Embarking on a "quest for unparalleled value," YNHHS has pared down spending system-wide in four categories.
This article was originally published on May 2, 2016.
A health system associated with one of the country's most respected institutions of higher learning is learning how to adapt to leaner times in the healthcare industry.
Last week, Yale-New Haven Health System, which operates three hospital campuses in the south-central region of Connecticut, co-hosted the first annual National Symposium on Value Innovation at Yale.
During a break at the symposium, Stephen Allegretto, CPA, MPH, who serves as vice president of strategic analytics and financial planning at YNNHS, told me the health system's leadership saw reimbursement cuts coming to Medicare and Medicaid in 2012. "We looked to the future and said, 'Whoa, our revenue is going to dry up. We need to look at this and see how we are going to get money out of the organization,' " Allegretto said.
In her keynote address launching the Yale symposium, YNHHS President and CEO Marna Borgstrom, MPH, said the health system's leadership has been committed to generating value for patients as opposed to emphasizing cost-cutting alone. She described the effort as a "quest for unparalleled value."
"It's not about what we can do, or what we need. It's about generating value for our patients," she said.
On the quality and patient safety side of the value equation, YNHHS has adopted several initiatives over the past four years such as the development of rapid response teams and the deployment of predictive analytics in clinical settings that have contributed to significant gains in patient outcomes. At YNHHS's St. Raphael Campus, those actions have generated a 30% mortality rate reduction.
In September 2012, YNHHS spent $160 million to acquire the former Hospital of Saint Raphael, a struggling safety-net hospital in New Haven located about a quarter mile from the Yale-New Haven Hospital campus. The deal created a 1,541-bed, dual-campus hospital in the heart of the city.
Largely through consolidation of clinical services and achieving economies of scale linked to the Saint Raphael acquisition, YNHHS was able to achieve a one-time cost-savings of about $200 million from the acquisition deal, Allegretto said. According to Richard D'Aquila, executive vice president of YNHHS and president of Yale-New Haven Hospital, regulatory commitments helped drive the consolidation strategy, he told a symposium audience. "There was one hospital, one provider number, one model for clinical services."
Sustainable Cost-Cutting Initiatives
YNHHS was able to additionally reduce spending by about $150 million from 2012 to 2015, and the figure was a focal point at the symposium.
The organization had set a target for $125 million in cost savings over the four-year period, primarily in four categories:
Human resources
Clinical redesign
Non-labor
Labor
"We beat our target, and it is sustainable," Abe Lopman, senior vice president of operations at YNHHS, told an audience at the event.
Patient care accounts for about 83% of the health system's annual spending, so cost savings from clinical redesign were the biggest slice targeted for spending reductions, at $60.8 million. Actual costs savings from clinical redesign were $33.4 million, but the shortfall was not surprising, Lopman said. "This is something that has to be part of your culture. It takes time to do it. Over time, we expect it to be better."
The health system was able to exceed its cost-savings projections in three areas: human resources, labor and non-labor. The total cost savings targeted in those areas was $64.2 million, with $116 million in actual cost savings achieved.
Allegretto told me the $150 million in spending cuts were modest when calculated on an annual basis—he estimates the annual impact on YNHHS's total budget at less than 1%—but meaningful for the health system, nonetheless. "For us, it sounds like a lot of money, but we are a $3.2 billion organization," he said.
Furthermore, the spending reductions, combined with the Saint Raphael acquisition and other positive impacts on the health system's bottom line associated with value-based initiatives, has enabled YNHHS to eliminate 250 open positions and avoid laying off as many as 250 employees over the past four years, Allegretto said.
"It's going to get increasingly more difficult to avoid laying people off as [reimbursement] cuts continue; so when you look at that $150 million dollars, I look at it as an incredible achievement. And we've kept it out of the system, and that's the most important thing."
Although several initiatives have helped YNHHS get closer to achieving success in the health system's quest to provide unparalleled value for its patients, he told me a handful of factors made the launch of the effort four years ago possible, including the adoption of a Quality Variation Indicators methodology.
The QVIs feature 27 summary categories of negative clinical outcomes such as implant complication, transfusion reaction, air embolism, drug poisoning, shock, infection, and obstetric trauma. "We had this external urgency [from declining reimbursement]. We had EPIC going in, so we would have the capacity to standardize care. We had just come up with the QVI methodology. And then we were at a place where people started trusting the cost-accounting data… Those four things came up at the same time, and because the leadership saw the future, we started our cost-value initiative."
'Change is Going to be Difficult for Healthcare'
As is the case with any Herculean quest, YNHHS has faced several challenges implementing value-based initiatives over the past four years.
Convincing the health system's clinical staff about the importance of cost accounting to help secure the organization's ability to serve patients well into the future has been among the hurdles, Allegretto told me.
Teaming financial analysts with clinical staff has been an essential element in educating frontline caregivers about cost accounting, he said. At YNHHS, there are at least two financial analysts working in every service line, and they are paired with senior nursing staff. "It's a team approach to that education. There is not a sheet of paper that you give them, and say, 'Here are the concepts.' It's relationship-building. I can't point to three pieces of paper and say, 'Here are the educational materials that we gave to physicians.' "
From October 2015 to April 2017, YNHHS is hoping to generate as much as $3.5 million in cost savings from hip and knee replacement procedures in the federal Bundled Payments for Care Improvement program, Allegretto told me. But the anticipated spending reduction has come at the cost of lost volume because one orthopedic surgeon refused to give up his favorite implant when the health system reduced the number of device vendors from seven to two.
The cost savings from standardizing hip and knee implants is estimated at a minimum of $2.3 million through April 2017, according to Keith Murphy, executive director of corporate supply chain at YNHHS.
As of Jan. 1, the surgeon who bucked implant standardization has taken 90% of his cases to a competing hospital, Allegretto said. "If we hadn't done that, we wouldn't have saved the $3.5 million across the system that we are going to save over the next couple of years."
Even the loss of one orthopedic surgeon to a competitor reflects the broader difficulty of adopting value-based initiatives in the healthcare industry, he said. "This kind of change is going to be difficult for healthcare, because where is he going to go? He is going to go to another organization and they're going to give him the implant that he wants."
Mary O'Connor, MD, director of the Musculoskeletal Center at the Yale School of Medicine and Yale-New Haven Hospital, told a symposium audience that the surgeon believed he was making the best decision for his patients, but the health system had indisputable data and value calculations in hand when negotiations reached an impasse. She recounted her pivotal remarks to the doctor: "Show me the data that shows your implant is better. You don't have it. I know you don't have it. So let's talk about cost, quality, and value."
