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Primary care physicians (PCPs) practicing in value-based care (VBC) practice models spend more time with patients, reduce unnecessary hospitalizations and demonstrate more frequent preventive care, according to Humana’s 11th annual Value-Based Care Report released Wednesday.

“Coordinated care that delivers the right care at the right time must become the standard,” Kate Goodrich, MD, MHS, chief medical officer at Humana, said in a news release. “Our report paints a clear picture: value-based practices deliver better patient experiences and health outcomes. Patients spend more time with their primary care clinician, which means more preventive care and better management of chronic diseases, like diabetes and high blood pressure. Seniors in value-based care models receive the care they deserve with a clinician who holistically understands their care needs.”

Results

Humana’s report highlights that Medicare Advantage (MA) patients in VBC arrangements experienced 32.1% fewer inpatient hospital admissions and 11.6% fewer emergency department (ED) visits compared to non-VBC patients. Preventive care also improved, with patients more likely to receive screenings for colorectal cancer, diabetes eye exams and mammograms. As a result, these patients were also more likely to meet blood sugar control measures compared to members not in VBC arrangements.

The report also demonstrates increased primary care engagement and reduced reliance on emergency and inpatient services. In 2023, VBC members had 10% more primary care visits than non-VBC patients, allowing for better preventive care and management of chronic diseases.

VBC MA patients also reported 90% satisfaction with their health care provider, according to Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey data.

Senior-focused primary care organizations (PCOs) combine a VBC model with a care delivery approach tailored to seniors. Compared to Original Medicare, senior-focused primary care patients had 17% more primary care visits, 6% fewer hospitalizations and 11% fewer trips to the ED. Notably, Black seniors visited their senior-focused PCP 39% more, and low-income seniors visited at a 21% higher rate.

Financials

Beyond clinical improvements, patients, clinicians and payers all benefit from the financial stability of VBC. In 2023, Humana MA VBC arrangements saved an estimated $11 billion — 25.8% in medical costs compared to Original Medicare. These savings were reinvested into expanded benefits, including lower premiums, at-home care, prescription delivery and food assistance for members.

Physicians in VBC models also saw financial benefits. According to the report, VBC physicians earned up to 241% above Medicare’s fee-for-service schedule, allowing for investment in better care delivery and operational sustainability.

Burnout

With physician burnout rates remaining high, Humana’s report suggests that VBC can help mitigate stress by fostering deeper patient relationships and shifting the focus from volume-driven care to meaningful health outcomes.

VBC providers report higher professional satisfaction due to smaller patient panels, team-based coordination and integrated technology that streamlines patient care.

“VBC is the best model for clinician satisfaction,” Snehal Parikh, MD, of Palmetto Pediatrics, said in the report. “This absolutely makes me happier as a physician. It’s possible to love what you do and to get great results.”

George Renaudin, insurance president of Humana, called for the wider adoption of VBC based on its track record. “Over a decade of our experience and research shows that providers navigating the shift to value achieve greater success with proactive support, an operational roadmap and actionable data. The path forward is clear: the value-based model is the future — we have seen it in action, and it’s the key to sustainable, patient-centered care.”

[SINGAPORE] As private equity (PE) investors pour money into Asian healthcare, some observers are concerned that this sector could soon overheat.

Some recent deals this year include KKR’s US$400 million purchase of a 54 per cent stake in India’s Healthcare Global Enterprises in February. In Singapore, another American PE firm TPG took Catalist-listed nursing operator Econ Healthcare private in a deal worth nearly S$88 million. When the proposed transaction was announced in February, the offer price represented a 20 per cent premium to Econ’s last traded share price on Jan 14.

“We are not the only ones to see the opportunity of healthcare in Asia, and, as a consequence, valuations can be high,” Abrar Mir, co-founder and managing partner of healthcare-focused PE firm Quadria Capital, told The Business Times.

Other factors driving investors to the healthcare sector – perceived as defensive, and so able to withstand the ups and downs of economic cycles – is the ongoing macroeconomic uncertainty and volatility in global financial markets. This is particularly so in Asia, where investors have been diversifying away from China in the last few years, to avoid being caught in the cross hairs of the nation’s tensions with the United States.

