Under Two-Sided Risk Models, Quality Of Care Increases Compared To FFS Medicare

Data examinations are beginning to shed greater insight on just how much better value-based payment models are for quality of care.

When comparing two-sided risk models in Medicare Advantage (MA) versus fee-for-service Medicare programs, the former performed better in all eight quality-of-care metrics. That is at least according to a new study published this month in JAMA.

The metrics examined included odds of inpatient admission; inpatient admission through the emergency department (ED); ED visits; avoidable ED visits; 30-day readmission; admission for stroke or myocardial infarction; and hospitalization for chronic obstructive pulmonary disease or asthma exacerbation.


The study was led by authors affiliated with UnitedHealth Group’s (NYSE: UNH) Optum and the Harvard T. H. Chan School of Public Health. The starkest differences among those eight metrics were in hospitalization for chronic obstructive pulmonary disease or asthma exacerbation, odds of inpatient admission, and avoidable ED rates, representing 44%, 18% and 14% differences between the two models, respectively.

It was based on a data set of 316, 312 individuals. It specifically was pertaining to physicians engaged in two-sided risk models. But it is also relevant to home-based care, as more providers are attempting to engage in risk-based models.

For instance, the home-based care provider Care Advantage Inc. – which has made two acquisitions in the month of December – is preparing itself to be engaged in these models. While it has worked with payers on some upside-only risk, it is trying to build out a set of services that bode for taking on downside, too.


“It’s important for the overall flow of the patient, and how we can take care of that patient across that continuum,” Care Advantage CEO Tim Hanold recently told Home Health Care News. “It’s also important because we have a number of pay-for-performance agreements that are in flight, and some new ones that are coming on board.”

Another example of a provider full-speed ahead on getting into fully risk-based models is the Minnesota-based Lifespark.

“We secured a full upside downside global risk contract,” Lifespark CEO Joel Theisen told HHCN earlier this year. “That really allowed us to deliver on this model and not be penny wise and pound foolish, but really smart longitudinally for these folks. I think it’s the only model, in my mind. I think everybody should be at risk, because I think everybody should be accountable to the health of these individuals that we serve. Not to their own bottom lines, not to their own business case or their piece or their fragment of the experience, but really global risks.”

It’s possible that physician agreements with Medicare Advantage plans may inherently perform differently than home-based care provider agreements with plans.

But most provider executives are in agreement that home health care and home care are quality drivers, which should theoretically help in risk sharing and pay-for-performance agreements with health plans.

“The improvements observed in this study may be partly or fully attributed to the Medicare Advantage model,” the study authors wrote. “The Medicare Advantage risk adjustment system appears to be meeting its intended goal by aligning the capitation payments to the health care burden of the individual beneficiary and aggregate population served, thus providing revenue to develop infrastructure that supports improvements in quality and efficiency for the patients enrolled in Medicare Advantage models with two-sided risk.”

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