Moving From Healthcare to Health in North Carolina

Oct. 25, 2019
Stakeholders describe alignment around shared vision, incentives, infrastructure

The State of North Carolina is drawing a lot of attention for its efforts to get all the major healthcare stakeholders rowing in the same direction. On Oct. 24, several leaders from the Tar Heel State  spoke at the Health Care Payment Learning & Action Network (LAN) Summit in Washington, D.C., about a radical idea: changing their focus from paying for healthcare to paying for health.

Launched in 2015, the Health Care Payment Learning & Action Network was created as a public-private partnership to work on best practices around alternative payment models (APMs). At the summit meeting, the LAN announced ambitious new goals to shift all Medicare payments and half of Medicaid and commercial payments to shared accountability APMs by 2025. As part of its measurement effort, it also released statistics that showed 35.8 percent of total U.S. healthcare payments were tied to APMs in 2018. Fee-for-service payments have dropped 33 percent since 2015.

The North Carolina panel included Drs. Rahul Rajkumar, Senior Vice President and Chief Medical Officer of Blue Cross Blue Shield of North Carolina; Mandy Cohen, Secretary of the North Carolina Department of Health and Human Services; and Wesley Burks, Chief Executive Officer of UNC Health Care.

Cohen noted that although North Carolina is a “purple” state with a Democratic governor and a Republican-controlled legislature that has refused to expand Medicaid, the transformation effort has bipartisan support “because we're focusing on health, not health care. Spending money to keep people healthy resonates across the aisle.”

She said the two largest payers, Blue Cross and Medicaid, and the large health systems are aligning across three dimensions: vision and goals, incentives, and investments in infrastructure. “These three together can accelerate our efforts,” Cohen added.  

North Carolina is just moving into Medicaid managed care, and with new CMS waivers  looking to scale up promising efforts from around the country to pay for nontraditional things that impact health such as housing, food and transportation. Another key focus is interpersonal violence. (An astonishing 48 percent of women surveyed in in North Carolina say they have experienced interpersonal violence and many of those women have children who may also be traumatized, she noted.)

“We don’t have all the answers from the evidence yet,” she said. “We have notions about food and housing, but we cannot pay rent for everyone. How do we tailor Medicaid dollars and drive the evidence base?” She said the state would spend $650 million over the next five years on building the evidence base so that health systems taking on risk will be able to say, “I want to use my dollars on this kind of housing for these types of patients.”

Cohen said the focus on social determinants also raises the question of how best to make a shared investment in IT platforms and a network of relationships. The state is creating an NCCARE360 system for closed-loop referrals with community service organizations.

In terms of shifting the focus to health from healthcare, Blue Cross’ Rajkumar said his organization is making a commitment to measuring health goals, such as the number of people achieving smoking cessation, diabetes prevention or reversal and screening for neonatal outcomes. “We want to be a company that is buying health,” he said, but he added it is difficult because “our business and regulatory mandates are not aligned to those goals.”

Rajkumar described Blue Cross’ ambitious goals for moving providers to risk. “By the year 2023 every Blue Cross member will have a provider that is 100 accountable for total cost of care and quality, with downside risk,” he said. “We think we can get halfway there by next year. We will pass 30 percent within a matter of days. This is an initiative that started 18 months ago. The meta-goal is that we want healthcare cost growth to be slower than wage growth in North Carolina. That is a goal I think we can achieve by 2022, and then sustain it for a generation. That is the path to long-term affordability.”

To work on this transition, he said, Blue Cross has had to play at three different levels. One is large systems. There are 10 systems in North Carolina with revenues of over a billion dollars. “UNC has been the most committed partner and the first major system to take this step with us,” he said, “but we expect all 10 will be in our risk program, which we call Blue Premier, by next year.”

The second level is working with independent primary care physicians. “We are working hand-in-glove with Aledade, tremendous partners doing amazing work in North Carolina,” Rajkumar said. “The third layer is what we call advanced primary care. These are the disruptive players — Iora Healthcare, City Block, Galileo —  that have a willingness to take total risk and operate with radically reduced panel sizes in primary care. My parents are primary care physicians and have panel sizes of 2,000. These guys have panel sizes of 250 to 300, so that unlocks an enormous amount of physician time. And they have best-in-class cost and quality performance.”

There are several things Blue Cross has learned along the way, Rajkumar explained: One is that the movement to downside risk matters. “To do that, we have had to make the alternative as unappealing as possible. In North Carolina, We have announced that our fee schedules are flat until physicians are willing to take a step into risk. We have tried to make quality measurement as simple as possible, and we have tried to build lasting and trusting relationships with these provider, including a commitment that as providers step into risk, we will begin to de-escalate our policies like prior authorization and post-service review – things that impede access to care.  This has been one of the hardest things I have ever tried to do in my professional career, but it is nothing compared with what Dr. Burks has to do now. Because it is one thing to sign a contract, but actually re-engineering care is 10 times more difficult. The hard work is just beginning.” 

Burks said one of the barriers to clinical transformation is getting physicians timely access to critical information. “None of us have built systems to get data to physicians in a way that will actually change behavior. That is the biggest issue. There is claims data, but we may not see it for months, so it doesn’t help change things. If we are asking providers to change, they need information back. That is a part that is difficult right now.”

Burks added that although UNC Health is seeking to join the movement from healthcare to health, the traditional ways it is measured for quality can be an impediment. “We are left with measures from national bodies that are traditional and not related to health. We can’t change because we have so many measures we have to comply with.”

Cohen admitted that the state government has a long way to go in terms of data infrastructure. “The capacity and sophistication of data at the state level is pretty weak,” she said. It is surprising how hard it is to use data created for one purpose for another, she noted. For instance, using data systems originally designed for fee-for-service to manage a population is messy and sometimes wrong. “We have to deal with that,” she added. “We are at the crawl stage of being able to use our data well.”

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