How difficult is the shift from volume to value turning out to be, in U.S. healthcare? A spectrum of perspectives on that question was shared by panelists participating in a panel entitled, “The Journey Toward Higher Value: Stakeholders on the Shift to Value-Based Care,” on Monday morning at the World Health Care Congress, which is being held at the Marriott Wardman Park Hotel in Washington, D.C.
Kavita Patel, M.D., a nonresident senior fellow at the Brookings Institution (Washington, D.C.) moderated a panel of all physician executives. Her fellow panelists were Richard Migliori, M.D, executive vice president and CMO, UnitedHealth Group (Washington, D.C.); Paul Rothman, M.D., CEO, Johns Hopkins Medicine (Baltimore); and Marc Rothman, M.D., CMO, Kindred Healthcare (Louisville, Ky.).
Dr. Patel began the discussion by noting that a recent survey found that anywhere from 10 percent to as many as 45 percent of all U.S. healthcare financial arrangements are “value-based” in some fashion, and adding immediately that, clearly, what constitutes “value-based,” and how big that proportion is, could be defined in any of a number of ways.
Patel then asked the other physician leaders on the panel why they believe (or don’t believe) that value-based healthcare will succeed in the U.S. healthcare system in the coming years. UnitedHealth Group’s Dr. Miglori stated that “This isn’t the first time this journey’s been undertaken, but this time it has its greatest promise. I say that,” he said, “because I think there are three trends in place that appear to be enabling a more successful journey. First, there’s more interest—we see more and more physicians wanting to be a part of an entity capable of taking on risk. The second is new technology. One of the things that happened in 1997 when we ham-handedly passed risk to a clinician environment,” he said, “is that physicians had very little in the way of navigation tools. Now there are some great navigation tools out there. In the days of fee-for-service medicine, physicians would worry about who’s’ in the waiting room. In the days of population health management,” he noted, clinician leaders are now “worrying about who’s not in the waiting room. Who’s sickest, and who are they caring for? It gets into the clinical and economic issues, and how to connect” with patients.
The third reason he is optimistic this time around, Miglori noted, “is the emergence of real leadership,” of two types. “There is clinical leadership to help a group of physicians becoming instead of individual contributors, now part of an integrated team. The other type of leadership is good sound financial healthcare leadership: the ability to know what kind of deal to get into, how much to go at risk, how to manage a transition so you can keep cash flow coming while going through value-based contracts. And I think because of those three trends, things will be different this time around,” compared to the managed care efforts of the 1990s and early 2000s. At UnitedHealth Group, he noted, “we will pay out about $100 billion this year to physicians and institutions, outside of pharmacy, for reimbursement. And 43 percent of that reimbursement is tied to contracts in which there is an element of value. And I’m pretty confident that we’ve passed the biggest hurdle, which is getting people going.”
Paul Rothman, M.D. noted that Johns Hopkins Medicine encompasses both a school of medicine and a six-hospital health system, along with health insurance products, as well as the fact that “We also help manage hospitals and health systems in 22 countries, from Chile to Saudi Arabia. So we’ve been thinking about value for a long time,” he said. “And for us at Hopkins, value always starts with innovation. We believe that the transition will occur, but that it will require innovation,” both clinical and medical-technological innovation, and innovation in terms of payment systems. He noted that providers like Johns Hopkins Medicine have been reimbursed since 1977 by the all-payer reimbursement system in Maryland, which is now a demonstration project, under the auspices of the Centers for Medicare & Medicaid Services (CMS). In the push for value, the Maryland payment system is generating “some great things, as well as some things that still need work” in terms of refocusing provider incentives, he noted. “But in terms of total cost, it’s certainly doing better than expected,” he quickly added. “In fact, our Medicare expenses actually decreased state-wise. And we’ve done well on some measures but not on all measures. So it’s an interesting system. We’re seeing a variety of behaviors. Hospitals are no longer going to get more revenue for higher volume. So you see good things in terms of not admitting people not necessary. But you also see hospitals… some behaviors that one would expect if one would want to decrease volumes. So we’re trying to work that out. So it’s an interesting model. I think it is going to be challenging for a place like Hopkins that innovates. So if you have a new procedure, how will you get reimbursed for that, because you have a global cap.”
