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Healthcare Industry Leaders React to Quality Payment Program Final Rule for 2018

November 3, 2017
by Heather Landi
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One day after CMS released its final rule for 2018 requirements under MACRA’s Quality Payment Program, industry leaders express a spectrum of reactions
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The day after the federal Centers for Medicare and Medicaid Services (CMS) released the final rule making changes in the second year of the Quality Payment Program (QPP) under the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law, healthcare industry leaders are voicing mixed reactions, but do seem satisfied with some of the increased flexibilities that were maintained from the proposed rule, and intended to provide clinicians with a smoother transition to the Quality Payment Program.

Late in the afternoon on Thursday, Nov. 2, CMS published the 1,653-page calendar-year 2018 QPP final rule, under the MACRA law, affecting Medicare-participating physicians covered either under the MIPS (Merit-based Incentive Payment System) program, or participating in APMs (advanced payment models). It’s clear that easing provider burden in complying with MACRA was a priority for CMS officials in keeping with many of the proposals in the proposed rule.

In a press release announcing the final rule, CMS officials stated, “While part of CMS’s broader strategy to relieve regulatory burdens for providers, these rules also reflect the agency’s efforts to promote innovation in healthcare delivery aimed at lowering prices, increasing competition and strengthening the relationship between patients and their doctors.”

“During my visits with clinicians across the country, I’ve heard many concerns about the impact burdensome regulations have on their ability to care for patients,” Seema Verma, CMS Administrator said in a statement. “These rules move the agency in a new direction and begin to ease that burden by strengthening the patient-doctor relationship, empowering patients to realize the value of their care over volume of tests, and encouraging innovation and competition within the American healthcare system.”

Some of the key changes in the final rule include raising the MIPS performance threshold to 15 points in year 2, from 3 points in the transition year, and the final rule allows the use of 2014 edition and/or 2015-certified electronic health record technology (CEHRT) in year 2 for the Advancing Care Information performance category, and gives a bonus for using only 2015 CEHRT. For the 2018 MIPS performance year final score, the performance category weights will be: quality, 50 percent; cost, 10 percent; improvement activities, 15 percent; and Advancing Care Information, 25 percent. A 26-page fact sheet summarizing the final rule can be found here.

Some healthcare industry leaders have expressed concerns about CMS’s decision to require a full-year reporting period for the cost and quality performance category, rather than a 90-day reporting period.

Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), said in a statement, “MGMA is very disappointed that CMS quadrupled the length of the quality reporting period under MIPS from the current 90 days to 365 days in 2018. This fourfold increase to the quality reporting requirements is in stark contrast to the Agency’s statements today that the final rule reduces regulatory burdens. CMS is in effect prioritizing quantity over quality and giving physicians less than 60 days to prepare for the 2018 MIPS requirements.”

It should be noted that the final rule sets a 90-day reporting period in both 2018 and 2019 for Advancing Care Information and Improvement Activities performance categories.

According to CMS, the final rule includes a number of policies designed to provide clinicians with a smoother transition to the Quality Payment Program. “The QPP final rule includes policies that reduce burden and support clinicians in small and rural practices to successfully participate in this program. CMS is decreasing the number of clinicians required to participate,” CMS stated in the press release.

“There weren’t a whole lot of surprises” with the final rule,” notes Jeff Smith, vice president of public policy at the American Medical Informatics Association (AMIA). “When you focus on the quality payment program in MIPS, I think CMS telegraphed that they want to provide much more flexibility and are looking for ways to make the program more feasible for docs, and I think the final rule really does follow through with that intention.”

Adaeze Enekwechi, Ph.D., vice president of McDermott + Consulting, a Washington, D.C.-based healthcare consulting firm, who previously worked at the White House Office of Management and Budget (OMB) under the Obama Administration as the associate director for health programs, contends that CMS designed year 2 of the MACRA QPP as a gradual ramp up to full implementation in 2020.

