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The Strategic and Strategic-IT Challenges Around Risk: Premier Execs Share Their Thoughts

June 11, 2018
by Mark Hagland
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Premier Inc. executives share their perspectives on some of the challenges facing senior patient care organizations, as they move into risk-based contracting

In the two articles that he prepared as part of the Special Report on Value-Based Healthcare for the second-quarter issue of Healthcare Informatics, Mark Hagland interviewed industry experts and leaders on the plunge into risk-based and value-based contracting on the part of U.S. providers, and the strategic information technology challenges around that plunge.

In preparing the articles “Value-Based Care: Landscape Tilt,”  and “The IT and Analytics Drive,” Hagland interviewed three senior leaders at Premier Inc., the Charlotte-based health alliance: Joe Damore, vice president of population health management; Mark Hiller, vice president of bundled payment services; and Shawn Griffin, M.D., vice president, clinical performance improvement and applied analytics. Below are excerpts from that interview.

When you look at the landscape around value-based healthcare right now, and the proverbial “journey of a thousand miles,” where would you see that we are as a healthcare system, in that journey?

Joe Damore:  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. 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.

Our forecast is 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.”


Joe Damore

Mark Hiller: 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 program under Medicare, announced in 2011, the thousand-plus participants have been dealing with two-sided risk across the life of that program. What’s more, 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 [BPCI-Advanced—the Bundled Payments for Care Improvement Advanced program, sponsored by the federal Centers for Medicare and Medicaid Services (CMS)] took off quickly.

I have no doubt it’s going to explode quickly. The applications to that program were due in, in March. And from the rumors I’ve heard, there has been a significant number of applications submitted to Medicare. And that will involve two-sided risk.


Mark Hiller 

Shawn Griffin, M.D.: From your analogy around the maturity curve, we’re still standing on opposite sides of the gym, trying to figure out if anyone wants to dance, and nobody’s a good dancer yet.

What are the biggest challenges that providers face in moving into risk-based contracting?

Damore: Living in both worlds—the world of fee-for-service incentives and of value-based payment—is very difficult. We have an expression at Premier: fee-for-service is the enemy of value-based payment. That is the number-one challenge, that the model of payment to providers has to be aligned on a value-based model. It’s like the example I gave around capitation and primary care: if my incentive is to get patients into the office, that’s what I’m going to do; but if my incentive is to manage my patients on a capitated model, I’m going to grow my panel and have advanced practitioners see my patients more. And I’ll use creative techniques, including virtual visits, e-visits, group visits. So in my opinion, that’s the greatest barrier.

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