Diving Into the Deep End of the Pool: A Look at Physician Groups and Risk

Oct. 4, 2016
As large medical groups from across the U.S. plunge into risk-based contracting, their leaders are finding that success depends on a combination of strategic prowess and the ability to skillfully leverage data analytics and information systems

Just as with everything else in U.S. healthcare, the path forward towards mastering risk-based contracts is one filled with challenge and complexity for the leaders of physician groups. But industry pioneers aren’t letting themselves be daunted by the challenges involved; they’re plunging ahead to create the future for themselves, their patients, and their communities.

That is certainly true for the 650 providers (500 of them physicians) at the Summit Medical Group, based in the northeast New Jersey community of Berkeley Heights, and with 36 care locations across northeastern New Jersey. Summit Medical Group’s leaders have spent years putting into place the strategic, operational, clinical, and IT foundations to take on risk on a major scale, and they’re ready for the future. They’ve also grown tremendously through expansion. “In 1989, when I came, we had 45 doctors,” notes Jeffrey LeBenger, M.D., the group’s chairman and CEO. LeBenger, a head and neck surgeon, who assumed the group’s top executive role in 2000, has aggressively moved to grow the group numerically (there were about 70 doctors in the group when he assumed its chairmanship), and to expand its presence across its service area.

How were the Summit Medical Group physicians able to find their way forward into successful risk-based contracting in a rapidly changing environment? “What happened is that we knew for us to grow, we had to be in the network of the largest insurer in the state, Horizon Blue Cross Blue Shield New Jersey,” LeBenger says. “So I started to manage with my CFO the negotiations” with Horizon BCBS, and “we were able to construct the first shared-savings product, with upside and downside risk,” with that health insurer. “That was about four years ago. And then once I knew that we had gotten Horizon, with 3.8 million beneficiaries in the state, we were able to grow our model,” as well as grow the medical group’s physician staff. There was no small investment involved, he underscores: “We spent millions developing our care management program, with hospitalists and with extensivists. And now we have four high-acuity urgent care centers. That’s the model. With chest pain, belly pain, our patients go there. And our admission rate is only 2-3 percent from our urgent care centers, whereas at the average hospital, they’re admitting over 20 percent of those patients.”

There are layers of details, but among the keys for Summit Medical Group’s success so far, LeBenger notes, are compensating the group’s hospitalists based on quality metrics rather than “per-click” patient rounding, leading to a 30-day readmission rate for Medicare below 8 percent (when New Jersey’s statewide rate is 18 percent), and the close care management of all patients through their transitions of care, through the group’s care management department, with all patients leaving the hospital seen by a nurse practitioner within the next day after discharge. “So with that, we’ve found that our PMPM [per member per month] cost” for patients in its risk-based plans “is $60, whereas the benchmark in New Jersey is over $110.”

Meanwhile, IT infrastructure has been absolutely essential to Summit Medical Group’s success in risk-based contracts, LeBenger says, but he emphasizes that “Infrastructure does not drive medical care. You have to have the physician buy-in and the program that manages patient care, and your infrastructure has to support the care, but not drive it.” And, finally, he says this about why physician group leaders can in some cases achieve what hospital and health system leaders struggle to achieve: “Often, when hospitals manage medical groups, the problem is that they use the wrong paradigm. Our paradigm is to take everything to the ambulatory sector, and do what’s right for the patient on the ambulatory side.”

Shifting paradigms create a complex landscape

At a time of shifting paradigms across the U.S. healthcare system, the leaders of physician groups are finding themselves working to build foundations for the future in a dramatically changing policy and operating environment. With the internal healthcare system reforms emerging out of the Affordable Care Act (ACA) ramping up now every year (around such areas as avoidable readmissions, value-based purchasing, and healthcare-acquired conditions), and with newer mandates emerging (including those around mandated bundled payments to providers in many healthcare markets for total joint replacement and now cardiac care), as well as an entirely new set of requirements emerging out of the MACRA (Medicare Access and CHIP Reauthorization Act of 2015), including the new MIPS (Merit-based Incentive Payment System), the leaders of pioneering medical groups are breaking new ground, even as others are struggling just to keep up with developments in the news.