Healthcare providers are finding financially sustainable ways to spend big dollars on improving the health of their patient populations.
This article first appeared in the October 2016 issue of HealthLeaders magazine.
While a universally accepted definition of population health is elusive, David Kindig, MD, PhD, and Greg Stoddart, PhD, took this scholarly stab at characterizing the concept in a 2003 issue of the American Journal of Public Health: "The health outcomes of a group of individuals, including the distribution of such outcomes within the group."
Kindig and Stoddart also asserted that "the field of population health includes health outcomes, patterns of health determinants, and policies and interventions that link these two."
Healthcare providers are collectively investing billions of dollars to support the "policies and interventions" deemed necessary to help boost the collective health of their patient populations, says Robert Massenburg, senior vice president and healthcare industry manager at SunTrust Bank, a corporate and investment bank based in Atlanta. "There are two areas where hospitals, health systems, and physician practices are investing in population health. One is information technology, and the other is infrastructure."
Electronic medical records dominate the information technology sphere of investments in population health, he says. "If you look at a single-site hospital with 200 to 500 beds, you're going to spend somewhere between $30 million and $75 million on an EMR system, which includes all the hardware, software, and the increased staff. You're not just buying hardware and software and using the same staff that you had—you're creating a new information group at the hospital.
"If you look at multisite hospitals, with between five and 10 hospitals, you're looking at exceeding $200 million in investment. If you're looking at a large academic medical center, with a large faculty practice, I have seen investments over a half-billion dollars. Those are sizeable investments, and most of the time, those investments are paid for over the first two or three years. … You're looking at somewhere between $50,000 for a single-physician practice, and for a group, in the low hundreds of thousands," Massenburg says.
"Hospitals and health systems are looking at decompressing their campus—moving certain levels of care and services off of their campus closer to where their patients are living and working."
He says infrastructure spending at healthcare providers that is designed to support population health goals focuses on two areas: brick-and-mortar investments in outpatient facilities off hospital campuses, such as urgent care centers, and revolutionary staffing changes that the healthcare finance consultant calls "the human element."
"Hospitals and health systems are looking at decompressing their campus—moving certain levels of care and services off of their campus closer to where their patients are living and working," Massenburg says of brick-and-mortar investments in population health capabilities.
"The human element" is a diverse collection of new or expanded healthcare staffing roles, he says. "When you're thinking about the patient's care team, it's going to be quarterbacked by the primary care physician and you're also going to have nonclinicians including financially minded members. Their roles will include data analytics for clinical protocols and pathways, assisting the team on the most effective and efficient means to deliver healthcare to the patient. In addition, caseworkers will continue to work with the uninsured and underinsured patients to either qualify them for government assistance and/or navigate the healthcare exchanges. You'll have others on the care team who will conduct door-to-door assessments, actually visiting patients in their homes. They will work with patients to make sure they are taking their medications, provide guidance on better nutrition, and encourage daily exercise.
"While this will add incremental cost to the delivery of care, in the long run it is expected to reap financial benefits by reducing readmission of patients including those with chronic illnesses such as diabetes, hypertension, and COPD. The expectation is that this team approach will promote a health-and-wellness concept, thereby reducing their overall need for healthcare services."
For health systems and hospitals, self-funding is the financing method of choice for investments in population health capabilities, Massenburg says. "We have worked closely with our clients to vet all of the funding options, including public debt, bank debt, leasing options, and self-funding. … Given the size and resulting net operating cash-flow levels along with the internal liquid reserves of most of the health systems, the majority have ultimately decided to self-fund."
Physician practices generally do not have the resources to self-fund investments in population health capabilities, he says. "Most of it is bank financing. Most of these physicians don't just have $50,000 sitting in a bank."
Pleasant population health surprise for rural providers
In rural areas, the federal Centers for Medicare & Medicaid Services has invested more than $100 million to help physician practices fund investments in population health, says Lynn Barr, MPH, CEO of Caravan Health and chief transformation officer of the National Rural Accountable Care Consortium based in Austin, Texas. But that investment of taxpayer dollars has not been sufficient to finance population health investments at rural practices, particularly regarding care coordinators, she says.
"Rural practices are having to come up with some of the money themselves. Ultimately, when a care coordinator builds a full panel, which we tag at about 200 chronically ill Medicare patients, then that care coordinator generates about $100,000 per year of revenue for the practice, and their costs are about $75,000."
The ability of care coordinators to drive new revenue from outpatient services that boost population health such as wellness exams, mammography, colonoscopies, and other preventive care services has been a revelation at rural accountable care organizations, Barr says. This is especially true for hospital CFOs who have been bracing for lower inpatient service and emergency department utilization as the overall health of their patient population improves, she says.
"What we are finding—and this was not expected because what we feared is that if you started coordinating care and the rural hospital started losing business, the whole thing would fall apart—is that we are hearing from the CFOs that even though their total inpatient utilization for their population went down and their total costs decreased, the local spending on healthcare services increased."
Digital retinal exams help control total cost of care
At safety-net healthcare providers such as Harris Health System, which includes 23 community health centers, five school-based clinics, a rehabilitation and specialty hospital, and two full-service hospitals, cost control is the prime financial benefit of investing in population health capabilities, says Jennifer Small, AuD, MBA, CCC-A, vice president of ambulatory care services at the Houston–based organization. Over the past three years, she says Harris has launched several population health initiatives aimed at improving clinical outcomes for patients with diabetes, including group diabetic visits and digital retinal imaging exams.
In 2012, Small proposed purchasing three digital retinal imaging camera systems at a cost of about $18,000 each along with a full-time technician to run each camera at an annual salary of about $35,000, she says, adding that the COO at Harris liked the idea so much he gave the nod when she suggested more than doubling the proposed purchase. That COO, George Masi, is now Harris Health System CEO. "George Masi asked how many cameras we would feel comfortable with. I said eight, and he approved it. Even with the financial constraints with the payer mix that we have, he saw the value and agreed that this was something that needed to be done," Small says, noting about two-thirds of the health system's patient population is uninsured.
The cameras have been deployed at primary care clinics.
