Including deadlines and addressing the ostrich effect are among the changes that improve outcomes.
HealthLeaders recently reported on BCBS-MA's Nudge Unit, a first-of-its kind initiative that "uses behavioral insights to present information in new ways." This information, deployed in multiple customer communications, "can lead to improved decision-making and better health outcomes."
In addition, here are specific Nudge Unit examples—provided by BCBS-MA—that illustrate the small wording changes. The plan reports that these updates increased at-home colorectal cancer screening by 3%, with 500 more test kits returned.
The plan's Nudge Unit initiative involved the mailing of a revised letter and fecal immunochemical test (FIT) to complete the home-based screening. The revisions incorporated behavioral science research on the importance of deadlines and the unintended impact of communicating health risks.
Revision 1: Deadline language
"Procrastination impacts us all," says Rebecca Oran, director of the Nudge Unit and Behavioral Insights at BCBS-MA. "Deadlines help to solidify next steps and avoid planning fallacy, or our tendency to underestimate how long it will take to complete a task. The most effective deadlines are often far enough away that individual has time to act, but not so far away in the future that it could lead to procrastination."
Oran cites research (example one and example two) that has found that individuals are more likely to complete an action if there are deadlines included. As a result, BCBS-MA updated the following language in its FIT test mailing:
Usual letter: No deadline language
Nudge letter: Added "Please return the included kit in the next 3 weeks."
Revision 2: The ostrich effect
Another BCBA-MA letter revision tapped into avoidance behavior.
"People often avoid taking actions that could result in unpleasant or negative news, such as positive test results," says Oran.
"Medical communications often include information about risk as a way to encourage patients to consider the consequences of not taking action and encourage them to do. However, that information sometimes has the opposite effect—patients feel more apprehensive about completing preventative screenings and in turn, avoid the screening all together (or "ostrich").
Oran adds: "Although it may seem counterintuitive, the ostrich effect has been empirically documented across various contexts from goal setting to investing."
The following was an additional change to the BCBS-MA FIT test mailing:
Usual letter: "Colorectal cancer is the second-leading cause of cancer deaths in the United States. However, it's also one of the most preventable and, when diagnosed early, survival rates can be as high as 90%."
Nudge letter: Removed this language.
Beyond letters
Getting customers to open a letter from their health plan, much less read it, is an ongoing payer challenge. For other Nudge Unit interventions, BCBS-MA has varied the outer envelope to get better results.
BCBS-MA's Nudge Unit is updating other communication vehicles as well.
"More broadly," says Oran, "the Nudge Unit has applied behavioral science across a variety of communication channels (emails, letters and faxes) as well as through digital channels (such as our member portal and public-facing website)."
These are among the Nudge Unit wins that BCBS-MA aims "to refine and scale," per Oran.
The partnership with Happify Health reflects stakeholders' continued expansion of telehealth applications while embedding digital therapeutics (DTx) into more treatment approaches.
Anthem has partnered with Happify Health to offer digital-first support for expectant mothers. Availability for the service, Happify Health Pregnancy Sequence, is planned for eligible members in select affiliated plans and markets before the end of 2022.
The following are highlights from the planned services from Anthem, which will re-brand as Elevance Health on June 28.
The new platform will reflect a Sequences approach.
A press release for the partnership notes that the Happify Health platform "is anchored in Sequences … digital experiences configured to support specific medical conditions [that] … weave together, in one unified platform." These experiences include online support from other women, coaching, and resources. Services and recommendations are localized and personalized for users.
Expert access augments peer support.
In addition to peers, Happify Health Pregnancy Sequence will be able to connect online with mental health, OB/GYN, nutrition, and other experts.
DTx is embedded.
The platform will include digital therapeutics to support non-prescription, mental health needs during pregnancy. DTx is a unique component of Happify Health's platform, which the company states "integrates AI with empathy, making healing more personal, precise, and connected for the entire care journey" as part of a "full spectrum of clinical-grade care solutions … for pharma, health plans, enterprises, and individuals."
An open-design platform.
Happify Health notes that its platform was created to "integrate with existing systems and point solutions" for a better user experience that also aids health plan technology strategy.
An Anthem leader's personal connection.
"As a mother to three, I felt what all moms feel — that pregnancy is a roller coaster ride, from preconception to postpartum care," said Bryony Winn, president of Health Solutions at Anthem. "Our partnership with Happify is about improving every aspect of the pregnancy experience — whether it pertains to physical or behavioral health — and meeting all the various needs of moms."
Part of Anthem's whole health approach to women.
The Happify Health Pregnancy is the planned first deployment for an Anthem strategy designed to span women's physical and mental health — from motherhood to menopause, and the personal and to the professional.