Sharing her initial takeaways on the 2018 MACRA QPP final rule, Enekwechi, who also previously served as a senior analyst with the Medicare Payment Advisory Commission, and at the Congressional Budget Office, says, “What the Administration is doing is really making an effort to continue to ease the burden of implementation of MACRA this second year, but, at the same time, they recognize that full implementation will begin in the third year, so they don’t want to leave clinicians completely unprepared. You see evidence of a little bit of a ramp up, when you look at the MIPS scoring, whereas before you needed a minimum of 3 points and now it’s 15. And, cost is now weighted at 10 percent in the second year as opposed to zero in the first year,” she says, adding, “To me, it read very much like a real effort to get folks ready for 2020.”

In the proposed rule, plans from CMS signaled that many more clinicians will be exempt from MIPS once again, like they were in year one of the QPP, which began in January. In keeping with the proposed rule, the final rule will increase clinicians’ low-volume threshold from $30,000 or less in Medicare Part B allowed charges or less than 100 Medicare patients to $90,000 in Part B allowed charges or less than 200 Medicare patients.

There has been some debate about whether excusing more clinicians from MIPS for another year is beneficial in the long-term. Enekwechi notes that one potential impact of increasing the low-volume threshold is a growing chasm between physicians currently participating in MIPS and those who are exempt.

“You have some clinicians who are participating in MIPS and going through the rigorous effort of measuring quality, reporting, and for all intents and purposes, marching toward higher risk payment models, and just getting more involved in advanced APMs (alternative payment models). And then, on the other side, you have a whole set of clinicians who are not going to be exercised in that way and will not adjust to these new payment models that are coming out, not just from Medicare but from the commercial side. I do think, if we continue down this path where the majority are not participating in MIPS or APMs, I think we’re going to start to see differences between those two classes of clinicians,” she says.

To this point, the National Committee for Quality Assurance (NCQA) said in a statement that it is grateful that the rule lets small practices form virtual groups in 2018. It said, “Virtual groups can help small practices join together to have enough patients for robust measurement and prepare for APMs. Unfortunately, the rule prevents the smallest practices from joining virtual groups by defining low-volume practices as ineligible for MIPS. Low-volume practices—those with less than $90,000 in Medicare revenue or 200 Medicare patients—most need virtual groups so they can have reliable measurement and reap rewards for improvement. CMS could remedy this by amending its low-volume definition to say these practices are ineligible for MIPS ‘unless they join a virtual group.’”

Smith notes several positive developments in the final rule, such as giving providers the ability to use either 2014 Edition Certified Electronic Health Record Technology (CEHRT) or 2015 edition CEHRT, which was also in the proposed rule. “It was good to see that CMS is continuing to try to find ways to gently encourage people to adopt 2015 edition CEHRT as they maintained from the proposal to offer a bonus for using it,” Smith says, referring to the policy in the final rule that states providers can earn a 10 percent bonus if they only use 2015 edition CEHRT.

CMS also increased the number of improvement activities that are eligible for bonus credit under the Advancing Care Information category. As one example, CMS plans to give bonus credit to physicians who consult patient-generated health data from consumer wearables. Smith says, “I think that will be an important policy moving forward, for a host of reasons, not least of which is the fact that there are a growing number of consumer technologies that patients are showing up at their doctor’s office and saying, ‘here’s my data, this is keeping track of my weight or blood pressure and how do we make sense of that.’ If you look at the improvement activity piece of MIPS, they are trying to give credit to innovation and experimentation.”

He continues, “And, while it doesn’t account for a huge portion of the overall MIPS score, I think it’s an important policy lever. It will be interesting to see what additional kinds of issues arise out of this new proposal to pay physicians to take patient-generated health data and spend time with that data, but, I think, overall, that’s a positive aspect of the Improvement Activities.”

In the press release about the final rule, CMS noted that to further ease clinician burden, CMS is adding an option to help clinicians and small, rural practices join together and share the responsibility of participating in value-based payments in virutal groups. CMS is also adding a new hardship exception to assist small practices and clinicians impacted by hurricanes Harvey, Irma, and Maria. This change mitigates the absence of Electronic Health Records as a result of the natural disasters.

