Population Health: Why It's All about Value

By nThrive | Posted: 12/18/2017

Dr. Carl Couch discusses population health

nThrive Chief Medical Officer Carl Couch describes how the Baylor Scott & White Health ACO in Dallas, Tex., improved quality while keeping costs flat and achieving $65M in savings. 

Editor’s note: At a recent Becker’s Roundtable in November, nThrive experts discussed the relationship between alternative payment models ushered in by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), population health and value-based care. Moderated by nThrive Senior Vice President and General Manager Kelley Blair, this Q&A summarizes key discussion points by nThrive panelists: Chief Medical Officer Carl Couch, MD, MMM, FAAFP, who helped to launch a successful accountable care organization (ACO); Moshe Starkman, senior value-based reimbursement consultant and MACRA expert; and Scott Jones, senior consultant and data analyst.

Q: As you think about Population Health, where do you see us as an industry today and why do you believe that payment models are so key to our success?

A: [Dr. Couch] Unfortunately, under today’s fee-for-service model, health care organizations don’t get paid for much of the pre- and post-episode care that is so extremely important in a population health model, however it is critical to support the full care continuum to attain value.

Whether you are fee-for-service or progressing toward value-based care, population health is one of the Triple Aim objectives and, I believe, is what ultimately gets us to delivering better care for our patients. MACRA and a general movement to risk and alternative payment models are fundamental components supporting the overall shift to population health.

Q: How do you define value, especially from the patient’s perspective?

A: [Dr. Couch] In simple terms, the definition of value is quality in relation to cost. The challenge is that health care in the United States is twice the cost of the industrialized world without better outcomes. As a result, people really do question the value that we provide.

For example, this is a big issue for the average family of four, which earns an average income in the U.S. of $58,000. Today, they pay about $23,000 annually for their health care or 40 percent of their income. Most people don’t think that’s sustainable and those who pay for health care don’t think they’re receiving great value.

Q: How will population health management help to reduce the burden on patients while improving the overall financial health of our health care systems?

A: [Dr. Couch] Population health necessitates that we address both sides of the value equation, both the quality we provide and at what cost. If your health care organization is going to be successful, even in a strong fee-for-service environment, you’ve got to think about the movement to shared risk, with alternative payments obviously helping to fund part of the components of population health.

Recently, MACRA has brought everybody back to the table on pop health, particularly physicians. The penalties of not performing under MACRA are going to be severe and every doctor is going to be measured both by how they perform on quality outcomes and the costs associated.

Q: During your time at Baylor Scott & White Health (BSWH), you were able to successfully execute on an accountable care organization (ACO). Can you talk about your results?

A: [Dr. Couch] Remarkably, over five years and covering a network of 5,000 doctors, 50 hospitals and 3,400 employees, our cost of care didn’t increase, remaining almost flat, while the actually cost of care in the community continued to go up.

This demonstrated an ability to truly constrain costs while delivering high quality. Over the same five year period we also achieved $65M in savings.

Population health graph

Q: What were some of the critical success factors necessary to achieve these results?

A: [Dr. Couch] The four critical success factors to achieve what I call “The Strategic Value of Value,” were:

  1. Emphasis on primary care
  2. Data-driven environment based on information collected from claims
  3. Physician leadership
  4. “Off-radar” management of patients when not in an acute-care setting

Because physicians are influenced by their peers, we also carefully selected a physician board of directors and physician committee chairs, who had to be educated on what value-driven health care really means. To do this we developed a two-year educational program with Southern Methodist University and The University of Texas, which emphasized the importance of data.

Value in healthcare

Q: When engaging physicians as leaders, what were some of the barriers?

A: [Dr. Couch] Telling physicians that “we want you to keep your patient out of the hospital and reduce the number of unnecessary tests,” is a hard sell because they are paid on a fee-for-service basis and it is their primary source of revenue. Essentially, the whole apple cart turns upside down with the economics of population health.

Where applicable, the only thing to say is, “if our model is successful, you’ll gain from total volume.” These sorts of conversations had to happen repeatedly, not just with physicians but also with our own hospital administration. These are difficult but necessary conversations that you have to have.

Q: You mentioned the critical role of data. How did you capture data at BSWH to guide you?

A: [Dr. Couch] It began by asking, “To what degree do we make investments in value?” To get there you have to invest in data collection, which comes from two sources:

  1. Electronic Medical Records (EMRs)
  2. Claims

These are the only true sources of cost and they give you the ability to see what’s going on with your patient. Just as important, you have to invest in aggregating the data in some meaningful way.

Getting to an analytics solution that can show you a view of what you want or need to do is really important.

Q: Scott, can you speak to the importance of data integration?

A: [Jones] One good example is a complex data integration we did with a large, $17B health system that wanted to aggregate and communicate information across 90 facilities in 22 states. Their goal was to begin preparing for value-based care, while also achieving clinical integration and across-the-board improvements.

