The Payer's Guide to Value-Based Kidney Care: A Proven Model for Managing High-Risk CKD Patients

The concept of value-based care first gained traction in the early 2000s when rising healthcare costs and disparities in quality spurred a shift in thinking about healthcare delivery.¹ Unlike traditional fee-for-service models, which compensate providers for the quantity of services delivered, value-based models reimburse providers based on their ability to demonstrate better outcomes at lower costs.

First introduced in primary care, value-based care is gaining a foothold in specialty care as government agencies and commercial payers look to improve care management and bring down the costs of care for the highest risk and most expensive patient populations.²

In part one of this two-part series, we discussed the benefits of value-based kidney care for healthcare providers. In part two, we focus on the implications for the health insurance industry, offering strategies for health plans to implement value-based kidney care programs.

Kidney care is the next rational step for value-based care

Kidney care is increasingly acknowledged as a prime area for value-based care given the significant opportunities to promote cost savings while also improving outcomes for a complex patient population. As former secretary of the U.S. Department of Health and Human Services (HHS) Alex Azar has stated, “Kidney care is a very rational next step from primary care when thinking about capitation and risk in value-based care.” But why is kidney care especially well-suited to deliver on the goals of value-based care?

1. Prevalence of chronic kidney disease (CKD): CKD affects about 15 percent of the U.S. population—more than 37 million people—and many cases go undiagnosed until the disease progresses significantly.³

2. Disproportionate share of costs: Simply put, kidney disease is expensive. Medicare spends more than $130 billion on patients with kidney disease—more than 24 percent of total spend.⁴ For employer-sponsored health plans, the average spend per person per year (PPPY) for members with CKD is $37,843.⁵ Once CKD progresses to end-stage kidney disease (ESKD), the costs of care can skyrocket. While ESKD affects only 1 percent of Medicare beneficiaries, it accounts for 7 percent of Medicare spending.⁶

3. Strong opportunities to reduce costs: Early detection and cost-effective interventions have proven effective in reducing complications and slowing CKD progression. A proactive approach including lifestyle modifications, medications, and management of comorbid conditions can help delay the need for transplantation or dialysis, which can cost upward of $100,000 annually per patient.⁷

4. Avoidable hospitalizations and readmissions: The number one driver of healthcare spending in the U.S. is inpatient and outpatient care,₈ with readmissions alone costing between $15 to $20 billion annually.⁹ CKD is among the top five diagnoses with the highest rate of readmissions,¹⁰ yet a significant portion of these may be avoidable. One analysis found CKD patients who see their nephrologist within two weeks post-discharge are almost 25 percent less likely to be readmitted.

5. Potential for improved care coordination: Because CKD patients often have comorbidities such as diabetes, hypertension, and cardiovascular disease, they typically benefit from coordinated care for disease management, medication adherence, and mental health support. Nephrologists are central to this interdisciplinary approach and tend to act as the medical home for their patients with CKD, forging longitudinal relationships that foster an emphasis on long-term outcomes. Yet traditional fee-for-service models typically don’t support the additional resources and services needed to deliver holistic kidney care. As such, many nephrologists see the promise of a value-based approach that encourages greater care coordination and enables them to treat the whole patient, not just their renal symptoms.

Value-based kidney care drives quality and controls costs for payers

With an emphasis on prevention and proactive kidney care, value-based care in nephrology can help reduce unnecessary hospitalizations and complications, minimizing the risk and financial strain of managing CKD and ESKD.

Collaborating with leading health plans, value-based care provider Interwell Health has helped its partners achieve improved clinical results and sustainable savings, underscoring the potential for cost-effective kidney care that aligns with payer goals. Interwell has consistently outperformed national averages across eligible patients, including:

• 50 percent higher home dialysis rate
• 41 percent higher transplant rate
• 14 percent lower all-cause hospitalization rate
• 43 percent lower cost trend

For instance, one regional health plan saved $3.6 million by shifting to a value-based kidney care model and, as a result, successfully reducing hospitalizations and increasing optimal starts*. The plan was spending $27.9 million each year on members with CKD stages 4 and 5 ($2,240 per member per month) and ESKD ($9,600 per member per month). After partnering with Interwell to implement a value-based kidney care program, the plan saw significant improvements, including a 60 percent year-over-year increase in engaged CKD members, a 30 percent reduction in hospitalizations among members with ESKD, and a 27 percent increase in optimal starts.

