Changing the paradigm – a pioneering healthcare delivery organization who thinks like a payer.

Michael Rose

The shift toward value-based care is gathering momentum in the healthcare industry. As part of this transformation, healthcare organizations will be required to take on greater and greater percentages of risk lives.1  By 2018, Medicare will convert 50% of its payments to value-based models. A new task force made up of providers, insurers and employers has committed to shift 75% of its members’ business into contracts with incentives for health outcomes, quality and cost management by January 2020.2

Many organizations are exploring value-based care, though due to potential financial risks, most proceed with an abundance of caution. Some providers, however, have chosen to lead the transformation … and they’re the ones positioned to thrive and gain market share.

I recently spent some time with Julie Castongia, Director of GE Applications at HealthCare Partners to discuss their journey from volume to value.  At the forefront of value-based care HealthCare Partners, a Southern California-based system that’s been steadily growing, both organically and through acquisitions, since its inception in 1992. Today, HealthCare Partners’ 5,000-plus primary care physicians are responsible for 1.2 million patients covered under risk arrangements (covered lives) across 7 geographically diverse markets.

HealthCare partners want to be the provider and the employer and the community partner of choice.  According to Castongia, “we feel that we can manage dollars as well as or better than a payer. So we’ll take on risk and provide the best and most appropriate care that we can” and 5 key elements organizations must address in order to be successful with partially or fully capitated arrangements:

  • Health plan alignment
  • Network alignment
  • Organizational alignment
  • Population health management
  • Information technology infrastructure

Health Plan Alignment

Payers and providers must work together to agree not only on the per-patient costs, but also on the best treatments and appropriate care.  Capitated arrangements with health plans allow HealthCare Partners to offer more programs up front. For example – the organization offers additional health education and disease management to help patients manage their own health conditions and take responsibility of their own care.

Network Alignment

Like payers, provider organizations that take the risk and responsibility to produce positive outcomes for patients strive to broaden their reach and improve access to the right care at the right time.

HealthCare Partners, for example, manages an Independent Practice Association network that wraps around its medical group model in each market to extend the organization’s reach farther into the community.

The organization uses its narrow network and geographically aligned services so that patients can be treated in the most effective setting for their situation, whether that’s in an out-patient clinic, a physicians group, the emergency room or elsewhere.

Organizational Alignment

A shift in mindset, of course, must start with the minds of every individual in the organization – employed and affiliated physicians, clinical and administrative staff, revenue cycle staff and institution leaders.

Population Health Management

To advance more proactive, cost-effective care, providers and payers are working to improve patient health in a broader sense. They’re looking to connect clinical and financial data of different systems in ways that provide a more complete perspective on their patients, including Enrollment, Referrals, Automatic Claims Adjudication, Capitation and Risk Management along with Electronic Data Interchange connectivity – to help ensure:

  • Effective management by exception based workflows
  • Accurate adjudication of complex member benefits and provider contracts
  • Transparent financial results

Information Technology Infrastructure

For an organization that continues to grow both organically and by acquisition, the ability of IT infrastructure to accommodate expansion and disparate systems is crucial.  This is particularly for those organizations that are just entering into capitated arrangements.  Since its inception, HealthCare Partners has been able to scale from a few thousand covered lives to over 1 million while supporting multiple health plans on a single platform.

Future Challenges

HealthCare Partners’ recent merger with international provider DaVita® is broadening the provider’s impact on delivering the best possible care at the lowest possible cost in the value based care model. The company’s ongoing growth shows that risk-based contracts, when managed effectively, can add to a provider’s competitive advantage in today’s environment.  While other organizations are at different stages in the transformation toward value over volume, Castongia advised that the time is now to accelerate these efforts just as HealthCare Partners is doing.

“New payment models are coming. It’s important to explore what the different models are,” says Castongia. “And you can start by dipping your toes in. You could decide to capitate a small group of cardiologists, let’s say. With a solution designed for value based care, you’re poised to respond to these different payment models and expand on them in a way that you can’t with a traditional revenue cycle system”.   I’d say that HealthCare Partners is very well positioned to thrive in the world of value based care!

  1. http://www.hhs.gov/news/press/2015pres/01/20150126a.html
  2. http://www.hcttf.org/releases/2015/1/28/major-health-care-players-unite-to-accelerate-transformation-of-us-health-care-system

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