welfare of Medicare beneficiaries."
"At the end of the day, data is the currency of healthcare—being able to understand and show how healthcare actually happens in communities," says one health tech executive.
HealthLeaders interviewed the governing body of one of those CCOs and its technology partner, Activate Care, to learn how the two are working toward a focus on preventive social care that helps individuals and families build generational strength.
How one rural Oregon COO operates
The Columbia Gorge Health Council (The Gorge) is the governing body of PacificSource Community Solutions – Columbia Gorge Region, one of 16 Oregon CCOs which includes Pacific Source Health Plans as its Medicaid MCO partners. CCOs were not only one of the first Medicaid ACO models in the U.S. but also one of the first ACO models of any kind.
For its CCO, The Gorge—a 501(c)3 non-profit serving an area of rural Oregon just outside of Portland—acts as a community advisory council, a role that former senior project manager Suzanne Cross notes "has a lot of power and voice in the governing of the CCOs. They determine how money is spent, advocate for access to services to improve."
The Gorge uses its power as a convenor to target regional need. It hosts a large cross-sector collaborative program that uses 17 community health workers employed at agencies across the region as its workforce. The goal is to assess regional needs, break down barriers, connect clients to medical and non-medical resources, and close gaps. The initiative serves people in Medicaid, Medicare, and those who are uninsured.
"Many health workers are trusted members of the community," Cross emphasizes. "They speak the language as a client that they work with. Our community health workers will tell us, 'They listened to me because they know I'm in.' And so that's really important for primary care providers."
Especially when there are non-medical reasons why a patient isn't following their care plan. In addition to lacking resources, Cross notes: "Maybe they also didn't really understand the instructions that were given … So having a trusted member of the community to learn from is really crucial."
The Gorge's technology partner, Activate Care, agrees, with founder and CEO Ted Quinn adding how important tech skills are as community-based workforces stand up their programs.
Creating a hyperlocal, community care record
A tech-trained workforce is just the beginning.
"Our focus is creating what we refer to as a community care record," says Quinn. "It's a technology and a platform which enables stakeholders that work within a community from different types of organizations and perspectives to really coordinate and drive care around specific individuals and populations."
Quinn adds: "The work The Gorge is doing is where it all really comes together, into a hyper-localized approach. I think this is why MCOs and Medicaid are trending to more holistic care, because they recognize that it's got to be done at that level."
Noting that Activate acts as a "technology convener so stakeholders can work together," Quinn emphasizes: "At the end of the day, data is the currency of healthcare—being able to understand and show how healthcare actually happens in communities across different organizations, and how they work together to measure, report, and show the impact of their programs."
Cross adds: "With cross-sector collaboration, there are HIPAA requirements and how to collectively share our work when you've got somebody at the housing authority, somebody in a primary care clinic, and somebody else working in a public health clinic. All of that involves breaking down the rules and creating contracts that allow us to work together, not duplicate services, and lean on each other's strengths."
"Activate allows us to understand the households that we work with, understand their needs, and understand how to navigate them."
Evolving the Medicaid MCO model
With Medicaid MCOs playing a central role in Oregon CCOs, Quinn and Cross discussed how important it is for traditional health plan models to evolve toward SDOH and for funding that ensures sustainability.
"If you think about the MCO business model, they have an established value proposition of how they deliver care," says Quinn. "They have resources they allocate out to the provider and delivery system to support their members. They have processes for how they track and report measurements back to the state or federal government and they have a set profit formula."
Quinn continues: "What we've seen over the last few years is that they're being pushed to incorporate the social determinants into their model to care. And that's really hard to do."
Cross agrees on the difficulty.
"We're trying to figure out how equity plays in, how to really be creative in addressing the social determinants of health when looking at Medicaid members. If you don't have a roof over your head or can no longer afford gas prices to get to work, you're not even going to think about going to the dentist or a mental health provider," she says.
The need for creativity applies not only to solving problems but how solutions are funded and reimbursed.
"It's really crucial to continue to be creative and to look at new programs that are successful. If something is not funded through state or federal sources, keeping services available is not sustainable."
Preventative social care
Despite the difficulty, the new expectations are clear, says Quinn—showing up in State Medicaid MCO procurements as well as federal initiatives.
"So here we sit—hopefully on the backside of the pandemic—and if you just follow the funds from CMS, you see that things have fundamentally changed," he says, adding: "It's hard to believe you'll be able to pull these things back."