Ofer Leidner, president of Happify Health, states: "We are thrilled to partner with Anthem and continue to support women's health journeys and ultimately create better health outcomes."
A response to research on women and depression.
Anthem's decision to partner with Happify Health was rooted in women's health research, including data from the National Center for Health Statistics Data Brief that show women are more likely to suffer from depression (10.4%, compared to 5.5% of men) and the Centers for Disease Control and Prevention on the prevalence of postpartum depression (nearly 13% of women).
States now have through March 2025 to use American Rescue Plan dollars.
Home and community-based services (HCBS) allow Medicaid members in need of long-term services and support to receive care in their homes. Members who are older or have disabilities are the most impacted, with COVID-19 exacerbating not only these challenges but states' abilities to respond.
How states will use the funds
Specific program strains have included HCBS workforce shortages, pay and benefits for these workers, and infrastructure weakness. States can use the American Rescue Plan (ARP) funds to:
Deliver services to members who are currently on waitlists
Create more tailored service for all members
Provide added support for members with higher COVID-19 risks
Help members' families, who often provide HCBS care
In a press release, HHS and CMS report that this extended ability to use funds "marks the latest action by the Biden-Harris Administration to strengthen the health care workforce, help people receive care in the setting of their choice, and reduce unnecessary reliance on institutional care."
In the same release, HHS Secretary Xavier Becerra comments: "Everyone deserves the dignity to live in their own homes and communities, and the Biden-Harris Administration is committed to protecting that right … Thanks to extended funding from President Biden's American Rescue Plan, we are expanding home- and community-based services for millions of aging Americans and people with disabilities across the country. We are working hand-in-hand with states to ensure they have the time and support they need to strengthen their home care systems and workforce."
CMS administrator Chiquita Brooks-LaSure adds: "Thanks to the American Rescue Plan, these additional funds will help people with Medicaid to live and thrive in the setting of their choice … With this extension, we are addressing states' concerns, giving states the time and resources to strengthen connections to care at home and in communities."
Executive Cara McNulty outlines the multi-point strategy—partnering with Aetna and beyond—that is helping improve quality access, equity, and treatment outcomes.
A recent commercial for Coors reflects much about pandemic coping and culture, including the role that technology plays.
In the ad, a young woman's fingertip hovers over the "I quit" email she's crafted to her boss as she prepares to join The Great Resignation. She hesitates. Her friend fetches her a beer. Liquid courage in hand, she hits send. Relief and celebration ensue.
HealthLeaders discussed the ad with Cara McNulty, DPA, president, Behavioral Health & Mental Well-Being at CVS Health, as part of our interview on the growing role of technology in mental health and substance use disorder (SUD).
"The message in that commercial is that you need to take a drink before you can take a bold step," McNulty responds. "During the pandemic, for many, self-soothing has become a dangerous equation. People are relying on substances more. They're self-medicating and need help."
Sobering statistics and the role of technology
A CVS Health/Morning Consult survey published in May revealed just how much help Americans need. Some 59% are concerned about their mental health—a number that increases to 74% for people who identified as LGBTQIA+, black, or who are among the younger and older. These and other numbers are up since the last survey in April 2020.
"We've had mental health, alcohol, and substance abuse concerns long prior to pandemic, but they've been exacerbated," notes McNulty. "Everyone has been impacted in one way or another but some populations more profoundly."
Fortunately, the survey also found that more Americans feel comfortable seeking mental health support and using technology to do it. CVS—with and beyond its employees and the members of Aetna (a CVS Health company)—has deployed multiple solutions.
CVS's Aetna programs include:
WorkIt – Comprehensive, evidence-based virtual treatment program for SUD, including personalized therapy, coaching, MAT, digital learning, and peer support. Specialized adolescent programs are also available.
Eleanor Health – Holistic, in-person SUD treatment in which providers proactively coordinate care related to physical, mental, and social determinants of health (SDOH). Technology is used to identify risk and supports.
MAP – Peer support foryear-one SUD recovery to help prevent relapse and promote long-term health. MAP also supports family members.
About these solutions, McNulty says: "We evangelize working on our physical health—how we eat, sleep—but we need to work on mental health, treating the head and heart together need the same attention."
Shatterproof and ATLAS
CVS, Aetna, and other health plans are also investors in Shatterproof, a nonprofit founded and helmed by Gary Mendell, who lost his own son to addiction.
Those plans are Anthem, Blue Cross Blue Shield (BCBS) of North Carolina, Cigna, Horizon BCBS-NJ, and UnitedHealth Group. Additional investors include Beacon Health Options, GuideWell/New Directions Behavioral Health, and Magellan Health.
One of Shatterproof's specific solutions is ATLAS (Addiction Treatment Locator, Assessment, and Standards), "a free online tool that helps people find high-quality addiction treatment programs."
