Major Insurer’s Value-Based Primary Care Gamble Is Paying Off
Friday, November 6th, 2020

Humana is reaping the rewards of its decision to gamble on value-based primary care, with the national health insurer receiving well over $600 million in additional income, resulting in a third-quarter profit of $1.3 billion. Humana’s venture into better primary care arrives at a time when healthcare prices are increasing, and insurers are searching for ways to cut costs on medical claims.

When more money is allocated initially for primary care, including screenings and preventative care, research has shown long term cost savings. Humana beneficiaries tend to be seniors in Medicare Advantage programs and cost more than younger, healthier patients, so that investment pays off. Better care with better outcomes has also led to more member retention, a key element in creating value.

Instead of paying physicians for each treatment they offer, which is how health plans historically charged for medical care, Humana pays primary-care practices a fixed monthly fee per patient. This practice is becoming more widespread, especially after the coronavirus outbreak stopped patients from accessing regular care and drained income from medical practices. When people stopped visiting their doctors’ offices, several value-based practices still received payments.

Humana’s Medicare Advantage members receiving treatment from physicians in value-based contracts last year could have spent an additional $4 billion in medical costs if they had continued their care from doctors paid the conventional way, according to the current annual value-based care study from Humana. In contrast with standard Medicare, participants of value-based plans have seen thirty percent fewer hospital stays and ten percent fewer ER visits.

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This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.