A survey of physicians and health plan executives shows progress on the path toward value-based care has stalled and that health IT is a hindrance.
More than three months ago, in his "no turning back" speech at an industry conference, Health and Human Services Secretary Alex Azar highlighted four ways the Trump administration planned to continue toward transforming the healthcare system to one focused on value rather than volume.
But that progress appears to have stalled, and may have even reversed, according to a survey of physicians and health plan executives from Quest Diagnostics.
Among the findings:
More than two thirds of respondents (67%) say they believe the U.S. has a fee-for-service system versus a value-based care system (27%). That actually represents a decline from last year's study, when those numbers were 63% and 29% respectively.
Some 57% of health plan executives say they now believe physicians don't have the tools to succeed in value-based care, up from 45% last year.
Only 39% of physicians say electronic health records provide all the data they need to care for their patients.
Some 80% of health plan executives say they believe investments made in technology for quality initiatives have improved the value of healthcare for patients, but only 68% of physicians agree.
Only 55% of physicians believe putting more emphasis on a consumer-based approach to healthcare will help advance value-based care, while 75% of health plan executives believe it will.
The study, "Stalled Progress on the Path to Value-Based Care," of 451 primary care physicians and health plan executives, suggests that despite the pessimism, both physicians and health plan executives agree that better alignment between the two groups is necessary to accelerate the transition, and that technological improvements will be necessary to achieve it.
But curiously, neither group is increasing investment in new health information technology. They are more interested in optimizing the tech they currently possess, and interoperability is a key impediment. Among physicians and health plan respondents combined:
"Making large health IT infrastructure investments" fell from 15% in 2017 to 11% in 2018.
"Investing in some new health IT" fell from 34% to 25%.
"Optimizing existing health IT" rose to 53% from 38%.
“Measures that optimize EHRs, make data more accessible and insightful, and reduce complexity of quality measurement are much needed steps to accelerate this transition," said L. Patrick Hames, MD, Quest Diagnostics' chief clinical officer, in a release.
Indeed, physicians and health plan respondents said the top two barriers to accelerating health IT adoption included incompatibility between systems (26%) and frustration that adopting health IT meant more work with little or no benefit (22%).
A survey suggests that developing measurement tools and aligning physicians and other clinicians are among the top keys to success as value-based care makes up an increasing share of revenue.
The shift toward value in healthcare reimbursement may appear to be happening slowly, but the industry's leaders seem to know investing in this dramatic change in the way they're paid is paramount.
They're investing in the tools and skills needed to make the transition more smoothly as patients, employers, and payers grow more insistent on quantifying the value healthcare organizations provide in their work, according to a HealthLeaders intelligence report: "Staying the Course on Value."
Lead researcher Jonathan Bees says hospitals, health systems, and other care providers are particularly focused on improving care coordination and patient engagement. They recognize these areas are critical to transforming care delivery toward prevention of high-acuity interventions, a 180-degree shift from the incentives that have driven healthcare services consumption for decades, and which still exert a huge influence on utilization.
The shift in incentives, measuring tools, and training may be difficult, but it's also difficult to change infrastructure needs to accommodate a shift toward value, according to Karen Hanlon, executive vice president, chief financial officer, and treasurer at Highmark Health, and the lead advisor for the report.
"You have to figure out, how do you repurpose that asset base to be aligned with what your approach to care is in a value-based model—one where you're trying to keep people out of the hospital," she says.
Four areas the survey of nearly 100 top healthcare executives reveals as current top targets for investment include:
Developing value-based performance metrics: 79% consider their ability to develop these competencies as somewhat strong (54%) or very strong (25%). Such investments can include expensive measurement tools and initiatives, but they don't have to.
Care coordination/guiding patients to appropriate care: Many organizations have made significant investments in guiding patients to appropriate care. 71% of respondents rated those capabilities as somewhat strong or very strong. Increasingly, those efforts represent labor costs in the form of care coordinators.
Aligning physicians and providers: Money isn't the key here, necessarily, but lining up incentives is a key challenge. For example, while 73% of respondents rated their employed clinician alignment as somewhat strong or very strong, they had challenges with independents, where only 42% rated alignment as strong or very strong.
