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.”
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.
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.
Hiller: I think there’s also still a misunderstanding out there of how these models work. When I meet to talk with providers about bundles, especially when I talk to providers new to the concept, there’s a vast different between how the program actually works, and their understanding of it. There’s this notion that you’ll get a single payment and figure out how to distribute that, and many providers aren’t comfortable with that, because they think they’ll now have to act as a payer. But the vast majority of bundles today still involve a FFS payment upfront, and it can actually be successful for them financially. To be successful with these bundles really requires managing quality of care: you don’t want multiple readmissions under a bundle. When you can reduce readmissions, and look across the continuum of care, which most providers aren’t used to doing, you can be quite successful, both financially and from a quality perspective.
Griffin: Joe nailed it well. We’re looking at organizations that have optimized their operations well over 40 years for fee-for-service payment, so no one’s optimized this. And this makes everybody lose sleep.
Shawn Griffin, M.D.
Damore: Another good example of this is Kaiser Permanente; I always use Kaiser as an example of a place where it’s easy to manage, because you have only one payment system at Kaiser, value-based payment. If you look at their success, and they had a tremendous financial year last year—I think they made over a billion dollars—it’s quite possible to be successful, if value-based care delivery and payment is your focus. The longer you live in both worlds, the harder it is.
What are some of the core strategic and operational IT and data issues involved in moving into risk-based contracting?
Griffin: Fundamentally, the response to risk is trying to increase control, and our data systems have not been organized to give us total control over processes. The challenge is that your insurance company you’re contracting with controls and owns the data; data ownership is an important concept. And even doctors aren’t all on the same EHR [electronic health record], who are in the same network. And now that the system of care isn’t just hospitals, but outpatient and post-acute as well, you have to build data and IT governance [around participation in value-based healthcare contracting]. And you have different metrics for different claims and clinical data types; and the fact that we’re trying to bring in different types of data and tell the same story with them, is difficult. And the lack of interoperability is a huge challenge.
Damore: I feel like we’re making progress on the claims data, because organizations are getting better at doing claims analytics; we’re now beginning to be able to use claims data to identify, for example, who the high-risk and high-cost patients are, etc. But I still see a huge challenge in the lack of interoperability among EHRs. I don’t see anyone who’s mastered the situation yet of networks that are using multiple EHRs.
Griffin: We have a sketch of interoperability that often involves dumbing down the information you share among EHRs. Almost nobody talks about claims interoperability. Medicare Advantage versus commercial plans, multiple Medicare Advantage plans, all are different versions of claims data. We all have a phrasebook for a foreign language.
Hiller: I would agree with everything that Joe and Sean have said. There are bright spots in all of this struggle, and what we’ve seen in bundles—I used to work on the hospital side, in the middle of my career, for eight years, and once a patient left a hospital, it was a black hole. And even though these claims aren’t tied to specific bundles or whatever, even having some level of information—seeing where our patients go, how long they’re spending time there, and 28 days in a SNF [skilled nursing facility] is something you anecdotally knew about, but now you can see it.
What should CIOs, CMIOs, and other senior healthcare IT leaders be doing right now, in the context of what we’ve been discussing here?
Griffin: Interoperability requires connectivity, so you need to be fleshing out your connections with all your providers, and that you’ve got the wiring down. And you’ve got to be working with your physicians, and make sure your clinicians are at your table as your building out your plan, and solving problems, not just increasing responsibilities. There’s no magic bullet, but there are islands of competency, where leaders of patient care organizations are doing this well, and sharing information with others.
Damore: I also think you need to take an interdisciplinary approach to governance of IT. The CMIO and CIO can lead that effort, but shouldn’t be doing it in isolation. You need clinicians, your quality leader, your financial leader, your clinical integration leader. So you need multiple people at the table. And you need to develop a roadmap that’s logical. So you really need to develop a targeted plan, and say, here are the stair steps to that plan. I see so many places where they haven’t really thought through it in a very organized, stairstep way, in terms of what you’ve got to do and in what order.
Griffin: Yes, it’s a huge process. Unfortunately, meaningful use-driven [EHR] implementations tended to get reduced to technical implementations, but improving the quality of care was actually the point of what meaningful use was supposed to get us towards. And the fact that we still have interoperability issues is witness to that.
What about the element of personal leadership in moving organizations forward?
Griffin: I definitely think we need a bias towards action. And clinician leadership in change in an organization is not only necessary for success, but the key to success. And with the excess of data and shortage of information and shortage of timeliness of presenting information in the workflow.
And it can’t be perceived as an IT project, correct?
Griffin: This is similar to if you were going to open a brand-new hospital. It’s an all-hands-on-deck kind of situation, not a hobby thing run out of the back of the IT department.
Is there anything anyone would like to add here?
Griffin: We’re seeing a broader emergence of cloud-based technologies, which will better help us leverage data analytics. And having trusted outsider advisers working with trusted internal leaders, is important. And we can either lead or react, and the leaders are tending to do better.
Damore: I think it’s an exciting time, and I do think with some of the changes in the administration, we’re going to see this transformation accelerated, because of the fact that there’s now leadership in place focused on it. I know the Secretary is looking for a couple of people in the VBP area, to help move this forward.
Hiller: I agree, I think this is a very exciting time, and has been for a few years now, and as a finance guy, it’s exciting to see these new programs blending in and being combined with changes in care delivery. And these bundles we’ve been working on that have been successful, it’s really a team-based approach, with clinician leaders, quality people, finance and IT people getting together, and the fee-for-service world doesn’t do that well, so this is exciting.