We kicked off our conversation by looking at value-based care and what it will take to achieve its promise. John called value-based care a Gordian knot. The fee for service model predominates in healthcare, and it is recognized by just about everyone — economists, politicians, health care folks — as unsustainable. One key issue is provider readiness for change, since we have “a sick care system, not a health care system.” How do we reach to objective of the Triple Aim? “Burn the boats.” Chilmark research concludes that while the ACA provided health care systems with some basic tools to measure quality of care, and incentives to form ACOs, there are a few pockets of value based care around the country — John says “you can count them on the fingers of two hands” — and there are still not a lot of organizations that can make the commitment to value-based care.
A speaker from Geisinger at Chilmark’s last Convergence conference suggested that healthcare organizations need to commit to move from fee for service to value-based care — can’t have a foot in each camp — so they need to sail to the far shore, and once they get there: Burn the boats. Have to go all in. It’s a significant culture change. John observes: “Culture eats technology for lunch.” Without cultural buy-in in the organization, no amount of technology will help; IT tools can’t do the heavy lifting all alone.
John observes that organizations that have moved in the direction of value-based care — like Advocate, with 500,000-plus covered lives in capitated models — have made significant cultural and technological investments. Physician organizations seem to be able to do this more easily than hospital-led organizations in most cases.
Specialty care is the Achilles heel of this effort. John told of a medical director in a health system trying to work in a value-based care regime, while his cardiologists wanted to be paid on a FFS basis: Holding them accountable invariably led to them decamping to another system across town.
So is the ultimate goal crossing the sea and burning the boats? Or is it living with this dual framework? John suggests that we don’t know yet, but that over time specialists won’t have a choice. “It will take several years to get there.” At present, the percentage of overall revenue attributable to value-based contracts in most organizations is not significant enough to motivate institution-wide behavior with direction from the C-suite. Moving into ACO arrangements with downside risk may speed things along.
We still don’t have universally accepted measures, quality measures are typically process measures, not outcome measures, and we don’t have the tools to identify what is “quality” – or consensus on how to measure quality. Without that metric, we can’t move forward; John says that if we can’t define quality, then we can’t define value.
Against this backdrop, we are seeing a convergence of payor and provider functions and organizations. Payors now have clinical staff; providers are assuming risk.
John posits that payors and providers must converge in order to be jointly successful at value-based care (e.g. by replacing cumbersome prior authorization requirements with trust).
Different payors are converging with providers in different ways. Aetna is creating local joint ventures with healthcare delivery systems and letting them manage their local books of business. United Healthcare is buying provider organizations and providing care directly to members.
An isolated few organizations are large enough to straddle the line successfully (Kaiser Permanente and UPMC are two examples that John offers). Most don’t have sufficient patient population to spread the risk adequately. Nothing like that of the federal health plans, which John notes are responsible for about 50% of the nation’s health care spend. Employer-sponsored plans will therefore be fast followers rather than trailblazers, according to John. And the ones that will be the fast followers are those with large concentrations of employees and other beneficiaries (think: Boeing in Seattle, GE in Detroit).
As we wrapped up our conversation, I asked John where he thinks we’ll be in five years, and he said he hoped that we’ll have much better tools and data to better understand where health care is being provided, better clinical pathways, and the ability to remove barriers to higher quality and lower costs.
I spoke with John as part of my ongoing series of fireside chats with healthcare innovation leaders – Harlow on Healthcare, on HealthcareNOW Radio. Listen to our radio station online, or ask your smart speaker (Amazon Echo or Google Home): “Find Tune In station 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.