Breaking News
December 12, 2018 - Gun violence is a public health issue: One physician’s story
December 12, 2018 - The Science of Healthy Aging
December 12, 2018 - Yes to yoghurt and cheese: New improved Mediterranean diet
December 12, 2018 - Researchers uncover a number of previously unknown insecticide resistance mechanisms
December 12, 2018 - Regulating the immune system’s ‘regulator’
December 12, 2018 - In breaking bad news, the comfort of silence
December 12, 2018 - Study finds upward link between alcohol consumption and physical activity in college students
December 12, 2018 - FDA issues warning letter to Zhejiang Huahai Pharmaceutical involved in valsartan recall
December 12, 2018 - Presence of antiphospholipid antibodies tied to first-time MI
December 12, 2018 - New study could help inform research on preventing falls
December 12, 2018 - Women and men with heart attack symptoms receive different care from EMS
December 12, 2018 - Disrupted biological clock can contribute to onset of diseases, USC study shows
December 12, 2018 - New publications generate controversy over the value of reducing salt consumption in populations
December 12, 2018 - New data from TAILORx trial confirms lack of chemo benefit regardless of race or ethnicity
December 12, 2018 - Specific class of biomarkers can accurately indicate the severity of cancer
December 12, 2018 - Meds Taken Do Not Vary With ADL Impairment in Heart Failure
December 12, 2018 - Long-term study shows that HIV-2 is deadlier than previously thought
December 12, 2018 - People living near oil and gas wells show early signs of cardiovascular disease
December 12, 2018 - IONTAS founder and pioneer in phage display technology attends Nobel Prize Award Ceremony
December 12, 2018 - People who eat red meat have high levels of chemical associated with heart disease, study finds
December 12, 2018 - New method uses water molecules to unlock neurons’ secrets
December 12, 2018 - Genetics study offers hope for new acne treatment
December 12, 2018 - New computer model predicts prostate cancer progression
December 12, 2018 - Nobel Laureates lecture about immune checkpoint therapy for cancer treatment
December 12, 2018 - More Illnesses From Tainted Romaine Lettuce Reported
December 12, 2018 - Aspirin could reduce HIV infections in women
December 12, 2018 - The EORTC Brain Tumor Group and Protagen AG collaborate to study immuno-competence of long-term glioblastoma survivors
December 12, 2018 - Insights into magnetotactic bacteria could guide development of biological nanorobots
December 12, 2018 - Sacrificial immune cells alert body to infection
December 12, 2018 - Low-salt diet may be more beneficial for females than males
December 12, 2018 - Major soil organic matter compound battles chronic wasting disease
December 12, 2018 - Findings may open up new ways to treat dwarfism and other ER-stress-related conditions
December 12, 2018 - New computational model provides clearer picture of shape-changing cells’ structure and mechanics
December 12, 2018 - 10 Facts on Patient Safety
December 12, 2018 - Poorest dying nearly 10 years younger than the rich in ‘deeply worrying’ trend for UK
December 12, 2018 - Innovative care model for children with ASD reduces use of behavioral drugs in ED
December 12, 2018 - Spending time in and around Hong Kong’s waters linked to better health and wellbeing
December 12, 2018 - Simple measures to prevent weight gain over Christmas
December 12, 2018 - Research advances offer hope for patient-tailored AML treatment
December 12, 2018 - Researchers discover a ‘blind spot’ in atomic force microscopy
December 12, 2018 - Sprayable gel could help prevent recurrences of cancer after surgery
December 12, 2018 - SLU researchers explore how fetal exposure to inflammation can alter immunity in newborns
December 12, 2018 - How do patients want to discuss symptoms with clinicians?
December 12, 2018 - Zinc chelation may be able to deliver drug to insulin-producing cells
December 12, 2018 - Brigham researchers develop automated, low-cost tool to predict a woman’s ovulation
December 12, 2018 - Some people with Type 2 diabetes may be testing their blood sugar more often than needed
December 12, 2018 - Slow-growing type of glioma may be vulnerable to immunotherapy, suggests study
December 12, 2018 - Study provides new information regarding microRNA function in cellular homeostasis of zebrafish
December 12, 2018 - Study provides new understanding of mysterious ‘hereditary swelling’
December 12, 2018 - Researchers shed new light on how to combat Shiga and ricin toxins
December 12, 2018 - Pregnant Women Commonly Refuse Vaccines
December 12, 2018 - Drug treatment could offer new hope for some patients with brain bleeding
December 12, 2018 - Health care financial burden of animal-related injuries is growing, study says
December 12, 2018 - Macrophage cells could help repair the heart following a heart attack, study finds
December 12, 2018 - Researchers develop new system for efficiently producing human norovirus
December 12, 2018 - New artificial intelligence-based system to differentiate between different types of cancer cells
December 11, 2018 - Brazilian professors propose guidelines for therapeutic use of melatonin
December 11, 2018 - Healthy Lifestyle Lowers Odds of Breast Cancer’s Return
December 11, 2018 - New research identifies two genes linked to serious congenital heart condition
December 11, 2018 - NIH Director talks science, STEM careers with preteens
December 11, 2018 - Disabling a Cellular Antivirus System Could Improve Gene Therapy
December 11, 2018 - New tool swiftly provides accurate measure of patients’ cognitive difficulties
December 11, 2018 - NICE releases new guidelines for diagnosis and management of COPD
December 11, 2018 - Without Obamacare penalty, think it’ll be nice to drop your plan? Better think twice
December 11, 2018 - Researchers capture high-resolution X-ray and NMR image of key immune regulator
December 11, 2018 - Natural flavonoid is effective at treating leishmanisis infections, study shows
December 11, 2018 - Avoidant grievers unconsciously monitor and block mind-wandering contents, study shows
December 11, 2018 - Study identifies how hantaviruses infect lung cells
December 11, 2018 - Improving PTSD care through genetics
December 11, 2018 - Dermatology providers show interest in recommending cannabinoids to patients
December 11, 2018 - Researchers to study effects of electroconvulsive therapy on Alzheimer’s patients with aggression
December 11, 2018 - Four dried fruits have lower glycemic index than starchy foods, study finds
December 11, 2018 - Optimization of drug dose sizes can reduce pharmaceutical wastage
December 11, 2018 - Ultrarestrictive opioid prescribing strategy linked with reduction in number of pills dispensed
December 11, 2018 - PET scans to optimize tuberculosis meningitis treatments and personalize care, study finds
December 11, 2018 - Researchers aim to identify and target high blood pressure indicators
December 11, 2018 - Researchers identify immune cell subset that may drive chronic inflammation
December 11, 2018 - Ezogabine treatment reduces motor neuron excitability in ALS patients, study shows
December 11, 2018 - One implant, two prices. It depends on who’s paying.
December 11, 2018 - Standardizing feeding practices improves growth trends for micro-preemies
Medicare Advantage plans shift their financial risk to doctors

