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The Keckley Report

The Value Agenda for Physicians in 2022

By December 6, 2021March 1st, 2023No Comments

This week, more than 800 will assemble in San Diego for America’s Physician Group’s (APG) 2021 Annual Conference. The group’s 335 member organizations seek to replace “the antiquated, dysfunctional fee-for-service reimbursement system with a clinically integrated, value-based healthcare system where physician groups are accountable for the coordination, cost, and quality of patient care.”

It’s a worthwhile ambition: the $4 trillion U.S. system is largely a fee-for-service. Despite setting an ambitious goal that 25% of payments by Commercial and Medicaid payers, and 50% by Medicare Advantage and traditional Medicare would require physician accountability for quality and value by 2022, results have been lackluster (less than 10%).

The reality is that healthcare system is change resistant: it has rewarded its investors, suppliers, distributors, hospitals and physicians reasonably well for decades while managing the public’s expectations. But at an unsustainable cost that’s well documented but not easily solved.

The value agenda for healthcare is the latest chapter: it’s not new. The notion of pay for performance in healthcare has been around for 30 years. The current iteration is about alternative payment models and avoidable readmissions and complications after hospital care. A centerpiece of these has been the Medicare Shared Savings Program (MSSP) aka accountable care organizations which reward provider organizations for managing care for a group of Medicare enrollees hitting quality marks while spending less than previous expended (the benchmark).

According to CMS last report, ACO’s have been moderately successful: 513 provider organizations participated in the last round. Physician-led ACOs saved Medicare $218 per beneficiary in 2020 vs. $168 for hospital-led ACOs and $145 for ACOs led by both physicians and hospitals. But other models have failed, data show that physician organizations with experience in managing care on a risk basis were more likely to be successful while novices dropped out to avoid losses.


As health policy veteran Liz Fowler steps into the Center for Medicare and Medicaid Innovation (CMMI) leadership role, the clock is ticking for the value agenda. While tweaking moderately successful models like MSSP to enable greater savings for Medicare and more participation by providers, three notable considerations must be allowed:

  • Only 15% of physicians practice in a fully integrated setting wherein care can be tightly coordinated and incentives for better care at a lower cost legally shared. Most of these are funded by hospital systems or private equity investors and all have infrastructure by which they can measure and monitor risk.

  • A significant portion of the savings potential for Medicare and other payers will be at the expense of hospitals. Some hospitals do a better job managing their costs than others. Some hospitals operate in locations that allow stronger operating margins than others. Some have stronger affinity for community benefit than others. And each is impacted differently in the value agenda.

  • Most physicians have not bought into the value agenda. Pre-pandemic, three in four physicians felt the profession was heading in the wrong direction as a result of too much red-tape and erosion of their clinical autonomy. During the pandemic, 12% shut down or limited their private practices capacity and one in four took a pay cut. Next year, the majority of physicians will resist anything that smacks of required participation in alternative payment programs or accountability for costs.

So, as APG assembles its devotees to value-based care in San Diego this week, the headwind facing the value agenda from doubters cannot be under-estimated nor the minority believing a nationalized system health system remedy better overlooked. Nonetheless, the value agenda is key to the system’s future.

That’s where we are.



“U.S. Ethics Ratings Rise for Medical Workers and Teachers”; December 2, 2020; Gallup

“Survey: Healthcare career satisfaction drops, burnout rises amid COVID-19”; April 6, 2021; CHG Healthcare

“Centers for Medicare & Medicaid Services- Medicare Shared Savings Program“; 2021; CMS

“CMS Releases 2020 MSSP ACO Results, Marking Fourth Consecutive Year of Net Savings To Medicare,” September 2021; Accountable Care Learning Collaborative


Recent Provider Deal Announcements

November 2021- medical concierge provider Sollis Health raised $35M in its most recent Series A financing round, bringing the company’s valuation to approximately $145M. The primary care anchored model includes offerings from preventive and emergency services to executive healthcare programs- all on a 24/7 basis.

Salt Lake City based Tava Health raised $10M in its Series A financing round which closed in late November of this year and values the company in the ballpark of $40M. The all too popular behavioral health investment isn’t new: far more mature companies like Teladoc, MDLive, Ginger, and others already have significant market share in this specialty; but the employer focused telemental health approach makes Tava stand out from the group.

Jury Decision Goes Against Pharmacy Chains Deemed Complicit in Opioid Deaths

On November 23, a federal jury in Cleveland found that three of the nation’s largest pharmacy chains — CVS Health, Walmart and Walgreens — had substantially contributed to the crisis of opioid overdoses and deaths in two Ohio counties, the first time the retail segment of the drug industry has been held accountable in the decades-long epidemic.