In fact, the medical group world’s pioneers have been busy moving forward into uncharted territory, says Don Crane, president and CEO of CAPG—“the voice of accountable physician groups”—a national association of medical groups involved in accountable care organization (ACO) development and other risk-based contracts. “Among the key learnings,” Crane says, “is that taking on higher levels of risk and moving to professional and not just institutional risk, is being seen as a good thing,” among the leaders of the most innovative medical groups in the U.S. “Doing so improves the quality of care, results in higher quality scores, and higher bonuses. And so moving up in risk is something that has grown in the CAPG membership.

On the flip side, one of the biggest challenges for the pioneers in accountable care, Crane says, is the unhappy realization that “Open networks really are a bear to work with, because the leakage is very high” among patients/plan members attributed to specific ACOs. “All of our groups have done what they can to create stickiness and patient engagement and such,” he adds, “but it’s difficult to do that against a backdrop that allows people to migrate everywhere.”

Meanwhile, Crane says, “Data and IT are of paramount importance. This movement from volume to value requires multiple competencies, all indispensable. One of them is IT: you just don’t take responsibility for a population and deliver care across the continuum without IT. You need a record with memory. And,” he continues, “interoperable IT becomes critically important, because of the need to measure and manage data. How do you do well in pay-for-performance, which is pretty much baked into all the programs?” excellent information systems and data analytics are essential “for those trying to deliver the Triple Aim,” the triple set of goals for improved patient experience, improved health status of populations, and reduction in the cost of care, that has been promoted for years by the Cambridge, Mass.-based Institute for Healthcare Improvement (IHI).

At the Alexandria, Va.-based American Medical Group Association (AMGA), John Cuddeback, M.D., the association’s chief medical informatics officer, says that “The biggest challenge is simply that you have to work under multiple financial models, because different payers are at different stages. Meanwhile, the recognition that analytics is a really important tool in pop health management, has been given a lot of attention, and caused people to be willing to actually invest in analytics, because they know they’ll need it.”

Further, Cuddeback says, “A lot of organizations understood the idea of an electronic health record and the benefits of having all the data in one place, and yet still hadn’t realized everything you can do… Figured out which patients out of all my patients with CHF or COPD are the ones you can focus on. Because you have to switch now from a reactive to a proactive model of care. So first is, we’ve got this data, let’s invest in analytics. And once you’ve done that, you still have to redesign the process of care, to take advantage of the analytics.”

Senior executives at medical groups agree that, once one gets “into the weeds” of developing the IT infrastructure for risk-based contracts, as well as establishing good It and data governance processes, things inevitably become complicated. In that regard, says Krishna Ramachandran, chief administrative officer of the DuPage Medical Group, a 560-doctor multispecialty physician group with 70 care locations, based in the Chicago suburb of Downers Grove, “I'd say that our biggest challenges and opportunities have been in creating the infrastructure and building the team (data scientists and developers collaborating with physicians and clinicians) needed to ingest and interpret the messy, new world of healthcare claims data. They have been a necessary part of creating actionable insights from the data.”

In that regard, Ramachandran says, it is absolutely essential go get physician buy-in around the sharing of data for clinical performance improvement at the individual and group levels. Fortunately, he says, “We’ve had an early start on this with the adoption of our unblinded dashboards starting 2010,” he adds. “It has certainly been a journey, but our physicians have enthusiastically embraced data and dashboards, and they are now an integral part of our culture. We continue to refine the data in new world of claims so that we can deliver more insights on a physician level as well.”

