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Question of the Hour: Getting to Affordability?

Posted By Louise Probst, Thursday, February 16, 2017
In 2015 federal spending on health care programs exceeded spending on Social Security for the first time. It's no wonder then, that as Congress considers replacing the ACA, affordability is top of mind.

Information in the BHC's recently released 2017 St. Louis Health Care Industry Overview: Volume I suggests that managed care plans shifting to value-based provider contracts seem to be making gains toward more affordable care. Most striking is the report's findings on Medicare Advantage (MA) plan performance.

New research shows MA plans out-performed fee-for-service (FFS) Medicare on quality, and may have contributed to a drop in FFS Medicare costs through a spillover effect. Poor and minority counties with the largest increases in MA enrollment saw the largest drop in FFS Medicare costs.

Increasingly, MA outperforms commercial plans - both nationally and locally. In Missouri, local MA plans outperformed commercial insurance plans on controlling blood sugar in diabetics, managing hypertension, and reducing hospital admissions.
The gaps across these products were wide.

Consider the cost implications for diabetes, with a national price tag of $322 Billion. St. Louis commercial plans saw a steep decline in the number of patients with their blood sugar in control during 2015, while MA plans reported notable improvements. Nationally, commercially-insured people with diabetes cost 3.7 times more than do people without the disease. The ROI could be considerable.

How to explain these performance disparities? The Centers for Medicare and Medicaid Services (CMS) Star Ratings program incentivizes plans to focus on prevention and positive health outcomes. In turn, MA health plans include payments that reward clinicians for better quality results. These levers compel provider attention to care management.

The BHC's recent survey of local health plans found many adopting value-based incentives. Join BHC's February 9th Member Meeting discussion of how employers can use value-based models to reduce costs while improving care quality.   

Warm regards,
Louise Probst
BHC Executive Director


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