"We are functioning on the assumption that the financial impact will eventually become net neutral. Certainly, with the retinal camera, it is identifying more patients that have retinopathy, and that means these patients will need to see more advanced ophthalmologists or other specialists. When you look at the costs of managing a patient who has a severe condition and it's caught early versus being later in the process and the condition exacerbates, it really makes sense to detect these things earlier. … There is the initial investment, but avoiding the downstream costs of care certainly warrants moving forward with the program."
Harris is planning to purchase five more of the cameras, so that most primary care clinics in the health system can be equipped with the devices, which are superior to traditional retinal exams because the cameras capture images of nearly the entire retina in seconds and store the data digitally for comparison to future annual exams. In addition to helping the health system reduce total cost of care for about 50,000 diabetics in its patient population, the digital retinal cameras are boosting patient access to retinal exams. Under the Healthcare Effectiveness Data and Information Set (HEDIS) measures developed by the National Committee for Quality Assurance, retina exams are a quality-of-care metric for patients with diabetes.
"Our providers and primary care physicians were doing an excellent job. About 96% of them were ordering an eye exam for their diabetic patients. The problem for us was access," Small said of the retinal exam challenge before Harris purchased and deployed the digital cameras in 2013. "We determined that the best way to improve our outcomes was to have a retinal camera because 96% of our physicians were ordering retinal exams for their patients, but only about 60% were getting the exams."
Now, about 72% of the health system's diabetes patients are getting the digital retinal exams, she says.
Urgent care centers playing a role in population health
Urgent care centers have become a powerful and profitable part of the population health strategy at the Our Lady of the Lake health system based in Baton Rouge, Louisiana, that includes a private, not-for-profit 800-bed Regional Medical Center, dedicated Children's Hospital, and 350-provider physician group and primary care network, says CEO K. Scott Wester.
"We have a clinically integrated health network called Health Leaders Network, and we are managing almost 100,000 lives. When you think about the population health aspects of it, the urgent care fits very nicely into the overall capabilities of managing a large patient population. … It gives another access point for those who have an urgent condition to seek care at a very affordable location—rather than to be seen in a very expensive location—then be able to have a quick follow-up visit with a specialist if that is needed."
Our Lady of the Lake has a dozen urgent care centers in a joint venture partnership with Premier Health, which is also based in Baton Rouge and manages the facilities. The cost of building and equipping each clinic was about $600,000, Wester says. "Being a joint venture company, we try to make sure that our urgent cares stand on their own two feet. Like any organization, we review typical financial metrics as well as patient service and clinical outcomes. Today, all of our urgent care centers have been very profitable—more profitable than running a hospital today, with hospital margins usually ranging less than 5%."
Urgent care centers not only support a health system's population health strategy but also generate a healthy return on investment, says Steve Sellars, MBA, Premier Health's CEO. "The contribution our joint-venture urgent cares can make to a health system's population health strategy maximizes ROI across the board. It starts by helping our health system partner reduce emergency room costs. … Up to 40% of patients treated in the ED could have been seen in an urgent care setting. When you consider the Center for Improving Value in Healthcare estimates the average cost of an ED visit is seven times what it would cost to treat in an outpatient setting, the potential for downstream savings is tremendous," he says.
Regulators should guard against unintended consequences linked to bundled payments and post-acute-care providers should brace for revolutionary change, says the chief of The Dartmouth Institute for Health Policy.
Bundled payments research published last week fires a double-barreled shot across the bows of federal policymakers and post-acute-care providers, the author of an editorial accompanying the research says.
In the Journal of the American Medical Association study, lead author Laura Dummit, MSPH, and 13 other researchers examined hip and knee joint replacement data from the Bundled Payments for Care Improvement (BPCI) initiative, Medicare's largest bundled-payments voluntary demonstration program.
Although the researchers found that reduced skilled nursing facility utilization among BPCI-participating hospitals cut episode-of-care spending without sacrificing quality, the data also indicates significant risk of negative unintended consequences, says Elliott Fisher, MD, MPH.
Fisher was interviewed by HealthLeaders Media last week.
The BPCI research, which included a control group of 841 nonparticipating hospitals, can be interpreted from polar opposite perspectives, according to Fisher, director of The Dartmouth Institute for Health Policy and Clinical Practice, in Lebanon, NH, and a professor at Dartmouth College's Geisel School of Medicine in Hanover, NH.
Beware of Unintended Consequences
"In one interpretation of the study, if the comparison groups were identical, it would suggest that you can improve care and lower cost without compromising quality," he says.
"The other interpretation of the study is that in a bundled-payment initiative it is possible to save money, especially if you select patients who will be cheaper to treat. That is a mechanism to reduce the cost within the bundle, but it undermines value because value is about delivering services that are needed to people who want them," Fisher says.
In addition to the temptation to cherry-pick healthy patients in the BPCI initiative, another potential unintended consequence of the bundled-payments model is perpetuating fee-for-service financial incentives that spur service volume, he says.
"The move to bundled payments may require a major correction, where they must be embedded within some form of accountability for the total cost of care. That could be accountable care organizations or primary-care-focused care payment models that hold primary-care physicians accountable for the total cost of care."
Policymakers at the Centers for Medicare & Medicaid Services bear an enormous responsibility as they launch and regulate mandatory bundled-payments models such as the Comprehensive Care for Joint Replacement (CJR) program, Fisher says.
"CJR will allow a much better evaluation because of its mandatory nature, but we should be looking carefully to see whether what happens is that fewer people who really need joint replacements end up getting them."
Post-Acute-Care Providers Face Business Model Disruption
As bundled-payments and other value-based payment models spread across the country, revolutionary change is bearing down on post-acute-care providers, he says.
Acute-care facilities are eager to have post-acute-care providers shoulder a share of the cost-cutting burden associated with bundled payments, Fisher says. "In hospitals, they are looking for ways to reduce costs within the episode that will not adversely affect the hospitals and physicians themselves but look to achieve the savings elsewhere."
A growing body of evidence shows post-acute-care is a prime area to cut total cost of care, he says.
"We know from lots of research, our own and others, that there are remarkable variations across the country in utilization of hospital services and post-acute care. The Institute of Medicine has claimed that regional variations in facility-based post-acute-care utilization are the major driver of regional differences in per capita healthcare spending… There is no question in my mind that there are opportunities to reduce discretionary utilization in the post-acute-care sector."
Post-acute-care providers need to embrace a business model that emphasizes value rather than volume, Fisher says.