Building a new culture at UPMC

At the vast UPMC health system based in Pittsburgh, change—including the physician culture change needed for success in taking on risk—has been in the air for a long time. Just ask Francis X. (Fran) Solano, M.D., an internal medicine physician who is president of Community Medicine, Inc., the largest group (330) of employed primary care physicians within the UPMC system, and vice president of the Physician Services Division at the health system. While taking on potential downside risk has been years in the making—Dr. Solano is currently working to develop a risk-based contract between Community Medicine, Inc. and the UPMC Health Plan—he has spent 15 years helping to lead a quiet, data-facilitated revolution around improvements in care quality and utilization management.

At the core of that effort has been the program Template for Change, which has laid a firm foundation for the taking on of financial risk in contracting, even as Template for Change has focused on initial shared-savings goals between and among the medical group constellation, the hospital system, and the health plan. The program, which has been applied to medical care delivery across all insurance lines (Medicare, commercial, Medicaid), has been implemented across the 330 primary care physicians in the Community Medicine constellation of groups, as well as 30 PCPs at Renaissance Family Practice based at St. Margaret’s Hospital, and 60 internal medicine physicians in a third group. The focus, Solano says, has been on providing monthly performance metrics to every physician in the program, at the individual, practice, and specialty level, for the following core statistics: inpatient admissions per 1,000, inpatient days per 1,000, ED visits per 1,000, primary care visits per 1,000, specialty visits per 1,000, diagnostic imaging rates per 1,000, and medical expense ratio. The physicians in the program have also been receiving data on their “HEDIS gaps”—gaps in care conveyed by HEDIS (Health Effectiveness Data and Information Set) data. Solano himself and his team look at a monthly 400-page printout of data, but, he notes, he learned early on that sending out massive amounts of raw data to the physicians in practices only led to mass confusion and frustration. T

he key has been that providing the doctors with these data points has helped them find “the patients who are high utilizers but are not yet in care management.” He says he jokingly refers to some of those patients as “our Seagram’s 7&7, because these are the people with seven diagnoses, who are on seven medications, and are seeing seven specialists”—and they are some of the key patients who need to be identified and care-managed. More seriously, he notes that the monthly sharing of clinical performance data, along with coaching sessions for physicians who are struggling, has made a huge difference. Still, “The biggest contribution” to physician behavioral change has been the average $20,000 in physician compensation that has been tied to individual physician performance on the various metrics being measured. Also very big has been the fact that the shared-savings program has involved sharing savings with the hospital system, an important factor, given that intended reductions in inpatient admissions and ED visits inevitably will affect the hospitals’ bottom lines.

“Sharing savings between the physicians and hospitals helps align the hospitals with us, because the hospitals take the biggest hit when you reduce admissions and readmissions,” Solano offers. “So when you break down the silos by sharing money across the continuum, that helps. And now the passage of the MACRA law has everyone aware of where this is going. They had never had cost data until recently, and charge-based data is very hard for physicians to understand. But with actual cost data from our health plan, doctors can use that, and they will start looking at the cost differential between a hospital-based colonoscopy and an ambulatory surgery center-based one, for example. And they are starting to pay attention to which specialists are over-utilizers, in terms of whom they refer their patients to.”

They key breakthrough, as UPMC’s physicians move towards taking on dual-sided risk, Solano says, is the need to push ahead into true outcomes measures. “Right now, when you look at quality, we’ve been using lots of process measures, particularly at the primary care level. We don’t have a lot of true outcomes measures yet, but I’m having our analytics team start to give me data across populations around such factors as the morbidity and mortality around atrial fibrillation. For example, when we recently looked at people who got anti-coagulation versus those who didn’t, we found that those who didn’t get anti-coagulation experienced a three-times higher rate of mortality. There might have been a number of reasons for this, but we want to explore why. And,” he adds, “we have 55,000 diabetics right now, and 30 percent of them are driving the costs, and the rest of them have minimal costs. Can you develop an algorithm to try to change that? Are there blood pressure medications they’re not getting? Or are they just very old and in very poor health? And the beauty of having an insurance company, is that I can get health plan cost/claims data and line it up with our clinical data in the EHR.”

