The trend to value-based care in the behavioral health market continues to evolve. In late September, Wayspring announced it raised $75 million to target individuals struggling with substance use disorder (SUD).
The market is ripe for innovation, as more than $90 billion is spent annually on the SUD population by Medicaid and Medicare Advantage managed care organizations, according to Wayspring. Further, only 10% of that population receives treatment.
The services offered by Wayspring primarily help to connect Medicaid patients to a network of SUD treatment organizations and coordinate services, including behavioral health, community-based peer support and primary care after an in-patient stay.
The Nashville, Tennessee-based Wayspring isn’t alone in seeing opportunities in the SUD and addiction treatment space: Bicycle Health raised $27 million in June, and Eleanor Health raised $20 million to further expand its value-based SUD treatment model and build out its technology platform.
Other companies such as Groups Recover Together have raised $60 million to build a value-based care model for medication-assisted treatment (MAT).
Carter Paine, the CEO of Wayspring, comes armed with years of experience in the value-based care world. He co-founded and served as president and COO of naviHealth until early 2019.
BHB caught up with Paine to go deeper into Wayspring’s model and get his thoughts on the state of value-based care in the behavioral health industry. Portions of this interview have been edited for length and clarity.
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BHB: Where do you see SUD going in terms of value-based care, and how are you planning to deploy the $75 million you just raised?
Paine: Behavioral health, in general, and substance use disorder treatment really lagged behind the rest of the value-based care movement, historically.
Medicaid plans are slightly behind Medicare Advantage plans in terms of cracking the value-based care code. As we look at the population, I think the No. 1 thing to point out is rising prevalence and rising costs. You typically think the Medicaid plan [has] somewhere between 8% and 20% of your underlying membership with a really high cost. That group is frankly just a tough-to-manage population.
From our perspective, there is an opportunity to think through the consumer experience, given how opaque and generally hard it is to understand what the right level of care for treatment is and who the quality providers are.
Then, there’s trying to figure out if we should do a telehealth virtual treatment versus on-site treatment. You know, SUD is an area with a lot of costs, rising prevalence and a ton of variance, in terms of how you can get in and receive care.
So from my perspective, it’s perfect for a value-based care arrangement, and a company like ours is designed to kind of get in the middle there, very similar to my previous business in naviHealth model, which was a post acute care management business. I saw a lot of the same things there. In terms of big market and care that people have a tough time navigating.
So this is a care coordination play?
You’re spot on. We’ve been doing care coordination for the past 18 months, with three — soon to be four — health plans.
We noticed that we are able to have a big impact on the site of care and also on solving social determinants of health (SDoH) issues. You know, really it’s the top of the pyramid, in terms of needs for these members, housing to transportation, financial assistance, phone. You need to solve these issues first, before anything else.
And what we noticed was that a lot of the members with SUD diagnosis who we are serving still have gaps in care on the provider side. That has helped lead us to our SUD at-home model.
The idea is, for those members who don’t have a PCP or access to other services, how can we build a gap virtually with our own clinic resources?
And while this is very much a kind of community-based care coordination and peer-recovery-support model, we really want to layer virtual components on the provider side as well.
Is the strategy to partner with the insurers and eventually help prevent more acute SUD needs from happening?
I think there is potentially a long-term opportunity there, but I would say it’s more focused on preventing readmissions into inpatient psych and residential facilities and designed to prevent admission to the ER and hospital.
A lot of folks going to residential facilities haven’t yet been diagnosed with a substance use disorder diagnosis. In terms of the members that we serve with the plans, they already have that SUD diagnosis already. Long-term, there might be an ability to identify them and get them into some type of outpatient treatment prior to a residential admission, but I think largely at this point, it’s tough. Frankly, a lot of members need residential treatment.
Intensive outpatient is not for everyone. I think we’ve done a really good job partnering with residential facilities, really to be their partner. Once someone transitions from those facilities, we know that those first 30 days are the highest-risk period in terms of relapse or overdose, and it’s our job to manage that with the facility and payer.
How do you grow your business with the residential treatment centers?
Contracts or with their insurers, and then we work with their network of providers. We then go set up referral relationships with different providers to really be an extension of their services.
Traditionally, providers and plans don’t always see eye to eye. Historically, they don’t always get the right information or utilization. We feel like we can be a real bridge between the providers and the plan, and also share information back with providers around performance and what happened to the members that transitioned from the facility.
