In Northern California, the Ups-and-Downs on the Drive Toward Value-Based Care

Feb. 23, 2018
A provider and health plan leader weighs in on value-based care progressions in California, and what’s holding the region back from being more advanced.

Having worked as a chief medical information officer (CMIO) at Sacramento, Calif.-based Sutter Health, and then in early 2017 taking a job as vice president of accountable care innovation and clinical transformation at Blue Shield of California (BSC), Chris Jaeger, M.D., is precisely the type of individual who forward-thinking healthcare organizations are looking for these days in their leadership departments: one who can push them into a new value-based care world, and who possess a combination of clinical experience with business shrewdness.

“I really have seen it from both sides of the fence,” Jaeger says in a recent interview with Healthcare Informatics,” adding that he came to BSC because of the collaboration and the history of its ACO (accountable care organization) programs. Indeed, at the San Francisco-based health plan, which serves more than 4 million health plan members and nearly 65,000 physicians across the state, started its ACO initiatives in 2008 with collaborations in Northern California, including a 2010 partnership with San Ramon-based Hill Physicians Medical Group and San Francisco-based Dignity Health, a partnership which launched after two years of planning.

“The secret sauce was a multi-partner agreement,” says Jaeger. “Dignity [Health], Hill [Physicians Medical Group] and Blue Shield set a global budget all together. And in that HMO/ACO-type model, there were aligned incentives, similar to what you’d see in a Kaiser [Permanente] structure. From there, you are shifting the mindset of acute care providers in particular, focusing on the budget instead of filling beds. Or you’re repatriating from out-of-network, and being mindful of patients who could have been served by [you], but were admitted to a competitor. But in a volume-based world, that’s far from the mindset,” he says.

Chris Jaeger, M.D.

In the Northern California healthcare market, Jaeger contends how Oakland-based Kaiser Permanente, an integrated managed care consortium with nearly 12 million health plan members in addition to some 720 medical facilities, is a driving force and with its current market share, and can deliver value by having alignment between its health plan, providers and facilities. “The non-Kaiser market shareholders, both on the provider and plan side, have to take notice of that and [develop] strategies that are mindful of it,” Jaeger admits. “Because of Kaiser’s drive and its presence, I’d say that Northern California is ahead of other parts of the country in its [value-based care progression] but still taking a step back, the number of Californians themselves that are getting care under a value-based care model is a minority compared to those getting it through a volume-based model,” he says.

In the Northern California region, Jaeger says there is plenty of experimentation, pilots, and proof-of-concepts that are happening, and even beyond that, some larger scale value-based arrangements. “But it’s still in the fairly early stages. You will see PPO Shared Savings Plans with essentially only upside risk involved for providers. You don’t see a lot of providers taking downside risk,” he says.

BSC, specifically, now has more than 40 ACO initiatives, with nearly a half-a-billion dollars in savings since their original inception, Jaeger says. He notes that one of the keys for BSC’ ACO success is having alignment across the care continuum, rather than just between a plan and a single entity, which is the case with many such agreements today.

But Jaeger points to the importance of “true alignment” across the continuum—not just in the acute care facility or ambulatory office, but extending to the SNFs (skilled nursing facilities), LTCFs (long-term care facilities) and the home. “How do we start to include other stakeholders in ACO arrangements to align incentives even more across the continuum of care? That would be one [of our] lessons learned and also would be a way to think of the future, too,” he says.

Another critical success factor for BSC has been the partnerships with providers, Jaeger attests, noting that building trust with ACO providers “is the biggest step.” He adds, “You need to share data with each other to identify the key levers on cost of healthcare and quality, focus efforts on those [levers] year after year, and then re-baseline them year after year. And our agreements are multiyear, so that sets a longer-term horizon rather than quarter-to-quarter. It takes time to build trust, and trust is something that could be destroyed in one second. Assume good intentions, have open dialogue and continue to nurture those relationships over time,” Jaeger advises.

One Key Roadblock to Value-Based Care

A recent report from the Healthcare Financial Management Association (HFMA), based on surveys of financial executives in hospitals and health systems, found that capabilities for sharing clinical information among hospitals, physicians and health plans are impeding the movement to value-based payment programs.

To this end, Jaeger agrees that data movement and reporting is one of the main challenges of getting deep into value-based care initiatives. “The health information exchange (HIE) part is the data liquidity [issue]. The majority of Californians do not receive care from providers in a closed healthcare ecosystem, like Kaiser, which isn’t fully closed but it’s as close as you can get [to being fully closed],” he says.

He continues, “The challenges are that the patients’ providers are probably on different EHR [electronic health record] vendors across the ecosystem, and even if not, they’re probably on different instances of the same vendor. And there are also different levels of sophistication for data sharing across the groups. And then, even if they are sharing, it’s usually via eHealth Exchange query response, Epic Care Everywhere query response, or Direct secure messaging. So there isn’t a true longitudinal patient record for the patient that follows them as they change jobs, change insurance plans in the same job, or change providers. You are lacking a true patient record over the long term for someone as they move through their life; a patient record that can be a backbone of population health down to personalized health for that person,” Jaeger contends.

Last year, big news in the California HIE world dropped when San Francisco-based California Integrated Data Exchange (Cal INDEX) and the San Bernardino-based Inland Empire Health Information Exchange (IEHIE) announced a planned merger that would potentially create one of the nation’s most comprehensive not-for-profit HIEs. The merger, now called Manifest MedEx, is viewed by Jaeger and other local healthcare leaders as “a key foundational effort.”

He adds, “Creating an infrastructure that can be this HIE 2.0, if you will, [could be] the foundation for value-based care that can support population health efforts and drill down to the personal level as patients migrate through their life. That’s critically important,” he says. Currently, Manifest MedEx combines 11.7 million claims records from Blue Shield of California and Anthem Blue Cross, and 5 million clinical patient records from 150 participating partners, according to officials.

Jaeger does note, however, that the merger hasn’t yet impacted the Northern California region as it has the southern side of the state, but he feels that under the lead of Claudia Williams, the former White House technology senior advisor, the new organization will be in good shape. “I don’t mean to speak for [Williams], but Cal INDEX, under its old leadership, was challenged with getting a large number of providers to sign on. The value proposition was a good one on paper, but perhaps too broad from an implementation perspective,” he says.

Speaking to the needs of the region more broadly, Jaeger feels that Kaiser, if it were to join Manifest MedEx and share its data, would create new value at the individual level for people moving in and out of Kaiser’s system. And from a de-identified data perspective and research perspective, “you’d be able to better study and understand what types of health interventions might create value versus the ones that won’t. That might help spread the adoption of things inside Kaiser to outside of [Kaiser], and vice versa,” he says.

Generally, Jaeger believes that there is a continued migration toward value-based care, and the move is viewed as a direction that providers want to get more engaged with. “Even two years ago, the volume-based model was still doing exceptionally well for a lot of the providers. The appetite for data sharing to improve value-based care efforts is greater than it has been,” he says.

Jaeger adds that there is a major need to have timely, accurate and actionable data, not just for cost purposes, but for quality, too. He says there is also a learning curve related to leveraging the combined sets of claims and clinical data for population health and individual health activities. “The vendors themselves will say that their population health platforms consume those data sets, but [in reality] they are still learning how to combine those data sets together. The care model needs to change. Just having the platform is of no use unless the care model can actually leverage the platform and the insights gained from it,” he says.

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