"If I were managing a post-acute-care facility, I would be thinking carefully about how I could partner effectively with hospitals so that for those patients who do need post-acute care—whether it is higher level or lower level—I would be seen as the preferred partner within my market as relationships are built and hospitals and the physicians who are managing patients work to manage the total cost of care for an episode."
How two Kentucky hospitals are helping employed and independent physicians embrace population health and prepare for value-based care models.
At Our Lady of Bellefonte Hospital, preparing for the business-model shift from volume to value has been like a surfer paddling wildly to catch and ride the wave of a lifetime.
"The market you are in is important," says Kevin Halter, CEO of Ashland, KY-based Bon Secours Kentucky Health System, which operates the 215-bed acute-care hospital.
"We're not in a real aggressive market. My biggest challenge is getting my physicians educated on the front end because they all see the wave coming. And that's true for any of the new initiatives—bundled payment and financial changes like MACRAare in the journals, but it's not right in front of them as it is in places like Richmond, Virginia."
Bon Secours Kentucky Health System is part of the Marriottsville, MD-based Bon Secours Health System, which operates 19 acute-care hospitals in six states.
In Ashland and other markets that are just starting to fully embrace value-based delivery of medical services, the relationship between hospitals and physicians is absolutely critical, Halter says.
"Hospitals have been in value-based purchasing for five-plus years, now it's going to go to physicians, and my physicians are just now starting to see it. The reason they are seeing it is I am putting it in front of them. We had a board retreat with about 40 physicians to start educating them.
The message, he says is "This is coming, you need to get prepared, we are going to help you get prepared by putting in a clinically integrated network.' Now, we are helping them work through the change so they don't find relief in the channels outside the hospital."
Our Lady of Bellefonte has 250 physicians on staff, with 30% of the staff hospital-employed. Employment status has had a significant impact on adoption of value-based care models among physicians at the hospital, Halter says.
"Employed docs get force-fed. They are in these programs. Bundled payments for instance, and MSSP ACO. We sign them up. As part of being an employed physician, some of your freedom of choice goes away, which is good and bad. The employed docs are much further along in the continuum of healthcare reform than our independents."
An Emphasis on Primary Care
Halfway across The Bluegrass State in Elizabethtown, Hardin Memorial Health is also devoting significant effort to working with physicians to ensure the shift to value-based care is as successful as possible, says President and CEO Dennis Johnson.
Hardin Memorial Health has a 300-bed acute-care hospital and is affiliated with Louisville, KY-based Baptist Health.
Investing in primary care capabilities and building relationships with independent primary care physicians are crucial for hospitals to thrive—or at least survive—as the healthcare industry adopts value-based care models and embraces population health, Johnson says.
"You don't have to employ every physician on the planet, but you do need to drive the primary care referrals... And if you have good primary care, you are going to be able to manage a population's health."
Primary care should be a central component of strategic planning at health systems and hospitals as they prepare for value-based care models, and healthcare provider leaders should be open to enlisting help from outside their organizations, Johnson says.
In 2011, Hardin Memorial and Baptist Health engaged the Healthcare Strategy Group, a provider of physician integration services, to assist with their strategic plan.
"That plan was approved in early 2012. We've seen a lot of gains from the strategies that were outlined in that plan, and we've just engaged HSG to do a refresh of our plan," says Johnson.
"HSG assisted both Baptist and Hardin on a primary care strategy about three years ago to help identify those markets where we had an opportunity."
He is bullish about Hardin Memorial's future. "Our investments in population health are good in either a fee-for-service world or a fee-for-value world. Primary care is really a low-risk, high-return investment."
Hospitals that have case mixes with relatively high numbers of medically complex patients face unfair financial penalties, researchers say.
The Comprehensive Care for Joint Replacement model, a mandatory Medicare bundled-payment program, is financially flawed and will unfairly penalize hospitals that treat medically complex patients, University of Michigan researchers say.
In a study published last week in Health Affairs, researchers call on the Centers for Medicare & Medicaid Services to risk-adjust CJR's financial performance reward-and-penalty mechanism to reflect the high costs of treating frail patients.
Case mix has a fundamental impact on hospital operating costs, Chandy Ellimoottil, MD, a clinical lecturer in Ann Arbor and practicing urologist who is the lead author of Health Affairs study, told HealthLeaders over the weekend.
"Case mix matters across hospitals," he said. "That's called warranted variation, which is essentially differences in methods and costs that are due to complexity of patients. Unwarranted variations should be the target of bundled payments programs and most performance programs—the use of discretionary services and the unmonitored use of skilled nursing facilities, those are kinds of unwarranted cost variation and they should be targeted."
"You should want to adjust for as much warranted variation as possible just to be equitable," Ellimoottil said.
The Hospital Readmissions Reduction Program is among the prime examples of CMS performance programs that feature financial penalties and risk-adjustment for medical complexity, Ellimoottil said.
CMS began implementing CJR in April, with upside-only risk this year and two-sided risk set to kick in next year. About 800 hospitals in 67 metropolitan areas are participating in CJR on a mandatory basis.
Under CJR, healthcare providers such as orthopedic surgeons and hospitals receive standard fee-for-service payments from Medicare for all claims through 90 days after discharge.
To determine gainsharing payments and financial penalties, CMS will compare healthcare provider spending on a patient's 90-day episode of care against a target episode price.
This year, target episode pricing is based mainly on historical spending patterns. In future years, target episode pricing will be based increasingly on regional spending patterns.
The University of Michigan researchers contend that risk-adjustment for the medical complexity of patients is needed in the CJR program to help ensure that hospitals with high concentrations of frail patients are not subjected to unfair financial penalties.
As CJR shifts from target-price benchmarking based on a hospital's performance history to benchmarking on a regional basis, financial inequity in the program will increase, Ellimoottil said.
"Risk-adjustment only matters when you are comparing hospitals to one another. Risk-adjustment did not matter so much for previous bundled payment programs like Bundled Payments for Care Improvement. CJR is unique because it utilizes a regional benchmark and because it is a mandatory program. These two points often get buried when trying to understand why risk-adjustment is important for CJR."
The Health Affairs study is based on data collected from 23,251 Medicare beneficiaries who had hip and knee replacement procedures in 60 Michigan hospitals from 2011 to 2013.
According to the study, Ellimoottil and his co-authors compared the impact of historical vs. regional target-price benchmarking and "found that reconciliation payments were reduced by $827 per episode for each standard-deviation increase in a hospital's patient complexity. Moreover, we found that risk adjustment could increase reconciliation payments to some hospitals by as much as $114,184 annually."