The Robert Wood Johnson Foundation is another investor in ATLAS, which launched in July 2020 in six states (Delaware, Louisiana, Massachusetts, New York, North Carolina, West Virginia) and expanded to 10 by June 2021 (Florida, New Jersey, Oklahoma, Pennsylvania). A winter 2022 rollout is planned in California, which Shatterproof states will make ATLAS available "to just over 40% of the US population."
McNulty stresses that Shatterproof and solutions help "democratize quality access—not just access but quality access."
She adds: "The goal is to validate quality providers in specific markets and with specific areas of expertise. It's not enough to get someone in the door; they need the best person.
Shatterproof's effectiveness will be studied by validating quality outcomes while assessing both patient feedback and the broader ecosystem.
Changing payer strategies
In addition to democratization, the approaches of CVS Health, Aetna, and other stakeholders reflect shifting mental health strategy. McNulty identified the role of stigma and the importance of right speech as examples, noting the unique role large companies can play to create change.
"How we talk about things matters," says McNulty. "Saying mental well-being is so much more empowering than behavioral health, which sounds more clinical. If we want people to be healthy, we have to address it, talk about it, and normalize it."
"It's okay to not be okay," says McNulty, adding: "Companies have the power and agility to talk about and normalize mental health. COVID aside, employers, companies, and communities were already realizing the importance of destigmatizing mental health and substance abuse—why upstream solutions are better than waiting until someone is in crisis."
McNulty cites CVS Health's own employee health efforts, including a mental well-being Colleague Resource Group that began less than year ago and now includes 3,000 active employees."
"Things are so different than they were three to five years ago," says McNulty. "It's also really important to also reach beyond health plan members and employees—to have partnerships to help deploy tech solutions virtually and in person while also investing in the larger community."
In addition to Shatterproof, CVS works with multiple organizations to reach underserved and underrepresented populations in the United States. CVS notes that this support "is focused on equitable, quality access to mental health care services and resources, particularly among the Black, Indigenous and People of Color (BIPOC) community. Its specific partners include:
American Foundation for Suicide Prevention – Includes a "first-of-its-kind education program … specifically for Black and African American communities" that will be piloted and evaluated.
Mental Health America – Aims to "increase the number of BIPOC individuals directly served by [MHA, including] … screenings and follow-up support for two million individuals.
National Association of Free and Charitable Clinics – Seeks to "increase the number of licensed mental health clinicians providing services to the underserved," including student training opportunities.
This latter investment is in addition to the role CVS Health's own clinic plays in providing accessible resources to support mental well-being.
"We have a large footprint and can offer screening and care navigation in our retail and MinuteClinics," says McNulty. "Some of these locations include licensed clinical social workers who can help identify resources."
She adds: "Health is contiguous. Our motto is to bring our heart to your health. Our goal through all of these initiatives is to meet you where you're at."
The story behind the story includes added insights from J.D. Power's Christopher Lis, a health plan success story, and the questions that linger.
The J.D. Power 2022 U.S. Commercial Member Health Plan Study identified call center support and digital tools as two key areas of customer dissatisfaction. Simultaneously, communication innovation is among the health plan approaches yielding results.
But key questions linked to customer experience, workforce, and other areas remain.
Results
There were four key findings from the J.D. Power responses, recorded January through April:
No change in customer satisfaction. Year-over-year results were flat, with no impact to the 17-point customer satisfaction increase over the past five years. Customer service, coverage, and network providers contributed to member dissatisfaction.
Respond and innovate for better results. Satisfaction was lower where customers rated their health plans as slow and conventional. Only 22% of members consider their health plans innovative, a number J.D. Power notes "has not changed in the past three years."
Call centers must do better. As part of an overall five-point decline, health plan member satisfaction hinged on customer service representative (CSR) engagement, knowledge, and response speed.
Traditional engagement is not enough. Health plan customers are dissatisfied with health plan text messaging (-14 points) as well as websites and mobile apps (both -6 points).
J.D. Power reports these takeaways from the responses of 36,366 members of 147 U.S. health plans and based on, but not limited to, six categories: billing and payment, cost, coverage and benefits, customer service, information and communication, and provider choice.
Health plan standouts
Amidst these results, a small group of health plans rated highly in their markets:
Among these plans, HealthLeaders highlights BCBS of Massachusetts (BCBS-MA) and its behavioral-science-driven customer communications.
Success story: The BCBS-MA Nudge Unit
Both anecdotal and empirical evidence support that small wins matter.
The importance of nudges toward better outcomes is well documented. Nobel prize winner Richard Thaler, and co-author Cass Sunstein define nudge as "any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives."
