The Chartis Group’s Bob Schwyn: Looking at the Strategic IT Issues Around the Transition from Volume to Value

Oct. 4, 2016
The Chartis Group’s Bob Schwyn shares his perspectives on the broad spectrum of challenges facing healthcare and healthcare IT leaders as they prepare their organizations to transition from volume-based to value-based payment arrangements

As more and more U.S. patient care organizations take on financial risk, whether as part of formal accountable care organization (ACO) contracts, or through any other kind of risk-based contracting, including bundled-payment contracts or other value-based contracts, the leaders of patient care organizations are finding that the analytics and other solutions available simple aren’t keeping up with their needs in optimizing their operations for risk-based involvement.

In that context, the editors of Healthcare Informatics named IT for risk-based contracting as one of their Top Ten Tech Trends in 2016. Among those interviewed for that article was Bob Schwyn, a Columbus, Oh.-based director in The Chartis Group, a Chicago-based consulting firm. Below are excerpts from the interview that HCI Editor-in-Chief Mark Hagland conducted with Schwyn this spring, in preparing the Top Ten Tech Trends feature for the March/April issue of HCI.

What do you see as the biggest challenges overall, as patient care organizations go into risk contracting?

Starting at 50,000 feet, there’s a need for conceptual readiness, for understanding who you are as an entity, and what your relationships are in your defined market spaces, in order to take on risk. So if I’m in an organization in a market that’s starting to take on more and more risk,” Schwyn says, “the question becomes, how prepared am I as an organization to meet a growing level of risk in the value-based world? Do I have the operational infrastructure? The relationships I need to cover a population? How will I establish those relationships? Do I have the technology infrastructure to support that?

Bob Schwyn

And where do I want to be in the market? Is this an opportunity for us to lead our market in a certain context? Do we want to be the market leader? Or might we be a follower in that arena? And other questions that help set the context for planning, would be, what would the types of relationships—commercial, Medicaid, Medicare? And what kinds of relationships will I need to build with other providers? Will this be a clinically integrated network? Do I want to take all this on my own? Typically, we would look at a three-to-five-year planning arc. And how quickly you more, and how many people will be under risk, will be very important to understand. So being thoughtful is going to critical.

What are the biggest challenges, IT infrastructure- and planning-wise, right now?

That’s a great question. I would tend to agree that the IT industry right now is not where we need to be to support higher levels of risk. However, as an industry, we’re underestimating the capabilities right in front of us. We’ve made tremendous investments in EHR infrastructures, and generally, those EHR solutions do come with some basic EDW and analytics capabilities. So there are ways to achieve some of the short-term needs while still building a more robust and intensive environment in the future. When we talk to organizations, it’s so hard to get them to understand that they don’t need to do everything—to be able to slice and dice in a million different ways across many payers, for example—we’re finding that you may need to do that as you move into a more robust environment.

In other words, you don’t need to start out buying the Cadillac right away, then, when it comes to infrastructure, correct?

Yes, and sometimes, buying the Cadillac when you don’t even know how to drive yet, isn’t going to help you a lot. So as you begin to develop a clinically integrated network or begin to take on risk, it’s important not to get lost in, “Gosh, we’ve got to get into this big data environment.” Typically, you need to streams of data—from claims and from your electronic health record, whatever providers are in your network. And you can get lost and overwhelmed in trying to do data normalization and aggregation, and that can become a data governance nightmare. So instead, say, look, we’ve got three risk contracts in the next three years, and those contracts will be based on certain elements. So let’s get clear about the key data elements we need. And so if I’ve got to get my data cleaned up, and there are 10,000 data elements, you’re going to get lost in that. But if you say, these are the top 10 or 20 data elements we need to understand risk, to understand patient status elements, etc., you don’t get lost in boiling the ocean.

What are the few biggest learnings we’re hearing from pioneers so far, in this transition?

The organizations that have done this well seem to have a higher level of maturity at integrating their IT planning as part of their overall enterprise planning. So they know, if I’m going here, I can’t wait until after I’ve gone into the risk contracts to go to my IT people and ask for things. At the same time, the smart CIOs are trying to make sure they’re not asleep at the wheel. But the organizations doing well tend to have more integration between overall strategic planning and IT strategic planning. And they tend to be mindful of, are we going to do this more at a corporate level or local facility level, for example? They’re very explicit about data governance functions and maturity. So processes are being led by clinical and other front-line operational leads.

So the organizations doing this well tend to have very strong operational and analytics capabilities, not just the technical. They need people who understand how to look at health status and disease prevention, all the things that go into understanding the data. These organizations have already tended to have built a high level of competency around these operational and strategic areas. And we would generally see very solid IT governance processes, including clear accountability for investments in IT, and strong project management capabilities.

What will happen in the next two years in this area?

That’s a great question. It’s interesting. We’re starting to see a bit of a trend and we expect it to continue in the next two years, and that is that those organizations doing this better than others, may be geographically located near organizations that may be struggling with all this. And so we’re seeing affiliations across organizations to share knowledge. And the organization doing it well is saying, hey, maybe we can broaden our market profile here. And the organization needing the help is approaching the other organization. We’re actually working with a number of systems in a couple of different states, on collaborative work like this. So I think it’s going to be a lot more of that; I think those organizations will try to affiliate or align in some way, to try to leverage those resources.

What should CIOs and CMIOs be doing right now, around all this?

We’d love to say that we’d like to see ideal streamlined clarity around a business plan, and IT being strongly aligned and clear. But if there’s one thing I’d advise CIOs and CMIOs and IT leaders, it’s that they should develop a framework for a roadmap that will take them into risk. You need to take it to the next level and be speculative, and say, these are the capabilities we need to build, and this is how we should do that. And ask your c-suite fellow executives, are these the capabilities you need? And if not, how can we facilitate a different conversation? And I see the absence of some of those discussions, and that’s one thing that IT leaders can do, is to help to facilitate those conversations. Otherwise, as a CIO, it quickly turns into an order-taking scenario; as opposed to mapping out, what do you need in 2017, 2018, 2019, and what is it that will be different in 2019 versus 2018, for example? And let’s be clear about what we need to get to.

Is there anything you’d like to add?

This is all part of a larger picture, really. I recently gave a talk on mission-critical volume-to-value transitions, and how complicated they are.

And what do you see as the main IT components in that transition?

I think that you need to be really clear about what kinds of capabilities you need: what data is coming in, where is it coming from, and how do I get that data into a usable format? And determine how the data will be used—for contracts, for decision support, for care management. And what kinds of outcomes do you need the data for? And we find that if we can help somebody define a scenario: for example, we’re going to have a care coordination function, but at a local facility level, and the system is going to help them do these two or three things, for example—and that creates a good discussion with clinical and operational leaders. So building a roadmap, with that level of discreteness, is very important.