As PE firms and their investors focus on acquiring companies independent of China, more deals have been transacted in Japan, South Korea and India, where the demand for healthcare and related services is strong and largely unaffected by tariffs.

“Japan has always been a stable healthcare market, and particularly because of (its) demographics and medical needs,” said David Braga Malta, thematic health principal at Pictet Alternative Advisors, to BT. “We saw some of the mid-sized Japanese pharma companies being very acquisitive in the recent months and years… And of course, we saw the boom in the IPO (initial public offering) markets in India last year.”

Asia’s appeal even drew European PE investors to buy South Korean assets for the first time in 2024, he added.

Last September, France’s Archimed spent US$742 million buying Jeisys Medical, a South Korean developer of aesthetic medicine devices.

Like shopping in Louis Vuitton

“One of the key things that I always say to my investors is that… investing in healthcare in Asia is like shopping in Louis Vuitton. So, as an investor, we have to navigate that, be careful not to overpay,” said Quadria Capital’s Mir.

According to a Bain & Co report, global PE deal value in the sector surged last year to an estimated US$115 billion – the second highest on record. Bain added that PE firms continue to invest in healthcare in the Asia-Pacific, where deal values have been steadily rising since 2016.

Industry participants named India as the country attracting the most number of healthcare PE investors. An ageing population, rising incidence of chronic disease and growing awareness of preventive care, combined with the opening up of its insurance market to foreign investment, are making India stand out. Bain estimated that the country made up 26 per cent of the 62 deals transacted in the Asia-Pacific last year.

PwC said its health industries practice in India hit a double-digit compound annual growth rate in the past few years as well. But Ling Tok Hong, deals and private equity leader at PwC, said that “this continued focus on the India market could make it more susceptible to overvaluation if investors are not cautious”.

South-east Asia’s healthcare sector is also attracting PE investors, leading to “unprecedented valuations” of Ebitda multiples in their 20s, noted Ling. He was referring to earnings before interest, taxes, depreciation and amortisation.

Room for growth; returns still strong

Despite the rising valuations in Asia’s healthcare sector, market participants point out that there is still room for growth, a key factor backing the higher valuations in the first place. The sector offers attractive long-term growth prospects as the supply of quality healthcare assets in the region is not growing quickly enough to meet demand.

In markets such as South-east Asia, “the number of large, institutionally ready platforms is still limited. This scarcity has helped sustain high entry multiples in recent years”, said Alex Boulton, partner and Asia-Pacific lead for healthcare and life sciences private equity at Bain.

He pointed out that South-east Asia’s healthcare sector relies heavily on private players. For instance, the private sector accounts for roughly half of all hospital beds in Indonesia and the Philippines.

“That structural dynamic creates an enduring role for private capital in expanding and upgrading healthcare infrastructure.”

Market participants emphasise that Asian healthcare is not in bubble territory.

Boulton pointed out that even with rising valuations, healthcare PE in Asia is still delivering strong returns. Bain’s analysis shows that from 2018 to 2023, the median multiple on invested capital (MOIC) for exited healthcare deals in the region was approximately 2.6 – meaning that a US$1 million investment generated a return of US$2.6 million. This compares with the global median MOIC of around two.

“That speaks to the sector’s ability to compound value through growth and operational improvement, even in a more expensive entry environment,” noted Boulton.

That said, while returns are likely to remain strong in the future, the median MOIC may not be sustained at these levels, he added.

Thus, market players said, investors will need to have a clear plan to create meaningful impact and value over the life of their investments.

WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Mike Braun (R-Ind.) introduced bipartisan legislation to codify rules directing hospitals and insurers to disclose cash prices and negotiated rates to patients before they receive medical care. The Health Care PRICE Transparency Act 2.0 stems from policies implemented via executive order in 2019, and builds on a bill and related effort Grassley pushed last Congress.

“Patients should be able to compare and shop for health care services. However, the pricing information they need when visiting the hospital or working with insurance companies isn’t always available. By strengthening transparency and accountability requirements, our bill would help lower costs for patients through more competition and added sunlight in the health care industry,” Grassley said.