CMS also reports that it intends to develop a demonstration project testing the effects of counting as credit participation prior to 2019 and through 2024 in Medicare Advantage plans that meet certain criteria. In a statement released on Thursday, Blair Childs, senior vice president of public affairs at Charlotte-based Premier Inc., said he is encouraged that CMS plans to develop a demonstration project to examine how Medicare Advantage alternative payment models qualify for the threshold test and obtain the five percent MACRA bonus prior to 2021. Childs noted that nearly one-third of Medicare beneficiaries are enrolled in an MA plan. “Many MA plans have engaged providers in innovative value-based contracts that are benefiting patients and should count toward qualifying eligible professionals for the bonus in 2019. This policy would level the playing field for clinicians in areas with high MA penetration,” he said.

Regarding CMS’s efforts to reduce provider burden, Enekwechi says, “I think they’ve leaned as far as they can, while still maintaining implementation. I think that the slow ramp up in terms of scoring, basically they went from 3 points to 15 points, that’s still pretty low. I think 10 percent weight applied to the cost category is better than 0, and not as terrifying as 30 percent for MIPS eligible clinicians. They have also created multiple ways to submit data and information; you can do it through registries, you can do it through their website. This agency is doing as much as it can to try to ease burden with respect to implementation.”


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Premier Inc. Executives: Time to Unpack Some of the Challenges and Opportunities Inherent in the Path Into Risk

September 24, 2018
by Mark Hagland
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Premier’s Shawn Griffin, M.D. and Steve Valentine share their perspectives on the challenges involved in the path into risk-based contracting

There is great complexity in how the shift from volume-based to value-based payment and care delivery is taking place inside the U.S. healthcare system. As discussed in one of the Healthcare Informatics Top Ten Tech Trends published in the third-quarter issue of the magazine, the path into risk-based contracting is particularly complex—and challenging.

For one thing, as those interviewed for the article agreed, as the shift from a volume-based to a value-based U.S. healthcare delivery and payment system moves forward—albeit unevenly and not as quickly as some would like—some of the lines between what providers and payers do are inevitably beginning to blur. Industry experts and observers say that blurring will necessarily have to occur, as provider organizations take on more risk. Indeed, many believe, the only way to wring significant savings out of the healthcare delivery system is to compel the acceleration of risk, headed in the direction of partial or full capitation.

A number of industry leaders were interviewed for that Trend article, among them three senior executives at the Charlotte-based Premier Inc.—Shawn Griffin, M.D., vice president, clinical performance improvement and applied analytics, and Steve Valentine, vice president of strategy and advisory consulting at Premier. Healthcare Informatics Editor-in-Chief Mark Hagland interviewed those Premier executives around the broad issues surrounding the taking on of risk by the leaders of patient care organizations.

Meanwhile, Griffin and Valentine also addressed issues around new disruptor organizations and business combinations emerging in healthcare, for a Trend article on that subject. Below are excerpts from that interview on both subjects, which took place this summer.

What do you think about some of the new business combinations, including the proposed CVS-Aetna merger, and how they might potentially upend the landscape for provider organizations?

Steve Valentine: Today [Aug. 3], the California Attorney General opposed the CVS-Aetna merger over cost concerns. We would call that a vertical merger. They have the Minute Clinics, the PBM [pharmacy benefit management company], etc.—we see them invading the healthcare space to compete for what we call “stickiness with the consumer.’”You have 9 to11 percent of the spend in pharmaceuticals. It will be interesting to see whether they go down a path like United, which has Optum, and which is acquiring medical groups.

Shawn Griffin, M.D.: You’re seeing continued attempts to find ways to put together groups that can help you save on healthcare spend. You’re seeing that with innovations, and with partnerships of all kinds, and they’re all trying to find out what the right team is, to become more efficient and improve quality. You’ve seen it with the EMR vendors, too.”

Looking at the forward evolution of risk-based contracting, how do you gentlemen see that evolution playing out, from your perspective as leaders of a nationwide alliance of provider organizations?

