Do Healthcare CEOs Agree on Whether VBC and MA Actually Save Money? Leave a comment
Value-based care and Medicare Advantage are often heralded as two of healthcare’s most promising strategies for controlling costs, but industry leaders can’t quite tell if they’re actually working.
During a recent discussion hosted by consulting firm rule of three, healthcare executives debated whether these models are truly delivering savings. Some have faith that value-based care and Medicare Advantage will soon deliver on their promise of lower costs, and others believe they’ve flopped when it comes to achieving their intended goal.
Michael Meucci, CEO of health data platform Arcadia, said value-based care is entering an era where it really needs to prove its impact.
In his eyes, the industry needs to move beyond focusing on coding optimization or star ratings and instead use value-based models to bring down costs by addressing fraud, waste and abuse. He sees a real opportunity there.
“There’s a bunch of healthcare costs that are just bad actors, and value based programs monitor that data more regularly than anybody else,” Meucci stated.
Risant Health CEO Jaewon Ryu agreed, saying value-based care has yet to fully realize its potential but that it remains the most promising approach for improving outcomes and managing population health.
Meucci also pointed out that some payers reducing enrollment in Medicare Advantage plans could ultimately strengthen margins and encourage more innovation in the cost-containment arena.
As insurers pull back from markets or benefits that have become less profitable amid higher utilization and tighter reimbursement, the plans that remain might be forced to operate more efficiently — which could create more room to invest in new care models and technology.
And Ryu noted that changes underway in Medicare Advantage, including reassessing supplemental benefits, could reshape the program as the country’s population ages.
He said there’s a possibility these shifts could ultimately make the program more sustainable and responsive to patients’ needs.
Another speaker — Dan Mendelson, CEO of Morgan Health — took a favorable view morof Medicare Advantage, noting that it now covers more than half of U.S. seniors and serves as a major platform for innovation, including the deployment of clinical AI tools.
To him, Medicare Advantage could ultimately outperform value-based care in terms of impact.
But Meucci pointed out that there’s still no consensus on why the touted value of Medicare Advantage hasn’t translated into lower expenses. He said the industry has yet to come up with a good answer as to why Medicare Advantage is still more expensive than traditional Medicare.
As a self-declared “dollars-and-cents guy,” Shawn Gremminger strongly pushed back on the notion that value-based care or Medicare Advantage is actually bending the cost curve. He is CEO of the National Alliance of Healthcare Purchaser Coalitions.
Gremminger argued that the fact Medicare Advantage continues to cost more than traditional Medicare raises doubts about the effectiveness of value-based payment models overall.
“I’ve seen no proof that value based care is actually saving Americans money,” he remarked.
Instead, Gremminger thinks employers will increasingly pursue direct contracting with providers, which he described as a simpler and more transparent method to reduce costs and gain more influence over healthcare purchasing.
For now, it seems to remain an open question whether value-based care and Medicare Advantage will meaningfully reduce costs or just shift spending around.
Photo: MirageC, Getty Images
