Humana Medicare Advantage value-based plans saved $8B in medical costs

A new report from Humana finds that “value-based care,” which focuses on quality of care and patient experience with deeper patient engagement, that is provided to Medicare Advantage members kept patients healthier and lowers costs.

The new report is part of an annual assessment of the model, which stresses a more personal approach, more time spent with patients, and more coordinated care than traditional fee-for service models of care. The model also puts an emphasis on prevention and lifestyle changes to help patients manage their health.

The tenth-annual report on the efficacy of the value-based model for Medicare Advantage members noted that the U.S. health system has faced some significant challenges in recent years, including the COVID pandemic, a stressed workforce, and growing awareness of inequities in health care. The Humana analysis acknowledges challenges remain but found better scores on measurements across the board for patients in the value-based care model.

“The data are clear: Value-based care works,” said Dr. Kate Goodrich, Chief Medical Officer at Humana. “As our report shows, this smarter healthcare model improves outcomes for Medicare Advantage members and allows primary care physicians to practice medicine at the top of their license and develop meaningful relationships with patients. At Humana, we are proud to lead the way on value-based care for our Medicare Advantage members, and we will continue to look for ways to expand this approach into other lines of business.”

Better care equals lower costs

For purchasers of health care, one big takeaway is that Humana, one of the nation’s largest health insurance companies, consistently finds that value-based care is lower in cost. The data showed that in 2022, Humana Medicare Advantage Value-Based contractual arrangements saved 23.2% in medical costs when compared to Original Medicare.

Patients in this model also see better preventive services and less time in hospitals. The study found 30% fewer in-patient admissions for value-based care patients compared with standard Medicare beneficiaries in 2022. And the value-based model scored better for preventive care: “Value-based care patients completed preventive screenings at a 14.6% higher rate than Medicare Advantage members not in a value-based care arrangement,” the report said.

They also saw primary-care providers more often, with 85% visiting their primary care provider at least once in 2022, compared with 75% of those in other models of care.

The Humana analysis also found that value-based practices also can cut down on low-value care. That term is defined as medical or clinical services that provide little or no clinical benefit to the patient. “Humana researchers found that members in Medicare Advantage, which tends to have more value-based care penetration, received fewer low-value services than fee-for-service Medicare members in 2019,” the report said.

Not an easy change for providers

The report noted that changing to a value-based model may be challenging for some hospitals and medical practices. “Many health system leaders and other decision makers struggle to find a way to transition traditionally fee-for-service organizations into a truly value-based care model,” the report said. “The initial investments in technology and training, not to mention the challenges of significant organizational change, require a balanced and phased approach where key leaders not only buy into the concept, but also truly understand the operational implications as well as the financial and clinical value.”

Related: Cigna report outlines the benefits, challenges of value-based care

The study pointed to results in the Florida Medicare and Medicaid market, where ER utilization per thousand for providers in value-based care arrangement was 10% less compared to providers not in the value-based care model.

“Health care organizations are working together more and more, and now we’re starting to see aligned payment model benefits in Medicaid,” said George Renaudin, Humana’s President of Medicare and Medicaid. “We are at the dawn of the next era in value-based care. As we think about how to continue improving health outcomes for our members, we will determine ways to apply our successful care models beyond primary care and Medicare Advantage.”