Shared Savings in Value-Based Payment Models Produce More Incentives

Value-based payment models that shared five-year expected savings offered stronger incentives for clinicians to implement preventive interventions for postpartum depression compared to models that offered shared savings over just one year, according to a study published in JAMA Network Open.

The Affordable Care Act requires most commercial health insurance plans to cover preventive services for pregnant or postpartum people at risk for perinatal depression. However, current payment models do not often properly promote these preventive interventions.

Most value-based payment models offered shared savings based on reductions in the total cost of care (TCOC), which represents how much was spent over the episode or the past year. Past-year savings prioritize short-term cost containment over long-term health outcomes that arise from effective interventions.

For postpartum prevention interventions, most savings accumulate after the first year. Therefore, a total cost of care model may not be the best approach to share value and provide significant financial incentives for clinicians to implement postpartum prevention services.

A value-based payment model based on the net present value of care (NPVoC) might offer more incentives as it is based on future savings estimated by improvements in patient health outcomes. Under this model, clinicians receive a share of the estimated future savings upfront.

Researchers developed a simulation model to determine which value-based model would produce the most shared savings payments to clinicians. The simulation compared an NPVoC value-based care model that shared 50 percent of the savings over five years with a TCOC model that shared 100 percent of the savings over one year. The simulation included 1,000 pregnant people enrolled in Medicaid.

Over five years, postpartum depression prevention services generated savings of over $730 per person.

Under the NPVoC value-based payment model, which offered 50 percent of shared savings over five years, clinicians received $367 per individual in financial incentives. Under the TCOC model offering 100 percent of shared savings over one year, clinicians received $177 per person, less than half of the incentive received in the NPVoC model.

If intervention costs counted against shared savings, individual counseling yielded higher expenses compared to group-based counseling for both value-based payment models, the study noted.

The Medicaid program had a 91 percent likelihood of seeing a positive return on investment after sharing the five-year estimated savings with clinicians.

Researchers ran the simulation model using different rates of Medicaid churn, defined as the number of patients who transitioned to a new Medicaid managed care plan, commercial health plan, or lost coverage. The first scenario did not consider churn rates.

As churn became higher, accrued healthcare costs declined, which led to decreases in clinician incentive amounts, the study found.

For example, with 20 percent annual Medicaid churn, clinician payments under the NPVoC model were $193, nearly half of the estimated amount with no churn. Incentives dropped by 73 percent to $98 with 50 percent churn.

In contrast to the initial analysis without churn, the TCOC model produced a higher incentive than the NPVoC model with 50 percent churn, offering $124 to clinicians.

Shared savings under the NPVoC model decreased by 37 percent when only Medicaid enrollees who screened positive for subclinical antenatal depressive symptoms but not antenatal depression received preventive counseling.

Using a value-based payment model based on the net present value of care and offering clinicians shared savings could improve patient outcomes and achieve significant financial savings through the implementation of postpartum preventive interventions, according to the study.

If a provider could offer postpartum preventive services to 1,000 individuals with low health insurance churn, clinicians could see incentives of more than $500,000, researchers said.

The study noted that clinicians would likely need initial funding to see incentive returns from NPVoC value-based payment models. In addition, payers should exempt preventive intervention costs from shared savings calculations to generate positive saving amounts.

As the value-based payment model generated the highest incentives in a setting with no health insurance churn, federal and state leaders should implement policies that address coverage gaps and expand Medicaid eligibility for pregnant and postpartum individuals, the study concluded.