The University of Michigan researchers developed a modest risk-adjustment mechanism for CJR that steers clear of disputed risk factors such as socio-economic status (SES).
"It touches SES a little bit because the risk-adjustment model includes a variable for dual-eligible status, but we don't include race and a lot of other more controversial factors. It really is more about medical comorbidities, and most CMS programs have some kind of risk-adjustment program. What we're looking at is just basic risk adjustment."
CMS is giving medical doctors four "pick-your-pace" reporting options while ensuring that they do not receive a negative payment adjustment in 2019.
Physician groups are praising last week's announcement delaying the reporting requirements established under the Medicare Access and CHIP Reauthorization Act (MACRA).
Prior to last week's announcement, physicians were facing full implementation of the of the value-based payment system for Medicare reimbursement under MACRA starting Jan. 1, 2017. The reporting requirements are considered onerous by many, and providers and payers pressed Medicare for postponement over the summer.
In Thursday's announcement, the Centers for Medicare & Medicaid Services granted physicians four "pick-your-pace" options to comply with MACRA's reporting requirements next year.
"By adopting this thoughtful and flexible approach, the Administration is encouraging a successful transition to the new law by offering physicians options for participating in MACRA. This approach better reflects the diversity of medical practices throughout the country," Andrew Gurman, MD, president of the Chicago-based American Medical Association, said in a prepared statement Thursday.
4 Pick-Your-Pace Options
In Thursday's announcement, CMS gave physicians four options to meet the reporting requirements for the MIPS performance categories next year and ensure that they do not receive a negative payment adjustment in 2019:
Submitting enough data to the Quality Payment Program "to ensure that your system is working and that you are prepared for broader participation in 2018 and 2019."
Submitting the full set of performance data for less than the full 2017 calendar year.
Submitting the full set of performance data for the full 2017 calendar year.
Participating in an Advanced APM in 2017.
Nitin Damle, MD, FACP, president of the Philadelphia-based American College of Physicians, says granting flexibility in the reporting requirements will help physicians chart the best financial course for their practices as the new payment system is implemented.
"The minimal reporting option will also allow for a longer transition period for those practices that still need time to adjust for the new MACRA performance requirements without being at risk of negative adjustments, while other practices that are able to more fully participate in 2017, for some or all of the year, could qualify for 'small' to 'modest' positive adjustments," Damle said in a statement issued Friday.
Although CMS has delayed the reporting requirement for the Quality Payment Program, a key takeaway point from Thursday's announcement is that Medicare's new payment system for physicians will likely launch as planned in 2019, Harold Miller, president and CEO of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, told HealthLeaders on Friday.
"This is not delaying implementation of MACRA, it's actually creating a less problematic starting point for the measurement that will go into determining what happens to physicians in 2019."
The reimbursement provisions of MACRA, which CMS have dubbed the "Quality Payment Program," establish two value-based payment pathways for physicians who provide services to Medicare beneficiaries:
The Merit-based Payment Incentive System (MIPS) and
Advanced Alternative Payment Models (Advanced APMs)
When the new payment system launches in 2019, most physicians are expected to receive Medicare payments through MIPS, which has four performance categories:
Quality,
Cost,
Clinical care improvement activities such as boosting care coordination, and
PCMHs, bundled payments, and Medicaid expansion are driving change and showing it is possible to transform a market on a wholesale basis, says one health insurance executive.
This article first appeared in the September 2016 issue of HealthLeaders magazine.
If you want to see what the healthcare industry landscape looks like after a statewide shift to value-based care models, look at Arkansas.
From the Mississippi Delta region in the east to the Ozark Mountains in the west, there are value-based reforms taking hold throughout the state's provider and payer markets. The patient-centered medical home has become the dominant primary care physician-practice business model; the top commercial payers and the state Medicaid program are jointly operating bundled payment reimbursement for nearly two dozen episodes of care; and private option Medicaid expansion through the Patient Protection and Affordable Care Act Health Insurance Exchange Marketplace has fueled the sharpest decline of uninsured patient rates in the country, with Gallup pollsters pegging the rate drop from 22.5% before Medicaid expansion in 2013 to 9.6% last year.
"What's different about the Arkansas market than just about anybody else you'll talk to is that the multipayer, public-private initiative did not start out as a voluntary or pilot effort. It was basically a mandatory, statewide approach that took the collaboration and consensus of multiple stakeholders to even have a chance. The story that could be learned from this marketplace is that it is possible to transform a market on a wholesale basis," says Steven Spaulding, senior vice president of enterprise networks at Little Rock–based Arkansas Blue Cross Blue Shield.
Medicaid expansion, PCMH proliferation, and a multipayer approach to bundled payments have had a significant financial impact on Arkansas providers, payers, and patients. The Arkansas Center for Health Improvement has helped spearhead payment reform efforts at the state level. In January, ACHI released the publicly and privately funded organization's Arkansas Health Care Payment Improvement Initiative: 2nd Annual Statewide Tracking Report, which shows the broad reach and deep financial effects of value-based reforms:
As of October 2015, 331,000 (82%) Arkansas Medicaid beneficiaries were receiving care through PCMHs.
In 2014, Medicaid spending on primary care totaled $522.3 million, with the program saving $34.3 million through PCMH cost reductions. Of the $34.3 million in savings, $12.1 million was allocated to per member per month (PMPM) payments to providers. The remaining $22.2 million was shared between the state and providers who met both quality and cost savings requirements. Shared savings checks were issued in October 2015, with several clinics receiving more than $100,000.
In 2014, practices enrolled in Medicaid's PCMH program posted a cost decrease of 1.2%, beating both the 2.6% benchmark increase and the 0.6% cost growth of practices outside the PCMH program.
As of October 2015, 780 primary care providers were participating in the Medicaid PCMH program (69% of eligible Medicaid providers).
About 250,000 Arkansas residents have gained health coverage through the state's "private option" Medicaid expansion. The 2010 U.S. Census pegs the state's population at 2.9 million residents.
