Q&A: Humana, Oak Street execs share keys to value-based pact

These days, value-based arrangements are common between traditionally adversarial entities like providers and payers. But making these partnerships successful requires a lot more than just signing a risk-sharing contract.

Health insurer Humana and Oak Street Health, which operates primary care centers, think they have the puzzle figured out. The organizations forged a value-based arrangement in June 2015, combining Humana’s pay-for-value expertise with Oak Street’s holistic, population-health-focused approach to serving Medicare patients in the greater Chicago area.

Now more than a year later, leaders from Humana and Oak Street are encouraged by the partnership’s early results, saying the use of robust data, open communication between payer and provider, and a focus on quality before cost are all helping drive success.

FierceHealthPayer spoke to Humana Chief Medical Officer Roy Beveridge, M.D., and Oak Street CMO Griffin Myers, M.D., to learn more about this unique value-based arrangement.  

Editor’s note: The following interview has been edited for length and clarity.

FierceHealthPayer: Can you start by telling me what led Humana and Oak Street Health to choose one another as partners?

Griffin Meyers
Griffin Myers

Griffin Myers: We built our practice as an exclusively value-based practice from day one, that was the intent. And we wanted to care for a specific population where we thought we could have the biggest impact. We wanted to innovate in value-based care, and that required a partner who’s not only sophisticated enough to do that value-based partnership with you, because you can’t do it on your own, but also could help us get better at it. Humana is a health plan very focused on being a leader in the value-based care space, so it was a nice fit from that perspective.

Roy Beveridge: What we’re looking for are high-quality providers who are really dedicated to the care of our members. Our members traditionally stay with us for more than 7 years, so it’s very important to us to work with entities that are going to invest the appropriate, good amount of time to engage our members and help them improve their health. Because from our standpoint, the healthier that Griffin’s physician can make these patients, the better it is for our members, the longer they’re going to stay with us, and the better it is for us long term.

"I have my phone on portrait mode, so that without even getting vertical I can flip through that list, and I know which patients were unfortunately admitted to the hospital." -- Griffin Myers

FHP: You mentioned the loyalty of Medicare Advantage members. How does your work together take that into account in terms of relationship-building with patients?

RB: From our standpoint, when our members are with really good clinicians, who have really good experience and are engaged, they’re obviously going to sign up and stay with Humana for the next year and the next year and the next year.

headshot of Roy Beveridge
Roy Beveridge

GM: We had a hypothesis very early on that happy patients would be healthy patients, and we have seen that. Folks who enjoy their experience, engage in their care plans, are healthier. We’ve seen that at Oak Street, and thankfully there’s now peer-reviewed literature that tells the same story. We have a voluntary attrition rate that’s under 2% at Oak Street. The reason for that is we have a net promoter score of 92% so far this year, which compares to what the Advisory Board reported last September—for primary care nationwide, it’s 3.

FHP: Can you take me through the nuts and bolts of how your organizations work together, and how you’re working toward your value-based care goals?

GM: There are three main pieces to that. The first is, we have a contract. It’s a full-risk arrangement—there’s a little variation based upon the county and based upon the state—but you can think about it as full upside, full downside. The second is that there are some transactions that go on, meaning we take care of patients and share information with our partners at Humana, and Humana does a really nice job sharing information and data, both in raw form and data analytics.

The best example: The first thing I do when I wake up in the morning is look at the census, which gets emailed to me and a small group of our medical directors. I have my phone on portrait mode, so that without even getting vertical I can flip through that list, and I know which patients were unfortunately admitted to the hospital, and which PCP unfortunately is going to wake up to that and recognize that they’ve got some work to do to help get those patients back into a stable home setting with their care back under control.  

So that’s the second piece, and the third is some really important relationships; we’ve become partners in the way that we manage care. Our regional medical director in Indianapolis has a counterpart at Humana, and they’re able to have conversations about patients and their care every day, about whether they are getting the right care, whether it’s being delivered by the right practitioner, and whether it’s in the right setting. We can’t do that on our own; we have to do that with our partner.

RB: From Humana’s standpoint, it’s important to us that Oak Street does well, not just because it’s the right thing for our patients, but also we have invested a lot of time and effort, so we want them to do financially well. It’s very reasonable for us to devote resources that help them grow and take care of their patients better. In the old world, with fee-for-service, there was always a challenging dynamic. People would want to do something and the plan was looking at utilization, and that was the knocking of heads. Once you’ve got value relations where you’re looking at the outcome, as opposed to the individual steps and how one gets there, then you can do very inventive things.

FHP: What are some of the inventive ways that Oak Street cares for patients?

One of the vans that transport clinic patients (Courtesy of Oak Street Health)

GM: When you think about what value-based care does, it changes the perspective in the way you look at patients’ problems. The example I always give is the moment I realized I wanted to start this practice. I’m an emergency physician, and a nurse looked at me at 3:45 in the morning and pointed and said, “it’s her again” (in reference to an ER frequent flier). It’s not that person’s fault that she is there; we don’t have a great history of providing equal access to care in this country for everybody, and there are a bunch of social factors that can impact that.

At Oak Street, we’re a clinic-based model, and when we first started we recognized very early that patients were having a hard time getting to a clinic. In a fee-for-service world, that’s their problem to solve. In value-based world, that’s ours to solve. So Oak Street now runs a pretty large fleet of neon-green vans that bring patients to and from their clinic appointments at no charge to them. Similarly, we provide care management services, home visits, behavioral health services, all kinds of things that in a billable world you probably wouldn’t do, but in a value-based world are not only the right thing to do for the patient, but end up being the right thing for us at Oak Street and the right thing for our partner, because we’re aligned toward the same thing.
FHP: Can you share any specific outcome-based metrics that have improved as a result of your partnership?

GM: At Oak Street, we talk about this with our team as, we want patients to be happy, healthy and out of the hospital. The measure of happiness is the 92% net promoter score. Health we measure by using the Healthcare Effectiveness Data and Information Set (HEDIS) metrics—we call it the stars system. For engaged patients who have been with us for 12 months, we are a five-star practice.

Oak Street patients sit at table
Oak Street Health patients (Courtesy of Oak Street Health)

The third piece—out of the hospital—the reason that’s important to us is because the unit cost of going to the hospital is extraordinarily high. The average hospitalization for an Oak Street patient is around $15,000, so if we can prevent that hospitalization, that’s capital we can keep and reinvest back in what we do. The nationwide number for hospital admissions per 1,000 older adults per year in this country is 315, according to the Dartmouth Atlas of Health Care. The city of Chicago has one of the highest rates in the country; it’s about 360. A dual-eligible male living in Chicago has a hospitalization rate of 770, and Oak Street runs just around 200, so that means we’ve cut the hospital admission rate by over 40% in our population.

RB: From a Humana standpoint, when we look at all of our value-based reimbursement model agreements, we’ve found a 6% reduction in emergency room visits among Medicare Advantage members (compared to MA members in standard arrangements). Even more importantly, we’ve found that screening for colon cancer has increased by 8% and breast cancer screening is up 6%. For older women, osteoporosis management is up 13%.

If we look at the HEDIS scores, we’ve found that there’s a 19% improvement in that, and at the same time, there’s a 20% reduction in costs associated with care of these folks. The common message that you keep hearing is, whereas cost is important, the quality measures are things that we hold to be most important. Unless you’ve got a really high-quality program across the entire network—as seen at Oak Street—you’re not going to retain members and therefore a lower cost doesn’t really help you. So quality has to go first, and cost then comes second.

Editor's note: A previous version of this article misspelled Griffin Myers' last name.