“It’s wrong that the same procedure can be 20 times more expensive in one hospital than in another, and there’s no other industry where consumers are in the dark on the price of what they’re buying. Knowing what health care services cost will lower health care prices because Americans can shop around and get the best deal rather than relying on insurers to negotiate with providers which drives the price up for everything. The Health Care PRICE Transparency Act 2.0 will pull the curtain back and put the power back in the hands of the American people, introducing real market competition into the health care industry and bringing down prices,” Braun said.

Grassley and Braun are joined by Sens. Bernie Sanders (I-Vt.), John Hickenlooper (D-Colo.) and Tina Smith (D-Minn.).

Background:

When Americans go to the hospital, they often don’t know how much their services will cost. This forces patients to rely on their insurance to pay as much as possible and negotiate rates with providers, rather than allowing them to seek various financial options. In some cases, the opacity surrounding agreements between insurance and providers has resulted in egregious disparities and waste.

The two rules issued in 2019 sought to increase price transparency, empowering patients and driving competition among hospitals and insurers. Despite support from consumers, not all hospitals and insurers welcomed the regulatory change. Some hospital groups even sued in unsuccessful attempts to keep consumers in the dark about health care costs. Among other things, the Health Care PRICE Transparency Act 2.0 would put these sunshine regulations into statute and beef up accountability.

Key Provisions of the Health Care PRICE Transparency Act 2.0:

Require publication of machine-readable files of all negotiated rates and cash prices – not estimates – between plans and providers.

Require publication of the actual prices for 300 shoppable services by 2025.

Expand price transparency requirements to include clinical diagnostic labs, imaging centers and ambulatory surgical centers.

Enhance enforcement mechanisms by increasing the maximum annual penalties for noncompliance to $10 million, with ceilings and floors determined by the number of hospital beds in a facility.

Provide group health plans the right to access, audit and review claims encounter data.

Prevent pre-emption of state price transparency laws, except for ERISA group health plans.

Codify the Transparency in Coverage (TIC) rule.

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Value-based care faces hurdles: ©Momius – stock.adobe.com

Over the past two decades, value-based care has been championed as an alternative payment model that prioritizes quality over quantity. This approach was predicted to be transformative to the health care industry and was set to revolutionize healthcare quality and payments. The idea was so appealing that, in 2014, a substantial 72% of health care executives were confident that the industry would transition from volume- to value-based care. That same year, a survey of U.S. physicians projected that half of their compensation over the next decade would be tied to value-based models. The Centers for Medicare & Medicaid Services (CMS) reinforced this vision, setting an ambitious goal for all Medicare fee-for-service beneficiaries to be in a value-based care arrangement by 2030.

The concept of value-based care is straightforward, and the potential benefits are significant. Value-based care arrangements can—and do—improve health care outcomes and reduce costs for patients. Additionally, the value-based care model could generate upwards of $1 trillion in enterprise value across payers, providers, and investors.

Yet, as we approach the end of 2024, the widespread adoption of value-based care has not met those lofty expectations. According to a 2022 report from The Commonwealth Fund, only 46% of primary care physicians (PCPs) reported receiving any payments from value-based care arrangements. These figures underscore a critical issue: there are significant challenges in transitioning to and sustaining this payment model.

Creating a value-based care model requires a significant administrative overhaul and large capital investment. The metrics underpinning value-based care—such as readmission rates, appointment timeliness, preventable infection rates, accounts receivable turnover, and patient-reported outcomes—are numerous and are continually evolving. Simply put, traditional practice management strategies must be drastically altered to manage and excel in the new value-based care model, necessitating extensive investments in information technology and human resources.

With ongoing staffing shortages and existing administrative burdens, physicians lack the resources necessary to navigate the complex setup required for value-based care. To transform the promise of value-based care into reality, the health care industry must truly work together and accelerate the implementation and adoption of this impactful care model by considering the following solutions, and payers are playing a large and effective role in making this transition a reality.

Greater adoption from commercial payers

While Medicare Advantage has heavily invested in value-based care, the commercial sector has been slower to make this shift. For PCPs, the necessary implementation changes for value-based care are more manageable if a significant portion of their patient population is covered by these arrangements. This is why CMS is aiming for the majority of Medicaid beneficiaries and all Medicare fee-for-service beneficiaries to be in value-based care arrangements by 2030.

