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Big Questions Answered helps us understand important CVS Health initiatives by taking a closer look at new products, powerful innovations and the big changes the company is making to achieve its strategic imperatives and build a world of health around every consumer. The company's senior leaders answer big questions from host Matt McGuire.
Matt McGuire
Value-based care has been a hot topic in the health care industry for many years. But what is it, and why is it still trending? While health care companies often agree on how to define value-based care, they don’t always implement it in similar ways.
On today’s episode, we’ll learn how this health care delivery model looks to address two problems in our health care system — quality and cost.
We’ll also discuss how CVS Health delivers value-based care and how patients benefit from it versus fee-for-service care.
Welcome to Big Questions Answered, a podcast that helps us understand the important initiatives at CVS Health. I’m Matt McGuire from the Enterprise Communications team. I’ll be your host as we take a closer look at new products, powerful innovations and the big changes we’re making to achieve our strategic imperatives and build a world of health around every consumer. Thanks for joining me today as we get our big questions answered.
I’m here with Dr. Sree Chaguturu, the Chief Medical Officer at CVS Health, and President of our Health Care Delivery business where he leads Oak Street Health, Signify Health and MinuteClinic.
Today, he’ll be sharing his insights on value-based care and how we’re delivering it at CVS Health. Dr. Chaguturu, thank you for joining me today.
Dr. Sree Chaguturu
It's my pleasure.
Matt McGuire
So, I am looking forward to discussing value-based care with you. It is a bit of a buzz word these days, but I get the impression it's often misunderstood. Can you explain what value-based care is and why it's gaining momentum?
Dr. Sree Chaguturu
Sure, happy to. If we think about value-based care, like you said, it's this buzzword that you hear a lot when people talk about health care and where it's headed. Let me try to explain it simply. What we have traditionally had is fee-for-service where you are paid for each service that you conduct. In value-based care, it's a health care delivery model that focuses on providing high-quality care while controlling costs. This is the key component. We are linking outcomes to the actual delivery of service. And instead of paying health care providers based on the number of services that they deliver, we are rewarding physicians, nurses, care teams for achieving better health outcomes for their patients. A lot of times when you're doing value-based care, that means that we're emphasizing preventive care, care coordination among health care providers. And making sure that we have a treatment plan that's personalized for the individual, for the patient, based on their health goals.
And the reason that it's gaining momentum is because in American health care, we have two problems. We have a cost problem and we have a quality problem. We pay a lot for health care in this country — over $4 trillion, fast approaching $5 trillion. That means, like, almost $1 out of every $5 we spend in our economy is towards health care. Yet we are not getting the same quality outcomes, mortality benefits and reduction in morbidity that we see in other countries that are spending less. And, so the momentum behind value-based care is driven by its potential to improve outcomes, reduce health care costs and improve patient experience.
Matt McGuire
So, you just outlined a few of the amazing things value-based care has to offer. And, I immediately think, hey, let’s do this! But I know it’s not as easy as that. Can you walk me through some of the challenges of value-based care delivery?
Dr. Sree Chaguturu
Sure. Happy to. So, the first thing is that it requires a lot of data. You need to be able to understand who are your patients, what are their clinical conditions, what’s their risk of getting sick? And then in addition to getting that data and being able to analyze that data is then to deliver care in a very different way.
And so traditionally-fee-for-service, there's one physician for every patient. In value-based care models, there usually is a team-based care model where there is not only a physician but a nurse, a pharmacist, somebody who might be helping with care coordination and social work and mental health. So, there's many more people involved and you need to coordinate the care among these multiple providers.
And then finally, there is the financial risk. So, you are being paid for outcomes, but if you have poor outcomes then you need to pay penalties for that, too. And taking on those financial risks can be very complicated. For health systems and providers to do if they don't meet performance target. So you have data challenges, you have a care team or what I call care-model challenges and then financial challenges. That said, those challenges are worth overcoming because a promise of value-based care is significant.
Matt McGuire
Yeah, I can imagine that that would cause a lot of difficulties, but you know, but then again from the patient perspective, I can imagine there's a lot of benefits. Can you walk me through those benefits? And additionally, how will other pieces of the health care system improve through value-based care?
Dr. Sree Chaguturu
As I described value-based care, central to it is our ability to use data to understand an individual patient's needs and then making sure that we have a care plan, a more personalized set of care and better coordination among health care providers, so that the patient can meet their individual health outcomes. It's a model that encourages preventive care, early intervention and chronic disease management. And the benefits are numerous for the patient. So, let's take an example because I think it's just much easier to understand if we think about a specific patient.
Let's say there's a patient who's been discharged from the hospital for heart failure, and they're in a value-based care model. They would come in within a few days from discharge to be seen by the care team. They might be first seen by a nurse who goes through the discharge instructions and makes sure that the patient understands what would be the next steps. For example, on their diet and what medications that they need to be on. And then the nurse might identify that the medications need to be optimized and talks to the physician, who then sees in collaboration with the pharmacist and maximize and reconcile the medications from before the admission and discharge. And then there's a recognition that they need to be seen by a cardiologist in short order, but also that the patient has challenges getting to their visit, so we need to make sure that they get transportation services through social work and care coordination, who helps them navigate their appointments, and ensure that they understand the treatment plan.