Griffin: When you look at Premier and the partnerships we’ve made over the years, we think that it’s incredibly important that the people who deliver the care have a seat at the table and aren’t being distanced. With some of these combinations, you start to see mixed affiliations. If you have a payer who owns some providers, how do they treat the ones they employ versus not employ?

The whole picking-teams thing can be very divisive. And some of these groups have existed within silos in the industry. Now, when you combine providers, payers, etc.—a lot of organizations have concerns when they sit down with an insurer that owns a lot of providers, or owns an analytics shop. I don’t think that we necessarily believe there’s a silver bullet with one magical algorithm to save the day. I think it’s going to be people working together to work with innovative models and collaborations, so that we can help people, but not at the expense of the people delivering care.

Valentine: As much as we want the collaboration, the competition is clearly heating up, and inpatient volume has gone flat, and more is moving to ambulatory side, and we’re seeing more payers creating and expanding narrow networks and tiered networks.

Griffin: Maintaining the network enables you to better collaborate on and coordinate care. It’s the collaboration to make sure you’re sending patients to a good acute-care space, not simply, “Here, we have a coupon.”

Can you comment on the continuous “arms race” that’s taking place in healthcare, in which health plans continue to consolidate in response to consolidation on the part of providers, and then health plans turn to creating narrow networks?

Griffin: I was at an organization with 2,000 physicians, and only 10 percent were employed, before I came to Premier. There are things that can be done to facilitate the transfer of care and efficient delivery or care, when you’re on a single platform, which is an important step to take to overcome the siloing of EHRs (electronic health records).

Can you speak to the essential need to master the use of data analytics in order to succeed in the journey around risk contracting?

Valentine: I served on the board of Healthcare Partners Medical Group for 16 years, and what I’ve seen, is that you need an analytics and process infrastructure—hospitalists working with care managers, pre-admission, during the acute stay, and post-admission, and we really needed robust data and information. You get good analytics data to look at costs, handoffs, and where things didn’t work well, and utilization.

What are the biggest stumbling blocks, in that work?

We always worried about patients accessing care outside our network, esp. in outside EDs. We would repatriate patients back into our network, so that we could really manage the patients’ care; that was critical. And if we could keep them within the contracted specialty network, keep the patients in the network, because you had specialists really trying to manage the utilization and care with you. Outside the network, you found a lot of costs driving up.

Griffin: The more fragmented the care, the more likely you’ll be to have extraneous or unnecessary tests, etc. More organizations want to go into the social determinants of health and to see how those influence the costs and quality of care. I’m an old family physician, I think the primary care physician relationship with the patient is core. So to make sure you have an underlying relationship, not just patients seeing doctors for individual encounters, that’s where you can make progress. When you have a relationship between a patient and physician, if they do have to receive care in a hospital, if you can be efficient with tests so they don’t have to be redone, etc., and make sure you’re sending patients to the right post-acute, not just allowing as many swipes as possible in a 21-day post-acute care… stay…

What would you say about the challenges of understanding utilization, care management, and care handoffs, in the moment?

Griffin: There are aspects involving real-time. I think as we’re seeing this risk being handed to providers, we’re all experimenting on the right mix of technology, care management, etc. Real-time becomes tremendously expensive. So what is the appropriate time interval involved? And about doing a fantastic intake meeting with the patient. And our collaboratives are trying to see where the benefit is. We’ve had care managers say, we didn’t get any extra benefit from intensive care management, but then a new study comes out later, and they say, gosh, it did help. That’s why working together in broader collaboratives is so important, and working together in larger groups is so important.

Valentine: You asked about social determinants. The social services agencies are already stressed in terms of resources. And as these ACOs reach out to these social services providers, Habitat for Humanity, etc., they’re very stretched, and are looking for economic support and are asking for funding. They need help.

What are some of the biggest learnings you’d like to share, as well as advice for CIOs, CMIOs, and other healthcare IT leaders, right now?