Medicare Advantage plans shift their financial risk to doctors

image_pdfDownload PDFimage_print

Dr. Christopher Rao jumped out of his office chair. He’d just learned an elderly patient at high risk of falling was resisting his advice to go to an inpatient rehabilitation facility following a hip fracture.

He strode into the exam room where Priscilla Finamore was crying about having to leave her home and husband, Freddy.

“Look, I would feel the same way if I was you and did not want to go to a nursing home, to a strange place,” Rao told her in September, holding her hand. “But the reality is, if you slip at home even a little, it could end up in a bad, bad way.”

After a few minutes of coaxing, Finamore, 89, relented and agreed to go into rehab.

Keeping patients healthy and out of the hospital is a goal for any physician. For Rao, a family doctor in this retiree-rich city 100 miles north of Miami, it’s also a wise financial strategy.

Rao works for WellMed, a physician-management company whose doctors treat more than 350,000 Medicare patients at primary care clinics in Florida and Texas. Instead of being reimbursed for each patient visit, WellMed gets a fixed monthly payment from private Medicare Advantage plans to cover virtually all of their members’ health needs, including drugs and physician, hospital, mental health and rehabilitation services.

If they can stay under budget, the physician companies profit. If not, they lose money.

This model — known as “full-risk” or “global risk” — is increasingly used by Medicare plans such as Humana and UnitedHealthcare to shift their financial exposure from costly patients to WellMed and other physician-management companies. It gives the doctors’ groups more money upfront and control over patient care.

As a result, they go to extraordinary lengths to keep their members healthy and avoid expensive hospital stays.

WellMed, along with similar fast-growing companies such as Miami-based ChenMed, Boston-based Iora Health and Chicago-based Oak Street Health, say they provide patients significantly more time with their doctors, same-day or next-day appointments and health coaches. These doctors generally work on salary.

ChenMed doctors encourage their Medicare patients to visit their clinic every month — for no charge and with free door-to-door transportation — to stay on top of preventive care and better manage chronic conditions. If patients are not feeling well after-hours, ChenMed even will send a paramedic to their home.

“We can be much more creative in how we meet patient needs,” said Iora CEO Rushika Fernandopulle. “By taking risk, we never have to ask … ‘Do we get paid for this or not?'”

