Aneesh Chopra served as Assistant to the President and Chief Technology Officer in the Executive Office of the President in the White House of President Barack Obama, from May 2009 through February 2012, helping to develop policy around technology and to guide thought leadership around technology. He currently serves as cofounder and president of CareJourney, the Arlington, Va.-based firm that provides software solutions and consultative guidance to provider organizations involved in value-based, including risk-based, contracting. On March 27 at the ViVE Conference being held at the Music City Center in downtown Nashville, he spoke exclusively with Healthcare Innovation Editor-in-Chief Mark Hagland regarding this moment in the ongoing evolution of value-based care delivery in U.S. healthcare. Below are excerpts from that interview.
Where are we right now in this long, complex journey forward into value-based contracting?
I believe we’ve flipped the narrative, where the supply of value-based contracting is now exceeding the capacity of providers fully capable of contracting with [payers offering those contracts]. The folks who want to flip the script to value-based contracting have the agency to make that switch. There is no a reasonable glidepath to one-third to 40 percent of your panel, but you’ve got to raise your hand.
It’s often been said that there are three groups of providers right now in healthcare, the pioneers, those who follow them closely, and everyone else, who’s waiting for the future to push them forward. Your thoughts?
That schematic works with the technology adoption cycle. But here, we have a contract adoption cycle and a technology and workflow adoption cycle. My ability to be an early or late adopter, the Venn diagrams don’t overlap as much as they should. I’m focusing my time and energy to motivate the business leadership of the provider networks to signal their intention to go ahead with VB contracting. The most frustrating situation I see is where a provider says, I’m in, they start the work, but the technology is nowhere near to where it needs to be, and they go months or even beyond a year without the technology needed. So we have a two-step problem: the demand signal for value-based contracts and the demand-signal for value-based technology and infrastructure. Those are not plug-and-play.
It’s been discussed that physician group executives are moving forward faster than are hospitals. What’s your perception of that gap?
Is the center of the universe a health system, or a physician network, in value-based care delivery? I find the health systems with strong physician leadership at the top are well-positioned, while it’s become clear during that the first chapter of the value-based care delivery journey showed that independent, physician-led ACOs [accountable care organizations], were the most successful. Maybe a third of the value in value-based care comes from a smarter, committed, primary care physician network; but there’s still the 70 percent that requires health system integration. So looking at the longer-term value-based care movement, there is an opportunity for health systems with strong physician leadership to deliver on the promise of value-based care.
Value-based care is clearly is better for patients. More broadly, if this becomes the more compassionate way to rein in healthcare inflation, then it will be a godsend when we otherwise face the next Balanced Budget Act proposal in Congress, whether in 2026, 2028, or beyond. Whenever it comes, if we don’t have a value-based option, we’ll see a slash-and-burn approach [to healthcare reimbursement at the federal level] that would break not only the healthcare system, but break the back of this country’s economic competitiveness.
The “one-foot-in-the-boat-one-foot-on-the-shore problem” is often discussed with regard to hospitals—the challenge of innovating when as little as 10 percent, say, of one’s reimbursement comes from value-based contracting.
Hospital operations are certainly high fixed-cost enterprises; but they are not unto themselves, the problem. We’ve got three layers of the cake; let me delve into that problem. First, we have a primary care opportunity to identify disease earlier and mitigate or slow disease progression; that’s opportunity number one. And value-based care creates the economic model for that to work and to scale it. The second issue is a pricing problem. The problem is that hospitals have created a little bit of a complicated accounting system where they have to upcharge prices on their commercial book of business in order to subsidize the costs of the publicly funded [Medicare and Medicaid] patients. However, if we had effective primary care to remove the lower—acuity patients, you could create pre-hospital-at-home, really, allowing Medicare and Medicaid patients being admitted to programs that can be run cost-effectively. So that overhead you’re describing gets more rationally allocated. Economists would say, you put your assets to your highest and best use. You have hospitals with beds filled with patients who could have been taken care of better in the community.
So then, the third layer of the cake? What’s the most successful program that CMS [the Centers for Medicare and Medicaid Services] has run in the last decade? The Maryland Global Budget Model [also known as the Maryland Total Cost of Care Model and the Maryland Global Budget Program]. It fixes hospitals’ budgets so they can be the leaders who can reallocate primary care and outpatient care and not financially worry about losses. More needs to be done to study the Maryland Global Budget Model; but it reflects the dream of administrators—if I could be unshackled from the unit economics of an admission, I might put my resources to bear more effectively, not just through primary care, but also through investments in retail care and home-based care delivery. I can’t imagine that Maryland has solved all of this, but they had the right model. So independent physician groups, the best model for Medicare ACOs. But incorporating specialists and hospital economics, it does feel like the Maryland Global Budget gives us a second option as an anchor of an American healthcare system. Imagine if the tech sector had built for the Maryland model, we might be much further ahead in developing the tools we need [for this journey].
What must provider leaders do to prepare for the evolution that will take place in the U.S. healthcare system in the next five years?
Let me introduce a term here: health information fiduciary. Let me explain: A world-class physician practice is out there educating the public that they’re ready for business, welcomes people, cares for patients, and provides great service. That’s still a fee-for-service model. When you don’t know the patient, you want them to come to you and you’ll respond. But a health information fiduciary is someone who knows something about you before you arrive. In the case of CMS, it’s the ACO model, where you get claims data on day one. So a health information fiduciary is permissioned to access information about you to glean information before you come in for the next visit, and intervenes in the best way. It might mean calling you up proactively, or enrolling you in some kind of program or coordinating chronic care management programs with physicians and their teams. So enrollment in programs, monitoring, triaging, that happens when a health information fiduciary understands that they’re responsible for the care of these patients. Both are important roles. I would like many more provider organizations to have at least a startup within their organizations that operations as some kind of health information fiduciary. When we debated the fiduciary role for financial advisors in the White House, the idea was that in a complex world of investing in stocks, people rely on their brokers, but if a broker gets a higher commission to get you to invest in Product A, it doesn’t feel as though they’re on your side necessarily. So a 21st-century Hippocratic oath might involve sourcing information and interacting proactively with people. And it’s proactive, connected and coordinated.