EVIDENCE BASED INSIGHT
Clinical Performance Supports Organized Value-Based Care
September 21, 2020 • 5 min read
KIM SONNEN • TERRY KETCHERSID, MD, MBA • KAREN GLEDHILL, JD, MBA
For more than a decade, Fresenius Medical Care has been dedicated to optimizing both the quality and efficiency of value-based care. Today, with more than 25 percent of patients enrolled in a value-based care plan, Fresenius Medical Care North America (FMCNA) has joined with nephrologists around the country to take the next step in optimizing care. InterWell Health is a physician-centric organization that integrates the expertise of 650 leading nephrologists with FMCNA’s deep in-market experience to further improve patient outcomes while lowering costs.
Value-based care (VBC) has many definitions, but the phrase is often used to make the distinction between payment models such as transactional fee for service, where providers are paid based on how much care they deliver, and value-based arrangements, where providers are paid not based on volume but on the value or outcomes their care delivers.1 In many respects, VBC supports the value equation:
Value = Quality/Cost
In value-based models, participants are rewarded for delivering quality in a financially efficient manner.
Fresenius Medical Care has been an active participant in VBC for over a decade. The company’s first foray into it was marked by participation in the Medicare End-Stage Renal Disease (ESRD) Disease Management Demonstration from 2006 to 2010.2 This was closely followed by an early experience jointly operating a Medicare Advantage Chronic Condition Special Needs Plan. Both experiences served the enterprise well, laying the groundwork for the rapid expansion that Fresenius Health Partners (FHP) has experienced over the past six years.
As of Q1 2020, more than one in four Fresenius Kidney Care (FKC) patients participate in a value-based arrangement, bringing the total medical spending under management to well over $4 billion per year. FHP’s value-based arrangements include relationships with both government payors and private payors. Historically, these total cost of care programs have been limited to patients with end-stage kidney disease (ESKD). But increasingly all payors are inviting providers to include patients with late-stage chronic kidney disease (CKD).
What does it take to be successful in VBC? Certainly, there are many keys to success, but among the most important is clinical performance, which manifests in several ways. Perhaps the most obvious is performance on specific quality measures. Every valuebased arrangement includes a set of quality measures. Sometimes, those measures serve as a quality “gate” in which participants must exceed an established minimum target in order to participate in savings. In other value-based arrangements, the actual quality score dictates the amount of savings the participant keeps.
Beyond these specific quality measures, clinical performance has a substantial impact on the cost of care, and the goal of valuebased operations is to align the two in an inverse relationship so that clinical outcome gains lead to overall cost reductions. Consider FHP’s calcimimetic experience within the End-Stage Renal Disease Seamless Care Organization (ESCO) program. Beginning in 2018, ESCO participants were responsible for the cost of calcimimetics utilized by aligned Medicare beneficiaries. The two calcimimetics available for use have several differences, including route of administration (oral or intravenous) and cost (one is available as a generic, the other is not). Recall participants in value-based arrangements are rewarded for the financially efficient delivery of quality (Figure 1).
Figure 1 | Visualization of the value equation
Within a quality vs. cost grid, or effectiveness vs. efficiency—which is the terminology preferred by many payors—the prescriber’s goal in a value-based arena is to be in the upper-right quadrant where quality is high and costs are low; it would be best to avoid the left lower quadrant where quality is low and costs are high. This data visualization tool permits participants—in this case, the calcimimetic prescriber—to drill down to further identify both positive and negative outliers. The view in Figure 1 includes over 45,000 ESKD patients in 23 separate markets. Each market is represented by a bubble, and the relative size of the bubble reflects the population within a specific ESCO. But each market can be viewed independently, reestablishing the origin of the grid such that individual practices in a specific market or individual dialysis facilities can be compared with their peers. Providing population health views of quality and cost data to prescribers leads to actionable insights for them, which ultimately improves clinical performance.
Optimal clinical performance within value-based arrangements brings many advantages to patients. When clinical performance excels within a value-based program, that performance often translates into financial improvement. These financial “wins” create a funding mechanism for additional clinical interventions, resulting in a virtuous cycle that benefits patients. Consider FHP’s experience with transition-of-care (TOC) visits. During the early years of the ESCO program, a nephrologist billing Medicare for a monthly capitation payment could not submit a claim for a transitional care management service (TCM). The TCM service is designed to improve the transition from the inpatient venue of care to the outpatient venue of care. Believing such a service was vital to care coordination, FHP designed an ESKD-specific TOC template and inserted it into the nephrology provider’s workflow.
When TOC visits are completed following discharge from the hospital, the ESCO pays the nephrology practice for delivering that service. In the company’s experience, patients receiving the TOC visit had a lower 30-day readmission rate (Figure 2).
Figure 2 | Thirty-day readmission rates in ESKD patients by TOC visit status
In a transactional fee-for-service environment, the expense of delivering TOC to ESKD patients is not covered. But when assuming risk for the total cost of care, the calculus changes. When pay is for value rather than volume, a funding mechanism emerges. The financial savings for avoided hospital stays no longer accrues to the payor alone, but to the value-based arrangement participants, permitting the investment in clinical interventions that may be out of reach in a fee-for-service environment.
The beginning of a patient’s journey with ESKD provides another example of the importance of clinical performance. The transition from CKD to ESKD is fraught with perils that emerge when care is fragmented. Coordinating care during this transition can have a tremendous impact on clinical performance. FMCNA’s Renal Care Coordinator program, in collaboration with physician practices, has not only improved the transition to ESKD for patients with late-stage CKD, but also had a positive impact on optimal starts, in-center treatment adherence, and the total cost of care within the first six months of starting dialysis (Figure 3).
Figure 3 | Impact of the Renal Care Coordinator program
ACHIEVING OPTIMAL CLINICAL PERFORMANCE
FMCNA believes it begins with the nephrology medical staff. Imagine a physician-centric organization that combines the depth and breadth of the Fresenius Medical Care VBC experience with literally hundreds of talented nephrologists from around the country. In December 2019, Fresenius Medical Care, along with more than 650 nephrologists across the United States, formed a joint venture partnership called InterWell Health. This venture combines the expertise of a diverse and preeminent group of nephrology practices with the experience of FMCNA to advance value-based contracting models such as those discussed above that are attractive to medical staff, payors, and patients by driving better clinical outcomes at lower costs. The network will deliver population health management services across the full continuum of CKD, transplant, ESKD, and conservative care.
InterWell Health will establish best practices and set expectations to drive optimal clinical performance across a variety of valuebased arrangements. Importantly, InterWell Health’s value extends far beyond the walls of the company, because the organization will develop a national high-performing renal network, allowing all nephrologists to have an opportunity to successfully participate in value-based arrangements. InterWell Health addresses the need to have a more physician-centric model to manage the total cost of care.
The shift to VBC is well under way. Fresenius Medical Care’s early ESCO and payor experience have established a strong foundation, highlighting the enterprise’s ability to succeed in VBC. As renal-related value-based arrangements expand to include renal transplant and CKD, optimizing clinical performance will become even more important to the medical staff, patients, and the company. InterWell Health is the next step in the VBC journey, collaboratively helping Fresenius Medical Care build on early success through population health management and optimal clinical performance.
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References
- What is value-based healthcare? NEJM Catalyst, Jan. 1, 2017. https://catalyst.nejm. org/doi/full/10.1056/CAT.17.0558.
- Centers for Medicare and Medicaid Services. ESRD Disease Management Demonstration. Last updated May 1, 2015. https://innovation.cms.gov/Medicare-Demonstrations/ESRD-Disease-Management-Demonstration.html.