This is very different type of care than the traditional fee-for-service where you would potentially come in the first month after discharge and wouldn't get that full review of what you need to manage your care. And, so, I think we could all agree as a patient getting value-based care, is much more ideal than the traditional fee for service.
And then there's another part to your question, which is what's the benefit for the health care system? Now imagine that heart failure patient. If we do all of that right, it is going to help that patient stay out of the hospital, avoid unnecessary emergency room visits, avoid rehospitalization. And if we can avoid that care, then we are, one, making sure that the patient stays healthy at home, but, two, reducing costs by eliminating unnecessary services. And this is a win-win for patients and for the health system. So, there is just a lot of benefits from value-based care. I hope that brings this to life.
Matt McGuire
Yeah, absolutely. And, so, I'm curious, where do we have value-based care delivery within CVS Health? And why is the Health Care Delivery at CVS Health unique?
Dr. Sree Chaguturu
We have — across CVS Health, we have a number of assets and capabilities that can help support value-based care. Let me dive deep into Health Care Delivery. So, within Health Care Delivery, CVS Health has been supporting patients in receiving health care. MinuteClinic, we have had MinuteClinic at CVS Health for decades. And what's exciting about MinuteClinic is we have now evolved our services, which has traditionally been to acute care services, to now preventative and chronic disease management. And, so, let's say you need your cancer screening visit or you have high blood pressure and you want that managed, we now have the capability to do that within MinuteClinic.
And, so, as I talked about value-based care and the ability to provide care coordination and chronic disease management in tailored individual health services for your unique circumstances, MinuteClinic has evolved substantially in its ability to deliver in value-based care.
Next we have Signify Health. And with Signify Health we are providing nearly 3 million home visits where we send clinicians into the home of seniors across America. And we sit down and understand the patient's clinical risk factors and conditions. We then help support them to get reconnected back into care to make sure that they get the services that they need. And, so, with Signify Health providing in-home health assessments, supporting our understanding of risk of members and in helping them to get back on to their path to better health, we are supporting value-based care for helping both providers extend their reach to support patients at home but also to make sure that payors have an understanding of the patients and the members that they're serving.
Lastly, is Oak Street Health. And in Oak Street Health, it is a primary-care based model focused on providing comprehensive care for older adults, including preventative services, chronic disease management and social support. That team-based care model that I've been describing earlier is expressed in spades at Oak Street Health as we support seniors in value-based care, we take on quality targets and cost targets in collaboration with payors to make sure that patients are healthier and we reduce the overall cost of health care.
So, I've just described MinuteClinic, Signify Health and Oak Street Health as three of our premier value-based care delivery capabilities and services that we provide at CVS Health.
Matt McGuire
Yeah, that was quite a line-up. Very nice. So, I'm curious, to just to wrap things up. Can you take a look down the road and tell me where you see value-based care headed in the next three to five years at CVS Health?
Dr. Sree Chaguturu
Sure thing. As I just described CVS Health's assets within Health Care Delivery, MinuteClinic, Oak Street, Signify Health, we made an explicit choice of where we want to be in value-based care. And that's a focus in primary care and in the home. We believe that primary care is central to being able to improve overall health care outcomes. It's the place where we have seen if you invest more into primary care, you can improve health care outcomes, but you can also reduce downstream utilization of services like emergency room and hospitalization. So, primary care will be a focus for where CVS Health invests and supports value-based care.
Secondly, what we do know is that more and more people are looking for services in the home, and with Signify being able to be in the home and help support members is critically important and we will continue to support patients in value-based care through home services.
Lastly, is technology. And we believe that technology is important in improving patient engagement and outcomes. So, through connected experiences such as telehealth services or digital applications, we will continue to use data and analytics to create more personalized care plans but provide tools to patients at the care team to allow them to improve on outcomes. And, so, I would just say our goal is to create, you know, more sustainable health care system that prioritizes patient health and well-being. We will continue to focus on preventative care, personalized treatment plans, better coordination among providers, and I know that we will continue to deliver superior care and value to our patients, customers and for the American health care system.
Matt McGuire
Yeah. Well, Dr. Chaguturu. This has been a great conversation. Thank you for stopping by and sharing what value-based care is and how we're using it CVS Health. I really appreciate it.
Dr. Sree Chaguturu
Oh, it's my pleasure. These are really complicated topics. I hope that we had an opportunity here to elucidate some of these ideas. And I will just say, I'm excited about what lies ahead for CVS Health, and I know that we're going to have a tremendous impact on the American health care system.
Matt McGuire
And a big thanks to you for tuning in to this episode. Until next time, I'm Matt McGuire. I look forward to joining you again to get more big questions answered.