Unlocking Value-Based Care Benefits for HME Providers

The value-based care model is not new to the industry; however, in recent years, its prevalence has accelerated. Amid this emergence, the major question on our minds in the home medical equipment (HME) industry is: How do we fit in?

Let’s start with the obvious: Value-based care is good for payers, providers and patients. It is designed around specific patient segments and/or conditions, the challenges that exist under traditional fee-for-service models and delivering higher quality of care with a better patient experience. By focusing on integrating care and working together to address health needs, a patient’s entire care team can use data to help avoid complications or better manage comorbidities that are common with chronic conditions.

Value-based care also has the potential to decrease unnecessary health care costs through holistic patient management and care coordination.

We can all rally around any method that creates an easier pathway for delivering standards of care—especially when that includes a greater emphasis on driving health equity and access to mental health resources and basic social needs. At the granular level, value-based models make health care simpler for patients, payers and providers by driving efficiencies and ease of use with the goal of improving overall patient outcomes.

But where and how do HME providers fit into this model? Does this model work for us—and how can we realize its full value potential? With a focus on driving efficiencies through a more holistic approach to health care, we’re already seeing incredible potential from a few value-based care models that exist today: Capitation agreements, utilization management and tracking, bundled payment arrangements and models focused on population health.

The Emergence of Capitation Agreements

The benefit to the payer in this contract agreement structure is clear: It offers predictability. Costs can change, as can patient mix, especially as chronic conditions that are prone to comorbidities become more prevalent. Insurance companies must figure out an equation in which premiums cover costs. During these periods of inflation and evolving reimbursement policies, the predictability of a capitated model is good for the payer.

And it is a great way for HME providers to enter the value-based care discussion. In addition to establishing pre-defined per-patient rates, they can see trends in utilization that are not always top of mind for payers. This is a perfect type of solution that creates reimbursement simplifications while opening a pathway to improve the patient experience.

For example, let’s say you’re an HME provider with a patient who orders incontinence pads each month. The patient’s insurance plan may agree to pay you $100 per month; this patient is going through 18 cases a month of regular absorbent pads.

As their HME supplier, you can see this usage and suggest that they may benefit from ordering a super-absorbent product, reducing the cases needed and costs per month. Now, the patient has an improved care experience and they’re using a product better suited for their needs, which brings them more comfort and longer periods of time between changing pads. By optimizing product and utilization, you can increase profitability from the payer’s set $100 rate. The payer, in turn, gets predictability in knowing that this patient will always cost the same amount—even if their needs increase.

This, of course, has a flip side where the HME provider’s costs could exceed the capitated rate, thus causing a loss. That’s why it’s important to establish agreed-upon benchmarks to drive value for each party. It’s up to the provider to monitor these trends under a value-based approach. It’s our responsibility to identify ways to decrease costs below the reimbursement amount to make value-based care a mutual risk worth taking.

Capitation models are growing in the HME industry. At Edgepark, we have established models like these where we analyze patient data to identify outliers based on utilization and product selection to offer cost-effective options without compromising patient care. This is a starting point to get to a goal of moving into a population health model focused on condition management, quality of care and outcomes.

A ‘Bundled Approach’ to Care

HMEs can support patients who are living with chronic conditions (which often come with other underlying conditions) by working with payers to simplify the delivery of the various needed supplies in a more holistic, bundled way.

Take Type 2 diabetes patients, for example. Many of these patients have comorbid conditions like high blood pressure, sleep apnea or obesity. Because of this, they are likely to need support that spans across many health specialists and providers. And they are also likely to need medical supplies that cross into various categories, such as blood pressure monitoring, specialized nutrition, CPAP, and continuous glucose monitors and supplies.

HME providers have the ability to offer these supplies as bundled services to a payer—as a collection of products that may have never been connected before but are needed to manage a complex condition like diabetes. Imagine a health care provider letting a patient know they’ll need multiple products to manage their condition and then offering one place that could supply these products based on the patient’s insurance coverage. Once again, this simplifies the patient and prescriber experience.

When we’re able to provide products holistically, the burden on the patient and the health care provider to put the puzzle pieces together is reduced. In this model, providers can be more proactive in identifying potential complications before they arise and bring patients in sooner to make changes to their treatment pathway. HME providers can help payers and physicians understand adherence patterns by reviewing utilization data and insights.

The Role of Technology

As we continue to work toward streamlining the complexities of the HME and/or durable medical equipment process, we’ve seen incredible success in our efforts to simplify prescriber experience with e-prescribing platforms. E-prescribing drives efficiency and peace of mind for providers by providing visibility that prescriptions and supporting documentation were successfully transmitted and received—meaning, they know their patients are on their way to receiving their critical supplies.

While it seems like a simple use of technology, HME providers can leverage different communication methods, such as texting, to increase engagement with patients, if they haven’t already. Products can only achieve the benefit they’re meant to achieve if they’re being used. One of the values of HME providers is that we provide a high-touch, high-engagement model that has been proven to improve patient therapy adherence. We know that the first few months on any new therapy is critical to a patient’s long-term success, and the experience a patient has with their HME dealer from the start absolutely sets the tone. High-touch, high-engagement models not only help identify if patients are feeling comfortable with their supplies, getting their supplies on time and more. They also help health care providers understand if they should check in with their patient to discuss education, support and resources that might be needed to improve adherence.

Putting the Patient at the Center of Care

Value-based care models strengthen our ability to deliver on these promises of care, and I’m looking forward to what the future will bring as we start to fit the pieces of this health care puzzle together. Many of us in this space are already dedicated to increasing access to medical supplies under insurance and to improving adherence, especially with patients in underserved areas who may not have direct access to support— and this model has the potential to accelerate this work. While we may not fully know what the future will entail for this model of care, there’s certainly a compelling case for the across-the-board benefits of finding a way to make value-based care a standard for the industry.