EHR standardization: Some 64% of respondents rated their EHR standardization among care partners as strong or very strong, but there's still plenty of work to be done to make sure these expensive investments yield results in value generation. For example, only 34% rated their predictive analytics capability as somewhat strong or very strong.
New cell-based immunotherapy drugs are changing the way certain cancers are treated at a small number of FDA-approved centers, with the possibility of becoming a first-line therapy.
A type of immunotherapy called Chimeric Antigen Receptor (CAR) T-cell therapy, or CAR T, has the potential to rapidly change cancer treatment.
But for now, it's limited to two types of cancers—certain types of leukemia and lymphoma—and is available at a limited number of FDA-approved treatment centers.
Yet some experts think it has the potential to replace chemotherapy and stem-cell transplants altogether, which would dramatically change how cancer is treated, and thus, how cancer centers operate.
In CAR T therapy, doctors extract and modify a patient's T-cells so they produce a protein that recognizes another protein on the surface of cancer cells, allowing the T-cells to attack cancer cells.
City of Hope, a Duarte, California–based research and treatment hospital, is one of 49 comprehensive cancer centers as recognized by the National Cancer Institute, and is one of only a few centers approved by the FDA to offer the CAR T drugs Kymriah and Yescarta.
Based on interviews with Harlan Levine, MD, president of strategy and business ventures with City of Hope, and Michael Caligiuri, MD, president of City of Hope National Medical Center, here are four factors that will play into how CAR T therapy could affect the standard of cancer treatment.
1. Using a Patient's Own Immune System
"In a broad context of using a person's immune system to fight cancer, it's cell-based therapy, and we've been doing that for multiple decades," says Levine.
"CAR T therapy is taking antibodies that recognize the tumor antigen and hooking them up to a virus, which infects the T-cell, and then infusing those T-cells back in the patient," says Caligiuri. "You get a twofer: a T-cell that knows where to go and can kill a multidrug-resistant tumor as well as a virgin tumor. This takes away the shield and it comes in after other therapies haven't worked."
2. High Treatment Prices Will Come Down
"Prices for treatment are in the seven-figure range, but over time, prices really drop when you consider the stuff you're avoiding having to do," says Caligiuri, referring to treatments that may not be necessary anymore. "As the safety profileimproves, the more patients you treat, the more comfortable you get with the anticipated and unanticipated side effects, and that ultimately improves outcomes."
"As we get more experience, we'll be more comfortable with the treatment and its role in the overall care of the patient," says Levine. "We talk a lot about value-based care these days. When we talk about value the tendency is to go to price, but with a patient, it's outcomes."
"As we learn more about CAR T therapy, we may move it up earlier in the treatment protocol to become a first line of treatment. The instinct with other conditions, like hypertension or diabetes, is what's called step therapy. That makes sense for conditions where you have time to find the right regimen, but [with] cancer, your best chance of a cure is your first chance," says Levine.
3. Potential for Expansion Limited
"This is a very expensive and highly technological treatment," says Caligiuri. "Are health systems willing to make the appropriate investments to do this really well? This won't be needed at every hospital. For the foreseeable future, it should be done at a center of excellence and, from the research point of view, it makes sense to pursue this in an academic environment.
"Leading cancer institutions will continue to invest in this area as part of a broader advance in oncology, but this is an early form of gene therapy. Until it becomes more commoditized, it won't spread far beyond centers of excellence. Only tens of centers are now getting product sent to them from the pharma companies," says Caligiuri.
"People underestimate the sophistication of this therapy," says Levine. "It involves not only extraction of cells and reengineering with the antibody to make it effective, but also the care and treatment of the patient. This is a safe place to come because of our 40-year experience with team-based care. If we move too fast, we'll end up with complications that are avoidable, and may undermine progress we're trying to make in the field."
4. Changing Standards of Care?
"Before this is exported, there needs to be an understanding of the breadth and depth of the side effects, some of which are fatal," says Caligiuri. "I would envision colleagues coming to City of Hope and other approved centers to learn how to manage [side effects] before doing this in their own institution."
"The treatments to date have shown a remarkable curative potential, which is an important part of value-based care when you have a drug that's really remarkable," says Levine. "It will go broader, and the fraction of patients who are cured will increase as we move this further toward front-of-the-line therapy."
