Humana is seeing significant cost savings and reductions in unnecessary care through its value-based Medicare Advantage (MA) arrangements, the insurer said Thursday.
Humana released its annual report on the performance of its value-based agreements with providers and found that MA members in these arrangements were admitted to the hospital 27% less often than those in traditional Medicare, and they made 14.6% fewer emergency room visits in 2018.
MA members in value-based arrangements saved 20.1% in medical costs compared to traditional Medicare, equal to about $3.5 billion in services, Humana said. Two-thirds (67%) of Humana’s MA members are treated by primary care providers in value-based arrangements.
“It really highlights that when you create a much more coordinated system that focuses on delivering better care at lower costs, you can produce better outcomes and produce savings,” William Shrank, M.D., Humana’s chief medical officer, told FierceHealthcare.
Shrank, one of the report’s authors, said the work to date has allowed Humana to build significant momentum toward growing both its use of value-based payment overall and its arrangements in which the provider is taking on downside risk.
About half of existing value-based models have downside risk attached, Shrank said. Humana is among the insurers committed to the Health Care Payment and Learning Action Network’s goal of having 100% of members in value-based models with downside risk by 2025.
Shrank said reaching that goal could lead to “tremendous” changes in how insurers do business with docs. For example, in an arrangement where the provider is taking on greater risk, prior authorization may not be required in many circumstances, he said.
“We can wrap clinical services around the provider even better than we do today,” he said.
RELATED: Up to $935B in U.S. healthcare spending wasted, says study from Humana, University of Pittsburgh
The members treated in value-based arrangements also received higher-quality care, according to the report. Physicians in these agreements from between 2016 and 2018 earned an average score from the Healthcare Effectiveness Data and Information Set (HEDIS) Star ratings of 4.44.
Physicians serving members outside of these arrangements averaged a 3.1 HEDIS score. This approach measures a health plan's performance on a variety of facets of care and service, Humana said.
MA members in these arrangements also received preventive screenings as much as 21% more often for certain conditions, the report found, including colorectal cancer, blood sugar and osteoporosis.
"We’re going to try and push every lever we’ve got” to continue growing value-based care, Shrank said. “We really do think it’s incredibly important for the future.”