CVS, Walgreens and Walmart said they would appeal the verdict. “Pharmacists fill legal prescriptions written by D.E.A.-licensed doctors who prescribe legal, F.D.A.-approved substances to treat actual patients in need,” CVS said in a statement.

“CVS, Walgreens and Walmart Fueled Opioid Crisis, Jury Finds”; November 23, 2021; New York Times

Pew Study: Meaning in Life Driven by Family, Occupation; Healthiness

Pew Research Center posed an open-ended question about the meaning of life to nearly 19,000 adults across 17 advanced economies. Highlights:

  • In 14 of the 17 advanced economies surveyed, more mention their family as a source of meaning in their lives than any other factor.

  • Family (38%), occupation and career (25%) and material well-being (19%), friends and community (18%) and physical and mental health (17%) are the top 5 across all countries.

  • In the US, family, friends, material well-being, occupation and faith are the top 5.

“What Makes Life Meaningful? Views From 17 Advanced Economies”; November 18, 2021; Pew Research

Study: Medical Liability Suits down during COVID

Per an online survey of 4,358 doctors across 29 specialties conducted from May 21 through August 28 this year:

  • 42% of primary care physicians were sued, down from 52% in 2019.

  • Likewise, specialists saw a decrease in lawsuits, with 56% of specialists were sued in 2020 through mid-2021, compared to 62% in 2019 led by plastic surgeons and general surgeons (83%), orthopedists (81%), and urologists (80%).

Malpractice Report 2021; Medscape

Study: Eating Disorder Hospitalizations Double in Last Half of 2020

As reported in JAMA Network Open, data from a large national health insurer showed substantial increases in hospitalizations among people with anorexia nervosa, bulimia nervosa, and other eating disorders, such as binge-eating disorder, starting in the second half of 2020. Hospitalization rates for these conditions roughly doubled compared to the rates in the prior two years. And individuals admitted to the hospital tended to stay about 50% longer, suggesting the disorders were more severe.

“The pandemic has deeply affected many people with eating disorders”; Nov. 26, 2021; STAT News

Apollo Closes Fund Focused on Root Causes of Aging

Last week, Berlin-based Apollo Health Ventures announced it raised $180 million to fund early entrants in the burgeoning anti-aging sector.

The anti-aging field has gained momentum in recent years, with Amazon’s Jeff Bezos reportedly investing in a stealthy biotech called Altos Labs just a couple of months ago. And in July, AbbVie and Google-backed Calico reached a $1 billion deal to double down on their partnership.

“Apollo Health Ventures pumps another $180M into the burgeoning race to slow aging” December 1, 2021; Endpoints News

Study: Pharmacy Benefit Managers (PBMs) Increase Profits as Sector Consolidates

PBMs’ gross profit from PBM-owned mail order and specialty pharmacies grew to $10.1 billion in 2019, up 13% from $8.9 billion in 2017, according PBM Accountability Project’s analysis of financial records, government reports, studies and surveys. Other findings:

  • PBMs’ gross profit grew 12% from $25 billion to $28 billion over that span.

  • Gross profit from retained administrative fees paid by manufacturers for services provided by PBMs increased 51%, from $3.8 billion in 2017 to $5.7 billion in 2019.

  • Gross profit from “other sources,” including spread pricing, pharmacy fees and claw backs, fees collected from payers and other non-administrative fees collected from manufacturers, grew by nearly 26%, from $8.5 billion in 2017 to $10.7 billion in 2019.

“Understanding the Evolving Business Models and Revenue of Pharmacy Benefit Managers 2021”; PBM Accountability Project

Study: Women Under-Represented in Healthcare Leadership

Ohio State researchers examined 31 leadership roles in 161 health systems with a minimum of 5 affiliated hospitals, 108 health insurance groups with at least 0.09% of the US health insurance market share, and the US Department of Health and Human Services. Findings:

  • The proportion of BOD chairpersons who were women was 17.5% in health systems, 21.3% in health insurance groups.

  • 15.3% of the CEO roles in health systems and 15.8% of the CEO positions in health insurance groups were held by women.

“Representation of Women in the Leadership Structure of the US Health Care System “; November 29, 2021; JAMA Network Open


Government Economic Reports: 2021 Economic Recovery Stronger than Earlier Forecasts but Consumer Confidence Lags

Government reports released last week indicate the 2021 economic recovery is stronger than earlier forecasts:

  • Weekly filings for unemployment benefits hit their lowest level since 1969 (Labor)

  • Inflation was higher as a result of supply bottlenecks and energy costs, but not as high as economists expected. (Commerce)

  • Americans’ spending throughout October was stronger than forecasted. (Commerce)

  • PCE inflation — for personal consumption — rose 0.6% in October, a big jump but short of economists’ forecasts. The Consumer Price Index posted a 0.9% gain in October beating the median forecast for a 0.6% jump and, like PCE, marked the largest one-month gain since 2008.

