Good Signs: NYC Health + Hospitals Corporation Boasts a True ACO Success Story | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

Good Signs: NYC Health + Hospitals Corporation Boasts a True ACO Success Story

November 9, 2017
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New York City Health & Hospitals Corporation’s leaders are able to boast impressive MSSP results to date

An article that appeared on Tuesday in the Health Affairs Blog was both fascinating and bracing. Authored by Nicolas Stine, Dave Chokshi, Janine Knudsen, Megan Cunningham, and Ross Wilson, “How America’s Largest Safety-Net Health System Built A High-Performing Medicare ACO” really is must-reading for anyone tracking the ongoing evolution of accountable care organization (ACO) development work specifically, and the shift towards value-based healthcare delivery and payment more generally.

As the article’s authors, senior leaders at the 11-hospital New York City Health & Hospitals Corporation (NYC Health + Hospitals), write, “The strategic implications of ACOs for safety-net providers and health systems are less clear. Some have questioned whether the safety-net health systems that serve a large portion of the country’s Medicare, Medicaid, and uninsured population are capable of the financial and structural investments necessary to succeed as ACOs. Others have identified unique strategies to help safety-net ACOs do well but predicted only modest and incremental success. Ultimately, it is not yet clear how the shift from volume to value will impact the financial viability of safety-net providers,” they write.

“Meanwhile,” they say, he need for a sustainable business model for safety-net systems could not be more acute. Along with rapid payment transformation and regulatory uncertainty affecting all health systems, safety-net organizations face particularly difficult financial circumstances. The simultaneous squeeze of decreasing subsidies and a payer mix tilted toward Medicaid and uninsured patients makes fee-for-service financing uniquely challenging. The future of safety-net systems, therefore, may be particularly dependent on their ability to adapt for success in the new value-based payment architecture. In this environment, the largest safety-net health system in the country, NYC Health + Hospitals, formed an ACO in 2012 to participate in the Medicare Shared Savings Program (SSP). Exhibit 1 offers an overview of the ACO at a glance,” they report.

The results of this initiative, to date? Impressive. As the authors write, “In its first four performance years, the NYC Health + Hospitals ACO (HHC ACO) has reduced costs by 4–12 percent annually compared to benchmark, while continually improving quality; it is the only ACO in New York State to achieve shared savings in all four Medicare SSP performance years. Overall costs to Medicare have been reduced by more than $31 million, generating shared savings incentive payments of nearly $14 million.” Honestly, those results would be impressive for any hospital-based patient care organization in participating in the MSSP. For a public hospital system? One could legitimately call them spectacular.

What’s more, data and analytics have been enormous drivers of NYC Health + Hospitals’ success. As the authors note, “Key insights from our initial analyses of ACO claims data were major drivers of how we set strategic priorities and drove performance. Among the most valuable tools provided to an ACO are the feeds of comprehensive claims data received monthly from Medicare. While we historically have had access to claims data for certain managed care subpopulations, the Medicare fee-for-service data are unique in that prices are regionally uniform and patients do not have network limitations. The ACO claims data therefore provide for more unfiltered analysis of how our patients interact with health care providers across settings and how our population’s use compares to local and national benchmarks.”

Now, the authors do concede that they actually started out with a few advantages, from an operational standpoint. “First, compared to our ACO cohort,” they concede, “we had low rates of certain types of high-cost elective outpatient use at baseline. For example, our expenditures per patient on magnetic resonance imaging (MRIs) are the lowest of all ACOs nationally. We hypothesize that this is driven by our role as the primary provider of many costly elective services (for example, advanced imaging and specialty care) for New York City’s large uninsured population. We have a limited supply of these resources and provide them according to clinical need and regardless of ability to pay.”

As a result, the NYC Health + Hospitals leaders note, “Our clinicians therefore become careful stewards of imaging and specialty care, and seek to promote access through avoiding unnecessary tests or referrals. Consequently,” they write, “we were able to devote less time and energy attempting to curb excessive or wasteful elective use compared to most other ACOs. Indeed, many health systems have historically developed fine-tuned financial machinery embedded throughout their operations to wring revenue out of the fee-for-service market. It was clear from our utilization data that we were already lean in this regard and could focus more on reducing costs in other areas.”