Health Affairsreports that BCBS-MA is one of the first health plans to apply this approach, establishing a Nudge Unit that, per the plan's recent press release, "uses behavioral insights to present information in new ways that can lead to improved decision making and better health outcomes."
Rebecca Oran, director of the Nudge Unit and Behavioral Insights at BCBS-MA, states: "Behavioral science techniques, such as framing or modifying the context in which choices are presented (choice architecture) to highlight the most critical information or make it easier to identify the possible options, can be particularly useful for helping consumers make decisions."
Hired to expand the plan's behavioral insight capabilities by working with internal teams and academic institutions, Oran adds: "To date, our Nudge Unit has had some initial wins that we aim to refine and scale."
Those wins include:
A revised member letter that increased at-home colorectal cancer screening via test kits by 3%, with 500 more kits returned.
A revised provider letter that increased PCP statin prescriptions by nearly 14% for patients with diabetes.
An update to the MyBlue app led more than 300,000 members to report the race and ethnicity data that CMS will increasingly require for health equity initiatives.
These are among the 53 interventions that BCBS-MA reports the Nudge Unit has implemented.
It is a balancing act. Oran notes that "like many health plans, BCBS-MA has long used industry standard tools (e.g., prior authorization, education, economic incentives) to influence member and provider decision making."
She adds: "Behavioral insights … can complement or even substitute for some of these traditional approaches without restricting freedom of choice or creating member or provider abrasion."
Meeting the needs of a unique customer
The J.D. Power results present "a complex set of challenges and opportunities for health plans, which have been struggling to win member trust and loyalty."
Trust and loyalty are difficult to earn in our most intimate, daily relationships. Payer challenges are even greater, amplified by the fact that the healthcare and health plan customer are unlike any other.
"Healthcare decisions can be complicated," says BCBS-MA's Oran. "Many patients can make suboptimal decisions (i.e., decisions that don't align with their values and preferences) when they receive an overwhelming amount of information—especially when less-relevant information makes it hard to find the most critical information about a decision."
Christopher Lis, PhD, J.D. Power's managing director of global healthcare intelligence, notes the importance of trust. "The good news is, there has been a lift in satisfaction related to cost, communication, billing and payment so some areas moving in right direction."
Questions raised
The J.D. Power results suggest additional health plan challenges:
Do customers know what kind of experience they want to have? Members want their questions answered quickly. But if fast answers lack clarity and/or accuracy and require additional customer service calls, what is the value of speed?
How can front-line staff be supported? CSR salaries are among the lowest on health plan (and any industry) teams. What can payers do to better compensate them for providing critical, first-line information?
Do customers assess digital innovation fairly? Humans use texting, websites, and apps every day. What then would customers prefer?
To this last question, Lis points out the importance of what different customers value: "Plans are all trying to be mindful of generational differences in customer communication. Maybe several decades ago, you could have more of a one-size-fits-all approach, but not now given rapid advances in technology and the number of new digital entrants."
Regarding the overall uniqueness of the healthcare consumer compared to other industries, Lis says: "Compared to other sectors of the economy, healthcare still has Information Age immaturity. There isn't full transparency on cost. There is growing but still not full transparency on quality and certainly not on outcomes and the ability to get good information."
He adds: "Despite this asymmetry of information, there has been significant improvement by plans and providers."
EBITDA and Medicaid growth, commercial loses, higher medical loss ratios (MLR), and consolidation and subsidy doubts marked the quarter.
Moody's Investor Service has reported first quarter (Q1) 2022 earnings for the seven publicly traded health insurers that are included in its ratings. The result was on overall stable outlook for 2022 based in part on lower projected COVID-19 costs, better insurer credit strength, and continued Medicare Advantage (MA) growth—despite inflationary threats and the war in Ukraine.
The status of these events, as well as the public health emergency, will determine much across commercial, Medicaid, and MA markets as the year progresses.
Growth: 3.7% average EBITDA
Moody's notes that while "enrollment growth was partly offset by increased medical costs, reflecting Omicron and increasing non-COVID utilization," EBITDA growth was actually higher (10.3%) when investment gains and market-based gains/losses are excluded.
Among the seven publicly traded plans that Moody's rates, EBIDTA ranged from losses by Aetna and Cigna (down 2.7% and 2%, respectively) to 8.6%-9.8% growth from most of the remaining insurers—Anthem, Centene, Humana, and Molina. UnitedHealthcare Group's EBITDA growth was at 3%.
Projections: Continued 2022 growth in the low double-digits, with the observation that "the growing diversification of the industry with the increasing investment in unregulated health services has boosted companies' credit strength, despite incrementally higher leverage."