For the annual period ending July 2015, Medicaid reported significant provider cost cutting for several episodes of care (EOC) in the state's multipayer bundled payment program: perinatal EOC, C-section rate reduced from 39% to 34%, with an estimated 2%–4% percent direct savings; upper respiratory infections EOC, 17% reduction in antibiotic prescriptions, with episode costs remaining flat despite a 10% increase in drug prices; ADHD EOC, average episode cost fell by 22%; and for total hip and knee replacement, the 30-day all-cause readmission rate fell from 3.9% to 0%, generating an estimated 5% to 10% direct savings.
Riding the reform rollercoaster
Medicaid expansion and physician-practice participation in federal and state PCMH programs have had profound impacts on Arkansas BCBS.
"Medicaid expansion did impact us in a big way here," Spaulding says.
"In Arkansas, they expanded Medicaid, which had a qualification point of about 18% of the federal poverty level, to 138%. And they decided to do that by getting federal money to purchase commercial insurance on the exchange. We got 140,000 people in Medicaid expansion, and we've learned a lot over the past two or three years. We originally thought these people might be a lot more like our commercial population than the historical Medicaid population, but what we found out was they probably were more like the traditional Medicaid population. We need to beef up our acute-care coordination services and our behavioral health services," he says.
In anticipation of serving thousands of Medicaid expansion beneficiaries, Arkansas BCBS boosted care management capabilities in 2013, says Maxine Greenwood, director of governmental and media relations at the health plan.
"We have community-based case managers in all areas of the state who use hospital census and discharge information to reach out to members who have been hospitalized. They also get referrals from providers and use emergency department and claims information to identify members with medical and behavioral health needs," Greenwood says. "Our case managers work closely with social workers and behavioral health staff to promote quality collaboration and care coordination for high-risk members with complex behavioral health conditions and for those with both medical and behavioral health needs. Community-based case managers are also familiar with local resources outside of the health plan that may benefit members with transportation and other services."
Since Arkansas BCBS started serving Medicaid expansion beneficiaries in 2014, the health plan has launched additional initiatives, including a telemedicine pilot designed to ease reimbursement for behavioral health services, she says.
Medicaid expansion has improved the lives of many economically disadvantaged residents, but Arkansas BCBS is grappling with a net negative financial impact from costs associated with serving Medicaid-eligible adults, he says.
"It started out as net positive. These people had never had coverage before, and they didn't really know how to use it; but as they got more comfortable and their providers helped them through the process, we've seen costs increase for us, particularly on prescription drugs. So right now, it's a financial challenge for us," Spaulding says.
"We have had to engage the delivery system in a different way to make sure we are collectively using our resources both from an insurer perspective and a provider perspective to get those people the right care, when they need it, where they need it from the people they need it from."
Medicaid expansion in Arkansas has transformed the roles of providers and payers, he says. "It's changed the whole relationship. Providers have less collectible debt. They have lower rates of uninsured patients. But now we have to battle with the way these people access the system—people who have never had insurance. For most of them, the only way they knew how to access the health system was through the emergency room."
Developing financially sustainable models to provide value-based care for Medicaid-eligible patients is daunting, Spaulding says. "It's resource intensive, and we have had to reassess our ratios of case management to population. We have had to engage the delivery system in a different way to make sure we are collectively using our resources, both from an insurer perspective and a provider perspective to get those people the right care, when they need it, where they need it, from the people they need it from; but going forward, it's going to require even more integration of both operations and culture, and there's going to have to be integration of financial incentives in all of this, so that we're all on the same end of the rope together.
"Part of that is the work that we are doing with the delivery systems across the state that are trying to organize themselves into clinically integrated networks to potentially share risk. The definition of the population under management begins with the alignment of the patient with a primary carephysician; so from that perspective,the role of the primary care physician is becoming more clearly defined," he says.
PCMH adoption has been building steadily in the state since 2010, with Arkansas BCBS launching PCMH contracting in 2010, the Centers for Medicare & Medicaid starting the Comprehensive Primary Care (CPC) Initiative in 2012—a multipayer program created to strengthen primary care that offers population-based care management fees and shared savings opportunities to primary care practices that participate, with the goal of improving care, achieving better health for populations, and lowering costs—and state lawmakers requiring all HIX-qualified health plans to participate in Medicaid's PCMH program.
Approaching population health with an emphasis on primary care is essential for PCMH success, says Alicia Berkemeyer, vice president of the enterprise primary care and pharmacy programs at Arkansas BCBS. "When we were trying to attribute members to a provider, we were quite surprised that many of our members had not seen a primary care doctor in two, three, four years. So because of our commitment to primary care and the belief in having a relationship with a primary care doctor, we spent an entire year going through our membership and educating them on the importance of primary care and having a primary care provider. If they did not choose a primary care provider in a 35-day period, we sent a second letter recommending one in their area to align them with, because if we want to get providers to manage a population, we have to identify the population they need to manage."
Another ingredient for PCMH success is financial support in the form of PMPM payments, with CPC PMPM Medicare payments in Arkansas averaging $20, Medicaid PMPM payments as high as $8, and commercial PMPM payments for Medicaid expansion patients set at a minimum of $5.
Getting up-front PMPM payments is crucial, Berkemeyer says. "That's the tool they needed to make this transformation. This is not an easy task for these providers. One of the key things that started early with the CPC money and the PMPM with the multipayers was that it enabled many of them to support care managers in their practices, and for care coordination and care management to be active and be proactive in closing gaps in care, getting the members in, making sure they're on their appropriate medication and that medication is reconciled. You could talk with any of the practices out there today with the CPC and the state PCMH—we have about 210—and they would say without that PMPM, they could not do the work that they are doing today."
Providers shift delivery of care to value-based models
Clinton, Arkansas–based Ozark Internal Medicine and Pediatrics is among the state's early adopters of PCMH. A practice with about 3,500 active patients, OIMP was among the first five physician practices selected for the Arkansas BCBS PCMH Pilot Project in 2010 and among the first 69 Arkansas practices selected for CPC participation in 2012.
PMPM payments have eased the financial pain that small rural physician practices face in the shift to value-based care, says Stacy Zimmerman, MD, FACP, FAAP, the leader and sole doctor at OIMP. "Care management is the most important area and also the most expensive, especially for the small practice. PMPMs must consistently support care manager salaries and staff overhead, or the PCMH model will fail," she says.
At small practices, matching financial resources with costly investments in PCMH capabilities such as electronic medical record systems is daunting, Zimmerman says. "Decreasing our total cost of care for all of our patient populations has allowed us to be eligible for shared savings; but, unfortunately, the small practice panel put us at a statistical disadvantage compared to the large practices."