"Over time, the sky's the limit for a multidisciplinary approach," says Caligiuri. "We have 14 active trials right now, but it's difficult to say when other such CAR T therapies will be considered so efficacious that they will be part of the paradigm. It's contingent upon facilities to grow the virus, to grow cells, and teams that can handle the volumes, as well as funding sources."
New study shows strong growth in giving to healthcare, but similar performance will be more difficult to achieve in 2018.
A new study by Giving USA estimates that charitable giving to healthcare organizations rose a strong 7.3% (5.5% adjusted for inflation) in 2017.
However, charitable organizations like hospitals and health systems can't necessarily count on a rapidly rising stock market and tax favorability—issues that fueled 2017's strong growth—to continue in the future.
Indeed, healthcare organizations weren't outliers in recording strong giving growth. Charitable giving overall in 2017 broke records, and other sectors also saw big increases.
Religion: up 2.9%
Education: up 6.2%
Human services: up 5.1%
Foundations: up 15.5%
Public society benefit organizations: Up 7.8%
Arts, culture and humanities: up 8.7%
International affairs: down 4.4%
Environment and animal organizations: up 7.2%
Overall giving reached more than $400 billion for the first time last year, increasing 5.2% over 2016.
But such increases were fueled by a booming stock market, a strong economy, and the prospects for a major tax law change that will take effect for the 2018 tax year that might make charitable giving less valuable for tax deductions, at least for individuals.
Some variables are beyond their control. The Healthcare Philanthropic Index suggests that the economic health of the community in which the hospital is located accounted for half of organizations' fundraising success.
But other factors that organizations can influence, such as their relationships with potential donors, accounted for all other contributed income.
To make sure giving doesn't suffer in 2018, hospitals and health systems will possibly have to refine their efforts to mimic those of top-performing organizations.
The Association for Healthcare Philanthropy noted that high-performing organizations, which are defined as those that raise more net funds than 75% of responding institutions, boasted the following attributes compared to all responding institutions:
They allocated an average of 13.5% of their fundraising resources to research on potential donors and major gifts, compared with 6.4% of resources for all institutions.
They engage in capital campaigns more frequently, enabling them to reach more potential donors.
They tend to employ more direct and indirect fundraising staff.
They tend to have an increased level of direct fundraising expenses—all actual costs needed to carry out each solicitation method.
A new poll of healthcare executives shows that healthcare organizations are considerably less worried about the financial impact of performance-based contracts than they were two years ago.
Healthcare organizations are considerably more bullish on value-based contracts than they were two years ago, even though nearly a quarter of them still don't currently participate in such contracts.
A new poll by professional services firm KPMG shows that healthcare organizations are less worried about the risk of negative impacts on operating income and profits that such contracts may impose on them should they perform poorly in terms of quality, safety and other important metrics that affect how much value-based contracts pay them.
In 2018, 13% of respondents saw risk of a modest (1-10%) drop in operating income from value-based contracts versus 25% in 2016.
In 2018, only 6% of respondents were worried about a significant (11%-50%) drop in operating income from such contracts, while 21% were worried about the same thing in 2016.
In contrast, 25% of 2018 respondents saw an opportunity for a modest improvement in operating income (1%-10%) by participating in value-based contracts, while only 13% saw the same opportunity in 2016.
And 13% saw an opportunity for significant (11%-50%) improvement in operating income in 2018 versus only 6% in 2016.
Both commercial payers and the Centers for Medicare and Medicaid Services have recently committed to increasing the percentage of payment that is based on value, although progress has been relatively slow.
Another interesting set of data points suggest that only a small percentage of the organizations' contracts include a value-based payment model even now, although comparison data from 2016 was not available. To wit:
23% of respondents reported that none of their contracts include a value-based model.
26% reported that less than 10% of their contracts included value models.
24% said between 10% and 25% of their contracts included value.
15% said between 26% and 50% of their contracts included value.
10% reported that greater than 50% of their contracts included value-based payment models.
“We are beginning to see performance-based payment models replacing traditional fee-for-service models,” said Matt Snyder, a KPMG advisory principal who focuses on internal audit and enterprise risk at healthcare organizations, in a release. “The need to shift from volume to value is shared by payers, providers, and ultimately patients.”