In addition, they note, “[O]ur costs were heavily concentrated in hospitalizations for patients with exacerbations of chronic medical and behavioral health conditions. Furthermore, among our most frequent users of acute care services, there was higher use of outside health systems in our dense urban setting. While most ACOs naturally focus on their high-utilizing population, it appeared that our performance would be particularly driven by our ability to better manage this fragmented care for a complex and chronically ill population.”

So, let’s be clear: for an ACO created and operated by a public hospital system, to be able to reduce costs by 4-12percent against its own benchmark, and also to be the only ACO in New York state to achieve shared savings in all four performance years so far? That’s huge. So, first of all, the NYC Health + Hospitals/HHC ACO leaders deserve a mountain of praise, just for achieving those metrics. What’s more, as we all know, public hospital management has historically not been especially innovative or enterprising. Certainly, that is changing, but the NYC Health + Hospitals leaders are obviously way ahead of their fellow public-hospital colleagues in many ways.

And, as quoted above, the NYC Health + Hospitals leaders have been deriving “key insights from our initial analyses of ACO claims data,” which have been able to “provide for more unfiltered analysis of how our patients interact with health care providers across settings and how our population’s use compares to local and national benchmarks.”

As the articles author’s note, “Our costs were heavily concentrated in hospitalizations for patients with exacerbations of chronic medical and behavioral health conditions. Furthermore, among our most frequent users of acute care services, there was higher use of outside health systems in our dense urban setting. While most ACOs naturally focus on their high-utilizing population,” they note, “it appeared that our performance would be particularly driven by our ability to better manage this fragmented care for a complex and chronically ill population.

 

These first two strategic insights are noteworthy in the context of recent debate around whether ACOs seeking to reduce costs should focus more on reducing low-value services for all patients as opposed to targeting those likely to be particularly high cost. In our case, the data suggested there was less opportunity for reducing systemic waste but a higher concentration of excess use among high-risk patients than other ACOs. We suspect this may be a more common dynamic for other safety-net ACOs. Indeed, the bulk of our savings have been achieved through reduced hospitalizations for patients with chronic conditions.”

In other words, for safety-net hospitals, there is great opportunity in zeroing in on targeting high-cost patients. The NYC  Health + Hospitals leaders also came to realize that, as they put it in their article, “[W]e would need to focus on identifying high-risk patients instead of just high utilizers. We reviewed multiple vendor products for risk stratification but had concerns about their predictive validity in a mostly dual-eligible safety-net population. Ultimately, we developed an in-house risk scoring system that could be internally validated using our historical claims data.”

Meanwhile, much innovation in the ACO world still relies on mission-driven personal leadership, as the authors note in their article. “Our ACO infrastructure, with site-specific physician champions and administrative leads,” they write, “attempts to encourage local creativity and engagement. Local medical directors appoint an ACO clinical lead at each of our 20 primary care centers. Each ACO lead engages with multidisciplinary teams embedded in each site’s patient-centered medical home (PCMH), each of which has 2014 NCQA level III accreditation. We found that each local leadership team functioned best under a different mixture of central direction and flexibility, and prioritized finding the right balance with each.”

There are so many lessons here, around the agile and strategic use of data, some potential secrets to effective ACO leadership, and the effective deployment of resources of all types. But the bottom line is this: if the New York City Health & Hospitals Corporation’s leaders can do as well as they have in the MSSP program, that means that their achievement is clearly possible for many types of hospital-based organizations, including those working with resource scarcity and other limitations.

And that means that the “Debbie Downers” in U.S. healthcare who keep pointing fingers every single time that CMS (Centers for Medicare and Medicaid Services) senior officials release new data on the various ACO programs, and we see that some ACOs are doing less well than others, need to sit back a bit and consider how early we are in the forward evolution of ACO development—and how much potential there really is, going forward. Let’s all keep our eyes open and celebrate breakthroughs like this one, and be aware that, in the accountable care and value-based healthcare phenomenon’s “journey of a thousand miles,” we’re still just a few miles from the start of the journey. And in that context, this is a hope-inducing report, indeed.

