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The Exec: In Maryland, Value-Based Reimbursement Model Offers Opportunities

Analysis  |  By Christopher Cheney  
   February 22, 2023

Maryland health systems are not financially rewarded for providing high volumes of services in hospitals.

The capitated reimbursement model in Maryland is one of the biggest challenges in serving as a clinical leader in the state, the chief clinical officer of LifeBridge Health says.

Daniel Durand, MD, has been chief clinical officer of LifeBridge since July 2021. He has also been chair of radiology at the health system since February 2016. Prior to taking on the chief clinical officer role at LifeBridge, Durand was the health system's chief innovation officer.

HealthLeaders recently talked with Durand about a range of issues, including innovation, clinical care predictions for 2023, and physician engagement. The following transcript of that conversation has been edited for brevity and clarity.

HealthLeaders: What are the primary challenges of serving as chief clinical officer of LifeBridge?

Daniel Durand: The challenges that are specific to LifeBridge versus other health systems have a lot to do with where we are in our evolution as a health system—we are a mid-sized health system—and a lot to do with the state of Maryland. One of my responsibilities is the clinically integrated network. In the state of Maryland, we have capitated hospital systems, so the hospitals are not volume-oriented. If too much volume goes to the hospitals, you lose money. There is a lot of effort to rethink healthcare delivery and think about everything we need to do in the hospitals and things we can do outside the hospital at ambulatory surgery centers and the home. LifeBridge has one of the largest home healthcare networks in the state.

The challenge in being at LifeBridge is also an opportunity. It is challenging because the hospitals cannot be unending profit centers. When you construct a network, you need to think about what you are going to deploy in the network—what you are going to keep out of the hospital. That puts us in a different position than many other states. You have to think about how things are different here based on how the reimbursement is different.

Daniel Durand, MD, chief clinical officer of LifeBridge Health. Photo courtesy of LifeBridge Health.

HL: Give me examples of innovations that this reimbursement model helps.

Durand: There are companies that are selling software suites, risk stratification tools, or services that take low-acuity cases and put you in a position to manage them in the patient's home entirely or bring the patient into the emergency room and then admit them into the home. Keeping patients out of the hospital in a medically responsible way has an incredibly high return on investment.

In other states, health systems have 50% to 80% of their revenue coming from hospitals. In most geographies, that means that most of that 50% to 80% is fee-for-service volume oriented, so more hospital services are better for you financially. In this geography, it is the exact opposite. It means our revenue is at risk for the total cost of care—you are not going to get paid for the amount of times patients come into your hospitals.

Things like home care and hospital at home have a good ROI in the state of Maryland, as do ambulatory surgery centers. Things that are harder to build a case for because of the way the reimbursement system is structured are new capital projects on hospital campuses.

HL: Do you have any clinical care predictions for 2023?

Durand: Generally speaking, we are going to continue to see strategic virtualization. During the coronavirus pandemic, what we have learned is that there are many possibilities for using telehealth tools. You are going to start to see for both physicians and other types of roles that we are going to virtualize a lot more. It is the only way we are going to get at some of the financial issues health systems are having across the country because I do not think revenue is going to solve the problem. We must find ways to take out cost. You must figure out to do the same or better with fewer people. You will see a lot of virtual nursing. There will be a lot more use of artificial intelligence algorithms in radiology—AI will screen images and the ones that have likely findings will get read first.

More and more cloud-based and machine-learning algorithms are going to be pointed at different things, and it is going to allow us to better deploy our staff, whether it is an acute facility or more longitudinal care. Then there is going to be more distributed care—there will be more hospital at home this year than ever before. That is going to grow exponentially.

There are a lot of exciting developments that got tabled or ignored during the pandemic, when there was a lot of emphasis on COVID therapeutics and COVID vaccines. There is some overlap. For example, mRNA technology, which is largely a way of vaccinating people, is going to become important for a variety of viruses but also cancer. I think mRNA is going to be a big deal because it got a huge coming-out party during COVID.

There is a big queue of exciting things coming into the cellular therapy space for cancer. Whether it is this year or coming years, you are going to see that space grow.

There are also anti-obesity medicines, which are on my radar as a cost issue, but there is also the idea of obesity being treated as more of a medical condition. There will be more interventions than just saying, "Go lose some weight on your own." It is becoming a treatable condition.

HL: What are the primary elements of physician engagement?

Durand: It is relational. The primary elements are making yourself available and communicating that you have time for people. Physicians do not have a lot of time. So, figuring out how to communicate with them is crucial. Laying the foundation for that involves developing relationships with people, which is getting to know them and that is enough to get somewhere with about half of physicians. There is also a credibility aspect. It is hard to be a chief clinical officer or chief medical officer too early in your career because people do not want to hear the opinion of someone who has not been in the trenches for a while. So, practicing and having credibility on some level is important.

You must be one of them. You must be practicing or have practiced. You must be viewed as professional, and you must get to know them and let them know you have respect for what they are doing.

The worst thing to do with physician engagement is to make your first contact with a physician some kind of remedial issue, where you are correcting them. Doctors do not like that.

HL: What are the keys to success for physician leadership?

Durand: Preparation, discipline, and humbleness are important. If I am going to do well with anybody, I need to understand why they practice medicine. The answer is a little different for every physician—you must understand what they are in it for. You put yourself in a position to lead physicians if you know why they are there to begin with. You must get to the "why."

The things we ask people to do are often counter-intuitive. As chief clinical officer, most of my initiatives have to do with change management—we are changing something. Often things are the way they are because the doctors like it. When you come along and want to change something, the odds are pretty good that the doctors are not going to be happy about the change. So, getting to the "why" behind a change is important.

HL: You have been playing a key role in strategically growing and shaping LifeBridge's provider network. What have been the primary elements of this effort?

Durand: The biggest thing driving the success of our provider network has been our partners division, which is overseen by our CFO, and it is mainly a portfolio of for-profit companies that we own outside of the hospitals. There are nursing homes, home care companies, and imaging centers—pretty much everything we need has been solved with a hybrid approach. It is a health system approach because it sits within the health system, and it exists to serve the health system and its patients. The acquisitions that are made are informed by the needs of the health system, but we have preserved an entrepreneurial spirit of independently run businesses.

Many times, when we acquire a business, we keep the founder on. That is invaluable because one of the issues with health systems is they can become too bureaucratic. We have a scrappy, entrepreneurial thread that drives almost all of our non-hospital expansion. It is a unique feature of how we do business at LifeBridge.

Our approach has been successful in a couple of ways. It is consumer oriented. So, when you go out and acquire small businesses that have brought themselves up by their own bootstraps, you do not get a lot of stale ideas or complacent people. You get people who know how to appeal to patients. They do business in a way that is completely different than what I experienced at academic centers or even as a consultant to large community-based health systems. It rubs off on everything. We are ahead of the curve when it comes to things like the convenience of urgent care.

Related: The Exec: Coronavirus Pandemic Remains a Top Challenge

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


In Maryland, health systems are financially rewarded for controlling the total cost of care while providing high quality services and good population health outcomes.

In 2023, expect advances in mRNA technology and cellular therapy for cancer.

To succeed in physician engagement, establish relationships with clinicians and have respect for what they are doing.

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