Embracing value-based models can also help health plans achieve higher Healthcare Effectiveness Data and Information Set (HEDIS) scores and quality ratings, which in turn increases their opportunities for bonuses, expansion, and reimbursement. In addition to improving member outcomes overall, a value-based approach helps close care gaps that directly impact HEDIS scores such as reducing hospitalizations and readmissions, identifying social determinants of health (SDoH) to better support high-risk patients, and increasing kidney health evaluation rates for people with diabetes, a known risk factor for kidney disease.

The results are in: Value-based kidney care delivers on its promise

Results from the government’s value-based kidney care program further validate that a value-based approach to kidney health management results in improved outcomes. A report on the first performance year of the program identified notable improvements in critical metrics for the quality of care in kidney disease, including increased use of home dialysis and a higher rate of optimal dialysis starts.¹¹ Additionally, transplant waitlisting rose significantly, suggesting a potential upward trend in transplant rates as the program progresses.

In addition to achieving impressive quality outcomes, individual participating providers in the program also delivered cost savings in CKD ¹² demonstrating that value-based care models can effectively enhance quality while controlling costs.

Payers can gain buy-in for value-based kidney care with pilot programs focused on measurement and results

Payers interested in value-based kidney care may choose to start with small pilot programs designed to provide comparable metrics with the outcomes and costs associated with patients in fee-for-service arrangements. Successful value-based kidney care programs focus on the following strategies:

• Collaboration with providers to prioritize patient-centered kidney care: Payer-provider collaboration includes sharing data insights, aligning on goals, and supporting kidney care coordination initiatives. It is also beneficial to provide coverage for services such as nutritional counseling, transportation, and home dialysis equipment to address patient needs.

• Early referral to nephrologists: Optimizing care and results for patients with CKD requires engaging both PCPs and nephrologists. PCPs play a critical role identifying at-risk patients early and referring them to a nephrologist before their disease progresses. From there, the nephrologist becomes the “quarterback” of patient care. Studies show early referral to a nephrologist is associated with slowed disease progression, especially among patients with other health complications,¹³ as well as reduced hospitalization and mortality. ¹⁴ Based on the data, clinical researchers have called for increased PCP and patient education on the value of timely referral to a nephrologist.¹⁵

• Adoption of risk-stratified models that incentivize preventive care: Advanced analytics can be used to identify patients at various stages of CKD and tailor care management programs accordingly. Health plans should develop innovative payment models (e.g., shared savings, bundled payments) and offer support and financial rewards to providers for preventive care programs, early interventions, and slowing CKD progression to delay or even prevent dialysis, which can substantially improve health-related quality of life and may be associated with a significant survival benefit and cost savings.¹⁶

• Ongoing measurement and evaluation: Last but not least, robust tracking systems are needed to measure quality outcomes and financial performance. Reporting should include metrics for key results including optimal starts, hospitalizations, readmissions, and cost savings.

Health plans don’t need to navigate the journey into value-based kidney care alone. Working with payer partners, Interwell takes on full risk for this complex, expensive patient population. Unlike startups with unscalable programs, Interwell’s approach to value-based kidney care has been honed over a decade and consistently delivers measurable quality improvements while lowering the total costs of care for managing CKD.

For more information about how value-based kidney care can benefit your organization, visit our payer page.

 

Notes

*Optimal starts are defined as a person with CKD transitioning to ESKD by receiving a preemptive transplant, starting in-center dialysis with a permanent access, or beginning home dialysis.

 

Resources  

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13. Nephrology: Nephrology referral slows the progression of chronic kidney disease, especially among patients with anaemia, diabetes mellitus, or hypoalbuminemia: A single‐centre, retrospective cohort study. https://onlinelibrary.wiley.com/doi/10.1111/nep.14311?
14. Cochrane Database of Systematic Reviews: Early referral to specialist nephrology services for preventing the progression to end‐stage kidney disease. https://www.cochranelibrary.com/cdsr/doi/10.1002/14651858.CD007333.pub2/full
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