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When Will Federal Healthcare Officials Liberate CMMI to Create Appealing Innovation?

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At a moment when the MSSP Program is particularly vulnerable, are officials at HHS and CMS preparing new offerings through CMMI that will appeal to provider leaders?

“What might be in the works over at the Centers for Medicare and Medicaid Innovation (CMMI)? Are there new pilot models actively in development that will be rolled out this year? Many industry stakeholders, including federal lawmakers, are eager to know what the relatively opaque agency has in store,” Associate Editor Heather Landi wrote here in an article on January 11.

“Created under the Obama administration, CMMI is charged with piloting, testing and evaluating alternative payment models (APMs)—such as bundled payment models, for example—with the intent of increasing quality and efficiency, while reducing program expenditures under Medicare, Medicaid and the Children’s Health Insurance Program (CHIP),” she noted. “However, CMMI has been notably quiet in the first two years of the Trump Administration with regards to new payment models. Last January, CMS did launch a new voluntary bundled payment model, Bundled Payments for Care Improvement Advanced, the Administration’s first Advanced APM.”

Landi added that, “In several speeches to industry groups this past fall, Health and Human Services (HHS) Secretary Alex Azar has indicated that the Trump Administration is exploring new voluntary bundled payments, and even revisiting mandatory bundled payments, which represents a strong about-face in the Trump Administration’s policy about bundled payment initiatives. Azar has even hinted that CMMI will get more involved in addressing social needs, such as food insecurity and housing.”

Indeed, in a September 6 speech to a meeting of the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in Washington, D.C., Secretary Azar said, “Of the priorities I have picked for HHS, the most ambitious and furthest reaching is transforming our healthcare system into one that pays for health and wellness rather than sickness and procedures… The outcome we’re aiming for is pretty simple: better healthcare at a lower price. But the question of how we deliver this outcome is much more complicated.”

Azar went on to say that “There has been some progress on some of the tools we need to execute this transformation. We have more alternative payment models, more coordinated care, and more value-based compensation than ever before. But the results we hope for haven’t always materialized. As just one example, we saw in the analysis CMS released at the beginning of August that the burgeoning number of Accountable Care Organizations have not delivered significant savings when all costs and incentives are taken into account.”

Importantly, he added, “[T]he best results we’ve seen have been in ACOs that took on two-sided risk—where providers have real accountability for outcomes. We’ve also seen better results from physician-run ACOs, as opposed to hospitals. Without real accountability, we’re just offering bonuses on top of payments that may be too high already. That’s why we have now proposed to simplify the ACO system into two tracks, requiring them to take on risk sooner. As our CMMI director, Adam Boehler, put it last week, if this means somewhat fewer ACOs, that’s okay with us.”

Remember, PTAC was created by the MACRA law, to help HHS get input and feedback for innovative ideas. As the committee’s website notes, “PTAC was created by The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which was enacted, in part, to improve how the federal Medicare program pays physicians for the care they provide to Medicare beneficiaries. MACRA authorized the creation of Medicare’s Merit-based Incentive Payment System (MIPS) and additional Medicare Alternative Payment Models (APMs). MACRA also created incentives for physicians to participate in APMs, and it specifically encouraged the development of certain types of APMs referred to as physician-focused payment models (PFPMs).” And, as part of all of that, Congress created PATC. Indeed, PTAC’s website notes, “The Secretary is required by MACRA to review PTAC’s comments and recommendations on submitted proposals and post a detailed response on the Centers for Medicare & Medicaid Services (CMS) website.” So it might well be at one of PTAC’s committee hearings that we’ll hear the inside scoop on what’s coming next.

As Landi noted in her Jan. 11 article, “Many healthcare industry stakeholders who support accelerating the transition to value-based care and payment models are eager for CMMI to develop and roll out new voluntary alternative payment models. And others want to see more transparency in the process. Just this week, two Congressional leaders, U.S. Representative Richard Neal (D-MA), chairman of the House Committee on Ways and Means, and Rep. Kevin Brady (R-Texas), ranking member of the committee, sent a letter to Verma calling for greater transparency from CMMI as it develops new delivery and payment models, noting that its process has ‘historically been opaque to Congress and to stakeholders.’”

