Humana hits savings, care goals in ongoing shift to value-based care

In the shift toward value-based care, at least one health insurer is making good on its goals to convert its contracts, according to the fifth annual value-based care report by Humana.

Humana has made the most progress toward adopting value-based care contracts among its Medicare Advantage (MA) membership, which reached 3.3 million in 2017. An overwhelming majority of these members (91 percent) have at least one condition, and 83 percent have at least two conditions, such as hypertension, diabetes or congestive heart failure.

Of its 2.9 million individual MA members that year, 1.9 million were affiliated with 52,000 primary care physicians in more than 1,000 value-based agreements. That figure hit Humana’s goal of having 66 percent of its individual MA members in value-based agreements with PCPs, according to the report.

“We believe value-based care is essential to achieving improved population health,” Stanley Crittenden, MD, lead medical director of the national Medicare review team at Humana, wrote in the report. “Thus, we continue to work closely with physician practices to support them in the transition to value-based care—with actionable data, care coordination, clinical programs, predictive models and innovative solutions.”

Care continuum

Louisville, Kentucky-based Humana recently completed two multibillion-dollar deals that gave the health insurer a 40 percent stake in both the home health care branch of Kindred Healthcare Services, the nation’s largest home health care provider, and Curo Services, a hospice care chain.

The deals underscore Humana’s strategy of smooth transitions throughout an episode of care and could help boost success in bundled payments, where providers are responsible for patients through an entire episode of care and are reimbursed for all services together in a “bundle.”

In 2017, Humana was involved in 28 bundles, according to the value-based care report. In 2018, that figure jumped to 62. Looking ahead, Humana expects another big jump in the number of bundles it participates in, Humana CMO Roy Beveridge, MD, told HealthExec. The company currently offers two bundled payment programs: total joint replacement and maternity.

PCP transition

PCPs are transitioning to value-based care, engaging in various payment models in addition to bundled payments. Humana also has two primary models with its PCPs: straight fee-for-service/bonus and value-based care.

Within the FFS payment model:

  • 8 percent of membership is FFS.
  • 25 percent of membership is compensated on FFS plus additional quality measures.

Within value-based care:

  • 35 percent is FFS plus bonus plus the potential for limited shared savings in Medicare.
  • 6 percent is limited value, with FFS plus bonus plus a care coordination payment and a higher portion of shared savings in Medicare.
  • 6 percent is full value, with FFS and 100 percent responsibility for Medicare expenses.
  • 20 percent is global value, with full responsibility for Medicare payments through monthly capitation payments.

In general, physicians in Humana MA value-based agreements had better health outcomes in quality measures, according to the report, with higher medication adherence, more care for chronic conditions such as diabetes, and a higher rate of preventive care.

This led to 7 percent fewer ER visits and 5 percent fewer hospital admissions––two key measurements of cost and quality in the value-based care era.

PCPs in value-based contracts with Humana in 2017 received a higher percentage of funds overall. PCPs in non-value-based agreements received 6.9 percent of every dollar spent, while value-based PCPs with Humana received 16.8 percent.

Physicians in value-based care agreements with Humana also saw more bonuses, with 70 percent of practices earning shared savings in 2017––up from 60 percent in 2016.

Compared to original Medicare FFS, medical costs for patients with physicians in Humana’s value-based agreements were 15.6 percent lower. Compared to Humana MA FFS, these costs were 1 percent lower.