After someone is discharged from a facility, this building really doesn’t typically know exactly what happened to that member. I think we offer that kind of bridge in between the plan and facility. We also really offer the bridge to the members, when they transition out of that facility to help them set up housing, transportation, an appointment with either behavioral health providers or treatment providers, which I think is one of the big gaps here. People transition from facilities, and they think they’re done. Or they struggle to find an in-network provider or PCP.
How do you define success with the health plans?
I think it gets down to the member.
With every plan that we’re working with, we’re highlighting multiple members that we serve each month, with actual stories on how we kept them stable. We highlight how we kept them in recovery, how they almost graduated from recovery or treatment.
Ultimately, we’re looking at: Can we get more members from OUD into MAT? Can we get numbers into long-term recovery and then keep costs down by lowering the utilization of emergency departments and hospitalizations? We have the SUD home model, which is why I think we’re pushing most of the market in terms of our solution, in a total cost of care model where we look to lock in a baseline cost for all SUD members across the membership.
We’re only successful if we’re able to lower the overall cost of care for that membership over a three-year period. So all of our plans are going to judge us on our clinical outcomes for the members we serve, but also if we’re able to save that plan costs over time by offering our services.
Is one of the easiest ways to do that keeping them out of the emergency room or hospital?
ER visits and hospital admissions are 40% or so of the total cost of care for this population. That is, obviously, our No. 1 focus, in terms of keeping costs down.
What have your conversations with insurers been like on the model?
We’ve been fairly focused on the Medicaid plan, and the Medicaid plans are recognizing the opioid epidemic, which we like to call the substance use disorder epidemic. We need to have an innovative solution coming from the plan, in terms of managing the population.
Every plan we work with is thinking about what it wants out of innovative solutions. Given the state’s push on more effectively managing SUD population through better peer recovery support or pushing medication-assisted treatment for opioid use disorder, we can really be that kind of outsourced arm of the plan to help, and we’re doing it from a lower total cost of care standpoint.
The interest has been really high. I don’t think behavioral health has ever been more top of mind.
Do you guys see an opportunity to bring this solution to commercial health insurers?
We historically have customers from our legacy solution, which we call risk mitigation, with several large commercial insurers including Highmark Blue Cross Blue Shield Alabama. And that service offering really focuses on scripts for pain management, and really opiate scripts in particular.
And we run analytics on that and work with their prescriber network on proper opiate prescribing and flag high-risk members within their population.
So, in terms of the at-risk offering and the care coordination offering, it’s been more focused on Medicaid plans. We do have one commercial plan that we do that for as well.
When I just think of prevalence here, the prevalence for a Medicaid plan is somewhere between 8% and 20%. That is their adult population with substance use disorder.
On the commercial side, it’s going to be 3% or less. We really fashion ourselves as having a community-based offering. There just aren’t big numbers of members or costs on the commercial side. We do think there’s a big opportunity on the Medicare Advantage side, with the D-SNP population pool and special needs plans. And so that will be a focus area of ours as well.
Where do you see an opportunity within Medicare?
A lot of times, members below 65 years old have multiple comorbidities and high prevalence of substance use disorder. We’ve been digging into the numbers the last few months and have just started managing these members on top of our Medicaid members.
You’re going to see some of the highest-cost members out there when you layer D-SNP and substance use disorder diagnosis. We see good opportunity there, and while we don’t have a value-based contract yet for D-SNP, we hope to fairly soon. We are managing D-SNP members for one plan on a fee-based solution right now.
Most people aren’t aware that the older population has substance use disorder challenges. Do you think your solution can be effective?
Yeah, we do. We’re talking about someone who is over 75 years old with a substance use disorder diagnosis and multiple comorbidities. The answer for them may not be absolute sobriety: It may be stabilization and management. If you think about what is driving their behavior and often driving their underlying comorbidity, it’s often substance use disorder.
And so getting a company or a clinical model intervention that really understands that SUD is an opportunity, that is not out there currently.
Where do you hope Wayspring will be in 12 months?
Hopefully launched in three new markets with our substance use disorder model and partnered the three new plans as well. We have a couple of those in motion, and I think from our perspective, we’re really thinking three to five years ahead.
We want to be a first-mover here with this specific value-based solution for Medicaid plans and D-SNPs. We think it’s a wide-open market and a huge need for plans going forward.