It is not surprising that when it comes to value-based reimbursement (VBR), like many pursuits, “practice makes perfect” is an adage that applies. We’ve seen that in the performance of accountable care organizations (ACOs). The success of, and the savings garnered by, ACOs has increased over time (see Medicare ACOs – The Enrollment & The Savings Are Increasing). This isn’t surprising, since the success in value-based environment involves both new management competencies and new models for delivering care.
The discussion by Wayne O. Wells, M.D., Health Resource Integration and Mark I. Foulke, Chief Operating Officer, Market Manager-Tennessee, Cigna HealthSpring during their session, Building A Sustainable Organization In A Value-Based Market- A Guide To Moving Your Organization From FFS To Capitation, at the 2018 OPEN MINDS Performance Management Institute illustrated this concept. Dr. Wells walked the participating executives through the 29-year journey to success with VBR for his independent practice association with their partner Cigna HealthSpring.
The trajectory to VBR started in 1989 with an IPA formed by the local hospital with a single payer contract for Medicare Advantage members. There was also a subsequent IPA. Both IPA were reimbursed with a fee-for-service plus performance bonus methodology—which resulted in bonuses for the IPA professionals and losses for the health plan. Not a sustainable go-forward plan. Eventually the relationship between the IPA and the health plan evolved from shared savings to shared risk—capitation with performance bonuses. Dr. Wells described it as a long, and sometimes bumpy, evolution—but one that in its maturity has been good for the IPA professionals. Cigna Healthspring’s Mark Foulke provided the health plan perspective on this long-term relationship. From his perspective, the IPA relationship has improved quality of care and quality of service to their members—while controlling costs. Both “partners” attributed the success of this partnership to three keys—data sharing, a focus on quality, and leadership.
Data partnership is critical—Dr. Wells explained that one of the most important things to develop is clear data sharing requirements with your health plan partners, and to ensure before you get into the relationship that you’ll be getting the right kind of data in real time. Dr. Wells described the challenges early in the relationship—and why data that was “three months old” didn’t work). In fact, he said the availability of real time data is one of the reasons that the Health Resource Integration IPA moved, over time, to an exclusive relationship with Cigna HealthSpring.
Quality is king—Mr. Foulke described how the partnership between Cigna HealthSpring and the IPA has improved quality. He presented examples of individual members and how their care improved under the IPA partnership arrangement. But beyond individual cases, he said that IPAs in value-based arrangements have two or three higher Medicare quality scores than those in the FFS system (see Medicare Physician Compare and Plan Quality and Performance Ratings).
Strong leadership is essential—The move to a new care delivery model involves great leadership skills at the practice level. Dr. Wells described the “task at hand”, convincing the first four or five physicians to get on board and then confirming the benefits to the rest of the physician team. Leading (and managing) the IPA over time has been one of the key challenges.
One of my big takeaways form the session, beyond the need for these partnership and these new operating models to “evolve”, was the role of clinical leadership in their success. Dr. Wells spoke frankly about his challenges as the leader of the IPA. But Mark Foulke put it in a different perspective. He said, “If you want to change clinical practice and you hire a bunch of business wonks to do it, it won’t work—or it will take a very long time.” My question when I left the session was if we are looking at a steady transition to VBR, how do we improve the “VBR Leadership IQ” of our clinical workforce? That is the subject for the year ahead.
For more on VBR and clinical leadership, check out these OPEN MINDS case studies on health plan/provider partnerships:
- From Health Plan Contract To Health Plan Partnership In Four Steps
- Value-Based Contracting In Practice: The Mercy Maricopa Integrated Care Case Study
- Value Based Reimbursement & Contracting: A Case Study
- Payer, Provider, Partner
- Think Health Homes Are Only For Medicaid?
- Preparing For Value-Based Reimbursement (Coffee Break Case Study)
- Together Is The Way Forward: Creating Successful Patient-Centered Outcomes Through Creative Payer & Provider Partnerships
- The Winding Path To Provider Partnership
And for even more on adapting your organization to meet the challenges of VBR, join OPEN MINDS Senior Associate Joseph Naughton-Travers at The 2018 OPEN MINDS Strategy & Innovation Institute for an for an exclusive discussion session, “Are You Developing A New Service Line? A Roundtable Discussion On Service Line Development.” Don’t miss this opportunity to share ideas and learn from the experiences of your peers in this informative, interactive discussion session.