Indeed, Reps. Neal and Brady wrote, "Significant policy changes made unilaterally by the executive branch without sufficient transparency could yield unintended negative consequences for beneficiaries and the health care community. We strongly urge the Agency to provide more sunshine in this process."

The challenge here is that even the APMs are heading through some very choppy waters right now. As I noted on January 11, The announcement on Wednesday, January 10 by senior officials at the federal Centers for Medicare & Medicaid Services (CMS) that the agency will require participants in the Medicare Shared Savings Program (MSSP) will be required to submit applications to the new Pathways to Success part of the Medicare Shared Savings Program (MSSP) by February 19, has roiled accountable care organization (ACO) leaders nationwide.”

And I quoted extensively a press release from the Washington, D.C.-based National Association of ACOs (NAACOS) that criticized CMS for the timeframe involved, following the issuance of the final rule on December 19. In its Wednesday press release, NAACOS stated that “The Centers for Medicare & Medicaid Services (CMS) late Wednesday announced applications to participate in the new Pathways to Success accountable care organization (ACO) program will be due February 19, two months after the agency published a nearly 267-page rule overhauling the Medicare Shared Savings Program. In response, the National Association of ACOs (NAACOS) is calling on CMS to give ACOs till later in March to understand the complex changes and determine participation options with affiliated doctors, hospitals, and other providers before committing to high-stakes decisions.” And the association quoted its president and CEO, Clif Gaus, Sc.D., as stating that “ACOs barely have time to understand the new rules, and organizing an application is very complicated and for some it is now a high-risk decision. There are too many difficult decisions to rush.”

So we have Secretary Azar stating on the record back in September that it’s OK with him if fewer patient care organizations participate in the MSSP program, and then on December 19, CMS announced that it was setting the deadline for the submission of applications to the new Pathways to Success program for February 19. Well, that move will almost certainly cause some ACO leaders to drop out of MSSP for now; indeed, in that same article, I quoted Jennifer Moore, a NAACOS board member and chief operating officer at MaineHealth ACO in Portland, Maine, as stating that her ACO would probably have to retreat to upside-only participation, simply because of the unreasonable deadline set for submission of applications for 2019 participation in two-sided risk.

So—does CMS have ideas for new voluntary APMs that are being developed now? And, very importantly, how appealing might those ideas be to providers? Here’s what’s clear: with MSSP participation already imperiled because of what providers see as unreasonable timelines in submitting applications for participation in two-sided risk, any new voluntary programs are absolutely going to have to be seen by provider leaders as having at least a moderate level of appeal—at the strategic level, programmatic level, and practical level—in order to attract any participation.

Because honestly, the rhetoric and mixed messages coming out of HHS and CMS right now are meeting with confusion, bewilderment, and frustration on the part of provider leaders nationwide. As I’ve noted in past commentaries, HHS and CMS leaders are caught in a complex policy web, in that they represent a Republican administration whose mantra has been that markets and consumers can help to drive change; yet the practical reality, as they know, is that, without using exceptionally focused, even pointed, strategies to gain participation, any voluntary programs that senior federal healthcare policy officials develop, will crash against a shoal of hard defeat in the face of provider reluctance to participate.

CMMI is a unique organization; created under the ACA to be the Medicare and Medicaid programs’ innovation test bed, it is now caught in a vise between free-market-tinged ideology coming from the White House, and the understanding, among senior HHS and CMS officials, that experimental APMs are going to be needed to be created and adopted, quickly, in order to begin to make a dent in the accelerating healthcare inflation trajectory that continues to bedevil the U.S. healthcare system. What’s more, CMMI Director Adam Boehler appears to be talented and thoughtful; now certainly would be a great time for him to be given the freedom and scope to create meaningful new programs that will appeal to the industry.

And, in the end, as political commentators are fond of saying, in a variety of different contexts, hope is not a strategy. Let’s hope we see CMMI developing appealing APMs that provider leaders can really be enthusiastic about participating in. It’s definitely time.

