COVID-19, Payers and Providers, and the Complex Shift Into Value in This Moment

July 28, 2020
Our July 9 panel discussion on the shift into value-based care delivery and payment uncovered fascinating issues—and opportunities—in this complex moment in U.S. healthcare

It was a fantastic experience to hold our virtual summer session on value-based healthcare on July 9, as part of our virtual summit on that day, with a stellar panel of discussants. In our panel on the system-wide shift into value, we asked some very basic questions on what had been learned so far during the COVID-19 pandemic that could help the leaders of patient care organizations going forward, as the U.S. healthcare system attempts collectively to move forward in the ongoing shift from fee-for-service-based payment to value-based, including risk-based, payment. And yes, it’s all complex.

Fortunately, I had a terrific panel of industry leaders to discuss these issues together, earlier this month. They were: Pamela Peele, Ph.D., chief analytics officer for the UPMC Health Plan and UPMC Enterprises, in Pittsburgh; Melanie Matthews, CEO of the Olympia-based Physicians of Southwest Washington, a physician group of; Jamie Clarke, chief value officer at the multi-hospital, multi-state, Wilmington, Delaware-based Nemours Children’s Health System; and Lori Logan, chief product and client officer at Geneia, the Harrisburg, Pennsylvania-based solutions provider affiliated with Capital Blue Cross Blue Shield. All the panelists were enthusiastic about the discussion, and it was lively and engaging.

At the outset of the discussion, I asked the panelists about the strange current moment; as I noted, prior to the emergence of the COVID-19 pandemic, senior officials at the Centers for Medicare and Medicaid Services (CMS), especially CMS Administrator Seema Verma, had been pushing providers very hard to participate in two-sided/downside risk, through its ACO (accountable care organization) programs. What does the landscape look like now, given the revenue challenges brought on by COVID-19?

“This is an interesting time. We’re never going to get this natural experiment, I hope, again,” said Dr. Peele, referencing the public health, operational, and financial crisis brought on by COVID-19. “So when we talk about shifting from fee-for-service to value-based care, we’ve struggled with that over the years, because we have had a hard time talking about what value is—how we talk about it, how we think about it, what it is. And when it comes to COVID-19 was a lot of care went away. People were afraid; they didn’t come to appointments, they didn’t come for preventive services or follow-ups. Now we actually have the opportunity to look back and find out what care was missed that mattered, and what didn’t. In other words, we can figure out what care has value.”

“I agree with Dr. Peele,” Jamie Clarke said. “As devastating as COVID has been, it has actually accelerated in some ways the move to value in some ways, for systems like ours. So what are some of those elements around value? One example, not unique to Nemours, was our rapid adoption of telehealth. Previously, we had been pushing for providers and patients to adopt telehealth, and it was slow; when COVID hit, we had to pivot quickly. We had five telehealth visits all year in 2019. We’ve already exceeded 20,000 telehealth visits in 2020, in our primary care medical home, so far. The same thing happened with ED volume; the ED volume in pediatrics dropped dramatically. And we need to ask ourselves, how do we not revert back to previous behaviors, in terms of utilization in situations in which patients should not have been using the ED in the first place?”

I then mentioned the research study that had just appeared in an article in Health Affairs online, in which a team of researchers found that the COVID-19 pandemic has had a massive financial impact on primary care practices in the United States, with anticipated average 2020 calendar-year losses of $67,774 in gross revenue per full-time physician, and, even with only a relatively moderate impact on primary care physician practices, a nationwide overall loss of at least $15 billion to primary care practices in 2020. I noted to the panel that, had the vast majority of physician groups been working under capitated payment when COVID-19 hit, the financial and operational landscape would have looked different indeed. What did panelists think about the shift to risk-based payment, in that context?

And, how does all of this look to leaders of medical groups, including IPA (independent practice association)-based groups? I asked Melanie Matthews. “I agree completely about defining quality and rapidly deploying what was not a routine regular part of the delivery model,” she said. “On the IPA side, we continued to receive our revenue stream under capitated payment, in spite of a drop in utilization. So that really speaks to compounding the use case around financial stability around capitated payment models, rather than running two organizations at once, one based on fee-for-service payment and the other based on capitated payment. And ACOs and clinically integrated networks that have administrative complexities built to support population-based care, were poised and ready to tackle COVID, not so much in terms of preparing the delivery system, though we did do work in that area, around supply chain, for example, but we were also able to use data and our infrastructure of care navigators to very rapidly identify which patients were hat elevated risk, what resources they would need, SODH and otherwise. So while the HC system was preparing for surges, pop health based organizations were really focused on keeping patients socially distanced and cared for appropriately. And in terms of the smoke signals we’re received on the policy front I would say that this should accelerate accountable care.”