Griffin: There’s not one magic bullet that will suddenly solve all your problems. There is a base of learning out there. Organizations like HIMSS [the Chicago-based Health Information and Management Systems Society], AMDIS [the Association of Medical Directors of Information Systems], CHIME [the Ann Arbor, Mich.-based College of Health Information Management Executives], etc., offer insights. And I think that providers collaborating with one another, sharing best practices, and working together on expertise, will help. I think it’s the providers who have relationships with patients, and organizations that have relationships with communities, and working a little harder and differently, will make all the difference. I don’t think some white knight will ride in on a horse.


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Is the Discourse Over the MSSP Program Teetering Towards Potential Conflict?

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The joint statement by nine healthcare associations this week points to potential conflict ahead around the MSSP program

Things appear to be heating up quickly in the interactions between the senior leaders at the Centers for Medicare and Medicaid Services (CMS) and the leaders of some of the accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) for ACOs.

As Healthcare Informatics Managing Editor Rajiv Leventhal noted in a just-published report, The National Association of ACOs (NAACOS) and eight other healthcare stakeholder groups have sent a letter to the Centers for Medicare & Medicaid Services (CMS), expressing concerns about the federal agency’s proposed changes to the Medicare Shared Savings Program (MSSP). In August,” he noted, “CMS proposed sweeping changes to the MSSP, by far the largest federal ACO model, with 561 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs (accountable care organizations) ought to move more quickly into two-sided risk payment models so that Medicare isn’t on the hook for money if the ACO outspends its financial benchmarks.”

Further, as Leventhal noted, “Specifically, CMS is proposing to shorten the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years. This proposal, coupled with CMS’ recommendations to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs—will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny. NAACOS, comprised of more than 360 ACOs across the U.S., is one association that has been actively pushing back on the CMS proposal. The group believes that ACOs need, and deserve, more time in one-sided risk models since it takes years to develop the necessary infrastructure to be successful. What’s more, NAACOS is of the belief that one-sided risk ACOs actually save far more money than CMS gives them credit for.”

Appropriately, then, considering their offense at CMS’s proposed changes, “NAACOS and others—including the American Medical Association (AMA), Medical Group Management Association (MGMA), and Premier—said in a press release accompanying the letter to CMS that the proposed Pathways to Success program would create several positive changes and includes a number of improvements the value-based community has previously recommended.”

Nor did their press release statement emerge out of a vacuum; indeed, CMS Administrator Seema Verma has become increasingly vocal about her frustrations with the MSSP program in recent months. As Associate Editor Heather Landi noted in a report, in late August during a webinar sponsored by the Accountable Care Learning Collaborative, Administrator Verma spoke in very firm terms about her insistence that ACOs in the MSSP program move forward with alacrity to take on two-sided risk. “I think many people recognize that it’s time to take that next step and it’s time to evolve the program; it’s been six years,” she said on August 27. “We also understand that there may be providers that are not ready. But, our focus is to work with providers that are serious about making the investments and providing better care for lower cost.” And, she added, “I think the experience that we’re seeing is that there are some providers that don’t take a few years to transition, and have come into the program right away, taking full risk, so we know that this is possible. After six years, there is a lot of experience out there and we can learn from one another as far as best practices.”

Statements like those have been deeply concerning to many ACO leaders—thus Thursday’s joint statement. “The ACO community wants to help CMS work through other issues in the rule which, if finalized as proposed, would have unintended consequences of undermining the broader shift to value-based care,” the leaders wrote yesterday. “Specifically, we are very concerned with shortening the time new ACOs have in a shared savings only model from six to two years and cutting in half the shared savings rates for these ACOs from 50 percent to 25 percent. This is especially concerning because a spring 2018 survey showed that over 70 percent of ACOs facing mandatory risk for 2019 were likely to leave the program as a result of being forced to assume financial risk. When analyzing the recent performance year 2017 MSSP results, it shows that Track 1 ACOs achieved more savings per beneficiary than ACOs in the two-sided MSSP models. We request that CMS modify these proposals for all ACOs in the final rule, to allow more time for ACOs in a shared savings only model and to apply a shared savings rate of at least the current 50 percent.”

