Key Pivot Points in UNC Health’s Value-Based Care Journey
In a recent webinar presentation with research firm Advisory Board, Robb Malone, Pharm.D., chief operating officer of UNC Health’s clinically integrated network, described some of the key decisions made during the academic health system’s value-based care journey.
UNC Health manages 400,000 lives across 10 value-based contracts, generating $193 million in value-based care revenue over five years. The UNC Health Alliance is both the clinically integrated network and the population health services organization. It includes 5,000 physicians, two-thirds of whom are employed.
Malone admitted that there was a learning curve for the organization, considering they started with this vision way back in 2008. “In the early years, we really came out of the gate hot and hit the ground running,” he said. “We had what we thought were great tactics. We had some good leaders and we had some new staff to do this work, but we saw some failures, and we weren't failing forward, because we weren't engaging our physicians and meeting our system where we were at that point in time.”
After a bit of a reboot, he said, they leaned more into their quality improvement culture. "That got us to this point of taking on risk and we started to engage with a care model that's different. Once we started doing that, we started to see this momentum gathering. I feel like we're at a totally different place today than we were even last year, and definitely 10 years ago, when we got our start.”
Initially they focused on maximizing on pay for performance and reinvested funds to prepare for value-based care by building a repeatable, extensible infrastructure to do it.
They started in primary care by adding quality improvement infrastructure, Lean Six Sigma coaches, and the development of care teams, he said. “That transitioned into a period where we established formal governance, because we were establishing the foundation of a network,” Malone said. “There was about a two-year effort to really set that up. UNC Health Alliance was formed as a clinically integrated network in 2016 and from there we grew our analytics team and that capability, knowing that's where we had to go.”
Next, they began to embed care managers across primary care, first in their employee network, and then seeking to identify how to help independent practitioners do that. “We were in a two-sided risk model. We didn't really know what we were doing at the time. But I think it was the right thing to do. Taking that risk really shook things up and made us pay attention to the right things really quickly,” Malone said.
One key inflection point was in 2018 when UNC Health Alliance joined UNC Healthcare’s formal decision-making. “We really got a seat at the table in developing strategy in a different way than we had before,” Malone recalled. “We grew our finance team and invested in not just budgeting, but also predictive analytics, evaluating contracts and opportunities,” he said. “We expanded our care management model across hospitals, EDs and post-acute care, focusing on transitions and building that team out. We built an SDOH infrastructure before COVID hit because we identified that reducing disparities was ultimately where we're going to have to close the most gaps in order to have differentiated performance and outcomes.”
UNC Health Alliance then grew its portfolio and started to focus on specialists. “At that time were dealing with the COVID pandemic,” he said, “and to be honest with you, we learned a lot from that that applies to this work today. We developed deep relationships with the largest payer in North Carolina. We saw improving relationships with other payers because we focused on looking at payers as partners, not as the enemy. We expanded our population medicine resources, really focusing on engagement and outreach and how to do those things more efficiently and effectively. We also started think about regionalizing care. We're really early in that process, but we believe care is local. We want regional risk pools and models of care to meet the needs of a community.”
Malone said having health system leaders invested in value-based care is critical. “It's not a question of commitment. It's a question of is this the right time? How far do we go? How much should we invest?”
Hospital CEOs see the value
Malone noted there are challenges in making this transition. “Hospital rate changes ultimately come up, no matter which way you go,” he said. He noted that fee for service is still the base, with value-based payment wrapped around it.
UNC Health Alliance had positioned itself to bring value-based contract opportunities to the system, and Malone described a key pivot point in their value-based care journey.
“We had an opportunity to go into a large downside risk commercial arrangement, and the trade-off was that this would require rate redistribution, with our largest hospital seeing lower reimbursements,” he explained. “It also meant we had to approve, adopt and implement a shared savings and incentive sharing model that would distribute large parts of these savings to our broader network. Those were trade-offs that our hospital CEOs and physician organization leaders were facing at the time. The hospital CEOs agreed to participate in this product. It really came after a hospital CEO stepped forward and said this will harm my entity, but I believe it is better for the system and a win for this network. And that really pushed us over the top to go in this direction. And I think they were right. Quickly we saw this opportunity grow by over 100,000 lives over the subsequent five-year period.”
Malone gave another example from a narrow network product in the ACA market. “With those, there's a trade-off, which comes in the form of discounts,” he said. “This is probably among the most controversial and difficult conversations that we had. But hospital CEOs came forward, despite how difficult this was and how the impact would likely affect them the most, and they supported this. They saw the opportunity, believed in our value-based care strategy, and allowed this to go forward. And this has led to 30% growth in market share in this product, year over year.”
Malone said one lesson learned along the way was to never overpromise what value-based care can deliver. “That could be the death of things for us.You have to set realistic expectations about the trajectory,” he said. “We never exaggerated what was out there. You have to be honest and direct about the fact that there is risk involved in this work.”
