Pioneering physician groups are helping lead the way in taking on risk-based contracts in a number of contexts—both in terms of federal accountable care organization (ACO) contracts, including the Medicare Shared Savings Program, Pioneer ACO Program, and Next Generation ACO Program, under Medicare, as well as in terms of commercial ACO participation—and in other contexts as well. Indeed, the September/October cover story of Healthcare Informatics will be focusing on the broad strategic and strategic-IT issues that physician group leaders are facing as they move more fully into risk-based contracting.
It was in that context that HCI Editor-in-Chief Mark Hagland recently interviewed Mark Werner, M.D. and Bob Schwyn, of The Chartis Group, the Chicago-based consulting firm. Dr. Werner is Chartis’s director of clinical consulting. In that role, he leads efforts around enterprise physician alignment and leadership, medical group performance, adoption and change management, performance innovation, population health, provider-payer relationships and the translation of strategy into clinical operations. Prior to joining The Chartis Group, he held a variety of executive positions in healthcare, including chief clinical innovation officer for Fairview Health Services, president and chief physician executive of Carilion Clinic and its associated hospital system, and chief clinical officer for Medica Health Plan. Schwyn, a director with The Chartis Group, has years of experience as an HIT executive leading teams in clinical transformation and the design and delivery of solutions for enhancing patient care quality, improving operational effectiveness and achieving excellence in customer service.
Indeed, it is in the context of physician organizations taking on risk and moving into new models of care delivery and payment, that The Chartis Group announced last month the creation of The Chartis Physician Leadership Institute. According to an Aug. 11 press release, “The Chartis Physician Leadership Institute brings together senior physician executives with unrivaled expertise from the nation’s leading health systems, academic medical centers, medical groups and health plans. It is dedicated to advancing health system and medical group performance through innovative solutions that drive physician alignment and engagement, and achieve the highest levels of organizational and operational effectiveness.”
Below are excerpts from the recent interview with Werner and Schwyn.
Dr. Werner, please tell me a bit about your clinical and administrative backgrounds that helped prepare you for the work you’re doing now at The Chartis Group, in the context of the risk-based contracting we’re talking about today.
Yes; my clinical background is as a pediatrician specializing in adolescent health; I no longer practice clinically. And I’ve done a lot of work around various payer-provider strategies and arrangements. I’ve helped to build out multispecialty groups and IPAs that have had to develop risk management capabilities, as well as the IT, and the clinical, capabilities. And it is in that context that we’ve just created the Chartis Physician Leadership Institute. It was officially launched last month, but we’ve been putting it together for the past year. It involves a cadre of physician advisers within Chartis, most of whom have had senior roles in patient care organizations, working with leaders to make sure they have the right alignment and capabilities around their physicians, and have been able to prepare to go forward. I’m the leader, yes.
What has been learned broadly around risk, by the leaders of the most pioneering physician groups?
Mark Werner, M.D.: I think the more experienced and thoughtful medical groups are realizing a couple of things. One is that they have to fully understand what kind of risk they’re taking on, and to be able to distinguish what most people would call health management risk, versus insurance or financial. Health management risk is taking on the risk for creating the right kinds of outcomes, in terms of quality, for patient care and patient management, for clinical performance and outcomes. Then there’s a level around medical expense management risk. Then there’s the insurance-level risk. So it really is three levels. And the leaders are aware of those three levels, and are able to define specifically what they’re able to take on, early on taking on the health management risk, and then gradually taking on the medical expense management risk, and ultimately, the insurance and financial risk. So they have to understand what is driving both the outcomes and cost of the populations they’re taking on, at a high level of specificity that allows them to have an actionable level of understanding, and to develop interventions to address them.
Mark Werner, M.D.
Bob Schwyn: To tag onto what Mark is describing, that’s one of the largest differentiators between organizations that are doing this well, versus those that have more challenges from an IT perspective, meaning, understanding what my level of risk is, and my capabilities to manage different levels of risk. When you get into the health management risk, it’s all about care patterns and variations, and understanding those. There’s technology, there’s analytics, to help illuminate the drivers of variation and of sub-par outcomes. You need to be very clear in understanding that. Understanding the problem statement will help you align your technology objectives, per your stage of maturity. As Mark’s describing, organizations are at all levels of maturity. And it’s important to parallel that with your IT build as well. Often, organizations don’t have a good correlation between where they’re at strategically and what they need in terms of IT. So understanding what you’re trying to solve for and what capabilities are involved, is very critical.
Is there a strategic confusion or lack of clarity over what people are taking on, with some of these contracts?
Werner: I think you’re exactly correct. It’s a large and prevalent problem. People are reacting, and don’t even know adequately what they’re reacting to. They’re following some rather trite ideas, without really stepping back and asking themselves, what kind of problem am I trying to solve? And how can I solve this problem more effectively for my patients? And sometimes without even a tactical plan for how to go after the problem.
