posted by AHIP
on March 27, 2019
On The Healthcare Policy Podcast, AHIP’s CEO Matt Eyles weighed in on the latest industry developments and news. He discussed ACA litigation, Medicare Advantage, competition and consolidation, paying for value, social determinants of health, and Medicare for all.
Matt Eyles: There are many efforts underway right now—particularly focused in the private sector—on paying for value and really evolving our health care system. You referenced, David, some of the efforts that are happening by CMS, and that’s really on an old fee-for-service chassis.
Health plans are working collaboratively with providers. Medicare Advantage plans are a great example of ways plans are working with providers to share more information, to share risk, to give better alignment around incentives and to really pay based on value. We see Medicare Advantage plans actually leading, and are quite far ahead, of the fee-for-service program.
Similarly, in the commercial market, there are many efforts between plans and providers working on behalf of providers to go into primary care, ACO, population health, and other models to align incentives.
We haven’t seen other sectors really catch up. For example, the pharmaceutical industry is really just in its infancy in terms of thinking about value and value-based contracts. Plans and providers I’d say are at the cutting edge there.
We’re also looking at things like, how do you align quality metrics? And making sure that we’re really measuring what’s important with respect to quality. Those are efforts that are happening collaboratively. AHIP’s working with CMS and the National Quality Forum on—
Eyles: Right, because we want to figure out what works and what’s really going to move the needle. I think when we look back 5 years from now, I think we’re going to realize that we’ve made a lot of progress compared to where we started from.
Eyles: I think you have to look at what you’re getting in Medicare Advantage relative to what you get in fee-for-service. I would contend that the value proposition of Medicare Advantage is much stronger than what you see in fee-for-service.
You mentioned, David, that total payments are about equivalent, about 100%. But when you look at what you get in Medicare Advantage—you get a maximum out-of-pocket limit, you don’t need supplemental benefits that you would need if you were just in the fee-for-service program. There’s good evidence out there to show that the additional average value-added services that a Medicare Advantage customer gets versus traditional fee-for-service Medicare is well over $1,000. And we’ve seen innovative supplemental benefits under Medicare Advantage plans. We’ve also seen data around lower in-patient cost and lower out-patient cost in Medicare Advantage.
I think it’s important to compare apples to apples, and there’s really not a lot of comparison between what you get under the standard fee-for-service program versus Medicare Advantage.
Eyles: It’s a great question David. I think the insurance sector is among the most rapidly evolving areas. We’ve seen some of the large-scale acquisitions that are vertically integrating across pharmacies, providers, insurance and other parts of the health care system. I think that’s a trend that we expect to continue.
And it doesn’t have to be large scale. We see health systems now that offer health insurance plans because they recognize that there can be a real beneficial and symbiotic relationship between offering a health plan and operating a health system.
I think we’ll see this evolve more quickly as we move to push risk more toward provider, and leverage the capabilities of big data and technology, and look at how we can get closer to the patient over time.