How Ochsner Helped Arcadia Develop Value-Based Care Contracting Tool

As a customer of healthcare data platform vendor Arcadia, Ochsner Health Network has played an important role in the development of a new tool called ContractIQ that the company says simplifies the design, negotiation, and forecasting of value-based care contracts. Julie Grantz, M.B.A., Ochsner’s vice president of value-based insights, spoke with Healthcare Innovation about some of the keys to the New Orleans-based health system’s success in value-based care and why they needed a tool like ContractIQ.

Healthcare Innovation: We’ve written a few times about the success Ochsner seems to have in value-based care, especially in the Medicare Shared Savings Program. For instance, the Ochsner Accountable Care Network achieved its eighth consecutive year of top-ranking results in both clinical performance and healthcare savings for the Medicare population in its care. Are there certain things you attribute that success to?

Grantz: All of our governing boards, all of our committees are physician-led. I think when physicians have so-called skin in the game, they are more inclined to be aware of the cost of care and be aware of duplicative services, because they know that if they're managing the total cost of care, then they're able to bring in a distribution that helps them hire another nurse practitioner or helps them expand their practice in different ways. Having a background in risk management for independently owned IPAs, I became close with those physicians and learned how they see it. I think the physicians who are part of our clinically integrated network feel ownership of MSSP. They use Ochsner Health Network services, such as outpatient case management and the virtual ED, to manage the cost of care so that, in the end, they can provide better care to the patients, and they feel control over it. 

HCI: I reached out out to speak to you because I saw you quoted as a customer in a press release from the analytics vendor Arcadia about a new tool called ContractIQ. Here is the quote: 

“We manage more than a dozen contracts with half a dozen payers, which places a burden on our team to reconcile those contracts and make sure we’re getting credit where credit is due. Arcadia’s ContractIQ helps us forecast performance during the year so we can course correct well in advance of receiving final results.”

Could you talk in a little more depth about your role at Ochsner and how this tool is helping you and your team? 

Grantz: I lead the finance part of our analytics team. That is the team that uses data to find patterns  and interprets and communicates those patterns to our operations team, which then goes and works with our network of physicians. When I came to Ochsner we were using a previous tool for our analytics platform, and it didn’t bring various EMRs together and allow us to look at all of our lines of business — Medicare, Medicaid, and commercial — together. So we couldn't get a full picture of what all of our admits per 1,000 or per member/per month costs were. We went through a very lengthy RFP process, and ended up choosing Arcadia to meet both of those needs, and it is a tool that my team on the cost and utilization side for medical and pharmacy uses every single day. 

But we still didn't have a financial tool that would bring in the benchmark components of our value-based contracts, the premium components. So I would often be asked: if cost and utilization keeps going down, why aren't we making money in these contracts? Every business has premium or revenue or a target, and then you take out the expenses, and whatever's left is what you get in savings — and I didn't have a way to do that. Internally we were using spreadsheets and building our own models. When we began to work with Arcadia, I expressed that this was a need, and some of Arcadia’s other customers were asking for something similar. And since we had such a great relationship with Arcadia, and we've done a lot of beta testing, we agreed that if Arcadia would commit to hiring the right actuarial folks and financial teams, that we would commit to building the tool with them. ContractIQ allows me to bring in all of the revenue and premium components and subtract all of that expense information and actually provide a financial picture for us.

HCI: So your team was pretty central to the development of this, not just a customer off on the side waiting for it….

Grantz: Yes, it has been so much fun, honestly.

HCI: Is it still relatively new? 

Grantz: Yes, it's a new tool, and we're implementing it for all of our populations. We went through a process of prioritizing our populations and also thinking about how Arcadia can use this tool for other customers. We started with Medicare Advantage. That's a space where value-based care and percent of premium contracts and shared savings contracts are widespread. So we started there with a payer that has a very standard data set. Most providers who are in their value-based contracts get the same data set, so that we could replicate it. And it's taken a lot of detailed work, but during the next year I'll be able to tell my network of providers that they can expect to earn X amount of dollars at the end of the year based on their current performance. And I've never been able to do so in the past. We were just relying on what the payers told us.

HCI: One thing I hear from other health systems is that payers want to send information to close care gaps, but that the data often lags, so the providers don’t want to use it. Do you use those notifications from payers or do you develop your own from clinical data? 

Grantz: It's a combination. We do get the payer information, and we went through the process where we were sharing that with our physicians, and they would say this is old. So now my team consumes the payer information and also pulls all of the information that is happening in the practices that the payers don't even know about yet, and combines the two. And that's actually where Arcadia comes into play, because we have insight into not just Ochsner’s instance of Epic, but other EMRs that our network of independently practicing providers are using, so it allows us to bring in that more current information. So if a payer says we've got 1,000 gaps, we might be able to close 200 of them right away and only send out 800.

HCI: So that capability that you're talking about with Arcadia to share data with your clinically integrated network, is that relatively new, or is that something you've had for quite a while?

Grantz: We're in our third year with Arcadia, and over those years, we've added practices that are not on Ochsner’s instance of Epic. We’ve had some bumps and bruises, but overall, the power of being able to have insight into multiple EMRs within our practices is invaluable. 

HCI: I was watching a value-based care summit a few weeks ago, and several of the people who were in jobs like yours were saying that getting data from the commercial payers was a lot harder than getting it from Medicare or state Medicaid programs. Has that been your experience with the commercial payers?

Grantz: I'm completely biased because my background is with a Medicare Advantage payer, so it's much more familiar to me. But yes, our commercial contracts have components to them that we don't have visibility into, like things that build our benchmark that we don't get data on. Some of it is as simple as patient risk scores being delayed by six or eight months. And some of it is more complex in that the payers, rightfully so, don't want to give us an accounting of their allowed versus their paid, because that's proprietary information, and that's completely understandable, but for me to be able to redevelop the benchmark and create an actual financial outlook, it is difficult. It's more difficult on the commercial side so in our roadmap for ContractIQ, we do have commercial contracts and commercial data that we're going to start to develop.