An Enabling Business Model for Population Health: Total Cost of Care

John Fryer
Senior Vice President & Head of Market, Lumeris

Value-based medicine is at a crossroads. With more than 60% of healthcare payments in 2022 included in some form of quality and value arrangement (up from 11% in 2012) [1] it’s hard to imagine a world where payers and providers are not focused on driving further adoption of quality and value-oriented programs. This increase in “adoption,” however, has not shown itself to be driving the impact we all need — reducing aggregate healthcare expenditures in the U.S., which are now projected to reach 5.2T [2], by 2025, or demonstrating an ability to improve the quality of care delivered broadly in the U.S.

This calls into question whether the programs are driving the results that they were intended to create. Much of this can be tied to the fact that the current arrangements are built on top of the broken and misaligned Fee for Service (FFS) system that still dominates healthcare payment models nationally (e.g., wellness visit “incentives,” care coordination fees, and shared savings programs). This is further evidenced by the data that shows only 6% [3] of total spending nationally in 2020 was truly population-based (e.g., PMPM or global budgets), completely delinked from the archaic FFS system.

If we are going to achieve the aims of value-based, population health, we must drive further adoption of total cost of care arrangements — payer relationships where the provider or provider organization takes responsibility for managing the cost of care for the defined population in scope — often, costs that live outside of the control of a provider (today).

It is a daunting concept at scale, but there are a number of examples where providers, markets, and businesses have shown an ability to succeed at driving out cost while providing top-decile quality and consumer outcomes. We are fortunate to represent one of those examples here in St. Louis where our 5-Star physician-anchored Medicare Advantage plan has allowed providers to take accountability for the membership, creating industry-leading results. With Medicare aged individuals representing the fastest growing segment of the population (anticipated to make up more than 20% of the total population and more than 45% of U.S. healthcare utilization by 2030), this is a perfect population to start with.

Lumeris is proud to offer Tribus, an additional capability, to partner with like-minded organizations as well as the physicians themselves, to bring and manage total cost of care contracts in a physician-led, consumer-validated care model. This additional approach will allow Lumeris to bring clinical leadership from our home market in St. Louis to work side-by-side with providers in other geographies — coaching, mentoring, and providing the support needed to navigate a successful transformation of an individual practice toward true population management. Anchored around the powerful infrastructure of Lumeris, Tribus is laser-focused on accelerating the adoption of total cost of care models. Sick of simply being a participant in a broken system? Ready to actually change the direction of U.S. healthcare expenditures? Let’s talk! Healthcare is too important to stay the same.

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