If accountable care organizations (ACOs) are to reach their full potential, the traditional fee-for-service approach that dominates today must be revised. As the ACOs take form, payers look to establish shared-savings programs and other payment models in an effort to create financial incentives for high-quality care.

A new report from the Commonwealth Fund, titled “Promising Payment Reform: Risk-Sharing With Accountable Care Organizations,” summarizes the research conducted on the ACO shared-risk payment models, with a specific focus on private insurers. For the review, the models had to include these criteria: a provider risk-sharing component, a broad array or full continuum of patient care/services, and meaningful quality incentives. Four approaches to shared-risk payment are: bonus payment at risk, market share risk, risk of baseline revenue loss, and financial risk for all or part of the patient population.

Key findings:

  • Payer-provider shared-risk models are in the early stage of development. Other than the traditional capitated HMO, there are few operational shared-risk models.
  • Definitions of shared risk vary, and shared-risk programs use a variety of program designs.
  • Providers lack the infrastructure needed to take on and manage risk, but some payers are providing support.
  • Shared-risk models have evolved from shared-savings programs.

Eight shared-risk models

Of models that are operational, three of the eight began operation early this year. The longest-standing shared-risk program is Medica Health Plan, launched in 2008, followed by Blue Cross Blue Shield of Massachusetts, begun in 2009.

Payer Existing shared-risk model Developing a shared-risk payment model
Blue Cross Blue Shield of North Carolina
Blue Cross Blue Shield of Illinois
Blue Cross Blue Shield of Massachusetts
Horizon Blue Cross Blue Shield of New Jersey
State Employees Health Commission of Maine

Source: Delbanco SF, Anderson KM, Major CE, Kiser MB, et al. Promising payment reform: Risk-sharing with accountable care organizations. The Commonwealth Fund, July 2011

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.