Report suggests VBC is effective in aiding quality, cutting cost

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A recent study assessing care in California contends that evidence shows risk-sharing value-based care is beating fee-for-service in terms of care quality and cost.

The report, the third annual effort to assess care by the Integrated Healthcare Association, provides evidence that financial risk borne by providers is having a positive impact on crucial value metrics such as quality and cost.

The study by the IHA, whose membership includes prominent payers such as Aetna, Kaiser Permanente, UnitedHealthcare and Anthem Blue Cross, provides some of the best evidence to date on the positive results of risk-sharing arrangements on care, and results of the research could help impact other such efforts nationwide.

The IHA’s third edition of the California Regional Health Care Cost and Quality Atlas is a comparative healthcare performance report that studied nearly 200 capitated physician groups and 20 accountable care organizations in 2017. It found that “risk-sharing appears to offer better value than fee-for-service, considering both clinical quality and clinically risk-adjusted total cost of care,” says Jeffrey Rideout, MD, the organization’s CEO.

"There has been much discussion regarding value-based care and shifting the payment model from volume to value,” Rideout says. “However, until the Atlas 3 release, limited data existed on the prevalence of financial risk sharing among provider organizations and the association between risk sharing and value.” One of the benefits of the study is California’s long-term experience with capitated care, something IHA has been following for 20 years, Rideout says.

Another finding of the study is that the greater the risk that providers take on, the higher the savings and the higher the quality of care, Rideout says.

The Atlas, released earlier this month, analyzes data from more than two dozen standardized clinical quality measures, including preventive screenings, care for chronic conditions, member cost sharing and hospital readmissions. The Atlas also looked at geographic impact and insurance product type variation in a way that enables apples-to-apples comparisons, IHA said.

The study found that patients in capitated models were 11 percent more likely to get preventive screenings. In addition, risk sharing was associated with as much as 3.5 percent lower total cost of care, a trend that also held true for pharmacy costs and patient cost sharing.

Pharmacy costs were 13 percent lower for providers sharing risk, the study also found. On average, patients in risk-sharing models paid $404 less in out-of-pocket costs per year, compared with those in fee-for-service models, and this difference was even higher for patients with chronic conditions.

Doug McKeever, chief deputy executive director of Covered California, says he uses the results of the Atlas report to align California’s official health insurance marketplace and target areas for improvement. "The insights help us identify the best value for our consumers, ensuring that we are providing Californians with affordable and quality health care options they deserve," he says.

Bill Caswell, senior vice president at Kaiser Permanente, says that, for many years, the industry has explored new models for funding care to both improve quality and decrease costs. “IHA's Atlas gives us the type of information we need to make sound decisions, and their recent findings support the notion that creating a system of care through models like capitation can drive high-quality, affordable healthcare services," he says.

The study concluded that 60,000 more women would have been screened for breast cancer if every patient in California had been in a risk-sharing model of care. In addition, a risk-sharing model may have prevented some 1,500 patients from receiving a dangerous combination of drugs opioids and benzodiazepines.

The report is available online here.

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