Paving the way for “Fee For Value” with Health Catalyst’s CEO Dan Burton — Harlow on Healthcare

I spoke with Dan Burton, CEO of Health Catalyst, about the range of his company’s work with health care systems when we met at HIMSS 2018. As he put it, Heath Catalyst provides three things:

• Data platforms to aggregate data from hundreds of sources, creating a single source of truth
• Applications to analyze data
• Expertise, so that when a client decides to work on projects that the data has led them to, the company can help them execute those projects

The key point to remember when thinking about patient data is that the EHR, while it’s been the cornerstone, is just one of a multitude of data sources needed in order to get a fuller picture of patient and population health. As Dan said, “the move from paper records to the EHR is necessary, but not sufficient, to harness all the data relating to an individual patient.” The aggregated data from all sources allows for pinpointing of opportunities for improvement using analytics.

Dan offered an example of the data and the analytics Health Catalyst brings to bear, in the realm of reducing readmissions. Since readmissions are caused by multiple variables working together, linking the EHR with the LIS (lab data), patient experience and socioeconomic data will help predict an individual patient’s higher risk of readmission, analyzing that data in real time and feeding it back to the provider organization can trigger actions that can help prevent readmission, e.g., focusing on food security, housing security, access to transportation, and other social determinants of health.

Technology alone is rarely enough to improve outcomes improve; human behavior has to change, too. Thus, Dan explained that Health Catalyst pairs its technology with expertise in the form of staff who have had success in — for example — reducing readmissions elsewhere.

Dan noted that the transition to value-based payment for health care services is going more slowly that one might thing form reading the headlines. Most Health Catalyst clients are “dabbling” in value-based care, but about 90% of payment is still made on a fee for service basis among Health Catalysts’ large health system clients.  Even those clients that are participating in the Pioneer ACO program, and other alternative payment models, are often working in two parallel universes simultaneously, because not all payment is value-based. Thus, provider organizations are working in the fee for service and fee for value modes at the same time.

To succeed in the fee for value world, Dan notes that it becomes more important to understand cost structures. Systems optimized for the fee for service world have focused on monitoring and measuring volume drivers, revenue drivers, rather than measuring cost. Health Catalyst is working with UPMC on building new cost measurement infrastructure, capturing data at the individual procedure level. Dan said, “When everyone focuses on this it will be revolutionary.” He predicts that ten years from now, there will be greater focus on the cost side of equation – and that will be beneficial both to the system as a whole and to individual patients.

Health Catalyst recently launched a patient safety application, supported by all the data in the platform and augmented by patient safety expertise, to reduce patient injury.With a database of over 100 million patients, and machine learning algorithms, Health Catalyst can pinpoint exactly where a client’s experience deviates from an expected norm and can then prioritize areas where client is below average and other clients have been able to do better, reducing all-cause harm events.

When I asked Dan what he hoped would change in the next five years, he had a very specific answer: Expansion of fee for value, value-based purchasing to more than 50% of the health care economy. He said, “That would give me hope about getting more effective, more efficient, and that will drive many other secondary outcomes.”

I spoke with Dan as part of my ongoing series of fireside chats with healthcare innovation leaders – Harlow on Healthcare, on HealthcareNOW Radio. You can catch me live weekdays at 8:30 am, 4:30 pm and 12:30 am ET. As each new show goes live, the last one joins the archive, available via SoundCloud or your favorite podcast app (iTunes, Stitcher, iHeartRadio). Your comments are welcome here. Join the conversation on Twitter at #HarlowOnHC.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting