Oura VP Jason Oberfest

Value-Based Care

Value-Based Care Quality Measure Overkill

Value-based care has worked better on paper than in practice, and a new research letter in JAMA Health Forum offers a possible explanation for the disparity: administrative overkill.

The first-of-its-kind analysis tracked 890 primary care physicians in value-based care contracts from 2020 to 2022, finding that:

• PCPs tracked an average of 57 quality measures.
• The average VBC contract contained an average of 10.2 quality measures.
• The average number of VBC contracts held went from 9.4 in 2020 to 12.3 in 2022.
• This chart has the full breakdown.

The first bullet alone shocked the authors of the study, as well as most industry onlookers who  

expected payors to have some form of quality measure coordination.

• The fact that the PCPs held an average of 11 VBC contracts with 10 quality measures each, and still managed to have 57 different quality measures shows how little coordination (if any) actually takes place.

• Extrapolate that administrative burden to an average panel size of 1,309 patients, and it’s no surprise that more providers aren’t lining up to jump on the VBC bandwagon.

What would help the situation? Although out of scope for this study, a well-timed Commonwealth Fund focus group with 29 PCPs explored answers to that exact question.

• The PCPs were concerned that many utilization and cost measures unfairly penalized them for outcomes beyond their control (ex. acute hospitalizations and total Medicare expenditures are also affected by other providers and specialists), and felt these measures should only apply to health systems or ACOs rather than small practices.

• The PCPs thought measures of access (ex. appointment availability, wait times) and continuous care (ex. repeat visits with the same doctor, communication) would better reflect true high-quality care.

• The lack of alignment across models and payors caused PCPs to use more time “meeting the requirements of payors than meeting needs of patients,” and they urged the government/employers to encourage consistent measures and reporting requirements.

The Takeaway

If value-based contracting is intended to promote high-quality care, does having doctors try to optimize for 50 different quality measures really accomplish that? An uncoordinated approach is not only unsustainable, but also counterproductive. Quality measures that amount to visit distractions and provider burnout aren’t a recipe for long-term success, and this study makes it clear that better coordination is a missing ingredient.

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The Wire

• Behavioral Health Parity Final Rule: The Biden administration released a “historic” final rule on behavioral health parity, requiring payors to cover mental healthcare on par with treatment of physical conditions. The rule bolsters protections around non-quantitative treatment limitations (NQTL), or requirements that payors use to restrict the scope of benefits such as prior authorization, step therapy, and provider network standards. In short, the final rule requires payors to analyze NQTLs for physical and behavioral therapies and address any disparities.

• Salesforce Industry AI: Salesforce rolled out Industries AI to provide access to over a hundred out-of-the-box AI capabilities purpose-built to tackle pain points across 15 industries, including patient services and benefits verification for healthcare. Available on Health Cloud, the new GenAI capabilities will provide care coordinators with pre-visit patient summaries including care plans, prescriptions, and prior auths. Verification agents will be able to quickly validate coverage, determine OOP costs, and see assistance eligibility.

• Care Intensity Spike: Last week’s MedPAC meeting brought the “intensity,” delivering more evidence that physicians have been seeking Medicare reimbursement for more complex patient visits, and fewer low-complexity ones. Service intensity has been spiking due to the increasingly wide gap between moderate- and low-complexity visits highlighted on Slide 8. While the report doesn’t dive into the factors driving the shift, we’re either seeing far sicker patients, a lot more upcoding, or a combination of the two.

• Sleep Rx Clearance: Withings Health Solutions received FDA clearance for its Sleep Rx mat, the first contactless device to aid in sleep apnea diagnosis without the need for wearable sensors. Obstructive sleep apnea is estimated to affect 30M Americans, with 80% of cases undiagnosed due to low availability and high cost of traditional detection methods. Sleep Rx addresses this gap by providing detailed sleep analysis from under the users’ mattress, and is now available by prescription as part of clinical sleep management or RPM programs.

• FDA Updates List of AR/VR Devices: The FDA updated its list of augmented reality/virtual reality devices that have received regulatory authorization. With 69 products, the list is quite a bit smaller than the 950 artificial intelligence/machine learning devices the agency has authorized. Just six AR/VR products were authorized in the first six months of 2024, including three solutions for radiology and three targeting orthopedics. 

• New Pieces of the AI Pie: Another generative AI player landed funding for the fight against clinical documentation burden, with AI documentation startup Pieces Technologies securing $25M in growth financing. Although Pieces has a ways to go before catching up to the frontrunners in digital health’s hottest segment, it’s reportedly surpassed 5.4M inpatient clinical summaries across major health systems, and it’s a promising sign that OSF HealthCare and Children’s Health participated in the round.

• Lung Screening + Smoking Advice: Adding smoking cessation advice to CT lung cancer screening improved quit rates in a WCLC 2024 study. In 153 people, researchers tested a digital health aid with video counseling, nicotine replacement therapy, and digital personal stories versus standard care (brief advice and referral to a quit line). The digital health aid produced higher tobacco abstinence than standard care at three months (52% vs. 20%) and six months (43% vs. 13%), as well as higher six-month lung screening completion (47% vs. 23%).

• Where VC Creates Value: Flare Capital looked at 4k healthcare AI funding rounds to see which investments went to companies that have scaled to a point where they can actually create value, and not many have. Health AI startups raised $60B over the last decade – 70% of that in the last five years – but most of that capital went to early-stage companies that haven’t made it past their Series B. Only 5% of VC-backed AI startups targeting health systems have raised a Series C or later, compared to about 16% targeting payors and 10% targeting life sciences.

• Most Promising AI Startups: Business Insider recently published a list of the most promising healthcare AI startups, based on investors at top VC firms who were asked to vote for one portfolio company and one startup they hadn’t invested in. The final list of 22 startups includes everyone from established high-flyers like Abridge (with over $200M of total funding) to seed stage up-and-comers like Equality AI, which has raised just $1.5M to reduce bias in AI models.

• Healthcare Employment Jump: The U.S. economy added 142k jobs in August, with unemployment ticking down to 4.2% from 4.3%, primarily due to ~60k news jobs split evenly between construction and healthcare. The Bureau of Labor Statistics data indicated that hospitals experienced a reprieve from labor shortages, with employment across the sector increasing 4.6% YoY as both new job listings and quit rates saw a steady slowdown.

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The Industry Wire

1. MGB unveils unified cancer care strategy.
2. Apple adds sleep apnea to Apple Watch, hearing aid to AirPods Pro.
3. NYU Langone performs first fully robotic lung transplant. 
4. Over 1k U.S. counties have no birthing facilities or obstetricians.
5. Allegheny Health serves as backdrop for TV drama, The Pitt.
6. UVA faculty demands removal of CEO and dean, leaders push back.
7. Researchers propose replacing BMI with body roundness index.
8. One-fifth of COVID deaths attributed to strained hospital caseloads.
9. Modesto’s Stanislaus Surgical Hospital to close after Medicare removal.
10. Nearly 50M people have been insured through the ACA exchanges.