The 2018 data covers responses from 221 healthcare finance professionals, while the 2016 data covers responses from 142 healthcare finance professionals taken during webcasts on the topic.
A new HealthLeaders survey shows that while value-based payment models continue to be a central focus of healthcare providers, reorientation toward a value-based infrastructure is a difficult-to-overcome obstacle.
Infrastructure changes may be the hardest part of transforming a healthcare organization toward a value bent, according to a new survey.
According to the 2018 HealthLeaders Media Value-Based Readiness Survey, respondents said that their preparation of a value-based infrastructure may be the key challenge to healthcare providers compared with care delivery and finance, where they feel they are farther ahead.
HealthLeaders Media senior research analyst Jonathan Bees, who prepared the report, says 50% of respondents indicated their value-based infrastructure was either somewhat weak or very weak, an indication there is work to be done in this area.
“The infrastructure changes to me are the hardest part because you have an asset base that, in many cases, could be a hospital that’s been around anywhere from 40 to 80 years,” says Karen Hanlon, CPA, executive vice president, chief financial officer and treasurer at Highmark Health in Pittsburgh, and the lead advisor for the Intelligence Report, which found varying degrees of readiness in three main categories of value preparedness:
Financial changes: 62% thought their preparation was very or somewhat strong, while 38% categorized their preparedness as somewhat or very weak.
Care delivery changes: 54% considered their preparation very or somewhat strong, while 46% said it was weak or somewhat weak.
Infrastructure changes: 50% considered their preparations strong or somewhat strong, while half considered them very or somewhat weak.
Infrastructure can be daunting because such investments are expensive and take longer to mature. Investments must be made in capital projects, ranging from expanding a network of urgent care centers or outpatient laboratory capabilities, to call centers and telehealth capabilities.
Respondents were more confident that they are further down the road to value in financial and care delivery changes.
Diving deeper into the report:
Only 3% categorized their care processes and systems as fully mature.
79% described their development of value-based performance metrics as very or somewhat strong.
63% described their collaborative relationships with payers as strong or very strong.
Download the free report here.
A report featuring leaders of 24 healthcare organization in a variety of positions shows that high prices and costs continue to fuel big changes that will require collaboration and innovation.
A report featuring candid conversations with 24 industry leaders from a variety of healthcare subsectors shows broad agreement on six themes that should drive healthcare convergence and an improvement of the patient experience.
To win, these subsectors must learn to collaborate, says the report. Authored by by privately held real estate firm Transwestern and IMEG, a design and consulting firm, the report features collected responses from a discussion among thought leaders at 24 healthcare-related organizations.
Some broad themes emerged from the discussion, including:
The growing use of technology to drive down costs: "Access to care being at fingertips or down the street is significant for healthcare. Telemedicine and its adoption will continue to push the boundaries of provider and patient; moreover, it will challenge the payment schemes in healthcare," said Spencer Seals, vice president of real estate and construction at Cook Children's Medical Center in Fort Worth, Texas.
An intense focus on patient-centered care: "Healthcare by 2020 will be forced to be more patient-centered with an emphasis on convenience," said Amy Waer MD, vice dean of education and academic programs at the Texas A&M College of Medicine.
The importance of being nimble and transparent: "Healthcare in general is becoming more and more transparent and consumers are recognizing that they have a choice. The issue is making sure consumers can make an informed choice," says Seals.
The solidification of the value-based healthcare model: "Value-based care is here to stay…As we see more large-scale vertical integration, we’ll see employers, insurers, and governmental agencies demanding cost and quality outcomes, and at scale," said Ryan Walsh, MD, chief medical information officer at the University of Texas Health Sciences Center at Houston.
The rise of personalized medicine, outpatient care and home healthcare: "Customers are looking for personalized support and optimal results. They expect access, convenience, and connection that companies like Amazon, Apple, CVS and others provide," said Wayne Baswell of Robins & Morton, a construction company.
The significance of generational differences: "Millennials and Gen Xers expect comprehensive management of health; quantified, self-developed data; transparent understanding of the data and what to do with it; answers anytime, anywhere, etc. Personally, as a Gen Xer with children, my complaint is that these things are not happening fast enough in healthcare," said Abigail Clary, principal and director of the health practice at CannonDesign.
