As a partner of ECG Management Consultants, Terri Welter has spent more than 20 years helping suppliers to develop innovative payment strategies and negotiate contracts with payers. It also helps health systems to develop and implement responsible care organizations and clinically integrated networks. In a recent interview, he gave his opinions about some of the reasons why the change to attention based on value has been slow in the commercial insurance front, and some things that could accelerate the change.
Health innovation: an email that I received from ECG management consultants had a provocative holder, something about why the value based on value is stagnating and what can be done about it. What are some signs that is being stopped?
Confusion: I see the signs literally every day. In ECG we do dozens of negotiations between suppliers and payers throughout the country, and in those negotiations, we are seeing an immaterial percentage of payments linked to value. It is somewhere between 1% and 3%. I think that when leaving the pandemic, we have had a lot of inflation, many labor problems in the industry. Many of our clients are financially tense. They are focused on obtaining a correction to catch up with that brand of high waters that hit expenses and do so, we are decreasing progress in value, because we are focused on that correction in inflation.
Many of rural health systems and suppliers have been even more tense financially. Therefore, some of the largest health systems have to invest in keeping them open, because these patients have any other place to go.
HCI: Are there particular challenges that face rural health systems by changing value?
Confusion: Yes, I think that a large part is access to primary care, and being able to invest in the infrastructure you need around the data. Many of these rural organizations have been connected to clinically integrated networks (CIN) or ACO of the largest regional systems. I think one of the problems has been if there is enough size and reach in those arrangements to make sense. Or do you have one foot for service and a value foot? I think it has been an impediment.
HCI: So how is that description that gave only 1% to 3% value of value coinciding with what we hear from CMS on how they want to have a large percentage of patients in a value -based care agreement for 2030?
Confusion: I am negotiations with commercial payers, Medicare’s advantage and the administered attention of Medicaid. You have CMS programs, and I think those programs have moved the needle, but then you have commercial and Medicare and Medicaid advantage, which are really only entering it. If we are going to advance, I think we have to have a larger scale adoption among those payers.
HCI: So, even when you have administered medical care organizations in a state, that does not mean that suppliers are in value -based arrangements, correct?
Confusion: That is correct. Usually, it is still a service rate. Now we are seeing some advances on the Medicaid side. For example, there are some states that are paying a member per member/per month to practices to help them build some infrastructure. They will give them a shared savings agreement. So we are starting to see it. I think the way of moving forward is that CMS supports some state initiatives. Medicaid is a great opportunity for value. On the commercial side, I think they will probably be the last to do so.
HCI: In your daily work, you work with the supplier’s side and help negotiate contracts with payers. Is it how it works?
Confusion: That is correct. We do a lot of analytical work in preparation for negotiations. We will see all transparency data, for example, to say, how do we compare ourselves to the market? And then we will sit at the table and negotiate arrangements or simply be behind the scene as an advisor.
HCI: We have been seeing that many of these negotiations are broken, particularly between Medicare Advantage plans and supplier organizations, and suddenly a large number of patients are expelled from the network for a health system and leads to many interruptions.
Confusion: Yes, and I believe that the two great drivers of that interruption are the administrative burden that hospitals and suppliers are seeing related to the participation of Medicare Advantage, in particular, together with the fact that they end up paid below Medicare due to the denials and pre -authorization requirements. So that is actually making those arrangements see again and say that Medicare will be better, or we can find a strategic partner of MA. Instead of participating with five, we could have two or three that could be better partners.
HCI: What are some of the challenges that doctors have in the transition to value based on value, even if they have a better data infrastructure now?
Confusion: Its compensation arrangements, even in some of the largest groups, may not be aligned with the value. I believe that this gap between having these CMS programs but not having the commercial programs involved is actually an impediment, because they do not give them the size and scope they need to be in value. In addition, they often do not have pockets to invest as they need. Therefore, they need help with those investments.
HCI: If we saw more alignment of multiple payers between CMS and commercial suppliers, especially in things like quality measures, would that facilitate life?
Confusion: Yes, absolutely, and not only what measures, but the definitions for them. There is a lot of disparity. If it is an academic health system, it has a population of patients with greater acuity. You may have different definitions for measures around those patients. The other thing is the availability of total cost of attention data. If it is a large enough health system, you may have the full continuum of suppliers so that you can access that data. But many of our medical groups do not have access to what happens to the patient when he goes to the hospital.
HCI: It seems that in the Medicare shared savings program, the ACOs led by a doctor do better than the hospital system. Is that because incentives for hospitals are biased?
Confusion: In part, but I also believe that only the fragmentation of the system has something to do with that. If you observe the medical groups that have had a good risk, whether CMS programs or even Medicare Advantage risk programs have been able to control where patients are going to the correct configuration of care.
Hospitals have actually done a much better job in the last five years or so to once again examine their outpatient strategies, do things about developing outpatient surgery centers and urgent attention, and I think that reducing prices in buyable services, images and things like that. But the configuration of hospitalized patients is for really sick patients who have the greatest sharpness. If you have them in an agreement based on value, it becomes a mathematical problem. The hospitals end up being the high cost component of the value based on the value.
HCI: I read that you have worked with the development of several clinically integrated state networks. What are some of the factors that lead to success there, and what are some things that have to work to get there?
Confusion: I believe that the most important factor for success is the cultural adoption of that movement at the executive level of C-Suite. I believe that those who focus on the prevention or progress of chronic diseases, particularly in the population of Medicare Advantage, have been the most successful, because there are opportunities to prevent patients from going to the hospital. It has to be directed by a doctor at the government level. And although primary care is central, another key is to discover how specialists involve.
HCI: We write a lot about alternative payment models of the CMS Innovation Center. They have received criticism from some in Congress because few of their models have shown enough savings to increase nationwide. Are there things that could do differently?
Confusion: As I referred to above, maybe they could implement them at the state level. We are a huge country. I think that trying to implement what works and giving state programs the opportunity to adopt them is probably the way to follow. I also believe that we have improved the availability of data based on CMMI work, but I still think we have a lot to achieve in that sense. So, if we can break down the barriers on that total cost of care and quality data and implement the models that work, it will probably lead to better adoption. If we could obtain the administered attention of Medicaid involved at the state level, then from there we could involve commercials.
HCI: Are there any regulatory things that can boost progress?
Confusion: We are in the early stages of the available price transparency data. For the whole history of medical care we did not have that data. Now we have it, and I think that will unlock the value eventually. At this time he is creating chaos because some organizations say I am badly paid; It seems that other organizations are paid in excess. And is creating this chaotic activity in negotiations. I think, ultimately, we will have less variability for that, and then we will see how we differentiate? We have to differentiate depending on the value, but it will take at least five more years. We are in the early stages, but for me, that will change the game.
HCI: Is there anything more than we have not spoken yet that you want to mention?
Confusion: I think that the investment in behavior health is really essential. If you observe access to behavior health, it is still a big problem, with the impact of behavior health on medical problems. So I would say that somewhere in this value equation, we have to focus more on investment in behavior health.
What is happening at this time is that behavior health is really insufficient. We are asking our suppliers to invest in it, which they are, but sometimes they don’t even cover their costs. Then we end up having an access problem. If you do not have access to behavior health, you will have major problems around the general health and population health. I think there is much more to investigate the evolution of how we advance the health of behavior.