And as the CMS deadline of 2030 approaches, industry experts expect that momentum for value-based care programs will increase. To help, CMS opened the CMS Innovation Center, which has committed to engaging all health care stakeholders—payers, providers, and beneficiaries—to improve quality, achieve equitable outcomes, and reduce health care costs. Other various initiatives, such as information gathering from beneficiaries, transparency, and the formation of State Transformative Collaboratives and the Health Equity Advisory Team, have been launched to support the agency’s goals.

Understanding how important provider networks are to the payer ecosystem, collaborating on how to make their networks successfully adopt value-based care has become increasingly important.

Industry enhancements in payment integrity

Claims processing and payment integrity have become growing administrative burdens for PCPs. Providers have experienced a 15% increase in administrative tasks over the past few years, partially as a result of staffing shortages from the pandemic. Payers and other health care partners can alleviate the documentation review process for providers and ensure that services are accurately billed and compensated. This support enables physicians to focus more on patient care rather than administrative tasks.

PCP incentives built into payment arrangements

Value-based care is based on incentive payments for quality patient care. However, additional incentives may be necessary to encourage widespread adoption among PCPs. Concerns about a national physician shortage are growing; the American Medical Association estimates that over 83 million people live in areas without sufficient access to a PCP. Additionally, primary care may not be the top career choice for new medical graduates due to lower compensation compared to specialists. By integrating further incentives into PCP value-based care agreements, the industry can motivate more physicians to enter and remain in primary care, thereby advancing the adoption of value-based care.

In a previous role as an emergency physician at a community hospital, I observed that many PCPs struggled to manage the overhead costs required to run a small practice, let alone the added expenses of adhering to value-based care requirements. These financial challenges are driving physicians to leave private practice and seek employment with health systems or other entities. The health care industry could help address these issues by offering infrastructure support to small practices. For example, artificial intelligence-driven tools can assist physicians in compiling the metrics needed for value-based care. While some progress has been made in this area, a lot of work remains to be done.

The impact of value-based care can significantly benefit all health care stakeholders, and it will require effort from everyone to make value-based care a reality. As a former practicing physician, I understand that the aim of delivering quality patient outcomes can be hindered by the paperwork and documentation that pull doctors away from patient care, but payers are moving in the right direction to reduce those administrative burdens and ultimately let doctors be doctors.

Timothy Garrett, M.D., is the Chief Medical Officer at Zelis

Tammy Schaeffer: ©Plante Moran

As leaders of the care team, physicians rightfully take their role in driving patient outcomes very seriously. This is equally true when practices pursue value-based care. To succeed in these arrangements, physicians must continue to act as the “captain” of a patient’s care, however they also must leverage the skill sets of their full team to support early identification of conditions, care plan execution, and ongoing patient monitoring and treatment.

Leveraging the care team to their full potential can be a challenge. Many organizations place the entire responsibility for risk capture and patient management on physicians. Unfortunately, this not only overburdens even the most dedicated providers, it also results in missed diagnoses, insufficient documentation and risk capture, and suboptimal reimbursement.

Conversely, when every staff member works at the top of their license and shares responsibility for identifying, documenting, and managing patient conditions, it creates a collaborative, purpose-driven environment that enables reliable care management and promotes accurate risk capture and reimbursement. Practices that pursue this team-based approach also see greater staff satisfaction and retention because staff feel more connected to each other and fulfilled by their work.

Embracing a new model

It’s easy to say “work as a team” but to truly achieve the right level of collaboration, physician practices must rethink how they function. Approaching this in a methodical way can lead to lasting and sustainable success. Here are a few strategies to consider.

Conduct a role-based inventory.Before making changes, it is imperative to understand the work being done by each role. Taking the time to complete a thorough inventory will identify work that isn’t adding value and pinpoint who may have capacity to take on more responsibility. This review should span the entire care continuum, from appointment scheduling to patient checkout, and must include what happens in-between visits. During this review, practice leaders should think through what tasks could be handled differently for greater efficiency and effectiveness. For example, while a physician must diagnose a patient and develop the appropriate care plan, other qualified staff members can facilitate parts of the assessment and examination, calling out important information the physician should address when meeting with the patient. Similarly, the team member can collaborate with the provider and check on patients between visits to answer any questions, discuss concerns, and make sure a patient is following the care plan.

