Money, Strategy, and the Future Landscape: Parsing Some of the Findings in Our State of the Industry Survey

Feb. 10, 2020
Looking at some core findings around strategy, implementation, and funding, our State of the Industry Survey revealed an industry in a moderately early, yet important phase of transformational change

It was both excellent and clarifying to execute our Healthcare Innovation State of the Industry Survey, published in the January-February issue of our publication. At a time of tremendous, fundamental change in the U.S. healthcare delivery and payment system, moments like this one offer great potential for assessing where we as an industry are, on this journey of a thousand miles.

In preparing the January-February cover story on the survey, we looked at the responses coming from nearly 200 senior healthcare leaders in patient care organizations nationwide. We certainly had enough evidence on the ground from which to draw some conclusions.

So, first of all, things are accelerating in the shift into value-based care delivery and payment. Fully 32 percent of respondents told us that their organizations are currently participating in the Medicare Shared Savings Program (MSSP) for accountable care organizations (ACOs), while even more—34.7 percent—are participating in ACO programs with private health insurers. That’s quite significant. Meanwhile, 21.3 percent are participating in Medicaid ACOs, while 12 percent are active in the Next Generation ACO Program.

That said, downside risk remains relatively low, with the following percentages reporting that their organizations are participating in downside risk-based programs: 13.3 percent with private health insurers, 12 percent with the MSSP program, and 10.67 percent with Medicaid programs. Fully 64 percent have not yet moved into downside risk; but as we all know, that will probably change relatively soon.

And when it comes to the percentage of their overall reimbursement involved in downside risk, only 6.67 percent said that more than 20 percent of their reimbursement was tied to two-sided risk contracts; another 6.67 percent said that 15-20 percent was tied to two-sided risk contracts; 10.67 percent said that 10-15 percent was tied to two-sided risk contracts; 10.67 percent said that 5-10 percent was tied to two-sided risk contracts; and 25.33 percent said that 0-5 percent was.

Smaller percentages also applied to bunded-payment contracting, with 20 percent currently involved in bundled payments with the Medicare program, 15 percent with private payers, and 7.5 percent with Medicaid programs, but fully 58 percent not yet involved in bundled payments at all.

Significantly higher percentages of patient care organizations are already involved in patient-centered care medical home work, however. Fully 37.3 percent are already involved in patient-centered medical home development, while another 21.3 percent are planning to develop patient-centered medical homes. Still, 31 percent reported no plans to do so.

What about such innovative areas as comprehensive primary care and integrated oncology? Asked whether their organizations were involved in the federal Comprehensive Primary Care Plus (CPC+) Program, 13.3 percent said they were; 26.67 percent were not yet participating, but were planning to do so; and 60 percent were not planning to do so.

Meanwhile, 20 percent are already actively developing integrated oncology care models, while another 24 percent are planning to develop such models, while 56 percent are not planning to do so.

Interestingly, when asked whether they are at advanced levels in their usage of analytics, only 24 percent said they were, while 49.3 percent reported that they were still early in their journey, and fully 26.7 percent have not yet even begun to use analytics in a significant way. That reality was echoed in their responses around whether or not they’ve executed health risk assessment across broad populations, with 30.7 percent saying yes, 45.3 planning to do soon, and 24 percent not having done so at all.

Looking at all those numbers so far, one gets a sense of an industry on the precipice of something big. More and more patient care organizations are moving into value-based contracting, and, from the numbers, it appears as though many more will be doing so soon. So we’re seeing early crests of waves here, though a real breakthrough will be once at least one-quarter of patient care organizations are in downside risk-based contracts.

Budgeting news is good

Meanwhile, the good news, we found, was that CIOs, CMIOs, and everyone who works with them, are being properly resourced for the coming few years, at least. Compared to two years ago, 70 percent reported that their IT budgets have increased, while only 23.75 percent said they’ve stayed the same, and only 6. 25 percent have experienced decreases. Meanwhile, nearly half (48.61 percent) have experienced at least a 10-percent budget increase, with nearly 15 percent (14.96 percent) experiencing a budget increase of 20 percent or more. That is quite encouraging, actually.

Those funds will definitely be needed going forward, as the results of our questions around care management revealed mixed levels of progress in that area. In response to our question, “Have you implemented care management programs at the primary care level, involving physicians and teams?” fully 60 percent said they had; but 18.7 still hadn’t, though were planning to do so; and fully 21.3 percent stated that they had no plans to do so. That is a slightly worrisome finding, given that it’s clear that over time, inevitably, virtually all patient care organizations will find themselves compelled forward into some kind of care management work, as federal healthcare policy shifts strongly in that direction, and as Medicare and Medicaid go, so will the rest of the healthcare system. Indeed, in many cases, private health insurers are already ahead of federal and state governments in compelling their contracted providers forward.

In terms of incorporating the social determinants of health (SDOH) into their population health and care management work, the results turned out to be right in the middle, with 45.3 percent of respondents reporting that their organizations were already doing so, and 41.3 percent stating that they were planning to do so; only 13.3 said that they had no plans to do so.