Growth: Medicaid and Medicare Advantage enrollment up
On historical trend, economic downturns continue to benefit Medicaid enrollment. Membership was up 23% year-over-year (YOY). Also on trend, MA continues its enrollment growth with a YOY increase of 13.2%. Organic age-in factors were aided by increasingly intense competitive practices.
Projections: For Medicaid, 4 million disenrollments after redeterminations—approximately 10% of the population—would make the largest Medicaid plans, Centene, and Molina the most vulnerable. For MA, Moody's notes: "As competition heats up, our rated companies will have to be more focused on the trade-off between margin and growth."
Loss: Medicaid's gains are commercial's losses
The pandemic has helped redistribute enrollment to Medicaid from commercial rolls, which were down 3.4% Q1 2022 and 1% YOY.
Projections: Expect declines in Medicaid enrollment but the fate of extended marketplace subsidies will determine growth shifts to commercial markets.
Loss: MLR increase averaged 84.8%
Pandemic costs, including hospitalization spikes due to Omicron, continue to bear the blame, although these are trending down.
Projections: Moderate COVID-19 costs should be countered by utilization from deferred care. Related to the latter, however, Moody's notes that cost uptick fears "have yet to materialize in a significant way, although this remains a risk."
Uncertainty: Subsidy expirations would turn gains into losses
Moody's notes that marketplace enrollment reached a record 14.5 million, up 2.5 million from 2021.
Projections: "Without new legislation to extend these subsidies, we expect much of the enrollment gains to reverse."
Uncertainty: More M&A scrutiny
The blocking of UnitedHealthcare's acquisition of Change Healthcare could be the first of many Department of Justice actions that limit M&A in 2022.
Projections: Moody's notes consolidations pros and cons, its capacity to grow capabilities and reduce costs, but its negative impact on leverage.
Congress, purchasers, and industry analysts weighed in on the role pharmacy benefit managers play in prescription drug costs.
In the final days of May, the pharmacy benefit manager (PBM) market was in the wrong kind of spotlight. A new federal bill and calls for Federal Trade Commission (FTC) action revealed the story that's been hiding in plain sight: that an increasingly small number of PBMs control the market and are themselves controlled by large insurers.
The following quotes relate to new Congressional action taken, responses to that action, and one pharmaceutical industry analyst who notes how alternative strategies often remain hamstrung.
"It is critical for Congress to direct the Federal Trade Commission to go after these arbitrary, unfair and deceptive practices while also establishing more transparency and accountability." — Sen. Chuck Grassley (R-Iowa)
"PBMs are the middlemen in the prescription drug supply chain and it's time for Congress to give the FTC the ability to shine a brighter light" — Sen. Maria Cantwell (D-Wash.)
Employers are among the groups impacted by PBM practices. On the same day the bipartisan Grassley-Cantwell bill was announced, EmployersRx—or Employers' Prescription for Affordable Drugs—a coalition of the largest employers in the U.S. sent a letter to the FTC urging action.
"Today, many PBM contracts with employer purchasers prohibit the disclosure of data regarding gross and net prices, rebates, and other financial information." — EmployersRx
The EmployersRx letter — penned by leading member organizations such as the Purchaser Business Group on Health (PBGH) — adds that "PBM contracts also contain unnecessarily complex definitions of commonly used terms, including 'generic' and 'specialty' drugs, that are often different from how those terms are used in regulation."
In an exclusive quote to HealthLeaders, PBGH's Executive Director for Health Policy Bill Kramer added his group's insight on how vertical PBM market integration has led to "inside dealing."
"These companies also own their own drug wholesalers, specialty pharmacies, mail-order pharmacies, group purchasing organizations, co-pay accumulators, and—in some cases—physician practices … The FTC has a responsibility to follow the money from initial sale of drugs from drug makers to wholesalers all the way to the final sale of drugs to consumers." — Kramer
Other stakeholders request that multiple avenues beyond the FTC be taken to strengthen PBM oversight.
"There are plenty of PBM actions for policymakers and regulators to address in order to ease the havoc they have wreaked on patients and small business independent pharmacies." — B. Douglas Hoey, CEO, National Community Pharmacists Association
Hoey adds that controlling PBMs allows insurers to "set their competitors' prices, dictate their competitors' reimbursements, use competitors' data to steer patients to PBM-affiliated retail, specialty and mail-order pharmacies, and limit where and what consumers can buy."
"Large employers, health plans, and government payers have shown limited appetite for change and continue to rely on the largest companies for PBM services." — Adam J. Fein, CEO, Drug Channels Institute.
While noting that "smaller employers have grown more willing to embrace small players by carving out PBM services from their health plan," Fein concedes the abiding challenge that smaller PBMs are often still dependent on the larger managers to perform the full cycle of business operations.
Participants, supporters, and opponents weigh in on the role of Medicare Advantage subsidiaries as program design evolves.