 

 

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Should Physicians and HIT Leaders Worry about the Implications of the Walgreens/Microsoft Deal?

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As architect Daniel Burnham once said, “Make no little plans”; the leaders of the Walgreens/Microsoft alliance, like so many others, certainly are thinking big these days
architect Daniel Burnham

Nearly every day, it seems, new business combinations are announced that are threatening to alter the landscape of U.S. healthcare forever. CVS’s acquisition of Aetna, completed last November; the announcement a year ago now that the executives of Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. were launching a broad (if not well defined) initiative to improve consumer satisfaction and reduce costs for their employees; Cigna’s acquisition just last month of pharmacy benefit management (PBM) company Express Scripts; and Amazon’s acquisition last summer of online pharmacy company PillPack.

Every one of those business deals represents a disruptive move in U.S. healthcare, with unalike “species” of organizations combining with one another. And now, the retail drugstore giant  Walgreens Boots Alliance Inc. and Microsoft Corp. are coming together in yet another disruptive venture. As Managing Editor Rajiv Leventhal wrote in an article on Tuesday, the corporations “are joining forces on a major seven-year healthcare partnership that will aim to ‘deliver innovative platforms that enable next-generation health networks, integrated digital-physical experiences and care management solutions.’” As he wrote, “The companies announced today that they will combine the power of Microsoft Azure, Microsoft’s cloud and AI (artificial intelligence) platform, healthcare investments, and new retail solutions with WBA’s customer reach, volume of locations, and outpatient healthcare services to accomplish their goals: to make healthcare delivery more personal, affordable and accessible.”

As Leventhal noted in his report, “While innovation in healthcare has occurred in pockets, officials of the two companies believe that ‘there is both a need and an opportunity to fully integrate the system, ultimately making healthcare more convenient to people through data-driven insights.’” Further, he noted, “As part of the strategic partnership, the companies have committed to a multiyear research and development (R&D) investment to build healthcare solutions, improve health outcomes and lower the cost of care. This investment will include funding, subject-matter experts, technology and tools, officials noted in the announcement. The companies will also explore the potential to establish joint innovation centers in key markets. Additionally, this year, WBA will pilot up to 12 store-in-store ‘digital health corners” aimed at the merchandising and sale of select healthcare-related hardware and devices.

“This gap creates an opportunity for the pharmacist to help monitor the patients’ health and prompt the patient to receive preventative care in the retail clinic or through a virtual care visit. Using an enterprise health cloud, like Azure, you create a more connected ecosystem so that we can share that data with the patient’s additional providers, track outcomes, and intervene earlier when an issue arises,” Microsoft CEO Satya Nadella said in a statement Tuesday.

And, Leventhal wrote, “Notably, the companies will also work on building an ecosystem of participating organizations to better connect consumers, providers—including Walgreens and Boots pharmacists—so that major healthcare delivery network participation will provide the opportunity for people to seamlessly engage in WBA healthcare solutions and acute care providers all within a single platform.”

Speaking to the difference between retail pharmacies and traditional care providers, Forrester analyst Arielle Trzcinski said in a statement emailed to the press that “[R]etail pharmacies offer an opportunity to engage with the patient much more frequently than at an office visit, giving an example of how chronic care patients see their pharmacist frequently, while some figures indicate that the average diabetic patient sees his or her provider once every six months.”

The implications of all of this are, of course, huge. For one thing, if one were to ask the average patient/healthcare consumer with whom they interacted more, doubtless, the vast majority would cite their retail pharmacists, rather than their primary care physicians. What’s more, what happens if Walgreens is able to follow through, as CVS also intends to do, in creating minute clinics in retail pharmacy locations? The impact could be revolutionary.

Indeed, it’s no secret that many patients are dissatisfied with the cumbersome, challenging processes around accessing primary and specialty care in the U.S. healthcare system. Simply accessing a timely appointment often proves to be a major hassle; and encounters around needed follow-ups and around questions to doctors and nurses often turn out to be such a hassle that many patients simply give up, with the result of medication non-compliance and other issues.

