Three years ago, in Chapel Hill, N.C., C-suite leaders at UNC Health Care took a broad view around the healthcare landscape and came to a critical conclusion about its organization: the health system needed to put more emphasis on moving from transition-based healthcare to value-based healthcare.
Indeed, it was at that time when senior executives at UNC Health Care—an integrated healthcare system which comprises UNC Hospitals and its provider network, the clinical programs of the UNC School of Medicine, and nine affiliate hospitals and hospital systems across the state—understood that market dynamics were changing, and as such, it was time for the health system to change, too.
“North Carolina has historically been a transaction-based market, particularly in the Raleigh area. So convening with outside consultants, our leaders began to get interested physicians both inside the organization and those in the community, to begin to create a clinically-integrated network,” recalls Stacy Mays, transformation executive, UNC Health System, a new role following her chief operarting officer title. “UNC Health Care, at that point, didn’t have a vehicle to affiliate with community providers and hold them close to the organization, but many UNC physicians are graduates of the medical school here, and have a good and favorable opinion of [us],” notes Mays.
Mays wasn’t yet in her executive role at the time of that decision, but was later hired to help build the clinically-integrated network. “We took a little bit of a different direction than we had initially anticipated. We thought we would start with direct-to-employer relationships, and we had one that was in place prior to my arrival, but we started talking to commercial payers also, and it didn’t seem like the time was right to focus on value in the commercial space. It was coming, but it wasn’t quite ready [at that time],” says Mays.
Nevertheless, UNC Health Care eventually moved into the Centers for Medicare & Medicaid Services’ (CMS) Next Generation ACO (accountable care organization) Model for 2017, a move that Mays says has afforded the health system the opportunity to “learn how a large academic institution with community affiliates can function well in a value-based environment.” She says, “We have coupled that with the fact that we now with 11 other healthcare organizations across the state, and we own a Medicaid managed care plan, which we anticipate [will commence], assuming we are successful in winning a bid from the state, sometime in 2019 or early 2020. So we went from a transaction-based approach to deep roots in value-based care very quickly,” she says.
One Foot in, One Foot Out
Perhaps the biggest challenge for health systems today transitioning to value-based care is that as they are pushing into risk-based contracting, they are also still maintaining a significant share of modified fee-for-service payment going forward. To this end, Mays notes that her role has shifted a bit recently, as she has stepped out of the core operating role to provide more strategic direction for the enterprise in how it deals with the transition to value.
“We anticipated there would be pushback [on the shift to value]. And [we thought] it would be a difficult thing for our physicians and core administrative staff to change direction in a way that would be necessary to be successful in value,” she says. But, that has turned out not to be the case, Mays attests. “Our doctors, particularly our primary care physicians, have embraced the opportunity to get out of the transaction mindset. We have bought into the fact that our job as healthcare providers is to help folks solve problems. It’s not about putting a Band-Aid on something that doesn’t address core issues. So this shift has given the organization the impetus to think about behavioral health integration, telehealth, addressing social determinants of care, and all of the other things that are critical for a patient’s health and well-being, even if they are not core clinical issues,” she says.
At the same time, Mays readily admits that conversations about having feet in both buckets—the value-based care bucket and the fee-for-service bucket—do happen every day at UNC Health Care, in a variety of ways. She says that the health system has indicated that there is a major commitment to value; one of the core goals is to meet its CMS benchmarks for performance as well as perform in the top 25 percent in quality scores among all ACOs. “That demonstrates a major commitment to value. But it’s absolutely a struggle when you are trying to balance traditional transaction-based services with value,” she says. “We as an enterprise need to do what’s best for the patient, and need to not worry about what the payment source is. That, over time, will take care of itself. That’s where it’s landed for us. It doesn’t matter who the payer is; it doesn’t make sense for someone to have 50 ER visits a year. That’s just not good care.”
Regarding the Next Gen ACO that UNC Health Care is participating in, Mays says that a decision was made to cast a “wide net in how we were integrating the ACO into the organization as a whole.” Last year, after the health system submitted its Next Gen application to CMS, it convened a group of 40 individuals across the system and asked them to help to prioritize the work streams that the group thought would be most important for ACO success. Says Mays, “We wanted to keep things simple and focus on just the fewest and most important things that would drive our success.”