What about other measures of health IT advancement, such as enterprise data warehouse development, and the use of artificial intelligence (AI) and machine learning? Here’s what we found: fully 45.3 percent of respondents already have an enterprise-wide data warehouse in place, while another 21.3 percent are planning to put one in place. Still, fully one-third (33.3 percent) are not planning to implement an enterprise-wide data warehouse.

Meanwhile, 17.3 percent of respondents told us that they are already actively using AI and machine learning tools in their clinical transformation work, while another 38.7 percent are planning to do so, while 33 percent indicated no plans to do so. What about for their operational transformation work? There, the results were similar, with 17.3 percent already using AI and machine learning in their operational transformation work, fully 40 percent planning to do so, and 32 percent not planning to do so.

Among those I asked about these survey results was John Kravitz, CIO of the Danville, Pennsylvania-based Geisinger Health system, an integrated health system encompassing hospitals, clinics, and a health plan, in mostly rural central Pennsylvania. Geisinger has been recognized nationwide as a pioneering integrated health system, including in the areas of care management, quality measurement, and plan-provider innovation.

When it comes to money and strategy, Kravitz told me, “I think that strategy will be very important going forward. CIOs and other senior healthcare IT leaders need to understand their organization’s core strategy and to focus on the customer. In an integrated delivery network with a medical school, we have multiple types of customers here,” he noted. “Physicians, patients, and medical students (4,000 students in our medical school and other advanced graduate-level programs), are all our customers. Focus on the customer, and how you’re looking to leverage technology forward. The ability to do telemedicine consult visits. Can you do a video visit with your child, with a physician in the middle of the night, so you can pick up the prescription first thing in the morning? Or minimizing ED visits.”

With regard to the funding, Kravitz told me that “I think healthcare has been kind of like urban sprawl; we have not been lean. If we were starting a new health system now, I would select EHR, CRM, and ERP—those would be my core three systems. There are too many redundant systems we’re supporting. We’ve got to skinny down our stack with vendor partnerships, so we can retool our resources, and focus them on our consumers.”

As for the technological platform needed to support all the tools and systems of the future, Kravitz told me that, “In our unified data architecture, our Hadoop platform will support part of that for our data lakes, but may also have a relational database that’s based on SQL, and then ETLing data—extract, transform, and load—back into the platform. As an example, if we mine the data and are looking at chronic disease patients, and find there are gaps in care, we can shoot order sets back into the HER, in this case, Epic or Cerner, via the relational database. We can generate order sets, and shoot those out the next time the patient presents.”

And, in that context, Kravitz told me, “One of the things that I’m doing right now is developing a cloud assessment strategy. I’m looking at private clouds for potential cloud hosting, but before we move in that direction, there are a number of data security protections we need to put into place first. And we also need to determine whether this makes sense, will we save money and achieve more agility, by moving into the cloud? Or is it a shiny object that everybody’s chasing? That’s what I’m looking at in terms of cloud hosting—keeping one and retiring two.”

For the cover story itself, I interviewed a number of industry leaders, among them, Barbara Spivak, M.D., the president and CEO of MACIPA, the Mt. Auburn Cambridge Independent Practice Association, a medical group serving the Boston metropolitan area. As Dr. Spivak told me for the cover story, “More and more insurers are moving towards some type of value-based care. But most organizations are not really organized in a way as to take downside risk,” says Dr. Spivak, the president and CEO of the Mt. Auburn Cambridge IPA (MACIPA) in the Boston metropolitan area. “And among those that do, many of them are achieving success more through luck than by design.”

Indeed, Spivak told me, “I think people will continue to work on and figure out how to cut costs. And I think that physicians and some hospitals and systems are really going to put a lot of work into decreasing utilization; but a good part of the country still won’t be doing that, because the amount of effort and infrastructure it takes to really decrease utilization and eliminate unnecessary ED visits and hospital days, takes a lot of infrastructure and a lot of work. And a lot of the systems are hospital-based systems. Do they really want to put money into programs that will decrease their volume?” She emphasized that “If you don’t have the capacity to do analytics internally or the ability to buy it, you shouldn’t even be in upside-only risk. Because the only way to manage risk is to have very impressive analytics. And the analytics need to be at multiple levels.”

Christopher DeRienzo, M.D., chief medical officer and chief quality officer at the three-hospital WakeMed Health system based in Raleigh, North Carolina, summarized an element in the future landscape very well when he told me, “If I’m going to be in a universe where I have downside risk, I should really be advanced in my ability to leverage analytics for population health management; and for those who have implemented comprehensive primary care strategies, leveraging data analytics really is table stakes.”

Indeed, Dr. DeRienzo emphasized, “As a health system, provider group, or plan, you have to be positioned the right way to begin playing in population health, and that takes years to build.” The good news? “We’re seeing the fruits of the early labor; the people who invested in people, technology and tools, and infrastructure and process, are moving forward. And there are a lot more folks in a more mature stage than was true in 2012.”

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