Direct contracting (DC) is an interesting name for a CMS model that permits private health plan subsidiaries to be part of Medicare fee-for-service (FFS) care reimbursement.
DC normally refers to the disintermediating of payers. Common examples include employers who contract with centers of excellence, ACOs, health systems, and integrated delivery networks—leaving health plans or other entities to act as administrative service organizations.
This DC trend is growing in the private sector.
A January 2022 HealthLeaders story noted that 73% of employers intend to adopt these strategies in the next three years. An American Journal of Accountable Care analysis added that the rising importance of social determinants of health (SDOH) linked with alternative data is driving purchasers toward "high-performance solutions" that are more innovative and disruptive.
The trend is also growing in the public sector via CMS.
The agency, the largest national healthcare purchaser, is to some degree disintermediating itself: allowing Medicare Advantage (MA) affiliates to manage Medicare FFS lives through the Global and Professional Direct Contracting (GPDC) model. GPDC will be retooled and relaunched in January 2023 as ACO REACH but with at least some of its current players.
Now that the April ACO REACH program deadline has passed, HealthLeaders looks at a slew of participants—including tech-driven, health-plan affiliated direct contracting entities (DCEs)—that want to continue their GPDC involvement, and the industry voices for and against the direct contracting design that ACO REACH will continue.
Health-plan subsidiaries proliferate: Two perspectives
Health Affairsreports that 28 of the first 52 GPDC participants announced in January 2021 were "investor-, not provider-, controlled [DCEs], most with roots in MA. Six of these, owned by four different MA insurers, are approved to operate in 19 states, with potential access to over 20 million traditional Medicare beneficiaries, over 60 percent of the national total."
Some of these entities continued with the deferred January GPDC 2022 cohort including Clover Health Partners, a subsidiary of Medicare Advantage (MA) plan and physician support services company Clover Health, and ActiveHealth Management, a subsidiary first of Aetna and now its parent company, CVS Health.
Both Clover and Active intend to apply for ACO REACH, which has evolved to prioritize health equity, support underserved patients and providers, and strengthen provider governance.
In a recent HealthLeaders interview, Clover Health president Andrew Toy emphasized his commitment to serving both MA and Medicare FFS populations: "Serving all people is the right thing to do morally," Toy says.
The company's Clover Assistant, a "digital on-ramp for value-based care" as highlighted in a 2021 HealthLeaders interview with Toy, gives PCPs the tools for better, more personalized, data-driven care. Toy adds that Clover Assistant's scalability is one component of its DCE expansion into GPDC and now ACO REACH.
"We applaud and welcome CMMI's evolution of ACO REACH to focus on advancing health equity for America's most vulnerable by making value-based care accessible to more physicians."
Mohamed Diab—former president and CEO of ActiveHealth Management and now an ACO CEO for CVS Health—also believes that CMS and CMMI are taking the best path toward. Diab further supports that these approaches remain provider friendly and are designed to physician achieve VBC success, aided by technology.
"Physicians don't have these resources," notes Diab.
"I've been in healthcare more than 25 years. I'm a physician by training, and do not believe that FFS works for the beneficiary or the provider," he adds, noting that the most rewarding part of his work is helping both.
"Yes, this work involves population health and technology. But we're talking about someone's mother or grandfather," says Diab. "The most enjoyable part of my work is reviewing patient cases and seeing that we are making a difference in their lives. It makes waking up on Monday morning an enjoyable experience."
DCE proponent positions
The mission drive of Clover and Active are apparent, as are their tech capabilities and feelings about FFS: "Nobody has benefitted from a transactional, fragmented system," says Diab.
Francois de Brantes agrees. He is also a strong DCE proponent and is SVP of Signify Heath, which "activat[es] the home as a key part of the care continuum" through a healthcare platform that supports provider VBC. Like Clover, Signify's business applies to both Medicare managed care and FFS beneficiaries. De Brantes believes that providers want these models just as much as other stakeholders.
He notes that MA-affiliated DCEs have to operate differently under GPDC and ACO REACH, moving toward the VBC and population health models—back by tech and health equity—that he believes the new CMS models exemplify.
To help make this point, de Brantes cites a January 2022 Health Affairs article co-authored by MedPAC Commission chair Dr. Michael E. Chernew who argues that ACOs—including GPDC—promote efficiency and equity better than FFS without compromising quality.
Chernew and his co-author, Dr. J. Michael McWilliams, refute circulating criticisms by arguing that ACOs and GPDC:
Do not limit patient choice, noting that beneficiaries can still see any provider and without adverse effects
Remain provider-centric
Continue to promote VBC objectives
Maintain Medicare guardrails against bad actors and code gaming, the latter more strongly than MA or Medicare Shared Savings Program (MSSP) models
Do not represent an MA colonization of traditional Medicare
DCE opposition
Others disagree with these positions—namely Dr. Donald Berwick, President Emeritus and Senior Fellow of the Institute for Healthcare Improvement and a former acting head of CMS under the Obama Administration.
