ISPOR Panelists Weigh the Success of APMs

May 19, 2020
Tony Hagen

Tony Hagen is senior managing editor for The Center for Biosimilars®.

The alternative payment model (APM) doesn’t perfectly balance the competing interests of revenue growth and value-based care, but it has been a learning tool, panelists said at Virtual ISPOR 2020, the annual meeting of the International Society for Pharmacoeconomics and Outcomes Research.

Alternative payment models (APMs) have long been an experiment in the health care community for incentivizing better, cost-effective care that maintains or improves outcomes, but are they working? This question was addressed by panelists during the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) annual meeting, Virtual ISPOR 2020, held this week.

APMs have notched some successes, said Elizabeth Oyekan, PharmD, a senior executive at Precision Value & Health in Centennial, Colorado. There have been cost savings and improvements in care, but APMs also are connected with higher spending and have been strongly resisted, “especially when it comes to arrangements that require [providers] to assume financial risk,” Oyekan said.

Even so, it is clear that APMs have outperformed strict fee-for-service (FFS) payment systems on many performance and quality measures over time, including in diabetes care, preventative services, and hospital admissions, she said. APMs are models that include payments to incentivize lower-cost, high quality care. Accountable Care Organizations (ACOs), groups of medical providers that may operate under an APM model, have achieved similar results.

Patient Enrollment Is Up

"APMs and ACOs have benefited financially from these improved quality measures,” Oyekan said. “And what we’ve seen is increased [patient] enrollment in addition to the financial benefit.” Those with 4 or more stars in the Medicare Advantage Star Rating System have seen a 13.1% increase in enrollment, she noted. “For those that have the coveted 5 stars rating, we have seen that they now have year-round enrollment, which is of extreme benefit to many organizations.”

An additional benefit is that the administrative burden has been lessened through fewer quality measure requirements.

The patient “experience” with health care systems has not deteriorated during the switch from FFS to APMs or ACOs, Oyekan said. “There was the fear that there was going to be some major impact, and that has not happened at this point.”

Some CEOs have been able to reduce costs of care by trimming overutilization of services or therapy and by focusing on higher-value therapies, she said. “And also, the bonus payments [available to APMs and ACOs] have become a new source of revenue for these entities.”

However, in many cases APMs and ACOs create incentives to reduce spending without appropriate quality protections built into them, and for many APMs in the commercial sector, only minor care quality improvements have been achieved. The Medicare Shared Savings program, which governs 517 ACOs, has seen increased Medicare spending, causing concern for CMS, Oyekan said.

APMs Are a Major Undertaking

“We’ve heard from many providers, and for many the question is, considering the significant behavioral and practice changes that have to occur and the investments it takes to become an APM, is it really worth it? And for many, with regard to the payments they have seen and the bonuses, they’re not quite sure that the change is worth what is being incentivized at this time,” she said.

The bottom line is that although the APM may not be the “final answer” for achieving value-based care, it has provided a good initial framework for grappling with improvements in value of care, she said.

The panel included Anupam B. Jena, MD, PhD, the Ruth L. Newhouse Associate Professor of Health Care Policy at Harvard Medical School in Boston, Massachusetts. With respect to the scale of APM involvement in health care, more than $3 of every $5 is linked to APMs, Jena said.

Some APMs may include elements of FFS spending and bundled care, in which a single payment is received for a suite of services associated with a single clinical episode.

Have APMs Reduced Admissions?

The FFS APM has been a focus of concern "in terms of whether or not it's actually reduced readmissions or whether it's an unintended byproduct of increasing mortality. There are selection cnocerns as well in terms of the types of patients who get hospitalized as a result of the program and the incentives that it places. Nonetheless, I think that this program has been very impactful," Jena said.

A key attribute of these models, Jena said, is that the quality of data and the ability to measure results are much greater now than 20 or 25 years ago.

Further, patient satisfaction is now a metric with many APMs. Patient satisfaction drives patients to a health care center, Jena noted. "The interplay between treatment effectiveness and patient satisfaction is going to be quite relevant, more relevant, I think, with APMs."

Ultimately, for the success of APMs, there has to be accountability, said Michael Barr, MD, MBA, MACP, executive vice president of the National Committee for Quality Assurance in Washington, DC. However, it’s important to clearly define the patient population for which the health care entity will be held accountable, and then performance data must be supplied regularly to guide care decisions, and these data should be acted upon.

Data for the Sake of Data?

Too much data or data for the sake of data can make inefficient workflows more inefficient, he said. “Let’s work on making data efficient and not expect or require any diversion to check a box if any question is not directly related to the delivery of care.”

Similarly, outcome measures should be chosen with care. “No APM will work unless the measures matter. The best way to undermine an accountability model is to select and highlight measures that are not perceived by clinicians in their teams or patients to some degree to be relevant.” Measures should be logical, feasible, usable, manageable, timely and actionable, he said.

Quality measures have evolved, he said. Paper-based measures include claims information, chart extractions, and patient surveys. The next wave was electronic. Electronic health records provided a better way of organizing data. From there, digital quality measures (DQM) emerged.

“This could be our future if we start working together, “Barr said of DQM. Patient data could be aggregated from multiple providers and organized by compatible systems linked to decision support. Treatment planning could be updated when guidelines change or new therapeutics are introduced, much the same way smartphone applications are updated. “This is the future, now,” Barr said.

Visit The Center for Biosimilars' conference page for more from Virtual ISPOR 2020.


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