First we did an inventory of their environment and determined that they had 58 different data systems across their different sites, including most major Electronic Health Record (EHR) and EMR platforms. We mapped all of the data systems, looking at financial reporting for each of the organizations and reconciling back to reporting, then we built one seamless reporting system that brought it all together.

Accomplishing this required us to teach, inform and socialize changes, in large part to explain where the data was coming from. Now they have one single dashboard everyone in the country can see via a common database platform.

Q: This is very powerful. How has it made a difference?

A: [Jones] First, they have a new sense of trust, knowing that they are looking at the same metric whether they are in New York or California. They can see if an issue had to do with days in AR or a clinical requirement. Second, the physicians, for the first time in their careers, have data transparency at their desktop. This gives them the ability to drill down and see exact patients in real-time with codes to know exactly where things were coming from. The last thing is measurement. Where they previously operated like a holding company, they are now able to conduct weekly calls, reviewing the same scoring and metrics to set common benchmarks for everyone.

In the press recently, it was reported that this organization went from $151M in operating revenue to $266M. The two things they attributed to their success were improvement in revenue cycle management and population health risk/gain-sharing.

Q: Moshe, can you speak to the importance of data integrity as it relates to new payment models such as MACRA?

A: Having a command of your performance scores in the MACRA Quality Payment Program (QPP) focus areas is essential to position your practice or network for current state assessments and future statement strategic planning.

We must create population health models that work to identify high-risk patients and intervene in advance so their condition doesn’t lead to higher costs down the road. As the old saying goes, “an ounce of prevention is worth a pound of cure.” To put that in terms of the cost, a $100 million investment in population health is worth a billion dollars of avoidable episodic and chronic care.

MACRA has helped move the ball forward by pioneering innovative quality-to-cost models as they pertain to Medicare Part B reimbursements. While this first effort is fatally flawed, MACRA has no doubt shifted the conversation to health care management, which is real and irreversible.

Primarily, what organizations and clinical practices need to understand is that the game changes with MACRA. Under the Sustainable Growth Rate (SGR), organizations reported their best scores and only nominal attention was given to the need for improvement. In the new world of MACRA, your best score may not be good enough. In other words, it may not be competitive against the national average. To reiterate, performance scoring is no longer limited to personal pride but is now the measure upon which clinicians compete against their peers for a positive reimbursement adjustment; or, at a minimum, avoid a negative adjustment.

Q: What does this mean for physicians?

A: [Dr. Couch] It is important to note that most physicians are born competitive and they always have three reactions to data: first, it’s wrong; second, my patients are sicker, so this doesn’t apply to me; and, third, okay, what can we do differently?

But as Moshe just highlighted, if you don’t measure something accurately it’s very difficult to manage and change it. On the other hand, we don’t like to be outliers. If you can show a physician how they performed last year and what they could do this year to improve then you can help to change their behavior.

When you get to three, you have physician engagement. This is important, of course, because physicians are responsible for three quarters of the health care charges in the United States. Why? Because they write the orders.

A: [Jones] I would add that it is important to ensure that the information is clear, concise and meaningful, presenting it, for example, as part a dashboard for physician leadership. This can help physicians and practice managers identify strengths and weaknesses, as well as compare scores against other physicians in the system. Just as you alluded to Dr. Couch, we have found that when physicians see what percentile they are at on various measures, we see improvement very quickly.

But I want to highlight that successfully managing a successful value-driven program is not a “plug and play” experience. Leadership must continue to review performance and have an open-door policy to show that the data reconciles and is accurate.

A: [Starkman] For my part, I would add that this is where understanding the relationship of quality to cost is important. Physicians are beginning to accept, especially the more recently trained, that the near-future state of medicine will be comprised of teamwork, pre- and post- episode-of-care considerations, and, most significant of all, profound accountability.

Q: Is this really the next step in evidence-based medicine?

A: [Dr. Couch] Yes, and it is a huge mandate today. Unexplained variation is probably one of the biggest reasons for poor quality care. However, rather than focusing on what is wrong we need to ask, “Why is it wrong, how did it become wrong, and, most importantly, what do we need to correct it?” Physicians are very quick and willing to create the evidence-based guidelines they need to measure themselves on.

Ownership is very important, as is the ability to clinically integrate, talking to one another through electronic health records or other methods.

Finally, I would like to add that it is important to recognize success and show doctors their colleagues who are achieving good clinical quality. Also, just as important, we need to recognize that the physician industry is under stress. What can we do to not to make this another burden? What can we take off their plate? How do we deploy new methods of care?

For more information on how nThrive can help your organization make the shift to value-based care and population health, while also meeting the coming demands of MACRA, watch our recent webinar, “Becker’s Roundtable: How analytics can help balance fee-for-service with value-based care.