In part two of a September 2021 series, also in Health Affairs, Berwick and co-author Dr. Richard Gilfillan argue that direct contracting:
Does limit patient choice in a larger sense "as millions of traditional Medicare beneficiaries, who made a specific choice not to enroll in MA, will find themselves in an MA-like managed care environment"
Is not provider-centric, if more providers are pressured through perverse incentives to join ACOs with MA-like controls
Undermine VBC objectives by involving the MA firms that are "so expert at driving up costs"
DCEs will "bring their MA-based medical, claims payment and possibly other managed care administrative practices" to the program
Represents a privatization of traditional Medicare in just about every way
More success through more complexity?
In a statement that might strain credulity, Chernew and McWilliams write that while an intermediary between CMS and providers "may seem analogous to MA … it is better understood as allowing cash flows conducive to transmitting incentives to partnering providers." The authors cite this as further evidence that direct contracting reaffirms patient choice.
Berwick and Gilfillan call this relationship anything but direct or empowering to physicians. It is also difficult to understand how adding a layer of payment complexity will make direct contracting VBC models more successful than 40-plus that have failed to produce "statistically significant savings to Medicare and to taxpayers.
Something better, but what?
In part one of the Health Affairs series, Berwick and Gilfillan reserve their strongest DCE criticisms for the model's resemblance to Medicare Advantage—calling MA a "perverse business model" that is responsible for chronic overpayment, "risk-score gaming," and for producing a "money machine" controlled by small number of individual plans.
And while "the tyranny of fee-for-service," as de Brantes terms it, "needs dislocation," it remains to be seen whether DCE and ACO REACH will be the best path to get there.
Just how much private money is invested in the social determinants of health (SDOH) and will it help or hurt outcomes?
To paraphrase the holiday favorite It's a Wonderful Life: Every time a healthcare bell rings, a cottage industry gets its wings.
The bell that's ringing, loudly, is health equity. The companies that have emerged improve outcomes through data, platforms, and analytics form the cottage industry. Many of these companies are funded by venture capital, traditional and corporate. And because they are, it remains to be seen which of the equities will be prioritized—private or health—and if new disparities will be created as a byproduct.
Growth of SDOH companies: 1985 to present
"The combination of increased SDOH funding with inefficient mechanisms to meet patients' SDOH needs has led to the emergence of the for-profit SDOH industry." This from an October 2021 Population Health Management analysis of SDOH companies from 1985 to July 2021. During that time, 58 companies have received $2.4 billion in private equity (PE) funding and have been valued at more than $18.5 billion. Highlights include:
Most SDOH companies (nearly 66%) were founded after 2000 but before 2010.
Between 2015 and July 2021, 19 companies have been founded.
Between 2017 and July 2021, nearly half of SDOH companies (46.6%) were focused on the home care/general caregiving sector.
Additional subsectors are community care coordination (20.7%), food insecurity and nutrition (10.3%), nonemergency medical transportation (10.3%), and value-based provider (8.6%).
More than 73% of SDOH companies during this time period have secured more than or equal to $100 million in funding. Another 88% have been valued at $1 billion or more.
Learning from value-based care
Healthcare has been here before.
Inc. once called the Affordable Care Act "the gazillion-dollar startup machine" whose emphasis on value-based care (VBC) had already spawned $10 billion in funding for 500 new companies by 2016. As Bob Kocher—a physician, venture capitalist, and leading healthcare policy advisor during the Obama administration—said at the time: "Anytime you take a sector and apply a whole bunch of regulatory changes and economic incentives to it, it creates enormous opportunities for new entrants to come and take advantage."
It still does and SDOH is the new vehicle. But not all SDOH investments, or motives, are created equal. To its analysis, Population Health Management adds:
"It is possible these companies structure their focus to the SDOH interventions most supported by new Medicare and Medicaid regulations. The most saturated subsector, home care and general caregiving, is responsible for nearly half (27, or 46.6%) of companies in the industry. Despite research heavily supporting outcomes from investments and interventions in food insecurity and care coordination, these sectors represent smaller components of the industry."
The study's authors specifically question "the downstream effects they [SDOH startups] will have on community-based organizations also working to improve SDOH."
Investment on a downturn
The PE bull market has now turned bear.
Citing CB Insights, HealthLeaders recently reported that Q1 2022 PE investment decreased quarter over quarter in two SDOH-associated areas: a 60% decline in mental health tech funding and a 32% decline in telehealth funding.