As the leaders noted, “The MSSP remains a voluntary program, and it’s essential to have the right balance of risk and reward to continue program growth and success. Program changes that deter new entrants would shut off a pipeline of beginner ACOs that should be encouraged to embark on the journey to value, which is a long-standing bipartisan goal of the Administration and Congress and important aspect of the Quality Payment Program.”

What’s more, the membership of this ad hoc group is in many ways as important as the content of their letter to CMS. In alphabetical order, they are: the Association of American Medical Colleges; American College of Physicians; America’s Essential Hospitals; America’s Health Insurance Plans; American Medical Association; Health Care Transformation Task Force; Medical Group Management Association; NAACOs; and Premier Inc.

What’s more, these groups represent a spectrum of stakeholders around the landscape of ACO evolution, including health insurers (AHIP), physicians in practice (AMA), medical group executives (MGMA), integrated health systems (Premier Inc.), and even medical colleges (AAMC). So their open letter to CMS is one that Administrator Verma and all the senior officials at the agency should consider very carefully.

As I said in a blog written after Verma made her comments in that webinar last month, and referring to Health and Human Services Secretary Alex Azar, Administrator Verma, and National Coordinator for Health IT Donald Rucker, M.D., “[I]t seems to me that Azar, Verma, and Rucker, and their colleagues, are in a bit of a challenging place here, because even as the progress has been measurably stronger in the Next Gen ACO program compared with that in the MSSP program, even in Next Gen, it hasn’t been spectacular. Meanwhile, Verma’s attempts to push down harder on the levers of payment and regulation in order to turbocharge ACOs, could very easily backfire, causing more ACOs to leave the MSSP program than to switch to two-sided risk.”

So we find ourselves at an excruciatingly delicate moment now in this “dialogue” between the leaders of ACOs and Administrator Verma. And this thing could “tip” in any direction. I would hope that Administrator Verma and her fellow CMS officials would take into consideration as they plan their next moves, anticipated to involve adding more rigor into the MSSP program. A careful balance will be required in order to avoid alienating perhaps the majority of ACO leaders, while still pushing the program forward. In any case, with regard to this entire subject, as we say in the news business, stay tuned.






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The CEO of a Nationwide Association of MD Groups Sees the Future—and It’s Not in Fee-For-Service

September 18, 2018
by Mark Hagland
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APG’s Don Crane shares his perspectives on the challenges and opportunities facing physician groups in the emerging healthcare landscape

The world of U.S. healthcare is undergoing massive change these days; indeed, the entire landscape around the healthcare system is shifting now, with new entrants, some of them disruptors, changing the realities on the ground for the leaders of patient care organizations. Meanwhile, the implications are legion, for physician-led organizations, including large and not-so-large multispecialty physician groups. Those subjects were topics of analysis in two of the Healthcare Informatics Top Ten Tech Trends, which appeared in the third-quarter 2018 issue of Healthcare Informatics.

For both the Trend article on the new disruptors entering the healthcare system, and the Trend article on the challenges and opportunities physician groups in the emerging landscape, Healthcare Informatics Editor-in-Chief Mark Hagland interviewed Don Crane, president and CEO of the Los Angeles-based America’s Physician Groups (APG), a nationwide association of physician groups involved in risk-based contracting. Crane, whose association represents more than 300 physician groups operating in 45 states, the District of Columbia, and Puerto Rico, is helping to lead a revolution in the medical group world, facilitating the collaboration around innovation among physician groups across the country.

Don Crane

Don Crane will be delivering a keynote presentation on November 9, during the Health IT Summit in Beverly Hills, sponsored by Healthcare Informatics. He will be speaking on the subject of value-based care and clinical transformation, sharing his perspectives as one of the leaders in the physician group world. Below are excerpts from his interview this summer with Hagland.

Looking at all these new business combinations and alliances—the Aetna-CVS deal, the Amazon/Berkshire Hathaway/JP Morgan Chase alliance, the inroads into healthcare being made by Microsoft, Google, and others—what do all of these business and technological incursions mean?