Carl Armato talks about cultivating work culture, commitment to patient experience, and the importance of bonuses for the health system's team members.
Not only does Carl Armato, CEO of Novant Health, headquartered in North Carolina, want his health system's employees to read his blog, more importantly, he wants them to engage with him through it.
He blogs about everything—from folksy stories to healthcare industry information—but every Monday edition of his blog focuses on the 14-hospital nonprofit health system's mission, vision, and values, and how he's observed employees' contributions to achieving them.
HealthLeaders Media recently spoke with Armato about Novant's employee bonus program, its consolidation under one brand, and the seven-year CEO's struggle to achieve engagement and alignment with both patients and employees.
Following is a lightly edited transcript of that conversation.
HealthLeaders Media: What's the biggest lesson you've learned about leadership as CEO?
Armato: Every Monday I post a blog to stay connected with team members. It's one of the best decisions I've made because it's one of the things, along with frequent rounding, that makes me accessible.
The blog has a chat feature so people can chat back. Since I've been CEO, I've written between 300–400 of them.
I remember writing about our employee bonus program early in my [seven-year] tenure. Caring for our team members is one of the most important things the executive team does.
A challenge with an old version of our incentive plan was that some of the factors the clinics were evaluated on were different from those in the rest of the organization.
That wasn't wrong on its face, but it didn't foster team unity, and our team members shared that with me. I probably got 100 other comments about what they'd like to see different. So, I took that advice and made changes.
HLM: Tell me about the employee bonus program. What's the strategic goal with it?
Armato: When we're doing well financially and hit the strategic imperatives, it's due to the team members. It's their efforts in saving dollars every day with their intentional efforts. We decided to reinvest much of those savings in employee bonuses.
That's how we began the discretionary bonus that aligns every team member around the organization's overall success.
When I took over, there were hundreds of brands throughout the organization. We brought all that together to become Novant. There were also probably that many incentive plans, so basing the incentive plan around organizationwide goals brought alignment around what was really important. For example, we've rewarded our team members for improvement in engagement and quality.
HLM:How do you ensure the bonus program is fair to all employees?
Armato: Every now and then I get feedback on compensation, where people talk about how much went to executives versus team members. But 80% of the bonuses are for director and below titles. So, if you think about that, that's a lot of individuals who received a bonus. All eligible team members, whether part time or full time—if they're not facing disciplinary action—they received a bonus.
HLM:What factors besides profitability are important in a time when healthcare is being challenged to provide better value?
Armato: We've got everyone in our 500 clinics and our 14 medical centers focused, and they're aligned to what's important to our consumers.
We have to be world-class at caring for our employees so they can be world-class caring for the patients we serve. Why? We're committed to the remarkable patient experience. We focus on more consumer-centric digital engagement with consumers.
We have 840,000 people using our portal, but we're focused on how we can use more predictive analytics to partner with them before they have a health crisis. So, we're investing there.
For example, we have 90,000 diabetic [patients who] we're working on predicting the likelihood one will enter the ER, and also partnering with external companies to figure out how to use predictive analytics to keep people out of the hospital and safe.
HLM:What's the biggest change you've made in your leadership style over your career?
Armato: I do a lot of open forums and webcasts with our team members where I take questions from the audience, and I get that question often.
My background is as a CPA/MBA, and when I was with what is now [global consulting firm] EY and then with another health system for 10 years, I was what I might call the fix-it guy.
I was one of the people they sent to difficult situations. I thought I had to micromanage that and I felt the weight of doing that personally. My early learning was to empower others.
Now, I don't mind sharing the stage and giving people the authority to do their jobs. I've watched people and our organization soar because I focus on cultivating culture. It's where I spend a lot of my time: rounding, answering the blog, ensuring we're addressing issues like physician and nurse resiliency. Or how we're handling health disparities.
I want to cultivate culture where people can have a voice in how we're going to transform healthcare in a transparent way.
Nine judges have been named to find the healthcare organization that best exemplifies actual improvements in health outcomes.
For all its popularity as an industry buzz phrase, population health is hard to achieve. Oh, there's a definition for it, but finding successful operational tactics to achieve better outcomes has been elusive.
