Transforming specialty care through value-based digital strategies

An average of 75% of the total healthcare spend in the US today is allotted to chronic illnesses and this spend is expected to continue to grow exponentially in the future. Five conditions make up a significant part ($4.1T) of this spending namely musculoskeletal (MSK), heart diseases, neurological conditions, diabetes, and the emerging behavioral health topping the list of the payer and employer spend in the last several years.

Within the confines of the current episodic care model, where a patient is seen for 15 minutes in an office visit a few times a year, chronic conditions are turning out to be a challenge to manage. To add to this the acute shortage of specialists, difficulties accessing specialty care, and delayed diagnosis leading to complications is significantly impacting the overall cost of care.

An aging population, fragmented inaccessible patient journeys, unhappy patients, and expensive medical bills are forcing US healthcare to reinvent its business model. A model that can help create a win-win situation for payers, providers, and patients to deliver short- and long-term outcomes, experience accessibility, and equitable health at a lower cost.

What role specialties play today

The current healthcare system has evolved to treat patients with acute diseases and is ill-suited to administer care to patients with chronic diseases. In chronic illness in contrast to acute disease, hospital care has a limited role, whereas ambulatory care and community-based care are much more important.

In the current system referrals are the link between primary and specialty care.  Typically, patients are referred to a specialist by a primary care provider for disease-specific care that requires expert diagnosis and management. Once the referral has been initiated, the PCP should ideally coordinate care by  tracking the referral, transfer relevant patient information   and ensure that the patient is in the right care pathway.

However, in the current state, both PCPs and specialists cite the lack of communication, effective referral management, and seamless information transfer as huge challenges in patient care. Apart from the difficulties in patient referrals to specialty, transfer of patient r esults and records from one provider either do not reach the other provider on time resulting in loss of critical time, or are a duplication of investigations and diagnosis, further causing treatment delays and increased cost of care.

This calls for a huge opportunity for specialties to play a critical role in complementing the PCP and tertiary care by transforming into a sustainable model that is preventive, boundaryless, and empowers patients and caregivers.

Market Forces Driving Specialty care

In 2022, CMS announced its aim to have all traditional Medicare beneficiaries aligned in an accountable care relationship with their provider by 2030 with a vision to advance health equity, expand coverage, and improve health outcomes thus driving Value-Based Care adoption.

To achieve this CMS has emphasized the shift in focus required to whole-person care, which requires additional depth and scope of services offered by specialty care with effective coordination of primary and specialty care providers. It has been identified that specialty care plays an outsized role in overall medical spending and offers important opportunities to increase the value of care.

The overall patient demand for specialty care is on an upward trajectory as chronic diseases and other long-term conditions require continuous management, monitoring, and engagement. Patients are looking at getting the treatment of a chronic disease under one roof (vertical integration) making it more effective and convenient thus freeing them from the burden of coordinating their care with myriad providers. Evidence also suggests that outcomes, coordination, and patient satisfaction are superior when specialists have a central role.

This integration is leading to a growing shift in the market towards value-based care agreements which provide greater financial stability with a regular revenue stream that isn't volume dependent. The adoption of VBC is also gaining traction in various specialties (MSK, cardiology, nephrology, oncology, and behavioral health). Specialties adopting such models have reported substantial reductions in hospital admissions, readmissions, and medication adherence, as well as the widespread adoption of in-home therapies, both improving outcomes and reducing the cost of care delivery.

Payers are swiftly moving towards integrated managed care models that better align incentives and provide higher-quality, better experience, lower-cost, and more accessible care. More payers view members’ health outcomes as critical to their bottom line. Commercial payers are ramping up investments in the provider space as part of a broader move to strengthen their role in patients’ overall care and to tap the provider profit pool. Large health insurers are looking at integrating doctors’ groups/specialty practices that care for patients in private Medicare plans. The absorption of doctor practices is part of a vast, accelerating consolidation of medical care.

CVS Health, with its sprawling pharmacy business and ownership of the major insurer Aetna, paid roughly $11 billion to buy Oak Street Health, a fast-growing chain of primary care centers that employ doctors in 21 states.

Kaiser Permanente integrates nonprofit health plans and hospitals with 8 multispecialty medical groups, which lets these entities work together to coordinate the entire continuum of care services for patients for investments in whole-person care.

UnitedHealth’s Optum has expanded its existing physician network with the acquisition of physician groups Atrius Health and Beaver Medical Group, widening its lead as the largest employer of US physicians.

Centene acquired Magellan Health, a benefits manager for behavioral health, for $2.2 billion, to solidify its foothold in the behavioral health space.

Blue Cross NC entered into a value-based contract with Fresenius Medical Care North America (FMCNA) and Strive Health to serve patients with chronic kidney disease. Blue Cross and Blue Shield of Minnesota (Blue Cross) also started a value-based care agreement targeting chronic kidney disease management and end-stage renal disease care.

Humana has partnered with Vancouver Clinic to expand value-based primary care services to Medicare Advantage members giving access to an integrated care team.

Further to this there is a steady rise in consolidation within the specialty businesses. Small medical and specialty healthcare practices are opting to sell their businesses to large corporations, investors, and hospital systems. Large practice consolidators seek franchise acquisitions of specialty-specific care practices with the goal of offering uniform customer experiences under unified brands. This is being hugely supported by many Private equity players investing in deals, especially in specialties such as MSK, behavioral health, and diabetes with abundant point solutions that are often difficult for customers to navigate. All this will help expand access to care, fund new technologies, making healthcare businesses more efficient by eliminating duplicate administration costs.

How Can Specialties make the best of this opportunity

Specialties today are looking at a model that is unique in its ability to provide value-based care at scale, combining medical expertise, advanced technologies, electronic health record systems, coverage, and care delivery. This need has created high demand for both technology and services to achieve the goal of whole person care. Having a technology infrastructure that can capture a 360-degree view of an individual patient will help improve care coordination and performance in chronic disease management.

Across specialties, there has been a fundamental shift away from a predominantly utilization-management approach to spend that aims to use analytics, care coordination, provider integration, and patient engagement to address avoidable spend more holistically.

Being nimble, specialties can innovate and bring in change faster. Creating digital first archetypes tapping into their deep medical knowledge combined with hybrid high touch patient interactions and care personalization are unique value propositions for specialties today.

An integrated digital care approach will help in seamless communication between PCPs and specialists, alleviate costly referrals, streamline care pathways, eliminate long wait times for in-person visits thereby reducing the likelihood of an individual’s care falling between the cracks of different medical disciplines.