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Betting on Value-Based Care

Philip Betbeze, for HealthLeaders Media, October 30, 2012

Big bet No. 3: Standardization

As the chief medical officer at Intermountain Healthcare—long upheld by politicians and others as a model of accountable care execution and strategy—Brent Wallace, MD, has done a lot of the groundwork toward establishing an accountable care structure at the 22-hospital system based in Salt Lake City. Yet Intermountain declined to participate in CMS' Pioneer ACO program. Does that mean it is backing off the strategy of taking on risk and reward?

Not at all, says Wallace. He says even though the system has achieved a lot in accountable care, especially surrounding improvement in costs and outcomes that can evolve from a strong commitment to information technology, he's still having a lot of difficult conversations with physicians over the need to participate in some of the system's internal initiatives toward accountability.

"We are working toward accountable care, "but we're defining it with physicians as shared accountability between Intermountain, physicians, and patients," Wallace says, adding, "I can't stress how important it is to develop among the physicians—especially those affiliated with the organization—an understanding that there's a need for change. The status quo is not really an option, and a large number of physicians in this country don't recognize that. The second cornerstone of that change actually needs to be a focus on quality care before you can get to establishing a medical home or ACO or any of these other things. If they don't understand a lot of what we try to do is aimed at accomplishing those ends, they look at it as the newest flavor of the month."

For the past 15 years, Wallace says, rather than experimenting with reimbursement directly through ACO vehicles created by others, Intermountain has focused on standardization among its hospitals and outpatient sites, developing guidelines for care protocols, measuring the protocols' impact on patients and physicians, and using data and analysis to offer feedback to physicians and other caregivers.

Interestingly, as Intermountain has developed focus in areas such as beefing up evaluation of how the flow of funds might change as the organization moves into population-based payment, it has not as yet signed broad agreements with payers on shared accountability, although its employed medical group does have some value-based structures with other payers. However, he says, "these are pretty low risk, taking the form of additional payment for certain metrics being attained."

Part of the reason for the system's slow pace of adding value-based structures, especially bundled payments, with its payers is because it can experiment with its own captive health insurance company, SelectHealth.

"We're working on how to appropriately incentivize everyone in the care delivery process," Wallace says. Although Intermountain's hospitals have worked with SelectHealth on bundled payments for total knee replacements, for example, "it is amazing how complex this is even for a fairly well-defined episode of care. I doubt that we will be actively pursuing bundled payments with other payers unless they push us toward that methodology."

Still, there's room to experiment with a captive commercial plan. There's a team working on shared decision-making between doctors and patients, for example.

"A lot of expenditures are semi-elective," Wallace says, mentioning such interventions as total knee replacement and cataract surgery. "It's really important to do a much better job than has been done historically on educating patients on benefits and risks with those interventions. Rather than being a situation where a physician has a procedure they could do that will get them paid more, you really get the patient well educated so they are involved in making a more rational decision. Our belief is that as we do that, a number of patients will say, ‘Not yet.' "

Meanwhile, Intermountain is having exploratory conversations with physicians about how to change their compensation methodology. That is less difficult for Intermountain's more than 900 employed physicians; independents still need
some convincing.

"There's a concern that if we do that, we will decrease the amount of work they have—that is fee-for-service thinking," says Wallace. "Our belief is that our docs are still going to be plenty busy, even if the number of procedures per population we're doing is less."

Intermountain's service area is blessed with population growth, and with the entry of the baby boomers into Medicare, Wallace says Intermountain will therefore have a larger population of patients for which it is providing care, all of which preserves volume for its physicians.

"They get it, but they don't reflexively think about it. We're trying to help them understand the realities of those population dynamics," he says.

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