Value based payment models and paying for recovery not relapse with Sarah Howe and Morgan Coyner

Experience a radical shift in the battle against addiction with the Alliance for Addiction Payment Reform's revolutionary strategies. Our guest from the Alliance unveils the potential of the Addiction Recovery Medical Home alternative payment model, a game-changer in incentivizing recovery over relapse for substance use disorder services. This episode is your ticket to understanding how healthcare systems can evolve from a cost-heavy, relapse-focused cycle to a value-based system that rewards positive outcomes and supports lasting recovery.

We're peeling back the layers of the traditional addiction treatment financial model and exposing the roots of its inefficiency. The Alliance's value opportunity calculator emerges as a star player, demonstrating the significant savings that can be achieved by both payers and providers when embracing this transformative approach. We dissect real-world applications of this model, examining tailored implementations across states and its immense impact on Medicaid's approach to addiction treatment. Join us for an insightful conversation that not only highlights the financial benefits but also the profound human impact of restructuring payment systems to foster recovery and well-being.

Transcript

Speaker 1: 0:00

Welcome to Hatching Creativity. This isn't just another behavioral health podcast. This is the place where thought leaders converge to talk about real-life challenges, breakthroughs and pivotal aha moments.

Speaker 2: 0:14

One of the things that we do that's a little unique is we manage a few different projects that are they're not for the economics, they're for the mission. So one is called the Alliance for Addiction Payment Reform. So if anybody is working in the addiction space, we've taken providers and payers from across the country and brought them together to talk about how we better pay for the performance of substance use disorder services and developed a value-based payment system. That I will tell you, because I find this really cool, because I did not do it, because I am not that smart. If you go to the website for the Alliance, it's CentadviseRecoveryorg and on this webpage is the value opportunity calculator. So I'm just really quickly, Mike. So this is again it's not something that we do except for the for money. We do it because we believe in this and this is the model that right now, the way we do substance use services is. We wind up incentivizing relapse, right, we pay for your relapse, we pay for you to get into a bed, we pay for you to get to outpatient services, but we know that recovery, treatment works and recovery is possible. So why aren't we paying for that recovery? Why aren't we incentivizing the provider to help maintain that recovery.

Speaker 2: 1:34

So what we did very recently is this value opportunity calculator and anybody can go in here a provider, a payer, government, an employer, anybody. So let's go to a payer and we say we were talking about like Blue Cross, they cover is that a million, let's say 10 million lives annually through their Blue Cross Medicaid right? And then they have another 10 million that they cover in commercial. And then we say what? We ask them, what is the prevalence of a substance use disorder? Now, that's the national average. So we can always start with the national average, which is 14%. But you might say, because you're a payer. Well, actually, as we look at ours, we got about 22% of our members that we serve as a payer that have an SUD. So we click on this. Of course we get your information here, because that's what every good consultant team will want to make sure we have your information. So hang on a second while I input information that will go to one of my colleagues and like yeah, like Sarah is logging in here again.

Speaker 2: 2:45

That's right, we're just going to do I can't even type here. We're just going to make me a PNC today and sure. So put that in there and here. Based on the national cost data, you may be spending 95,. Is that billion? That is yeah.

Speaker 1: 3:05

That's a gazillion. I think that's a gazillion.

Speaker 2: 3:09

You're spending a gazillion dollars right On your total class of care, which is physical, behavioral pharmacy, for just the substance use population. That's it. So what we're saying if a payer had 10 million Medicaid lives, 10 million commercial lives, with 22% of them, that group makes up 57% of their spending today, right now. And if you did an alternative payment methodology that increases recovery rates here is you can save $7.5 billion to $11.3 billion, or 5% off your total cost of care. And what is the value opportunity for that?

Speaker 1: 3:49

This is awesome. Do you have suggestions, Because I know a lot of these payers are allowing people to create their own value based care proposals. Are there suggested proposals on here or how so there is?

Speaker 2: 4:05

we do have a model here which is called the addiction recovery medical home alternative payment model because we need to have a whole lot of words and called the arm APM.

Speaker 2: 4:14

So we have a good acronym on there and then we have a paper on what that model is, what it looks like and how do you pay for recovery instead of relapse, and we have as a consulting firm. What we have done with this model is we have both locally and at statewide level, from a provider and a payer level. We have adapted it to all of those different constituencies and help them develop their own models. So we've actually worked in a few states that have us developing this model for a Medicaid population. We've worked locally with different payers and then we've done it on the opposite side, where a provider has come to us and says I want to negotiate it. I don't know what to ask for, I don't really know what my costs are, so how do I do this? And we pull again this information together and say here's what you need, here's your break even point, here's what you've got to get to for this to be a good value for you the shared risk, the shared reward and so we can do that with the data that we get from you.

Speaker 2: 5:16

But this particular calculator, like I said, which anyone could use all any time, we can do it from a provider, we can do it from a payer I think I pulled that one payer just now. We've got government and employers, so that's just a little and I bring that up as a snapshot. Because we do this work, because we believe in the work that we do, so we manage the Alliance for Addiction Payment Reform and then we separately, because we were born and bred and raised in Chicago we lead what's called the Health Care Council of Chicago, because we believe that health care should talk to each other. So we have no public policy agenda, we do not lobby. Our whole goal is to take all facets of Chicago's health care ecosystem and bring them to the table, because we believe we do better work when we talk to one another. So that came out of Third Horizon as well.

Speaker 1: 6:10

That's awesome, I agree, though we have conversations all the time about transparency and the importance of especially while you're looking at holistic human care right and the ability for medical EMRs to speak with behavioral EMRs and to be able to understand what's going on. I mean, look, even on my best day, when I show up at the doctor and they ask me what surgeries I've had or what I'm allergic to, I can't even remember that stuff.