So what will happen if Walgreens, like CVS, manages to achieve success with one or more elements of this initiative? Those could include enhanced continuum of care for patients, especially those with chronic diseases; improved communication among all care delivery stakeholders; and enhanced patient/consumer satisfaction.

A few stakeholder groups should be paying particular attention here, including practicing physicians and healthcare IT leaders. For practicing physicians, could anyone deny that this business initiative, along with the others mentioned above, should be disconcerting at the very least? Already, patients needing relatively immediate medical attention, are turning en masse to urgent care centers, as both health systems and health insurers are working to cut down on the volume of emergency department visits, which are tremendously expensive, and which burden the healthcare delivery system in ways that are not sustainable. But now, with both Walgreens/Microsoft and CVS/Aetna, is anyone denying that the era of pretty-close-to-immediate medical attention is on the horizon?

The reality is that, while most patients like their primary care physicians and are satisfied with their care overall, strong majorities, in polls, continue to complain about poor service, bad communication, and delays accessing care and accessing follow-up support. What happens when most decent-sized Walgreens and CVS drugstores are staffed up with PCPs or advanced practice nurses, to handle the colds, coughs, flus, strep throats, and minor skin and digestive issues that could easily be handled by such service offerings?

One of the core policy issues here is that the U.S. healthcare payment system remains largely predicated on primary care physicians physically touching patients in order to get paid. Yes, telehealth services are expanding daily; but in most situations, patients still need to go through the awkward, inconvenient, sometimes even-arduous process of scheduling an appointment, using some form of transportation to get to that appointment, and waiting in a crowded physician office, in order to access primary care.  But in 2019, when GrubHub can deliver one’s banh mi Vietnamese sandwich to one’s home, and Amazon is sending everything from books to clothing to furniture to God-knows what, directly to people’s doors, how much longer will healthcare consumers continue to be patient with the glacial pace of care delivery change in U.S. healthcare?

Meanwhile, healthcare IT leaders will inevitably find themselves somewhat behind a proverbial eight-ball on all this, caught between the intensifying demands on the part of practicing physicians, especially primary care physicians, for full clinical IT support for their practices, and constant business changes, including merger-and-acquisition activity in their own organizations that is continuously scrambling their long-term planning.

So we’re seeing both business and technology changing, and changing quickly, with numerous examples already of industry-disruptive business combinations, and technology advancing to the point where previously unimagined breakthroughs are now imaginable. For example, Walgreens and Microsoft noted that, “Through this agreement, Microsoft becomes WBA’s strategic cloud provider, and WBA plans to migrate the majority of the company’s IT infrastructure onto Microsoft Azure,” as corporate officials put it. And “Microsoft also plans to roll out Microsoft 365 to more than 380,000 Walgreens employees and stores globally.” And, to make things just that more intriguing, the announcement quoted Stefano Pessina, executive vice chairman and CEO of the Walgreens corporation, as stating that “WBA will work with Microsoft to harness the information that exists between payors and healthcare providers to leverage, in the interest of patients and with their consent, our extraordinary network of accessible and convenient locations to deliver new innovations, greater value and better health outcomes in health care systems across the world.”

As renowned Chicago architect Daniel Burnham so famously said, “Make no little plans; they have no magic to stir men's blood and probably themselves will not be realized.” There’s no question that the senior leaders of all of these business alliances, combinations, and initiatives are going to be “no little plans.” It would behoove clinicians, clinician leaders, healthcare IT leaders, and all c-suite leaders in provider organizations to think Burnham-sized thoughts; these businesspeople from outside traditional healthcare delivery are certainly doing so.

 

 

 

 

 

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Blue Cross NC, Five Health Systems Announce Major Shift to Value-Based Care

January 16, 2019
by Heather Landi, Associate Editor
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The insurer aims to have half of its 3.89M customers covered by VBC contracts by next year; all customers in VBC arrangements in five years
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Blue Cross and Blue Shield of North Carolina (Blue Cross NC), one of the state’s largest insurers, and five of the state’s major health systems in North Carolina have announced a new value-based care program that encompasses hundreds of thousands of healthcare customers throughout the state.

