In Northern California, the Ups-and-Downs on the Drive Toward Value-Based Care | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

In Northern California, the Ups-and-Downs on the Drive Toward Value-Based Care

February 23, 2018
by Rajiv Leventhal
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Blue Shield of California’s Chris Jaeger, M.D., discusses how his organization, and the Northern California area more broadly, are progressing with value-based care initiatives in a region that is mostly driven by the Kaiser Permanente presence

Having worked as a chief medical information officer (CMIO) at Sacramento, Calif.-based Sutter Health, and then in early 2017 taking a job as vice president of accountable care innovation and clinical transformation at Blue Shield of California (BSC), Chris Jaeger, M.D., is precisely the type of individual who forward-thinking healthcare organizations are looking for these days in their leadership departments: one who can push them into a new value-based care world, and who possess a combination of clinical experience with business shrewdness.

“I really have seen it from both sides of the fence,” Jaeger says in a recent interview with Healthcare Informatics,” adding that he came to BSC because of the collaboration and the history of its ACO (accountable care organization) programs. Indeed, at the San Francisco-based health plan, which serves more than 4 million health plan members and nearly 65,000 physicians across the state, started its ACO initiatives in 2008 with collaborations in Northern California, including a 2010 partnership with San Ramon-based Hill Physicians Medical Group and San Francisco-based Dignity Health, a partnership which launched after two years of planning.

“The secret sauce was a multi-partner agreement,” says Jaeger. “Dignity [Health], Hill [Physicians Medical Group] and Blue Shield set a global budget all together. And in that HMO/ACO-type model, there were aligned incentives, similar to what you’d see in a Kaiser [Permanente] structure. From there, you are shifting the mindset of acute care providers in particular, focusing on the budget instead of filling beds. Or you’re repatriating from out-of-network, and being mindful of patients who could have been served by [you], but were admitted to a competitor. But in a volume-based world, that’s far from the mindset,” he says.

Chris Jaeger, M.D.

In the Northern California healthcare market, Jaeger contends how Oakland-based Kaiser Permanente, an integrated managed care consortium with nearly 12 million health plan members in addition to some 720 medical facilities, is a driving force and with its current market share, and can deliver value by having alignment between its health plan, providers and facilities. “The non-Kaiser market shareholders, both on the provider and plan side, have to take notice of that and [develop] strategies that are mindful of it,” Jaeger admits. “Because of Kaiser’s drive and its presence, I’d say that Northern California is ahead of other parts of the country in its [value-based care progression] but still taking a step back, the number of Californians themselves that are getting care under a value-based care model is a minority compared to those getting it through a volume-based model,” he says.

In the Northern California region, Jaeger says there is plenty of experimentation, pilots, and proof-of-concepts that are happening, and even beyond that, some larger scale value-based arrangements. “But it’s still in the fairly early stages. You will see PPO Shared Savings Plans with essentially only upside risk involved for providers. You don’t see a lot of providers taking downside risk,” he says.

BSC, specifically, now has more than 40 ACO initiatives, with nearly a half-a-billion dollars in savings since their original inception, Jaeger says. He notes that one of the keys for BSC’ ACO success is having alignment across the care continuum, rather than just between a plan and a single entity, which is the case with many such agreements today.

But Jaeger points to the importance of “true alignment” across the continuum—not just in the acute care facility or ambulatory office, but extending to the SNFs (skilled nursing facilities), LTCFs (long-term care facilities) and the home. “How do we start to include other stakeholders in ACO arrangements to align incentives even more across the continuum of care? That would be one [of our] lessons learned and also would be a way to think of the future, too,” he says.

Another critical success factor for BSC has been the partnerships with providers, Jaeger attests, noting that building trust with ACO providers “is the biggest step.” He adds, “You need to share data with each other to identify the key levers on cost of healthcare and quality, focus efforts on those [levers] year after year, and then re-baseline them year after year. And our agreements are multiyear, so that sets a longer-term horizon rather than quarter-to-quarter. It takes time to build trust, and trust is something that could be destroyed in one second. Assume good intentions, have open dialogue and continue to nurture those relationships over time,” Jaeger advises.

One Key Roadblock to Value-Based Care

A recent report from the Healthcare Financial Management Association (HFMA), based on surveys of financial executives in hospitals and health systems, found that capabilities for sharing clinical information among hospitals, physicians and health plans are impeding the movement to value-based payment programs.

To this end, Jaeger agrees that data movement and reporting is one of the main challenges of getting deep into value-based care initiatives. “The health information exchange (HIE) part is the data liquidity [issue]. The majority of Californians do not receive care from providers in a closed healthcare ecosystem, like Kaiser, which isn’t fully closed but it’s as close as you can get [to being fully closed],” he says.


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