So far, the OIMP journey has been financially arduous, she says. "Ours has been net negative because we have to put a larger percentage of overhead toward the model than larger practices. For example, all overhead items associated with a PCMH like care management duties and salaries cost me the same as a 10-doctor practice."
Searcy, Arkansas–based Unity Health has experienced a payer-mix boost from Medicaid expansion but the health system, which is centered on 286-bed White County Medical Center, is seeking to offset Medicare reimbursement reductions, says Vice President and Treasurer Stuart Hill.
"We did see an improvement in our payer mix. From an inpatient perspective, we did see a payer shift to fewer self-pay patients. We did see a few more Medicaid patients; but in Arkansas, Medicaid expansion was mostly on the private insurance side. Those who were 138% over the poverty guideline qualified for commercial insurance as opposed to traditional Medicaid," he says.
"We're still taking greater Medicare cuts than we are getting benefits from the private option Medicaid expansion. In 2016, we're estimating probably a $3.5–$4 million net deficit because Medicare essentially got zero market basket increases. You add that to sequestration," Hill says.
Baxter Regional Medical Center in Mountain Home, Arkansas, a not-for-profit 268-bed acute care hospital, also is facing financial cross-currents in the state's shift to value-based care, says Ivan Holleman, former vice president and chief financial officer, who retired in August 2016. "We have seen a significant shift from more profitable inpatient services to the outpatient setting. Despite substantial efforts and success in increasing our market share, we have seen a 10% decline in acute inpatient services over 2014."
Baxter Regional is pursuing several strategies to offset declining inpatient cases, he says. "We are working to maintain our financial position through market growth; ongoing efforts at efficiency; and, in partnership with our community physicians, establishment of a clinically integrated network and a Medicare Shared Savings accountable care organization. This organization is named Baxter Physician Partners or BPP, and we have partnered with North Arkansas Regional Medical Center in Harrison and their physicians to have the state's second-largest MSSP ACO as measured by benefit lives."
From 2013 to 2015, Medicaid expansion had a net positive financial impact at Baxter Regional, Holleman says. "The private option/Arkansas Works program has had a net financial favorable impact on BRMC of $3.3 million associated mainly in reduced costs from uncompensated care. It would have been difficult for us to maintain our financial position without this program."
Arkansas is blazing a trail for other rural states seeking to make the shift to value-based care, says ACHI Director Joseph Thompson, MD, MPH.
"From a timing perspective, our increases in efficiency and decreases in hospitalization coincide with our expansion of Medicaid under the Affordable Care Act. While we have reduced the cost associated with unnecessary hospitalizations, we have increased the number of hospitalizations through the private option. One of the reasons why the feds are interested in our model is that for the 30 states that have large, rural areas, this could be a way to introduce value-based payment without necessarily having complete ownership of a single network by a major health insurance plan," says Thompson.
Last year's top shared-savings performer in Medicare's first two-sided risk model for accountable care organizations is developing a medical-services delivery strategy that can be applied nationwide.
A shared-savings care delivery model that precipitates declining inpatient revenues in the shift from fee-for-service is the stuff of nightmares for most hospital leaders. But Phoenix-based Banner Health is living the value-based dream.
"The road is rocky, but we see a clear path to where we are going. We are very confident that not only can Banner get there, but the country as a whole can do this and do this in a sustainable way," says Robert Groves, MD, CMO of Banner Health Network, the health system's Pioneer ACO.
BHN was among the 32 inaugural Pioneer ACO participants in 2012 and outpaced its peers in the program financially last year by a wide margin, according to performance data that the Centers for Medicare & Medicaid Services released last week.
For the 2015 performance year, BHN kept spending below its Pioneer ACO benchmark by $35.1 million, earning a $24.5 million shared-savings payment. Newton, MA-based Atrius Health posted the second-highest spending-benchmark performance, spending $6.7 million below its Pioneer ACO benchmark. Minneapolis-based Fairview Health Services earned the second-highest shared-savings payment, at $2.6 million.
BHN also posted the fifth-highest Pioneer ACO quality score last year, at 95%.
Enrollment in the Pioneer ACO program has dwindled steadily, however. Last year, a dozen organizations participated; BHN is among nine Pioneer ACOs this year.
Although three Pioneer ACOs exceeded their spending benchmark last year, Peoria, IL-based OSF Healthcare System is the only organization that owes CMS, with a $1.6 million shared-losses payment due. Pioneer ACO generated more than $37 million in net savings for CMS in 2015.
Pioneer ACO encourages providers to coordinate the entire care continuum, and Banner Health has embraced that vision. "This is a 9,000-square-mile market. It is hard to own everything, and that is true nationally," Groves says.
Banner Health was well-positioned to succeed in Pioneer ACO from its inception largely due to the health system's history of cooperation with independent physicians, says Lisa Stevens Anderson, vice president at Banner Health and CEO of BHN.
"Banner has a history of partnering with independent physicians," she says.
"We have an employed medical group, Banner Medical Group, that has grown quite a bit over the past five years, but it's only been formally in existence for five years. One of the partner organizations that is part of Banner Health Network is called Banner PHO, physician-hospital organization, which has been in existence in the eastern Phoenix metropolitan area for more than 25 years."
Technology-fueled Growth
Since Pioneer ACO was launched in 2012, BHN has achieved year-over-year gains in quality scores and shared-savings payments by establishing new capabilities and deploying proven value-based care strategies, Groves says.
The health system's iCare telemedicine program is a prime example of how investing in new technology is helping BHN manage the frailest patients among the ACO's 60,000 beneficiaries.
"In their homes, we put in specialized tablets that allow instant communication with the healthcare team, including a physician if the patient needs one," Groves says.
"We put in resources that allow patients to track their weight and other key variables depending on their illness, so we get an early warning when things start to go awry."
"We also have applied traditional strategies but done them very well, like case management and care management," he says. "We take the folks who are not as sick as our highest-risk patients and manage the strategies that are likely to keep them at their optimal level of health."
"Finally, we couldn't do this without the full support and engagement of our aligned partners," Groves says.
"That not only includes physicians, but also our post-acute care partners, home care, palliative care and hospice. We are trying to put the whole puzzle together without leaving any of the pieces out."
A three-pronged strategy to reduce the appeals backlog notwithstanding, the backlog of Medicare billing disputes is expected to exceed 1 million contested claims by 2020.
