McKesson’s CMO on Transitioning to Value

Oct. 4, 2016
Healthcare Informatics recently interviewed Michael Blackman, M.D., chief medical officer of McKesson Enterprise Information Solutions, about the industry’s shift to value-based care, and how the vendor is best positioning itself.

A survey earlier this year from physician staffing firm Merritt Hawkins & Associates found that roughly one-third of responding physicians were offered a production bonus based entirely or in part on “value-based” metrics last year compared to 23 percent the prior year. Meanwhile, according to a Forbes analysis of the report, just 6 percent of total compensation is now tied to “quality or value-based metrics,” compared to less than 5 percent in 2015. “We are moving in the direction of value-based compensation, but the reality just doesn’t match that aspiration yet,” said Travis Singleton, Merritt Hawkins senior vice president, said in an interview with Forbes.

The “aspiration” Singleton likely is referring to the goal set forth by the U.S. Department of Health and Human Services (HHS) last year when the agency announced a plan to tie 30 percent of traditional fee-for-service (FFS), Medicare payments to quality or value through alternative payment models such as accountable care organizations (ACOs) and bundled payments by 2016, and tie 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.

As such, the bar has been set by the federal government, who continues to look to curb rising costs and focus on quality. Key to much of this movement is the role health IT vendors play in being able to position providers for this rapid change. To this end, one of the most prominent health IT vendor players, McKesson, recently announced a joint venture with Nashville-based Change Healthcare, a provider of software and analytics, which will combine “substantially all of Change Healthcare’s business” and “the majority of McKesson Technology Solutions businesses” into a new company, according to a statement from both vendors.

As Healthcare Informatics reported on the merger, “The deal to merge McKesson's IT unit into a new company with Change Healthcare apparently does not include its Enterprise Information Solutions (EIS) business, a division of McKesson that provides core hospital information systems such as Paragon. This was a particularly noteworthy move as industry watchers have been speculating that McKesson might sell its acute care IT business since the company sold its ambulatory electronic health record (EHR) assets to e-MDs back in March. Following the series of moves, a Fortune report citied Morningstar analysts as noting about McKesson, “Management has not made any material investments within this business over the past several years, and to our understanding, the technology was two to three generations behind other major HCIT players.”

To discuss this, and much more about the biggest challenges and trends healthcare stakeholders are experiencing in their transition to value-based care, Healthcare Informatics recently interviewed Michael Blackman, M.D., chief medical officer of McKesson Enterprise Information Solutions, and formerly CMIO of Pittsfield, Mass.-based Berkshire Healthcare Systems. Below are excerpts of that discussion.

What are your main areas of focus these days at McKesson?

I spend most of my time on [figuring out] what we need to do to improve the strategy and direction for the clinical use of the core EHR and everything that surrounds that. And a big part of that is setting all this up in a way that enables the transition to value-based care. This probably sounds pie-in-the-sky, but the idea is to make the EHR a tool that clinicians want to use, or at least see value in using, as opposed to the general “I am forced to use it” that you hear. Doctors often roll their eyes about EHRs, and the general view of EHRs is that they are like cable companies in that “I have to have one but no one really likes any of them.” We really want to change that perception.

Michael Blackman, M.D.

How can you change that perception?

The biggest piece is to make sure that providers are educated and getting people on the same page, and understanding that the landscape is changing and that it needs to be a team effort going forward. The “good old days” in which a physician was solely in charge and you had a single person taking care of a patient is not the case anymore and hasn’t been for quite some time. It’s about enabling the system to truly support team care where you have a variety of people on the team taking care of the patient.  

You also have to improve communication, but one thing that has happened as people move towards EHRs is that they forget to talk to each other, so some of the old face–to-face communication is missing. To move towards value based care, communication needs to extend beyond the four walls of an organization. Most healthcare is not delivered in the inpatient setting, so how you communicate between various specialists, primary care providers, and rehab facilities is key.

But, historically various payment models have argued against those kinds of things. There are exceptions to that, of course. People with different payment models, such as Kaiser [Permanente] for example, have done that well for years, where they have taken advantage of every opportunity they have with the patient to address those things that need to be done. How do we leverage the system to say to a patient, “Maybe you’re here for a sore throat, but what about a flu shot or a colonoscopy,” as opposed the traditional reactionary view of the primary care practice?

As you mention, healthcare is moving away from just the inpatient side. McKesson has made moves selling ambulatory EHR assets, and also just announced a new health technology company with Change Healthcare. So how do these moves fit into healthcare’s big picture?

Some of these pieces, such as McKesson moving into a joint venture, [signal] that McKesson is looking to position itself to take advantage across the board. What I am doing with Paragon is making sure we are expanding to the ambulatory space, because frankly, the important piece is the continuity between the inpatient and outpatient side, and sharing that information. The ambulatory EHRs that McKesson used to have and are now spinning off were strictly ambulatory pieces, so they didn’t have that inpatient connection. The ones with Paragon are meant to be the full-suite. We’re now thinking about the core EHR, where does the patient typically go, and what do you need beyond that to help with analytics and big data?

Lots of people are still operating in the fee-for-service world. What are biggest challenges as stakeholders have feet in both buckets?

The challenges are keeping an eye on the incentives. As crass as it sounds, how are people being compensated? Because that’s how people tend to focus. The trick at the moment is figuring out how to balance the two. People are rapidly transitioning, but are still living in the FFS world. At the end of the day, if you do the right thing by patient and provide the best care you can, everything else will follow along.

Are the government’s goals it has set for value-based contracting appropriate or too ambitious?

It’s ambitious in spots, but the biggest problem is about what we’re choosing to measure and does that truly have an impact on outcomes? Sometimes I think we measure things because we are capable of measuring things. If you go back to the early days of meaningful use and computerized physician order entry (CPOE), the [requirement] was “one electronic order placed on a patient.” And I would never recommend this, but if you set it up so every patient who showed up in the ER or was admitted to the hospital immediately got an order for a multivitamin, guess what? You achieved that measure. Have you improved outcomes? No. So I think we need to be careful about measures that are there because we can measure them versus [measuring] what will have a greater impact.

What trends are you seeing with providers’ level of education and readiness for this new world?

It varies, like anything else. On the whole, people aren’t that prepared because they are focused on their job of taking the best possible care of the patient. With all of these other pieces, such as reporting burdens, there can be pushback from clinicians because the best person to [take action] might not be the doctor himself or herself. Is it something you really need the doctor to do? You want people to work at the top of their licenses in healthcare. Physicians’ salaries are largely one of the biggest expenses for a hospital, so you want to use those resource efficiently. You want physicians to think about more complicated problems. In the old model, the way that primary care providers typically survived was by seeing those types of patients that frankly didn’t need to be seen by a physician level practitioner, but those visits paid almost as much as a complicated patient with congestive heart failure, hypertension or diabetes. If you get to a value-based system, you enable doctors to spend more time on those who need it, and less time on those who don’t. Holistically, that makes a lot of sense, and I think everyone is better off.