Involve physicians early on.Practice physicians must be at the table and engaged in any restructure or alignment activities from the outset. Provider insight is critical to these changes, especially the integration of evidence-based care. Physicians will also have key insights on what they should handle versus what may be supported by another team member. If providers don’t have confidence that things will get done well and in a timely fashion, they may try to manage everything on their own, which will stall a practice’s efforts towards greater collaboration and teamwork.

Depending on a practice’s size and current dynamics, it can be helpful to bring in an expert third party to facilitate an unbiased inventory and help identify areas that may be ideal for restructure. An outside resource can remain objective as they consider assorted perspectives and recommend the optimal structure based on the practice’s unique characteristics.

Accessibility is key. Accessibility is the greatest leading indicator of success in value-based care.Still, many practices struggle to help patients get the care they need when they need it. Using your staff to their full potential can assist with proactive risk identification, fostering a positive patient experience and enabling strong quality performance.

The move to quality starts at the front door. For example, when the patient arrives for an appointment, patient access staff can assess demographics, document preferred communication methods, assess social determinants of care, review insurance information, and check eligibility for payment programs the patient may not be aware of or is using. The team can also administer certain screenings, such as the PHQ-9 questionnaire, which assesses a patient’s risk for mental health conditions like depression and anxiety.

After the patient’s appointment, staff can help schedule follow-up visits or get information about referrals, helping the patient navigate the next steps for additional care. Throughout these interactions, staff can get to know and develop a rapport with patients, increasing the likelihood that patients will reach out to the practice when they have a problem instead of waiting until the issue becomes an emergency that requires a hospital stay.

Care adherence is a team effort.Medical assistants serve as a liaison between patients and physicians. For instance, instead of physicians having to answer 15 patient messages during their lunch break, medical assistants can triage patient questions, answering those that are administrative and surfacing to the physician those questions that warrant the doctor’s attention. Medical assistants can also ensure that patients have the information they need before departure, facilitate patient education, provide medical supplies, and answer basic questions patients may have. They can also proactively reach out to high-risk patients between visits to check how things are going. During these interactions, medical assistants can ask patients whether they are taking their medications, check for side effects, provide education, and answer questions. This can help improve care plan adherence and avoid acute situations while building patient trust.

Standardizing workflows is foundational to optimal outcomes. If you don’t have a standard way to do a task, don’t expect a standard outcome. Practices should establish clear care processes and pathways to ensure that risk identification and care management tasks are performed by the right person at the right time. This is especially important for managing chronic conditions, such as diabetes, hypertension, congestive heart failure and COPD. For these conditions, practices should have systematic and standardized care pathways which outline team actions to facilitate strong condition management and clinical outcomes.

Document the new approach. We’ve all heard the phrase, “if it isn’t documented, it isn’t done.”This has never been more true than as practices optimize and standardize tasks and workflows. As practices develop new ways of working, they should document each step to ensure that everyone in the practice has a clear understanding of what they are supposed to handle, why it’s an essential function, when it should happen, and how it connects to everyone else’s work. If practices don’t document the new workflow, standard performance often doesn’t happen, allowing tasks to fall through the cracks and causing frustration for patients and staff—not to mention increasing risk.

Educate patients about the new model.Some patients may feel uneasy relying on staff members other than physicians to meet their needs. Clearly and intentionally communicating the purpose and value of each role—and how these functions seamlessly work together to ensure high-quality patient care—is crucial to help patients feel confident they’ll receive timely, knowledgeable assistance regardless of who they interact with at the practice.

When collaboration happens by design, practices see better outcomes

By approaching value-based care as a team sport, practices lay the foundation for better performance. This degree of collaboration doesn’t happen by accident. Physician practices must design roles and processes intentionally, ensuring everyone works at the top of their license and follows choreographed, evidence-based care pathways. Taking the time to methodically approach the work at hand will help the practice identify risk and manage care more effectively while fostering an environment where everyone is focused on achieving the same goals.

Tammy Schaeffer, RN, JD, is a principal at Plante Moran.