To me, they signal a very restive employer world, a restive and dissatisfied employer world, certainly, when you talk about Google and Amazon, and so, too, with the carrier-PBM combination. There, it’s more about the players looking for a new model, implying that there’s a dissatisfaction to the point of abandonment of faith in the existing model. So, has the inefficiency of our current healthcare delivery system now produced pain at such a high level that it’s no longer about academic conversations, but time for a variety of different actions? That’s what it’s telling me, that we’re about to hit a pain point. Healthcare is using up more and more of our GPD, and really is hitting our global competitiveness now. So yes, this is very significant.

With regard to the planned Aetna-CVS merger—should physicians feel unsettled?

I have an upcoming board retreat, where we’ll be speaking to the Walmart-Humana, CVS-Aetna, and Cigna-ExpressScripts arrangements; I don’t think that the architects of these various transactions see them all in the same way. They have slightly different strategies, and are facing different challenges. These are smart-darn people, and it’s different from the sort of minute-clinic concept we’ve seen in the past. That concept didn’t really take off. Someone said there’s a Walgreens or CVS within 3 minutes of every American, or something. But the minute-clinic concept didn’t exactly work. But what’s different about these diagonal mergers? I think some of it lies in the data—you’ll be combining the data of a health plan with a pharmacy with a PBM [pharmacy benefit management company]. And we’re moving into an era of artificial intelligence and machine learning and the ability to stack up algorithms to the nth degree and know things we didn’t know before.

There’s also the factor of the idea of the transformation of primary care. I think they envision a world where you don’t have to call your doctor six weeks in advance, drive through traffic, wait for hours, wait for days to get your results—and that just doesn’t seem cool in the second decade of the 21st century. It’s a model begging for revolution.

And how will all this impact physician groups? The short answer is, I don’t fully know. The longer answer is, we’re actively thinking about it. The one thing I have a massive amount of faith in is that when it comes to professional care by doctors, nurses, etc., the Pentium chip is organized physician groups; it’s not Dr. Marcus Welby all alone; nor is it health plans that sit on high in penthouse buildings; nor is it hospitals. It’s aggregations of doctors supported by data and analytics, and supported by a constellation of people—psychologists, social workers, even bus drivers, in terms of transportation. And there, you get quality, and you marry within an organization the desire to improve quality and the health of individuals and the population, and at the same time, be stewards of resources. And that’s important, because healthcare’s single biggest problem is unaffordability. So we need stewardship of resources married to expertise in care delivery. I think the new models to come will float to the top.

And, in terms of the disruptors, they envision a world where you don’t have to call your doctor six weeks in advance, drive through traffic, wait for hours, wait for days to get your results—and that just doesn’t seem cool in the second decade of the 21st century. It’s a model begging for revolution.

With regard to the pace of physician groups moving into risk, is it about at the level you’d expect?

As best as I can tell, the pace is going moderately well. Has it accelerated? No. Has it slowed? Probably not. It doesn’t feel like there’s a white-hot fire underneath it at the moment. There is a generalized belief that we need that movement to occur and succeed. At the same time, there are entrenched interests.

Our efforts rise and fall based on what’s going on around the country. And we continue to get new members out of interest in this, but they’re not pounding the doors down yet. They’re reading the signals from the government and commercial payers carefully, and they’re content to sit in the status quo and make a pretty good living, and don’t want to incur enormous cost and effort unless they have to. So the level of push is not as hard as we’d like. But some changes coming out of various rules sets coming out of a very bold and laudable administration, as far as I’m concerned.

When it comes to managing two-sided risk, everyone has spoken of the criticality of data. What’s being learned in that area?

Upside risk makes sense for a while; it’s baby steps. But it’s weak tea in terms of driving real change. If you get lucky with the right benchmarks, you can do well. But it doesn’t induce real structural change. But when an organization faces downside risk, also known as bankruptcy—that really forces change. When you take that higher risk, you’ve got to have the data. You’ve got to risk-stratify your population, and treble down on the resources you’re using on the patients at highest risk. All of a sudden, you move into the big leagues.