In a May 2021 letter that can only be described as scary, early-stage accelerator and investment leader Y Combinator advised companies to "plan for the worst." The letter's post-script adds: "If for whatever reason you don't think this message applies to your company or you are going to need someone to tell you this in person to believe it… please reassess your beliefs on a monthly basis to make sure you don't drive your company off a cliff."
Balancing need, utilization, and investment
While investments were down, other PE barometers were up. Funding for the Q1 2022 telehealth market was still $3.2 billion-funded and startup valuations climbed 350%.
While the positive role of PE and its long-term SDOH investment may be in question, the downturn clearly comes at a bad time as the need for more telehealth and mental well-being services remains high.
In its 2022 Environmental Scan, the American Hospital Association (AHA) reports that telehealth utilization is still 38 times higher than pre-pandemic levels. The AHA further reports that 40% of consumers and 57% of physicians want to continue using virtual care. FAIR Health adds that mental health continues to generate the highest percentage of telehealth claims at 64.2%.
Stakeholders have decisions to make
Payers and other traditional healthcare stakeholders—including those with PE investment arms—must navigate these contradictions. Two examples are integrated provider-payer giant Kaiser Permanente and not-for-profit, mid-Atlantic leaders CareFirst BlueCross Blue Shield.
Per Population Health Management, Kaiser has "a large databases of SDOH tools tailored to specific domains, as well as an evaluation of each." This is rare in an industry still searching for SDOH standards.
CareFirst has announced that it is expanding its investment in SDOH data across all business functions for an "enterprise-wide social risk intelligence strategy" with its existing partners, Socially Determined. What began as a pilot focused on the root causes of diabetes has expanded to employer, philanthropic, and care management decisions and investments.
Both Kaiser and CareFirst have distinct venture arms—Kaiser Permanente Ventures and Healthworx—although the above-referenced developments are not specifically tied to those companies.
The broader SDOH business case
An August 2021 HealthLeaders feature posed the question: When private equity firms invest in healthcare, who benefits? The article noted the importance of "build[ing] economic models that do not simply lead to near-term profits and cause damage to the healthcare ecosystem."
While the quote referred to PE physician practice investment, it applies equally to past decisions on VBC and evolving ones for SDOH. Improving health equity will require multiple business and ROI cases and companies that are in it for the long haul. That ROI ranges from lowering total cost of care and adverse utilization/readmissions, to improving care plan adherence for a specific condition/population, to increasing the number of healthy days that individual consumers experience.
Massive valuations do not equate to long-term success. And when the objective left in the lurch is health equity, it can be a lose-lose proposition.
Clinical trial innovation must be patient-centered, inclusive, and tech-enabled.
The Reuters Pharma Clinical 2022 virtual conference, held May 17-19, featured more than 20 presentations but one predominant theme: that "accelerated technology adoption in clinical trials … has neglected patient needs." The conference included 40-plus speakers, largely from the life sciences industry.
The event spanned traditional topics (trial design, engagement, and participation) while highlighting the need for greater inclusivity so that the following tech advancements do not come at the expense of patients:
Standardizing trial data and digital health developments
Expanding clinical trial virtual options post pandemic
Using AI and machine learning to enroll more diverse participants faster
These topics were presented against the backdrop of the conference’s stated mission: "We must establish new industry-wide benchmarks now, leverage recent digital innovations, and ensure permanent cultural change toward patient-centric trials. If we do not act immediately, we risk losing this opportunity to rebuild patient trust."
Additional conference presentations emphasized the importance of patient-reported outcomes, pipeline strategies that please both regulators and investors, and partnerships with advocacy groups to aid participant engagement.
Data standardization
The Reuters conference emphasized that data standardization in clinical trials is necessary to achieve a common healthcare industry objective: scale and efficiency. One panel (“Faster trials need unified data standards across healthcare”) highlighted the need for:
Specific performance indicators for data collection
Real-world data (RWD) to identify trial participants
Data standards that also speed automation and quality outcomes "across tools, sites, and … measures"
Data standardization has also become central to health equity, specifically the collection and use of race, ethnicity, and language (REAL) data. Beyond the world of clinical trials, multiple CMS regulations and initiatives will require this data—a focus stakeholders generally support while raising concerns about the lack of existing guardrails.
Breakthrough technologies, decentralization, and real-world data
The Reuters panelists also addressed trials involving digital therapeutics (DTx) and the growing role of decentralized clinical trials (DCT) during and post-COVID-19.
DCTs use telemedicine to conduct trials remotely and virtually. Meanwhile, DTx trials must increasingly use RWD and real-world evidence as patients, providers, and payers look beyond the pill for treatment. This is critical as drug costs rise—particularly for emerging one-time, curative, and gene/cell therapies.