Kindred Health Care’s Marc Rothman, M.D. noted that for Kindred Health Care, the largest diversified post-acute care provider in the country, and the nation’s largest home health provider, the shift to value has been challenging in a number of ways. Probably fewer than 10 percent of our contracts have value attached to them, but we hope to double that in the next year or year and a half,” he noted. Still, he cited two very major challenges to shifting from value-based to value-based payment in post-acute care. First, there is no consensus on ways to measure what value means in a post-acute care setting. Elements of value will inevitably focus on the quality of the many care transitions that take place involving post-acute care providers and organizations. But the second element of challenge, he noted, is the fact that moving forward in this area will require a surge of physician leadership, as any shift towards value will necessarily require physicians to lead their fellow colleagues forward to achieve operational consensus on the concept of value and on the measures that can and should be used to determine the relative value of care delivery and services.
In response to Patel’s question on how the transitions will take place, Migliori emphasized the critical importance of physician leadership in moving any patient care organization forward on value. “The leadership of these organizations has to have the ability to be expert in the product that’s being delivered, that is, medicine,” he said. “And on the other hand, organizations also need the ability to manage rather sizeable businesses. So we’re watching the need for the [patient care] organization to be multispecialty at the level of leadership. Systems have to be better connected, better informed, and better aligned. And when people move too quickly and jump into the wrong type of risk arrangement, or don’t keep an eye on their cash,” there are problems. “We see the inability for a lot of groups to even know what their underlying costs are to deliver a service,” he noted. At UnitedHealth Group, one key has been using its Optum subsidiary to help patient care organizations to leverage data analytics to understand their clinical, financial, and operational outcomes under value-based payment. What’s more, he noted, his Optum colleagues are “there to make the system work better for everybody: Optum will go to a group and help them do well with all payers.” He strongly recommended what he called a “gradual transition to episode-based models, and then to shared-savings arrangements and shared-risk arrangements, and eventually all the way to full risk.”
In terms of helping to lead the transformation to value, Paul Rothman said, “We always begin with the patient and the nurse and the doctor. What decisions will be made at the bedside between the physician and nurse, and the patient? And the reason this value is being moved to the delivery system is because the physician and nurse can decide what’s of value to the patient. For the physician and nurse right now, it’s a dramatic time of change. One of the things is to provide them the tools to do it. The first tool is the electronic medical record, which we thought and still think, will be a great tool. And you ask physicians and nurses about the value, long-term, they see the value, but they’re still trying to finish their Epic notes at home” right now, he said, to laughter in the audience. “So in the long term, it will provide value, but in the short term, the physician and nurse are under tremendous time pressure right now.”
Another area of importance, Paul Rothman said is that “We always think about engaging that patient in their involvement with the doctor and nurse. And in terms of integrating the system, true value will come as we think about integrating transitions. And to do that, you have to engage the delivery system and that nurse and doctor, together. And one of the things we’re doing is to build clinical communities.” And that, he added, inherently requires physician and nurse engagement in the development of new care delivery models and changes in clinical operations. “People have to have a sense of understanding the models they’re getting into, and that wasn’t presented in medical school.”
Still, he continued, “You might hear some things today that won’t give you all the optimism you might need, but go meet first-year medical students, and understand the excitement they have in being involved in change in healthcare. They want to be part of the change. The residents are so excited about bringing more value to patients. And they’re engaging them earlier on and getting them involved in the change; they also know how to use an EMR better than everybody!”
And Marc Rothman added that “I have to talk a little bit about infrastructure. It’s funny,” he said, “because personally, I saw it from the other side. After fellowship, I wanted to see what the future state looks like, so I spent four and a half years running the post-acute care system in Permanente, to rejoin what most people call the ‘real world,’ which most people don’t do. And the real world is challenging—it’s one foot in the boat and one foot on the dock, as you say. And a lot of it is changing the infrastructure, and that momentum doesn’t come from CMS directly. And because we don’t have acute-care or primary care physicians under our umbrella, that’s historically been challenging.” As a result, he said, “one key enabler for getting post-acute care involved” in clinical transformation is “interoperability. We have four IT systems. So we created a health information exchange at Kindred to try to tie all our systems together. The other thing is analytics. We have probably more data about post-acute care and long-term care than anyone else in the country. But we don’t have the data analysts to help us. So we’ve entered into a partnership with Inovalon and Avalere to help us analyze our populations. Our patients vary widely between the most expensive patients in the system and everybody’s aunt who needs a hip replacement. So we’re working on that. And the other key enabler to get us from the doc to the boat is the physician piece,” referring again to the need to bring physicians together under physician leadership, sometimes in a staff model.
In another area that poses challenges, the panelists agreed that the duplication of effort around the need for providers to report clinical and other outcomes to a wide variety of outcomes programs remains a deterrent to engagement, particularly physician engagement, in the effort to shift to value-based systems generally. In that regard, UnitedHealth Group’s Miglori noted that “We’ve fully endorsed coming down to a smaller set of quality measures.”