Playing Nice in Healthcare

“Being able to get at data and see what’s driving the data is a big advantage for us in an integrated system,” Bland says. “We’re running reports on a monthly basis and can ask questions on the data and the methodology and look at [recent] trends. Basically, you walk over to the next office and you can have a conversation. That dialogue is key. Commercial payers are interested in becoming timelier with their data, but they’re not quite there yet.”

Martin’s Point built a $750,000 data warehouse, and it has paid back, says Christine Torraca, senior consultant, delivery system performance. “Data is one of the fundamentals. You can talk about collaboration and joint goal setting, but if you’re not working from a data-informed perspective, the likelihood of success is not great.”

Meanwhile, Banner Health, an integrated health system based in Phoenix, which operates 23 hospitals and other healthcare entities in seven states, has created the Banner Health Network, designed to take on ACO development both through the Medicare Shared Savings Program (MSSP) for ACOs, and via collaborative contracting with health plans in Arizona.

Leaders at Banner Health Network have been building a groundbreaking collaborative initiative with the Hartford, Conn.-based Aetna. According to Tricia Nguyen, M.D., chief medical officer of Banner Health Network, the organization could have done this more individually and purchased individual elements such as reporting solutions, population registry solutions, an analytics engine, and a health information exchange (HIE) capability, and chosen to integrate all these disparate data sources, itself. “The reality is that EHRs [electronic health records] don’t have the capability to integrate claims data together with the data we have as a provider. So this gave us the opportunity to use a single integrated suite of solutions to work with a partner like Aetna. That having been said, Aetna will not see any payment from us for their technology and services unless they can help us achieve savings. We recognize each other’s strengths. So this is a payer-provider-vendor partnership, and it’s unusual,” she says.

Tricia Nguyen, M.D

RISKY BUSINESS

Shared risk is a fundamental part of a sustainable insurance system, say healthcare pioneers.  Providers and payers recognize that for ACOs to reach their potential, there is a need for payment models other than the fee-for-service approach dominant today. According to The Commonwealth Fund, as new ACOs form, payers are establishing shared-savings programs and other payment models in an effort to create financial incentives for high-quality care. Payers are also considering payment methods that confer a portion of the financial risk to the provider, seeking to create stronger incentives than shared savings only; in fact, the proposed rule for the Shared Savings Program (established by the Centers for Medicare & Medicaid Services) includes a shared-risk component.

Providers should be in charge of how healthcare is delivered, and for that to happen they have to be at financial risk as well as risk for the quality component, says Phil Kamp, CEO of Valence Health, a Chicago-based healthcare solutions provider. “Health systems are used to getting paid for what they do. The more patients, they better they are financially. So now, transitioning from volume to value is huge. The biggest piece of that is the transition piece—going from fee-for-service to risk.”

The best way to make this happen is to align incentives, Kamp continues. The insurance company wants to reduce utilization. And they want to make sure if they’re getting $100, they spend less than $100. But on the provider side, they want to do more. Those two things don’t coincide, says Kamp.

The best form of collaboration, Kamp advises, is when health plan and provider leaders can agree that the provider should take on financial risk, but also be given the tools, resources and skills to succeed at taking on that risk. In the 1990s, providers got into risk without the tools to support, and the insurance companies didn’t help them, Kamp says. They would instead focus on trying to give the providers as little of the premium as possible. “And the providers failed—they failed at contractual relationships, they didn’t have the right services, and they had the wrong people in charge. Today, the difference is we have the numbers, analytics, and experts to make it work. The data will show that provider-sponsored health plans are more cost effective and provide higher quality care than commercial payers. If you are providing the best care you possibly can, it will be the most cost effective. That’s what it’s about—getting doctors to play a role in cost effective population management.”

At Blue Shield, because all partners had both upside and downside financial risk for total healthcare expenditures, they had a powerful incentive to help each other. This imperative applied to all of the cost categories, which were divided as follows: facility costs, professional costs, mental health costs, pharmacy costs, and ancillary cost. Each partner’s degree of risk depended on its ability to influence per member per month costs in a particular category, Blue Shield’s Jones says.

Simon Jones