Getting a health system to think like a physician group

Coming at all this from a different perspective are the leaders of Mosaic Life Care, an integrated health system based in St. Joseph, Mo. Though Mosaic Life Care is anchored by a 352-bed community hospital, its leaders have determined strongly that they are forging ahead into the risk-based world both enthusiastically and without the shackles of thinking like hospital administrators who fill beds—so much so that their organization’s foray into the competitive Kansas City healthcare market is purposefully purely on the outpatient side, says Linda Bahrke, R.N., the health system’s population health administrator. Importantly, Bahrke says, she and her fellow senior executives at Mosaic are fully committed to taking on more risk over time; they welcome it. Right now, Mosaic is in year three of its participation in the Medicare Shared Savings Program (MSSP) for ACOs. It has been in Track 2 of the program, involving downside risk (60/40 split), but has applied to move into Track 3 of the program for next year, involving greater downside risk (75/25 split).

Mosaic’s ACO has been doing well, Bahrke says: the ACO received $5.013 million in shared savings from the Medicare program after year one, and $2.065 million after year two; but they missed the mark in year three, as the performance benchmarks have continued to ramp up in rigor. Still, she notes, the ACO’s overall quality score is running at 96.11, which puts it near the very top nationwide in the MSSP program overall.

“The most important thing that you need after simply establishing a care management program” to thrive in a risk-based environment, Bahrke says, “is to create an IT system that puts the data in the physicians’ and other clinicians’ hands real-time, that helps them transform their thinking from acute care to a more longitudinal approach. One of the first things we did was to update our EMR to flag that a patient is in the program, and also to identify their level of risk; and to then provide real-time information about some of the care that they have or are receiving. How many times have they been in the ER in the last six months? How many medications are they on, and have they filled all their prescriptions? And in terms of standards of care testing, if they have diabetes, have they gotten their hemoglobin a1c test recently? Typically, in the acute-care setting, the physician addresses the acute need. In our model, the physician has all that information, and so that we can address things upstream, more proactively, with a more longitudinal mindset.”

And, in terms of the thinking behind such work, Bahrke says it’s important to let go of thinking like a hospital-based organization that needs to fill beds. “We are a health system that’s reinventing ourselves,” she says. For instance, we entered the Kansas City market with only physician and outpatient services; we have no intention of offering inpatient services there; that market is already saturated.”

CIOs and CMIOs need to be transparent in data-sharing

All those interviewed for this article agree that CIOs and CMIOs will be key players in helping to move their organizations forward into the value-based, risk-based world. Asked what he would tell CIOs and CMIOs, UPMC’s Solano says, “I would tell them that you need to share data, you need to be transparent. We started giving transparency data six years ago to our doctors, where we publish by doctor and practice and performance, we rank each practice by size and by doctors’ individual performance. That was a bold step. Obviously, people don’t like to be #500 or so. When you’re at the bottom, you’re not really happy, but it does drive change.” But, he reemphasizes, sharing reams of raw data is not helpful. The data shared has to be small in its number of data points, meaningful, and actionable to physicians in practice.

Meanwhile, CAPG’s Crane says he believes that the full implementation of the MIPS program and all the requirements under the MACRA law, will be “transformative in terms of Medicare,” pushing all Medicare-participating physicians in the U.S. away from traditional fee-for-service payment. “We know that the vast majority of physicians will be in MIPS, and that will require them to manage and marshal data for pay for performance in ways they may never have in the past,” he says, noting that even those physician groups not yet taking on risk-based contracts per se are going to need to approach data in a whole new way. In that sense, he says, “Getting ready for MACRA is the biggest thing that CIOs, CMIOs, CEOs, and CMOs need to do”—and plunging ahead into risk-based contracting itself will require a gigantic, strategic leap into the future.

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