Medicare's recent $1.5 billion hospital-claims settlement deal is not a big deal in the grand scheme of the program's claims appeal backlog, federal records show.
Last week, in response to a Freedom of Information Act request from Kaiser Health News, the Centers for Medicare & Medicaid Services released a list identifying the 2,022 hospitals that received billing-dispute settlement payments last year.
The settlement deal gave hospitals 68 cents on the dollar for disputed Medicare billing claims for patients admitted on or before Oct. 1, 2013. Kaiser Health News reported 35 hospitals got more than $5 million in the deal, with the median payment pegged at $307,642.
Long Island Jewish Medical Center, a 900-bed acute care hospital in New Hyde Park, New York, that is among nearly two dozen hospitals operated by Northwell Health, was among the facilities that received the largest settlement payments—$10.8 million for 1,230 disputed claims.
Participating in the settlement was preferable to waiting out the appeals process, Robert Shapiro, executive vice president of finance and CFO of the Great Neck, New York-based health system, said last week in an email to HealthLeaders Media.
"We settled with CMS in 2015 to take advantage of the 'time value' of money. At that time, we were concerned that CMS would change the rules down the road."
The ultimate venue of appeal for Medicare billing disputes is U.S. District Court. But before billing disputes reach that court, they can be challenged at four levels:
Redetermination by a Medicare Administrative Contractor (MAC)
Reconsideration by a Qualified Independent Contractor (QIO)
Adjudication hearings before an Office of Medicare Hearings and Appeals administrative law judge (ALJ)
Medicare Appeals Council hearings
Despite settling 260,000 claims in the 2015 fiscal year, the backlog of Medicare billing-dispute appeals at the ALJ and Medicare Appeals Council levels shows no sign of easing, according to the Office of Medicare Hearings and Appeals (OMHA).
A division of the U.S. Department of Health and Human Services, OMHA administers Medicare billing-dispute appeals independently of CMS. For the federal fiscal year ending September 2015, more than 884,000 Medicare claims were awaiting adjudication before administrative law judges. Another 14,800 disputed claims were awaiting hearings before the Medicare Appeals Council, which reviews appeals of ALJ decisions.
A Three-Pronged Strategy
Clearly, the capacity to conduct ALJ and Medicare Appeals Council hearings is inadequate, and OMHA acknowledges that there is a problem.
It says says federal officials have launched a "three-pronged strategy" to reduce the appeals backlog, including "administrative actions to reduce the number of pending appeals and encourage resolution of cases earlier in the process."
OMHA's forecast is grim however: "Based on the projected impacts for all CMS and OMHA administrative actions currently being implemented, the backlog is expected to be approximately 1 million appeals by the end of FY 2020. However, this is nearly 50% less than what would have been pending if these administrative actions were not taken."
Lawrence Hughes, assistant general counsel at the American Hospital Association, says the Medicare billing-dispute appeals process needs mending. "Hospitals continue to have millions of dollars tied up in the appeals process; leaving hospitals to make do with insufficient resources, and their employees and patients to pay the price," he said Friday.
"If we don't get a handle on spending at some point, we will have a government-financed system," predicts the head of the Pacific Business Group on Health.
With healthcare-spending growth continuing to outpace growth of the national economy, large employers are facing a gargantuan challenge.
"It's challenging because healthcare is not their prime business. To large employers, healthcare is just one of the many suppliers they work with, and the cost of healthcare is part of the overhead of a business that is otherwise pumping gas or selling groceries, says David Lansky, PhD, president and CEO of the Pacific Business Group on Health, a nonprofit business coalition that through its member organizations, is "demanding increased value" in the healthcare system.
"So, it is going to be difficult for them to step up to an even larger degree, but it is necessary," he says.
Employer-sponsored insurance helps cover the medical expenses of about half of all Americans, according to the Kaiser Family Foundation. Despite the cost of providing this benefit to their workers, large employers are committed to the ESI market, Lansky says.
"There's an understanding that if we don't get a handle on spending at some point, we will have a government-financed system and we will look to the taxpayers to figure out how to cap total healthcare costs. Most employers don't want to see that happen," he says.
At Some Point, Healthcare 'Becomes Unaffordable'
"They think they add value by being an advocate for their employees in the healthcare system and building wellness programs, benefits programs, mental health programs, and disease management programs that ultimately are beneficial to their employees. They don't want to give that up; but at some point, it becomes unaffordable."
The double-digit pace of healthcare-spending growth seen at the turn of the century appears to be tamed, according to the 2016 National Health Expenditures Report released last month.
It forecasts that national healthcare spending will increase at an average of 5.8% through 2025. If that prediction is accurate, the healthcare sector's share of the total economy will rise from 17.5% in 2014 to 20.1% in 2025.
Over the past 20 years, U.S. economic growth has not exceeded 4.7%, according to World Bank data on annual economic growth since the country emerged from The Great Recession in 2010 at 2.1%.
Large employers will play a pivotal role in determining whether annual healthcare-spending growth can be reduced to at least 3%, Lansky says. "The way our healthcare economy is structured, a great deal depends on what the buyers of services decide to reward, incentivize or require from a contractual point of view."
He says large employers find themselves increasingly working with both Medicare and the states to try to achieve impacts as buyers.
"The purchaser community has been very fragmented over the years, both employers fragmented from each other and employers working separately from state governments and the federal government. That fragmentation has been changing, where we are seeing a lot more alignment among the buyers."
A prime example of healthcare-buyer alignment, according to Lansky, is in Arkansas, where the state's largest corporation, Bentonville-based Walmart, is participating in a Medicaid-led bundled payments program that features nearly two dozen episodes of care including heart failure.
Lansky says large employers are increasingly engaged in several other strategies to help cut healthcare spending nationwide:
Centers of excellence programs where "patients are going to get the highest quality care, which is ultimately cheaper because there are so many fewer readmissions, new operations and complications."
Reference pricing "that works through benefit design to give patients information about the cost of care and where they can get comparable quality care for lower cost."
Direct contracting with accountable care organizations, which involve large employers picking high-value healthcare providers then rewarding their workers for seeing those providers with reduced cost-sharing. "Then you work with that care system to continuously improve what they do, to become more efficient, and ultimately lower costs."
"When you look at these strategies, what many of them have in common is ensuring that patients get into the hands of the highest performing providers and services; so we are rewarding the low-cost, high-quality provider with more business, and we are informing patients where they can go to get that care," he says.