Crane: As a trade association, we committed to moving 90% of our members’ Medicare business into capitated arrangements by 2018. While many of our members are already committed to this model, others are adopting a variety of new approaches that involve taking risk, even in PPO and fee-for-service products. As an association, our favored model is capitation because it offers superior quality and a better patient experience. We want to move more members in that direction.
Crane: Our members have achieved higher levels of both efficiency and quality. On the efficiency side, if you compare Medicare Advantage (MA) practice in a given community to practice in Original Medicare, you see 35% lower hospital utilization along with lower admissions, lower length of stay, lower days per thousand, and generally much more efficient delivery. As for higher quality, the Integrated Healthcare Association just released a study comparing commercial HMO to PPO products. For five of the six quality measures examined, HMO products delivered by integrated groups were 11 to 46% more compliant with various quality guidelines than PPO products.
Crane: It starts with the conviction of our members that they, and we, can deliver better care in a capitated, clinically integrated system. This is in our DNA. We believe this is the way to deliver better care, without waste, and with higher quality. Also, we’re watching the market. MA penetrates 30% of the Medicare population now. It will be 50% in five years. The balance will be in a mix of ACOs, patientcentered medical homes, shared savings programs, bundled payment, global budgeting, etc. All of Medicare is moving into risk. I think we will easily get 90% of our members into capitated care in Medicare by 2018.
There is a push and pull at work here. The market is the push, with both Government and commercial payers moving in this direction. The pull is the stronger business case for delivering capitated care. We now have tools not previously available, such as data warehouses that enable data mining for a higher level of outreach into the community, for risk stratification, etc. All of these tools contribute to a better care delivery model in a capitated environment.
Crane: We do hear often about patients’ frustration in navigating the fee-for-service system. They are relieved and grateful to find better care coordination and more assistance in navigating the system when they move into a coordinated care product, like Medicare Advantage.
Crane: The nationwide move from volume to value is underway. Physician groups are moving into risk-based models. I think everyone needs to do it with some degree of urgency. If we move too slowly, an impatient policy world will take steps that could actually impede the progress. I urge everyone to get about this business and take a bit of a leap of faith. Waiting around another decade won’t help. This is a plea for responsibly rapid pacing.
On a personal note, I find it very gratifying being part of this massive movement to change the payment and care model for the good of all. It can bring a better, sounder economic footing for our country, and produce a healthier population at the same time.