The Medicare Imperative

Jason Pyle, CEO, BaseHealth

“ The greatest opportunity to improve patient care and reduce costs long-term is found in the unknown, rising risk population.” — Jason Pyle, CEO, BaseHealth

There are 50 million Medicare members today. In the next 10 years, 76 million more people will become eligible, making it the single largest shift of middle-aged to elderly population in U.S. history. It’s unprecedented and the long-term implications raise serious concerns, especially considering Medicare is expected to run out of money by 2029.

How did we get here? We all pay into Medicare from day one of employment. The problem is that healthcare costs today are outpacing what we have and pay into Medicare. And once all the baby boomers turn 65, the federal government won’t collect enough in payroll taxes to pay for all the care that Medicare patients will need. Layer on top of that challenge an antiquated infrastructure, challenges of securing quality care and coverage gaps — there are many inefficiencies that contribute to the high cost of Medicare today.

So how do we fix it? Abandoning Medicare is not acceptable. Congress could hike taxes or ration care to save money. None of these are great ideas, but maintaining status quo isn’t an option, forcing us to sharpen our pencils and look for ways to stem the rising costs, while improving patient care.

The Transition to Value-Based Care

One area that shows promise is the shift from fee-for-service to value-based care. The advantage of value-based care is that it removes any incentive for unnecessary tests and procedures. Alternative payment models such as Medicare Advantage and Accountable Care Organizations (ACO) have shown promising results and push the adoption of value-based care payment models. But these too have challenges.

For example, a 2017 report from the Government Accountability Office found 35 percent of Medicare Advantage enrolees, especially those in poor health or with chronic conditions, dropped out because they have trouble getting access to the care they need.

The Pioneer ACO model launched in 2012 by the Center for Medicare and Medicaid Services (CMS) recently reported a gross savings of $68 million over five years across eight ACO organizations. These are great results. But it started with 32 ACO organizations, meaning 24 dropped out for various reasons. Some didn’t produce savings, others suffered significant financial losses and a few failed to meet performance goals.

So, while we’ve seen progress, there are barriers that CMS still needs to address in order to ensure long-term participant success and sustainability.

Unknown Rising Risk

Most Medicare Advantage programs and ACOs focus on the high-utilizing population, the five percent that cost the most. While this seems like a good approach, in reality it doesn’t work, because these five percent are already sick and getting the treatment they need. The greatest impact and opportunity to improve member care and reduce costs long-term is found in the unknown, rising risk population. These are the patients who look healthy on paper until they have a major medical event. At BaseHealth, we refer to these individuals as “Invisible Patients.” They don’t have a complicated claims history, so they often go undiagnosed, but only because they haven’t been to the doctor recently.

Our risk assessment engine uses predictive analytics to find the Invisible Patients. We deliver a roadmap that shows the next most likely outcome for a patient, and what interventions will yield the highest return on investment at an individual level. We don’t just say that five percent of your population is likely to develop diabetes, we identify the specific individuals that are very likely to become diabetic and identify the next best intervention to take with those individuals to prevent that outcome. We also provide the projected cost savings for each intervention recommended, enabling healthcare systems and ACOs to invest their time and resources where it will have the greatest opportunity for impact.

Limited Healthcare Resources

Financially, we’re talking about one of the most expensive industries in the world — $4.2 trillion in revenue in the U.S. To save Medicare, we must lower costs, improve outcomes and increase patient satisfaction. And we must do it all at the same time.

The challenge for healthcare organizations participating in risk-sharing models lies within their ability to make strategic investments that improve care, while remaining financially viable. This means any interventions that improve care must also show a return on investment.

BaseHealth enables healthcare systems to focus their limited resources where they’ll have the greatest opportunity for impact. It allows them to address the unknown rising risk by proactively reaching out to these patients to address their gaps in care and put them on a treatment plan that can change their health trajectory — reducing costs and improving care.

Having this type of analysis available, could very well be the answer we need to save the bedrock of healthcare in the U.S. — Medicare. It should become the standard against which all other intervention modeling tools are measured, and if so, will allow us to preserve care for many generations to come.