The five health systems—Cone Health, Duke University Health System, UNC Health Care, Wake Forest Baptist Health and WakeMed Health & Hospitals—and their accountable care organizations (ACOs) have committed to participating in Blue Premier, a new value-based model of care in which Blue Cross NC and the health systems will be jointly responsible for better health outcomes, exceptional patient experience and lower costs, according to a Blue Cross NC press release.

“With agreements from five of the state’s major health systems and their ACOs, Blue Premier is one of the most rapid and comprehensive shifts to value-based payments in the nation,” Blue Cross NC officials stated. Patrick Conway, M.D., serves as president and CEO of the Durham-based health insurer and previously served as the Chief Medical Officer, Deputy Administrator, and Director of the Center for Medicare and Medicaid Innovation (CMMI), a division of the Centers for Medicare and Medicaid Services (CMS).

Within five years, Blue Cross NC has committed to having all 3.89 million customers covered under Blue Premier’s value-based care contracts. By early 2020, fifty percent or more of all Blue Cross NC members will have a provider who is jointly responsible for the quality and total cost of their care, the health insurer stated.

“As a practicing physician, I have experienced first-hand the challenges plaguing our health care system,” Conway said in a statement. “Historically, our health care system pays for services that may or may not improve a patient’s health, and our customers simply cannot afford this approach. Moving forward, insurers, doctors and hospitals must work together, and hold each other accountable for improving care and reducing costs. We applaud the leadership and commitment of these five leaders in health care to help transform health care delivery in North Carolina.”

During the HLTH Conference, held at the Aria Resort in Las Vegas last May, Conway discussed the payer-provided landscape in North Carolina and alluded to opportunities accelerate the move to value-based care and payment models, according to reporting from Editor-in-Chief Mark Hagland. “We’re looking at a new model, where patient care organizations can partner more fully with Blue Cross North Carolina,” Conway said, per Hagland’s report. And Conway continued, “We’re saying, you can take this alternative pathway with us. And we’ll jointly be accountable for the total quality and cost of care. And we want you to go into two-sided risk. And we’re wondering, should we turn off all prior authorization? And documentation other than for risk coding and STARS measures, we won’t worry about how you document. And for people in the audience, those kinds of partnerships are very exciting, because you’ve now got a provider and payer that are no longer locked into rigid rules, but where you can innovate on quality and customer experience.”

According to the insurer, Blue Premier ties payments to doctors and hospitals over time to the value of services that improve patient health. This means that total payments to the health systems under Blue Premier will be based on the health systems’ ability to manage the total cost of care and their overall performance, measured by industry quality standards. Through a “shared risk” financial model, the health systems will share in cost savings if they meet industry-standard goals to improve the health of patients – and share in the losses if they fall short. “The unprecedented commitment from these five large health systems makes Blue Premier one of the most advanced and comprehensive value-based care programs in North Carolina and the nation,” Blue Cross NC officials stated.

“This unprecedented step by Blue Cross NC and many of the state’s leading health care organizations will make a big difference in advancing high-quality, innovative care in North Carolina,” Mark McClellan, M.D., Ph.D., director of the Duke-Margolis Center for Health Policy said in a statement in the press release. “At Duke-Margolis, we remain committed to supporting state government and private-sector initiatives to reform payment and improve care – providing needed examples for the nation.” 

In a statement, Donald Gintzig, president and CEO, WakeMed Health & Hospitals, said, “This collaboration represents an important step forward in our efforts to provide patients in our area and across the state with high quality, coordinated services for the best value. Our health systems are bringing together valuable resources in a more integrated way that will ultimately lead to better health and more affordable health care.”

The news of the value-based care collaboration comes a month after the health insurer announced a partnership with Aledade, a Bethesda, Md.-based company focused on physician-led ACO development, to launch a value-based care initiative to support primary care physicians across the state. Through the initiative, the two companies will support physician-led ACOs tailored specifically for primary care physicians and the communities they serve. Through these ACO arrangements, Blue Cross NC will collaborate with Aledade to provide physicians with technology and data analytics tools to better manage patient care and costs. After joining these ACOs, practices gain a more comprehensive view of their patients’ total cost of care, gaps in quality of care, and experiences throughout the entire health care system, the companies said.

 

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