Anthem Cut ER Costs by 3% with Value-Based Care Reimbursement

February 01, 2017 - In recent years, the national health payer Anthem has been advancing value-based care reimbursement by collaborating with primary care providers and operating the Enhanced Personal Health Care program, according to a report released in March 2016 from the Anthem Public Policy Institute. The Enhanced Personal Health Care program seeks to help primary care physicians transform their practices and support flexible contracting capabilities so that providers steadily take on more financial risk.

This program has been operating for four years and advancing value-based care reimbursement through partnerships with more than 54,000 providers. By the end of 2015, Anthem was serving about 4.6 million members through a value-based care reimbursement platform.

The report called Early Results from the Enhanced Personal Health Care Program: Learnings for the Movement to Value-Based Payment outlines the key benefits that patients experienced through the Enhanced Personal Health Care program. Some of the advantages include improved quality and preventive service use as well as a 3.3 percent cost savings for members treated by providers participating in the program.

In recent years, federal government agencies including the Department of Health & Human Services (HHS) has steadily pushed forward value-based care reimbursement through its goal to transition at least half of fee-for-service Medicare claims into alternative payment models by 2018.

“It is in our common interest to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” Department of Health and Human Services Secretary Sylvia M. Burwell said in a public statement. “When government and business work together we can all benefit. Patients can get the right care at the right time, doctors can achieve the best ideals of their profession, and health care can be more affordable for individuals and companies.”

Fee-for-service payments have kept healthcare delivery from greater coordination between facilities and led to a significant rise in medical spending. For instance, while healthcare spending was 5 percent of the Gross Domestic Product in 1960, that rate is expected to reach 19.6 percent in the US by 2024.

As such, over the last handful of years, the healthcare industry has been moving steadily toward adopting value-based care reimbursement models and transitioning away from fee-for-service. 

To support stakeholders in this effort, HHS created the  Health Care Payment Learning and Action Network (LAN) where providers, patient advocacy groups, and payers like Anthem can participate in designing new payment structures. The recent passage of MACRA legislation has also pushed forward the adoption of alternative payment models.

While Anthem and other payers benefit from the cost savings and member satisfaction of value-based care reimbursement, providers are able to improve collaboration and obtain flexible contracting options. Health insurance companies are finding that value-based care reimbursement models can be implemented with providers around the nation at varying levels of knowledge in alternative payments and different experiences in financial risk sharing.

Anthem’s Enhanced Personal Health Care program offers its membership a number of benefits including after hours call coverage allowing members to get their questions answered in the middle of the night as well as daylight hours. The program also supports physician practice transformation and offers providers the opportunity to participate in collaborative learning sessions.

Providers participating in this program are also advised to utilize disease registries to engage patients in high risk populations in wellness initiatives. Additionally, Anthem’s value-based care plan includes participation in quality and performance measurement as well as use electronic health records. 

Some of the results from the Enhanced Personal Health Care program include 5.7 percent fewer inpatient stays for every 1,000 patients, a 3.5 percent decrease in emergency room costs, and a 7.4 percent reduction of acute admissions for at-risk patients with chronic medical conditions. These steps also go a long way toward reducing medical spending for Anthem and provider organizations.

“As policymakers formulate next steps in moving more providers and payments into value-based arrangements, EPHC [Enhanced Personal Health Care] and similar programs should be examined for their rapid-cycle learnings,” the report stated.

Other health insurance companies should consider following the lead of Anthem and invest in value-based care reimbursement programs aimed at transforming practices and healthcare delivery.