During the last week of June, Advisory Board hosted over 200 healthcare executives at our value-based care (VBC) summit in Dana Point, California, to talk about all things VBC — including the future of Medicare Advantage (MA). 

We asked attendees whether they thought value or growth was the better measure of MA’s success right now. Almost universally, attendees said growth — which is a fair assessment. MA enrollment is booming and has been for the past 10 years. We’ve recently seen a shift to acquire diversified assets to create a senior care ecosystem meant to drive value. However, the jury is still out on whether this mergers-and-acquisition strategy will successfully deliver value. Meanwhile, MA plans are still pushing to enroll new members. While this focus on growth might lead to short-term success, it is not sustainable long-term, because this growth cannot and will not last forever.

In the next 5 to 10 years, the total number of enrollees in MA will continue to increase as the senior population grows. However, the rate of enrollment in MA will decline to less than 1% when Gen X replaces baby boomers as the generation aging into Medicare eligibility. (For reference, the growth rate from 2010 to 2020 was 3%.) This declining growth rate will require the industry to pursue success in MA in a new way. We think that will mean shifting focus from generating growth to generating value. 

Refocusing from a growth-at-all-costs mentality to one that is more centered on value is a monumental task with no clear path. So, we asked summit-goers what they think needs to change in the healthcare industry to help balance value with growth. Here are the five main themes we heard in their responses:

• The industry needs a common definition of “value.” Not only does every payer in the industry have their own definition of value, so too do providers, patients, and life sciences. We need to understand how these definitions differ. And we, as an industry, need to come to a common understanding of the meaning of value.
• The industry needs to understand where value comes from and for whom we’re meant to generate value. Is it from the provider to the patient? From the payer to the provider? To CMS? These questions are, of course, dependent on first realizing our shared definition of value. But we also need to recognize that we may need several metrics of value that paint a comprehensive picture across the industry.
• We must determine how to measure value outside of clinical sites of care. A focus on patients’ time outside clinical settings has an outsized impact on behavior changes, which can impact healthcare spend.
• We should champion the ways that value leads to growth. Demonstrable, long-term value in healthcare can generate both revenue growth (through cost savings) and consumer growth (if consumers are less likely to switch plans or providers and recommend others).
• Providing value requires systematic change. The healthcare industry must prepare for the necessary longitudinal investments to perform well at value.

The consensus? We have a lot of work to do as an industry and we need to start with a shared definition of value to progress. 

Luckily, we aren’t starting at square one. There are existing VBC strategies we can use to reconcile value with growth, such as high-risk patient management, preventive care, psychosocial support, and network management. Most summit attendees felt the industry needs to prioritize high-risk patient management to balance growth and value. Specifically, they agreed that a focus on chronic disease management and preventive care for middle-risk patients would have the biggest impact on that balance.

Need help navigating the future of Medicare Advantage? We can help! Reach out to our experts at  AskAdvisory.