A Way To ‘Provide Less Care’

Some patient advocates, pointing to similar experiments that failed in the 1990s, fear “global risk” could lead doctors to skimp on care — particularly for expensive services such as CT tests and surgical procedures.

“At the end of the day, this is a way to keep costs down and provide less care,” said Judith Stein, executive director of the Center for Medicare Advocacy.

Dr. Brant Mittler, a Texas cardiologist and trial attorney who has followed the issue, said Medicare Advantage members should be suspicious.

“Patients don’t know that decisions made on their behalf are often financially based. There may be pressure on doctors to cut corners to save money and that may not be in the best interests of a patient’s health,” he said.

The insurers and physician groups disagree. They said limiting necessary care would only exacerbate a patient’s health problems and cost the doctors’ group more money.

Noting that Medicare members stay with Humana an average of eight years, Roy Beveridge, the insurer’s chief medical officer, said the plan would be unwise to skimp on care because that would eventually leave the company with sicker patients and longer hospitalizations.

“It makes even less sense for physicians at financial risk to skimp on care because patients are typically with their physicians much longer than they are with a health plan,” he said.

A study that examined care at ChenMed, published last month in the American Journal of Managed Care, found health costs were 28 percent lower among patients who had more than double the number of typical visits with their primary physician. The study was conducted by researchers at ChenMed and the University of Miami.

To offer more personal care, ChenMed doctors typically see only about a dozen patients per day — about half as many as is usual for a doctor who gets paid for each individual service.

Medicare beneficiaries, who can choose a private health plan during the open-enrollment period that runs from Oct. 15 to Dec. 7, generally have no idea if their health plan has ceded control of their care to these large doctors’ groups.

After choosing a Medicare Advantage plan, they generally sign up for a medical group that is part of their health plan’s network, often because doctors are close to where they live or because the doctors offer extra benefits such as free transportation to appointments.

Eloy Gonzalez, 71, of Miami, said that before switching to ChenMed a couple of years ago his doctors always seemed to be in a hurry when he saw them. He’s happy with his ChenMed physicians.

On a recent visit, he spent nearly 20 minutes with Dr. Juana Sofia Recabarren-Velarde talking about keeping his blood pressure and lung condition under control. She also showed him exercises to manage back and shoulder pain.

“If she thinks she needs to see me once a month to monitor my blood pressure and see if anything else is happening, it’s OK with me,” said Gonzalez, who pays nothing for the office visits or generic drugs under his Humana Medicare Advantage plan with ChenMed.

A Growth Spurt

Nearly one-third of the 57 million Medicare beneficiaries are covered by private Medicare Advantage plans — an alternative to government-run Medicare — and federal officials have estimated that the proportion will rise to 41 percent over the next decade. The government pays these plans to provide medical services to their members.

The “global risk” system has been used in South Florida and Southern California since the late 1990s and nearly half of Medicare Advantage members in those regions get care in the model. The use has spread further in the past two years as large physician companies have become more common, and about 10 percent of Medicare Advantage plan members across the nation are in them now, health consultants say.

In addition, new information technology allows these groups to better track their patients. With mixed results, Medicare Advantage insurers for years offered doctors bonuses to meet certain quality care standards, such as getting members vaccinated against the flu or controlling diabetes and other chronic diseases.

Under the “global risk” arrangements, the health plans give the physician companies the bulk of their Medicare funding when they take on the mantle of being financially responsible for all patient care.

For the doctors’ groups, the arrangement means they get paid a large amount of money upfront for patient care and don’t have to worry about billing or having to get insurers to always preapprove treatments.

Because the “global risk” arrangements are designed to reduce plans’ costs, they potentially allow the companies to lower premiums and attract more customers, said Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design.

“I see this trend continuing to grow as clinicians will be accountable for the first time for the care they provide,” he said.

Historical Lessons

But Ana Gupte, a securities analyst with Leerink Partners in New York, noted providers can also lose money if not successful.

That’s what happened in the late 1990s when some physician-management companies such as FPA Medical Management and PhyMatrix took on financial risk from insurers only to later go bankrupt, interrupting care to thousands of patients.

Health insurers say they now trust only doctors’ groups that have shown they can handle the financial risk. They also retain varying levels of control. Insurers set benefits, handle member complaints and review which doctors are allowed in its network.

Martin Graf, a partner with consulting firm Oliver Wyman, said the old financial arrangements failed because provider groups did not manage the risks facing their patients.

“Now they know physician groups must be vigilant about their patients — whether they are in the office or not,” he said. “Everyone is aware of the failure of the past.”

KHN’s coverage of these topics is supported by John A. Hartford Foundation and The SCAN Foundation

Kaiser Health NewsThis article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

Tagged with:

About author

Related Articles