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COVER STORY · HEALTHCARE FINANCE STRATEGIES


thrive in risk-based contracts, what about academic medical center (AMC)-based health systems? Well, the leaders at UC San Diego Health, the San Diego-based academic health system, are quite deter- mined to find out—and they’re investing time, effort, and resources in the venture;


patients, very acute oncology patients. And when you’re in any risk model, you want a breadth of patients. We get some, but not as many as, say, Kaiser. So our strategy is to expand beyond our traditional borders and create a clinically integrated network.” And, adds Agnihotri, “Academic medical centers are being left behind because other healthcare systems are creating their own networks and trying to limit the choice of those patients, and payers are trying to create narrow networks. But the AMCs are picking up on value-based care. We’ll drive the change around value-based care, and over the coming years, AMCs will be lead- ers in value-based care going forward.”


Jeremiah Reuter


indeed, UC San Diego Health in October 2017 opened a Population Health Services Unit, led by a group of executives, includ- ing Parag Agnihotri, M.D., chief medical officer for population health services, and Duncan Campbell, COO, population health services. Their team is helping the organiza- tion to manage several risk-based contracts, including a Medicare Track 1 Plus contract, covering 31,000 lives under the MSSP pro- gram, which they first joined on Jan. 1, 2018, on the standard three-year contract. And what has the experience been like? “For most providers who get into an MSSP contract, the first year is the most difficult, because you’re still catching up on data,” Campbell says. “They base their benchmark on three years of historical data leading up to your participation. They send you monthly files,” he says, “but the data is difficult to interpret, and you don’t have everything at your fingertips. Year 1 is a foundational year for us, and we’re bring- ing in analytics tools” from major vendors, including from their EHR vendor. And, leveraging those tools, he says, “We’re just starting to drill down into areas we can reduce cost, reduce clinical variation, and start to improve the overall quality of care.” In that context, Campbell says, “One of the difficulties for any academic health center is that you probably have the best of the best subspecialists, which means that you’re attracting some of the sickest patients in the community—transplant


A moment of truth in Boston It’s encouraging that academic-based health systems like UC San Diego Health are moving forward with value-based contracting. But those who have gained considerable experience with risk-based contracting have significant concerns about the ongoing challenges they’ve faced in their participation in the Medi- care ACOs and others. One who has words of caution is Barbara Spivak, M.D., president and CEO of the Mt. Auburn Cambridge Independent Practice Asso- ciation, or MACIPA. “We have to look at the different levels of challenge,” says Dr. Spivak, whose organization was one of the original 32 ACOs in the Pioneer ACO Program in 2012, 2013, and 2014, and which later rejoined the Medicare initiative in Track 3 of the MSSP in 2017 and 2018. In fact, Dr. Spivak notes, “We had to drop out because they changed their benchmarking methodology, and our budget dropped by 10 percent, and we were never going to make 10 percent savings on that contract. Every year you’re in this, you continue to watch things,” in terms of the benchmarks and requirements for Medicare ACOs. “Clearly, working with the government is challenging, in that the data comes very late, and that some of your performance is not really predictable,” Spivak says. “For example, the risk coding adjustment, which can make a very big difference in your performance, doesn’t come until the year is out. And that makes it very hard to really know how you’re doing as the year is going on. In our commercial contracts, we ‘fix’ things, and get more real-time data as the years is going on. With Medicare, it’s very hard to do that.” Fundamentally, she says, a lack of clarity and predictability looms large over her organization’s participation in Medicare accountable care work. Meanwhile, in the midst of Medicare


8 hcinnovationgroup.com | MAY/JUNE 2019


program changes, MACIPA has also been working through organizational changes. As of March 1, Mt. Auburn Hospital, MACIPA’s affiliated hospital, joined the new Beth Israel Lahey Health system, as an affiliate of that combined health system’s clinically integrated network. “All of our care management operations will remain in place; and hopefully, we’ll end up even buying some services from the system, to enhance our care,” says Spivak, who adds that size and scale really do matter when evolving forward one’s participation in ACO and other value-based contracts.


CMS puts the pedal to the metal All of these strategic developments for patient care organizations are taking place in the context of an intensifying emphasis on two-sided risk on the part of Seema Verma and other officials at the federal Centers for Medicare & Medicaid Services (CMS). Verma and other senior federal healthcare policy officials have been making increasingly vehement statements about their intention of push- ing more and more participating ACOs into downside risk, and pushing hospi- tals and physician groups, more broadly, further into value-based payment in general. What does all of this mean in the next few years? The picture is clear, says Blair Childs, senior vice president of public affairs at the Charlotte-based Premier Inc. “Remember, it’s not just in MSSP; the BPCI—the Bundled Pay- ments for Care Improvement Initia- tive—moved everybody immediately to two-sided risk. So I think all the models are moving in that direction. With bun- dled payments, it happened when they restarted it, in October 2018.” With regard to that shift to two-sided risk, Childs notes that, in late March, 15 percent of participating patient care organizations dropped out of the BPCI program. Still, he says, “There is a widespread movement towards two-sided risk. And the question is whether it will be commercial ventures in two-sided risk or Medicare. And the calculation around Medicare fee-for-service has to do with two factors: with your benchmark, with how you measure your competitors; a variety of factors come into play. And so all of our members are mov- ing towards two-sided risk, sometimes in Medicare Advantage or in direct contracts with employers; or they’re starting their own plans. This is a widespread reality, and I think everyone’s wrapping their heads around the fact that this is the emerging reality. And as we’ve discussed in the past, it is always very market-dependent.”


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