Schwyn: I would echo that. I think there is a confusion out there, and then a tendency to feel like there’s some urgency and therefore, one needs to react. Our experience tells us that, rather than reacting—certainly in our work with our clients, we try to direct that activity, to make sure that you’re building the tools you need, commensurate with that roadmap; and two, make sure you’re mitigating that risk—because these tools are expensive to buy and costly to stand up. So making that alignment between the strategic and the tactical is critical.
Werner: I often tell clients, start with the end in mind. Understand what your goals are. And I find that when they try to start at the end, the medical groups are somehow trying to preserve today’s practice environment, and find a way to keep the revenue coming. And they haven’t really realized that the marketplace is trying to get you to fundamentally transform your practice. They’re not just trying to help you find new and creative ways to get you revenue. People don’t always understand what the end state is going to be. And that’s particularly challenging for medical groups, and as Bob says, it causes problems.
What would you say about the need to move patients upstream, to less-acute care interventions?
Werner: I agree with the point that that CEO was making. I think it’s very difficult to approach transforming healthcare and it get to some kind of risk-based arrangement, through the prism of a hospital-based model. You simply can’t get there. And it’s proving very difficult for hospital operators to make that transition. At the same time, medical groups need a lot of the resources that a hospital system can provide. The medical group leadership needs to very clearly articulate its goals and strategies, what it wants to accomplish; and it needs to approach the health system very thoughtfully, so that they come to these conversations with a level playing field. I worry about the medical groups that are only being passive recipients of requests from health systems. Back to the Physician Institute—that’s one of the key tenets of how we’re trying to help hospital systems and medical groups work together—that it has to involve bidirectional, strategic thinking.
Schwyn: I think that along those same lines, when I look at it from an IT-programmatic perspective, folks have to make the same kind of pivot around their IT capabilities. For instance, when you get into analytics, it’s not about reports that count beds filled or throughput; as Mark Werner put it, it’s understanding the key drivers that are leading patients to become inpatients—and what the insights are that I can gather around that data, that can help the leaders of the medical group or organization to understand what the challenges are. So that pivot is also challenging in terms of thinking about what they’re looking to do, analytically.
What should CIOs and CMIOs be doing right now, in this context?
Schwyn: IT leaders need to be in this interstitial space between the strategic and the tactical. And this is an opportunity for senior IT leaders to really help make an investment, and to work with their peers and with the business leaders, to really help understand the types of risk they’ll be entering into, the kinds of drivers they’ll be helping to measure, and find ways to really bridge that gap. We’ve found that it involves developing use cases, thinking about the capabilities we’re trying to develop from an IT perspective, and developing the interventions involved. It’s really walking through all that; and I think the IT folks don’t always have the level of sophistication to do that. So per what Mark Werner was saying, these IT leaders need to help develop competencies.
It seems clear that there will be a need to bring in a lot of data analysts and data scientists. We’re hearing that organizations are bringing together teams of individuals with experience from outside and within healthcare. What are your thoughts on that?
Werner: There’s no doubt there’s a shortage of good analysts of all types. I think team-based approaches are probably one of the better ways of going forward. That said, everyone on the team has to come in with an interest in learning how to walk in the clinicians’ shoes. I need people who are willing to spend time with me as a clinician, to develop a sense of the kinds of clinical challenges I’m facing—who can take the raw analytics, and put it into a clinical framework. I think that’s critical. The other piece that’s missing, particularly in healthcare, is people with an actuarial background. And I think that actuarial capabilities will be very important going forward.
Schwyn: Yes, that’s certainly a challenge at virtually every client we talk to. And it’s two-fold: one, how do I develop and acquire these competencies? And there’s a speed issue, too; I need to develop these capabilities very quickly. So there’s a sense of urgency about it. And there are ways to temporarily get people quickly. And as Mark said, some organizations are bringing in people who can understand the care process and the documentation and how things get recorded; so that’s one element. The second element is how you build the back-end data algorithms that mesh all this data together, and correlate all the data in order to derive insights. That’s a challenge, too. And many organizations are looking at some of the new graduates coming out of school. And this new generation is more adept at all this. And we’ve seen that happening.
Do you have any last thoughts?
Schwyn: We didn’t talk about data management and governance. And you and I have talked about that before. And we can’t be silent on that issue. There’s such a lack of understanding of good, strong data, and how it’s captured and recorded and aggregated. And there are a lot of organizations really straining with that. And it’s hard to do that in the rearview mirror. So the challenge is to get organizations to look forward, and say, how do we design our care delivery processes and care management processes, and clinical documentation processes, so that we’re capturing the right data in the right way, to begin with.
What will happen in the next couple of years, in all this?
Schwyn: I think some organizations will emerge as leaders, and there will be people who clearly are able to do this. And that will create more of a sense of clarity around best practices. If you just look at the vendor solutions available in this space, it is staggering. And the number of folks who claim to have a piece or portion of this is incredible. And that to me is a sign that organizations haven’t yet clarified what they need. So I think there’s going to be a lot of sorting out in the next years.