And, in that regard, Lori Logan said, “We’ll see more value-based payment models and capitation, because it’s recurring, swift, and reliable. And the tools that we’ve put in place and the data and analytics we’ve put in place to support value-based care are also those that need to be put in place for just-plain good care. An example is around population health stratification and [proactive] outreach to patients, especially right now, as patients are fearful of coming in. So making sure that providers are prioritizing resources is so important. And the tools have proven that they’re not just needed for the payment model, but for good-quality care. And one thing we see is payers really trying to provide help to providers; they’re realizing in this [emerging] world that we all have to help each other. Those collaborative working relationships, and the technology, will both be essential going forward.”

I then asked my panelists what they thought healthcare industry leaders needed to do now to develop the types of partnerships that will move the industry forward into the shift into the value?

Physicians of Southwest Washington’s Matthews replied, “I think that the relationship between providers and payers really relies on the foundations of any kind of successful business relationships—communications, transparency, guiding principles like what we’re trying to do together, the [collaborative] value proposition. In value-based contracting,” she emphasized, “you can’t have negotiations from opposite sides of the board room. We have to focus on improving the health of the community. So one is realigning the way in which payers and providers interact, so that it becomes less adversarial; and then aligning incentives according to those principles, so everyone’s aligned. And then, data and claims. So, shared alignment for revenues and compensation, and real data.”

“UPMC is both a payer and a provider; we’re the second-largest payer-provider in the country, after Kaiser Permanente,” Peele noted. “But we’re both open and closed; we have employed physicians and contracted physicians, and owned hospitals and contracted hospitals. So it puts an interesting spotlight on this. And what do payers and providers need to do, going forward? They need to trust each other. Payers think providers are over-utilizing, or whatever. And providers think payers are trying to rip them off. And when there’s no foundational trust; and when we don’t trust each other, the patients don’t trust us, either. And trust has to sit at the bottom of the three-legged stool among payers, providers, and consumers. And what’s involved in that? Data. So how can we optimize care? The goal between the payer and provider is transparency—the ability to see a 360-degree view of members, and to share that view with providers.”

“Yes, we can’t reiterate the word transparency enough,” underscored Nemours Health’s Clarke. “If we are in this together, we have to be open books, and be vulnerable. And that means opening up that data. As payers and providers want to take on more risk together, we have to prepare for that together; and we have to set expectations, and establish common interests. So it’s still about relationships; payers and providers were historically on opposite sides of the table. So how do we actually transition that to be working on behalf of the common interest around our patients?”

And I asked Geneia’s Logan whether that creates a kind of “trust but verify” situation between payers and providers. “Yes, it’s about relationships, and the data helps to instill a trusting relationship,” she said. “Also, conscious work has to happen around roles. But often, there can be terminology barriers; we spend a lot of time working through those issues with payers and providers. And we see a lot of progress in the making, in this space. The role that used to be provider relations in health plans used to be around, how do you submit your authorization, or check your claims status? Now, it’s a business development role, a relationship-building role, it’s a how do we sin this together, role. It’s a much more sophisticated role. And both parties bringing the data together to the table, builds trust. It’s both payment and clinical data together. I do see a lot of efforts in that regard. But like any relationship, you have to figure out how to talk to each other.”

The discussion continued, including into areas around the impact of accelerated telehealth-based care delivery on healthcare operations in the coming months. What was and is clear to me is that, with leaders like these, there will be a successful path forward through the complexity of the current moment, as payer and provider leaders unite around the mission of improving the health of their communities and making U.S. healthcare more efficient, cost-effective, and satisfying to all the stakeholders around the immense enterprise of our complex health system. All the panelists agreed that there will be challenges going forward, but also, importantly, that much has actually been learned in the past few months that will be quite useful in the near future, and that will benefit patients and communities.

Sponsored Recommendations

A Comprehensive Workplace Safety Checklist

This checklist is designed for healthcare facilities focused on increasing workplace safety. It’s meant to inspire ideas, strengthen safety plans, and encourage joint commission...

Healthcare Rankings Report

Adapting in Healthcare: Key Insights and Strategies from Leading Systems As healthcare marketers navigate changes in a volatile industry, they know one thing is certain: we've...

Healthcare Reputation Industry Trends

Navigating the Tipping Point: Strategies for Reputation Management in a Volatile Healthcare Environment As healthcare marketers navigate changes in a volatile industry, they can...

Clinical Evaluation: An AI Assistant for Primary Care

The AAFP's clinical evaluation offers a detailed analysis of how an innovative AI solution can help relieve physicians' administrative burden and aid them in improving health ...