PROVIDER TRANSFORMATION
experiences, stakeholders are shifting to value-based payment models “reluctantly.”
Rutledge has quite the resume on healthcare finance and quality. She was a health system CEO for 15 years, and was recruited to help set up the Center for Medicare & Medicaid Inno- vation (CMMI), where she led a team in the creation of the government’s first bundled payment model, the Bundled Payments for Care Improve- ment (BPCI) Initiative. “People have asked me that if they are successful in value-based care, what will that do to their [volume] of hospitalizations? That alone says we are not successfully [evolving],” Rutledge contended. She also noted that there has been lagging adoption from commercial payers, in comparison to how the government has pushed financial risk. “Physicians have asked for risk-based contracts; some commercial payers say yes, and some say no. They will do a bundled payment model or two, but they will not fully [embrace] population health,” she said.
Niyum Gandhi, executive vice
president and chief population health officer at New York City-based Mount Sinai Health System, who was also on the panel with Rutledge, agreed that progress has been incremental, but at the same time, pointed out that “it took 100 years to build the sick care system we have today.” Gandhi continued, “To say that we are going to rebuild the $3.5 trillion healthcare system in seven years…well, no one really expects that. There is meaningful progress being made.” Speaking more to the progress, Gandhi said some of those institutions that have been successful have lowered their total cost of care by about 20 percent. “We are learning, and the next five to seven years will be very interesting. Will we continue incremental learnings or take what we have learned and turn that into more aggressive bets?” Gandhi pondered. Even Presbyterian’s Mitchell and Johns Hopkins’ Miller stated that despite their respective organiza- tions’ levels of success, business model misalignment is still prevalent. “Every provider will be at a different [maturity level], so you need to create different glidepaths to get there. You can’t just flip the switch on capita- tion,” Mitchell said. And Miller noted that even though Maryland hospitals are on a global budget for payments, physicians in the state are still largely in the fee-for-service model. BCBS’ Samitt said that in some other instances, higher standards need to be
set, referring specifically to account- able care organizations (ACOs) that might have “declared victory” since they might tie a little bit of payment to quality. “But in my book, you’re not an ACO unless you are in the top quintile of quality and in the lowest quintile of cost,” he said.
New care models pushing the envelope The recent launch of a new set of vol- untary value-based payment models for primary care physicians under the label “Primary Cares” already has the sup- port and enthusiasm of stakeholders, many of whose reactions are summed up here. At the conference, healthcare thought leaders expressed even more fervor.
Rutledge said she’s excited about the
prongs, as Healthcare Innovation reported in April. The Primary Care First Initia- tive creates an opportunity for providers to leave behind fee-for-service and be paid for keeping their patients healthy and at home. The second is Direct Con- tracting, which allows sophisticated organizations to take full accountability for their patients at a local level. Both paths are voluntary and they emphasize a focus on complex, high-needs patients. As explained by Rutledge, Primary Care First will allow primary care
introduction of the new models, and a big reason for that is that previous mod- els from CMMI have not proven to gen- erate many savings with the exception of just three or four. “I was thrilled with the launch of these [payment] models; they are very transformative, and not incremental,” she said. The newly announced effort has two
providers to get a population-based capitated monthly payment, which will be risk adjusted with a flat pri- mary care fee. “It moves the primary care providers away from the E&M codes, to a [system] where they get a lump-sum payment to manage and coordinate care.”
Along with that change in payment
structure, there is an upside potential of 50 percent and a downside [risk] of 10 percent to decrease hospitaliza- tions, she said. As CMMI Director Adam Boehler said last month, “Doc- tors who earn $200,000 today could earn up to $300,000 if their patients stay healthy at home.” Rutledge noted that the government is esti- mating about 25 percent of primary care providers will look to enter this model. The second prong is Direct Contracting, which creates three pay- ment options for providers to take on varying amounts of risks and earn rewards based on quality outcomes. Unquestionably, the initial feedback
is that the government means busi- ness with these new payment models, so much so that the transformative change that stakeholders believe is needed may have already begun. Melanie Matthews, CEO, Physicians of Southwest Washington, who was part of the second panel discussion, called the launch of the models “cul- tural transformation.” Paul Grundy, M.D., founding president of the Patient-Centered Primary Care Col- laborative, and who was also part of the second panel discussion, remarked, “There is only one way to herd a cat and that is to move the food. And the food has just been moved.” HI
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