Quinn continues: "On the community side, we've spent a lot of time and effort focused on reactive social care, but where we haven't spent a lot of time is on the preventative social care. When COVID hit and as we are headed into an economic downturn, the needs are going through the roof and the supply to meet that need is often not well understood. Through the work of the past couple of years, we're collecting that data that helps tell the story of the community."
"That," the Activate CEO notes, "is going to help us build the evidence base to say, 'How do we think about preventative care? How do you get further upstream so that when someone's life goes sideways, they know where to go?'"
Cross agrees: "Once someone has the resources that are available to them, how do we use the data to get more resources and address system gaps?"
Returning to a different kind of sustainability, Cross emphasizes the need for generational support.
"How do you start to build savings and what does that mean? How do we also help the next generation have a better opportunity?"
While noting declines in the percentage of people covered by their employers, the AAF panel asked multiple questions about the model's future and opportunities for reform.
Holtz-Eakin framed the ESI discussion politically—between the "government-sponsored single-payer healthcare" that the Left prefers and, by the Right, as an "accident of history…[that is] not taken seriously as market phenomenon" that would be typically defended.
Following these contrasts, Mulligan framed ESI's value proposition:
People stick to the model, even when the price increases.
As distinct from individual health insurance…you're not alone. You're buying with groups of people.
The group insurance structure offers concentrates innovation and ease.
There is a lack of competition, with employers able to get better deals than individual buyers.
Lack of insurance leads to more government-subsidized healthcare.
Impact of subsidies
Schaefer highlighted how the ACA changed the ESI policy landscape while focusing on efforts to fix the model's deficiencies. The Heritage Foundation executive highlighted the unique challenges of small businesses and how less advantaged subsets of employers impact the role of the ACA marketplace.
Schaefer discussed the subsidy firewalls put in place "to prevent erosion of employer-based coverage," noting that the loosening of these firewalls "have created a deterrent where people are going to say, 'We're just going to flood out of the employer market.'"
Moderator Holtz-Eakin posed how expanded and increased subsidies—in 2021 and then extended through 2025 via the Inflation Reduction Act—"reorganized the deck chairs, moving a lot of people out of ESI and into the ACA."
Despite clear marketplace growth, Mulligan described "Obamacare" as "an incredibly bad brand," with Schaefer reiterating ESI's value proposition as "the brand you know" and a more desirable opportunity with employer resources for benefits navigation versus 1-800-number support from the federal government.
"As people are faced with more and more of these tradeoffs, even with the 'financial benefit,' they'll still want to gravitate" toward ESI.
ESI flexibility
Schaefer highlighted another ESI value: how quickly employers shifted their health benefits in response to the pandemic, such as telehealth, and how much faster this occurred than in areas such as Medicare. The Heritage Foundation Director noted the ability to pivot faster in general as an advantage of ESI.
Mulligan added to this, stressing the importance of innovation to the U.S. economy and healthcare in particular. The economist noted that companies are better at innovation in general than not only the government, but individuals and their capacity to get the same results. "A group like employers are perfect for that," he concluded. "In an innovative world, the employer system has a lot going for it."
Biggest threats to ESI
When asked by Holtz-Eakin what ESI's biggest threats were, Shaefer noted "the incremental attempts to supplant it"—citing continued subsidies, State caps, and other "strategic and small" regulatory moves. She added that left-leaning politicians are more likely to succeed with this approach than the universal healthcare and "Medicare for All" messages attempted.
Mulligan believes, however, that Medicare for All still has more legs. With this, Mulligan highlighted a kind of conflicting groupthink in which it's difficult for individuals to achieve innovation individually or navigate massive changes, yet when they do, they find a collective approach "seductive."
AAF's president agreed with Mulligan, stating: "If you say insurance companies are pushing back on it [Medicare for All], that's proof it's a good idea."
Policy levers to strengthen ESI
For people who fall between the cracks of government-subsidized care and ESI, Schaefer suggested different approaches to grouping individuals. "While it's still a work model and its focused on where you are employed, where we see a mobile workforce and a changing workforce of people patched together … are there ways we can mimic ESI?"
Schafer also suggested further scaling the benefit flexibility employers have come to expect as a result of the pandemic. Mulligan predicted that the intersection of technology and drugs will aid ESI.
The panelists' concluding comments focused on how employers could be innovative leaders in the area of gene-based healthcare services.
