When it comes to aligning physician incentives and processes in order to master value-based contracting in healthcare, senior leaders at the 30-plus-hospital, Arlington-based Texas Health Resources (THR) have been working assiduously to put everything together, confirms R. Todd Richwine, D.O., chief medical informatics officer at the Texas Health Physicians Group, the umbrella physician group attached to the THR integrated health system.
Referring to the Next Generation accountable care organization (ACO) program sponsored by the federal Centers for Medicare and Medicaid Services (CMS), Dr. Richwine notes that, “As part of the Next Gen ACO, we have 85,000” Medicare beneficiaries being managed under that program. “And we’re in multiple other ACOs,” he adds, referring to the 29,000 Medicare beneficiaries covered under the North Texas Specialty Physicians Medicare Advantage contract the system services, the 21,000 Medicaid beneficiaries covered under the AmeriGroup ACO, and, in the commercial realm, the 112,000 United HealthCare, 69,000 Aetna, 48,000 Cigna, and 19,000 Humana health plan members that THR clinicians are caring for, for a total of more than 354,000 patients altogether.
As for Texas Health Resources’ journey into value-based care delivery and payment, “I would say it’s been slow and steady,” Dr. Richwine says. “We started into ACO work years ago with a group called Medical Edge, which became Texas Health Physicians Group. So we have a long history of working towards quality and being physician-led. We have a large number of very active physicians—anything around reimbursement or quality measures, is, led by physicians,” he adds.
Asked about the biggest challenges, Richwine offers, “I think the biggest challenge has been developing the support staff necessary to do well on the measures. The physicians are very motivated to do the right things for their patients. Unfortunately, some of what’s required falls outside of what physicians can accomplish themselves. It really requires an entire multidisciplinary team to achieve results, on behalf of sometimes-difficult populations. We make sure that we’re providing the care—everything from physicians to PAs and nurse practitioners, to social workers and case managers.”
Richwine and his colleagues at Texas Health Resources are far from alone in facing down the complexities of value-based healthcare. As early on in the collective journey as the U.S. healthcare system is, the leaders of organizations like THR are learning valuable lessons in how to prepare broadly to take on financial risk in contracts with the public and private purchasers and payers of healthcare, and how to engage and align physicians.
Early On in the Journey of a Thousand Miles
Certainly, the grand adventure in value-based healthcare is in its early stages. Asked to characterize how far along on the proverbial journey of a thousand miles U.S. providers are in that journey, Joe Damore, vice president at the Charlotte-based Premier Inc., says, “I think we are still in the childhood years, about to enter the teenage years, maybe, on this. We’ve got about 20 percent of both commercial and Medicare arrangements, that are two-sided—it’s actually 17 percent in Medicare that are on two-sided risk now, up from 13 percent,” he adds. “We’re moving more and more towards two-sided risk, but it’s a slow process. The delivery systems want to make sure they’re ready, and that they have the tools, knowledge, and information to manage two-sided risk. But one-sided risk has continued to grow, with over 500 Medicare ACOs across the country, and about the same number of commercial ACOs.”
What’s more, Damore says, “Our forecast that two-sided risk will pick up even more soon, as providers need some downside risk to really focus on this. And we’ll also see a growth in Medicare Advantage and Medicaid managed care, involving some downside risk to providers. Many health plans want to do this and shift risk to providers, too, but many don’t have the infrastructure in place to move towards a capitated arrangement for primary care plus shared savings for specialty care; very few have built the tools to do that. There’s a desire to do that. Blue Cross of Hawaii has implemented that model, where they’re capitating over 500 physicians in Hawaii for primary care, and providing shared savings for total cost of care.”
“To add to what Joe has said, in the past many years, I’ve been focusing on the bundled payment side, and one of the interesting things with bundled payment is that if you go back to the BPCI (Bundled Payments for Care Improvement) program under Medicare, announced in 2011, the thousand-plus participants have been dealing with two-sided risk across the life of that program,” says Mark Hiller, vice president of bundled payment services at Premier. What’s more, Hiller notes, “There’s two-sided risk in the total joint replacement program. We’re working with providers on CHF, pneumonia, COPD, and so forth, in addition to total joint, and with two-sided risk. So that’s growing, if more slowly, than the broad population health-related programs. But in the bundle area, it’s growing fast. I wouldn’t be surprised if the new program took off quickly, he says, referencing what’s called BPCI-Advanced—the Bundled Payments for Care Improvement Advanced program, sponsored by CMS.