Betting on Value-Based Care

Philip Betbeze, for HealthLeaders Media , October 30, 2012

Superior Health Partners, which is a separate nonprofit organization formed by MGHS in 2010 as the basis for Superior's accountable care organization, has eight affiliate agreements with other smaller UP hospitals as well as a major partner in Blue Cross Blue Shield of Michigan.  MGHS leaders see SHP as a laboratory for organizing care in a geographic area that they hope can be exported to other parts of the state, says Noren. He and his physician leadership team did a lot of the groundwork in preparing physicians and getting their cooperation through Noren's "service lines" vision of team-based care (see HealthLeaders, November 2011), but lacked the capital to fully build it out with the technological and labor resources necessary to ensure financial stability. That, among other attributes, made MGHS an attractive acquisition for a large player like Duke LifePoint Healthcare.

"Superior Health Partners' organized system of care, which is the evolution of medical home and pay for performance, speaks to the regional management of populations," says Noren. "That's our ACO lookalike. Meanwhile, we have set ourselves up beautifully with our patient registry, to jump into a CMS Medicare shared savings ACO. We want to minimize the risk we need to take by being incredibly well prepared for it."

Change equals uncertainty

If some of what MGHS and other healthcare entities are doing seems experimental and risky, it's only one of many different organizational models being created, whether governmental or in the private sector, that aims to deliver better outcomes at lower cost. It's a daunting task, says David Ebel, a director and senior CFO consultant for Atlanta-based Warbird Consulting Partners, whose healthcare experience includes 10 years as CFO at Mayo Clinic in Rochester, Minn.

"The contrast between paying for services and paying for minimizing services, particularly at the individual level, is an absolutely huge change and complete reversal of the revenue model for healthcare over the last 100 years," he says.

The only certainties surrounding this inversion in payment methodology is that there will be change and that there will be unintended consequences for those changes, Ebel says. Changes in how CMS and commercial payers are organized are themselves breeding a wide variety of organizational models for healthcare delivery.

"There are physician-organized accountable care trials, hospital-based accountable care initiatives, and payer-based initiatives," Ebel says. "This differs market to market, so there's not a specific model we're moving away from or moving to, and it's not at all clear that all will succeed or that any will."

Making the transition to a completely new payment model carries provider risk that's unprecedented. "You can come to a bad end either by clinging too tightly to the current model or by putting all your eggs in a basket of dramatic change when that's not really the way you're being paid," he says.

Big bet No. 1:

Give physicians leadership roles

Large physician practices are finding ways to insert themselves into leadership roles because the hospital is not necessarily always needed as the lead organization in accountable care. If you want to lead change in your market and retain your market clout, however, it probably doesn't pay to wait too long, Ebel cautions, sharing a story about a hospital that, after much deliberation, finally decided that it wanted to put together a primary care network and become head of an ACO.

"Lo and behold, most of the providers had already signed up with a specialty physician organization that wanted to be its own ACO," he says.

Simon Prince, MD, president and CEO of Beacon Health Partners in Manhasset, N.Y., heads one of those physician organizations that wants to lead the shift. In early 2010, Beacon began adding independent private practitioners to its physician network. Critically, barriers to entry are low—providers need only commit to upholding the clinical standards of the organization and have a certified electronic medical record, care protocols, and reimbursement models that are tied to quality and patient outcomes measurements. Though some of those requirements seem daunting, practices can remain independently owned and structured. The idea, says Prince, is to give independent physicians a route toward becoming regionally prominent.

Getting started early is extremely important for physician-oriented accountable care organizations, he says.

"We started our IPA from really nothing—a bunch of independent private practices—in summer 2010," he says. "We made a deal with Empire BlueCross BlueShield that helped to galvanize the group and get us to the next level. After putting that infrastructure in place, we decided to participate in the Medicare shared savings program, and we were selected, which really serves to push all the initiatives forward for us."

One of those initiatives is a coordinated patient-centered medical home initiative, for which Beacon has a new medical director. There are pros and cons to this structure, Prince admits, especially the fact that the group is not affiliated with major hospital systems.

"That makes it attractive to those who want autonomy, but the lack of being under one tax ID and of oversight on their salaries make it a tougher lift to get them on a coordinated EMR and do what we need to do to push the
agenda forward," he says.

The group is focusing on partners in the disease management, care management, and IT space, but at least for now is eschewing deals with what Prince calls "big institutional partners" like hospitals and health plans. He says the aforementioned BlueCross agreement is operational and reimbursement based, rather than strategic. Right now, the focus is on improving care and being able to prove they've done so.

He's counting on the fact that most of his partners are starting to understand that the push toward proving a practitioner's value-add is not a passing fad.

"We're not going to get enhanced rates and shared savings bonuses for doing nothing," he says. "The biggest risk is in not doing it. We have to, unless you want to join a hospital or health system and cash in your chips. It's just not sustainable to do it the old way."

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