The nine judges for the 2019 Hearst Health Prize for Excellence in Population Health know it when they see it though.
The 2019 winner of the prize will be judged on "actual improvements in health outcomes and/or health behaviors, not just financial measures, clinical process measures, or measures of participation."
That's a quote directly from the website that offers guidance for the prize offered by Philadelphia's Jefferson College of Population Health. It will be awarded for the fourth time in March 2019, but what hints can applicants take from previous winners? For one, you'd better be able to demonstrate improvement in the health circumstances of real people.
Previous winners have been Community Care of North Carolina, Intermountain Healthcare, and the Massachusetts Housing & Shelter Alliance in 2016, 2017, and 2018, respectively. Here's what they did:
Community Care of North Carolina: Won in part because of the organization's model for managing transitional care for the 2,600 North Carolina Medicaid beneficiaries a month who are at risk for hospitalization or readmission. Hospitalization and readmission for the population declined by 10% and 16%, respectively, between 2008 and 2016, and total Medicaid costs for those involved were reduced by 9%.
Intermountain Healthcare: Won because of its Mental Health Integration program, which has tracked patients involved in a program designed to help them manage and treat mental health conditions, for 10 years. Among its most impressive results: Significant reductions in payments to the delivery system were associated with the Team-Based Care group vs. the Traditional Practice Medicine group ($3,400.62 vs. $3,515.71) and were lower than the investments in the Team-Based Care program itself.
Massachusetts Housing and Shelter Alliance: Won in part because of its permanent supportive housing program to address chronic homelessness and the associated overutilization of acute and emergency care resources by this population.It achieved a 78% reduction in utilization of emergency services within the first six months of obtaining housing for homeless people.
Sorenson expected to help guide transformation with expertise on clinical and operational best practices.
Charles Sorenson, MD, is joining the board at Renton, Washington-based Providence St. Joseph Health. His appointment is the latest in a trend in which large health system boards are adding members with specialized expertiseto their boards to help them reorient to the patient in implementing clinical and operational best practices.
Sorenson should fit well on a board that advises fellow physician leader Rod Hochman, MD, PSJH's president and CEO, who's executing a bold vision of growth and transformation.
Sorenson, who retired as Intermountain Healthcare's president and CEO about a year and a half ago to make way for current President and CEO Marc Harrison, MD, could help PSJH further transform the organization into one that produces better outcomes for patients at lower costs.
While CEO at Intermountain, Sorenson led an organizational transformation to focus on patient welfare as the holistic center of healthcare decision-making. If that sentiment sounds like it should be self-evident in healthcare, those who lead healthcare organizations know it isn't, necessarily.
"We are honored to welcome this exceptional physician executive to our board," said Rod Hochman, MD, president and CEO, Providence St. Joseph Health, in a press release. "His experience and vision will be invaluable as we work to serve our communities.”
We went into some detail about how PSJH plans to integrate the now seven-state, 50-hospital system in our most recent cover story, including speaking to Hochman about his vision. PSJH is still digesting its 2016 merger with St. Joseph Health even as it considered growing even bigger earlier this year, before ultimately tabling merger discussions with Ascension.
Look for Sorenson to add expertise in at least three key areas for PSJH:
Leadership development: Since his retirement, Sorenson has led Intermountain Healthcare's Leadership Institute, a program designed for select high-potential health system leaders. Intermountain and other health systems send top up-and-comers there to learn how to incorporate what Sorenson calls "principle-based decision making" into their leadership styles.
Cost control: Sorenson's eight-year tenure at Intermountain was preceded by his role as executive vice president and chief operating officer at the health system for 10 years. He knows where the costs are, and he knows how to get them out. He implemented systemwide best practices for increasing efficiency and controlling costs while continuing to practice—primarily in urologic oncology surgery.
Aligning incentives: He's extremely interested in finding ways to align healthcare incentives so that keeping people healthy benefits not only the patient but every entity involved in providing their care—clearly not the case in healthcare today. He changed the mission statement at Intermountain from providing excellence in providing healthcare services to helping people live the healthiest lives possible. He's big on data and using that data to measure whether the interventions performed on patients truly help them live healthier lives.