  • October inflation data dragged on Americans’ confidence in the economy, with sentiment sitting at decade lows. (Michigan Index of Consumer Confidence)

Morgan Stanley economists boosted their estimate for current-quarter growth to 8.7% from 3% on Wednesday, citing “the wealth of data” that showed fresh strength throughout the economy.

“Wall Street’s verdict is in: the US economy is booming again”; November 25, 2021; Business Insider

“Inflation rises sharply in October, prompting more fears of a price-growth crisis” Business Insider November 25, 2021; Business Insider

Study: Majority of Hospitals Non-Compliant with Price Transparency Rule for Radiology Services

Among the 13 radiology services designated as a common shoppable service required by CMS’ Hospital Price Transparency final rule, Michigan State University and Johns Hopkins researchers found that 36% of hospitals had reported a price for 1 of the 13 services as of Sept. 6.

  • Disclosures were least common for mammography of one breast (30%) and highest for computed tomography (CT) of the abdomen and pelvis with contrast material (39%).

  • Among those that did post their prices, hospitals raising prices highest for CT exams of the head or brain, where the median negotiated price of $813 far outstripped the $137 charged to Medicare.

“Hospitals’ infrequently published prices suggest substantial variance in radiology service charges to commercial payers”; December 1, 2021; Fierce Healthcare

Study: More than Half of Seniors Discharged Get No Follow-Up from Hospitals

Researchers analyzed post-discharge follow-up for 3591 participants 69+ years of age discharged from acute care hospitals to home during the years of the study. Findings:

  • 44.1% reported receiving help within 3 months of discharge. Compared with people not receiving help, those receiving help were older years, 79.7 vs 77.6, had worse self-rated health at baseline (47.1% with fair or poor health vs 26.5%) and were more likely to have dementia (21.8% vs 5.5%).

  • The percentage of respondents who reported receiving help increased during the study period from 38.1% of hospital discharges in 2011 to 51.5% in 2017.

“Trends in Receipt of Help at Home After Hospital Discharge Among Older Adults in the US”; November 30, 2021; JAMA Network Open

Study: Out of Pocket Costs Common for Colonoscopy Despite ACA Provisions

The Patient Protection and Affordable Care Act requires several colorectal cancer screening modalities, including colonoscopy and noninvasive stool-based tests (SBTs), be covered with no consumer cost sharing for individuals with an average cancer risk who are eligible for such screening on the basis of age. Researchers analyzed Commercial and Medicare Supplemental administrative claims databases from January 1, 2014, through July 31, 2019, for adults aged 50 to 75 years. Findings:

  • 15.8% underwent subsequent colonoscopy within 6 months, and 57.8% with a subsequent colonoscopy had a polypectomy.

  • Consumer cost sharing for colonoscopy after a noninvasive SBT was common (OOP cost>$0 in 48.2% of commercial claims and 77.9% of Medicare claims):OOP costs ranged from $99 to $231 depending on the original screening test used (multitarget stool DNA, fecal immunochemical test, or fecal occult blood test) for patients with either commercial or Medicare insurance. The OOP costs were higher when polypectomy was performed.

“Out-of-Pocket Costs for Colonoscopy After Noninvasive Colorectal Cancer Screening Among US Adults With Commercial and Medicare Insurance”; December 2, 2021; JAMA Network Open


COVID Trackers, CDC Guidance & Other Resources

KFF: 23% of Adults have Gotten Boosters

23% of fully vaccinated adults have already received a COVID-19 booster shot, more than double the share who had done so in October (10%) per the KFF COVID-19 Vaccine Monitor report released Thursday. Most other vaccinated adults say they definitely (37%) or probably (19%) will get a booster shot as recommended, while about a fifth say they will probably (10%) or definitely (8%) not do so.

“KFF COVID-19 Vaccine Monitor: November 2021”; December 2, 2021; KFF

Study: Telehealth Visits Spike in Pandemic

According to the HHS report:

  • The number of Medicare fee-for-service (FFS) beneficiary telehealth visits increased 63-fold in 2020, from 840,000 in 2019 to 52.7 million in 2020.

  • Total utilization of all Medicare FFS Part B clinician visits declined 11% in 2020 compared to levels in 2019.

  • Most beneficiaries (92%) received telehealth visits from their homes, which was not permissible in Medicare prior to the pandemic.

  • Prior to the pandemic, telehealth made up less than 1% of visits across all visit specialties but increased to 8% of primary care visits, while specialty care had smallest shift towards telehealth (3% of specialist visits).

“Medicare Beneficiaries’ Use of Telehealth in 2020: Trends by Beneficiary Characteristics and Location”; December 3, 2021; HHS