Are physician groups beginning to use artificial intelligence and machine learning, in earnest?

The answer is yes. I’m surveying my board next week. But the pioneers are starting to use AI and machine learning, yes.

Do you know yet what they’re learning in terms of process?

Well, of course they’re learning better what the ailments are in a population, etc. They’re just able to do a better job of diagnosis and then care management care planning—being able to treat people more intelligently than ever before.

What percentage of your organizations have unlocked the key around multidisciplinary care teams?

That percentage is very high. Some started a couple of decades ago with this. This is not rocket science, it’s fundamental blocking and tackling. So within my organization, you’ll see a high percentage of organizations making good use of multidisciplinary care teams. Outside my organization, not so much. It’s no secret that you should be using mid-levels to support physicians; but you kind of need the payment model to make it work. Otherwise, you still have doctors working per click, like hamsters on a wheel. As you get into risk-based capitation, that’s where the model changes, and voila—all of a sudden, you have big panels, risk management, and multidisciplinary care teams. You almost can’t separate the organizational model from the payment model.

In terms of physician groups working with social determinants of health data, what are you hearing?

Well, we’re in the early stages of physicians and physician groups moving into working with social determinants of health data. If you talk to a doctor who is still in fee-for-service about the social determinants of health, he’ll say, nice idea, but are you kidding? I didn’t go into healthcare to be a social worker! If you talk to APG members, you’ll see that they totally understand it. You so often need to get into the home, and into transportation, and nutritional support. If a patient can’t get to the doctor’s office, and isn’t eating and is living in a high-crime area, no amount of good diagnosis and prescription will produce a good outcome. In Medicare Advantage, given the latest rate note and the bipartisan Balanced Budget Act, Medicare is basically beginning to cover social determinants of health stuff; that’s in a nascent stage, but people are gearing up for it. I think I saw that Humana and Ascension Health had created a new venture around social determinants.

Meanwhile, we’ve entered into a partnership with Partners in Care, a foundation headquartered in Los Angeles, and they’re available for hire to do home visits and other similar sorts of social work items. And my members are hiring them to do that kind of outreach into patient’s homes. It’s really helpful with the frail elderly and such. So seeing where the puck is headed there, we entered into a partnership with Partners in Care. And that’s a whole new frontier. Now for physicians to be responsible for home visits, well, that’s new. So there’s a transformation underway there as well.

What do you see in the next couple of years around that?

I think it’s just another data set. And if you’re going to start to do home visits to the frail elderly, you’ll need their addresses, of course. And when you do your chops and cuts and sorts, you’ll need to be looking not only at their a1c, but their neighborhood, and their nutritional status, etc., and you’ll now have additional data to help you guide your care plan. It might involve home visits, or Lyft or Uber; so there needs to be data to support that.

How will the data analytics component evolve in the next few years for the leaders of physician groups?

Well, it starts with a recognition of the need for data. Those physicians just wondering what to do about MIPS, etc. They’ll realize they’re utterly unequipped to set up a data analytics shop themselves, so you’ll see movement into groups. And the next step is to get to the facility to do it, and that means joining a group or an IPA. That’s the dynamic we’re going to see. And then we’ll start seeing better results.

And, how do you see the future more broadly?

There’s no future around fee for service; it’s eroding out from under doctors. You look at the Medicare fee schedule and increases slated for the future. What are they? The anticipated increases to physician payment under Medicare are going to be 0.5 percent, 0.25 percent, from here out to as far as the eye can see, they’ll be nearly flat; and the increases in costs of running practices will be increasing 2, 3, 4, 5, 6 percent. So you’re quickly on the way to the poorhouse if you’re trying to stay in a fee-for-service world. So how will we make a living? To make a living doing what you want to do, you’re going to need to find a different way to make a profit under flat revenue. How do you do that? You keep the population healthier. You stare into the data and figure out who will get sick next, by using predictive analytics.


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