Local, provider-owned health plans need to be customized to the specific requirements of their communities if they are to be sustainable, experts say.


Sept. 21—There is little consensus among healthcare finance leaders about how healthcare transformation should occur but at a recent meeting they agreed standing still is not an option. 

“This is a good time to catch up on the change-management literature,” Willian DeMarco, founder and president of healthcare consultancy Pendulum Healthcare Development Corp., said at the meeting..

CEOs often tell DeMarco that they wish they had more advanced training in change management.

“No one is prepared to totally transform this current disconnected series of skirmishes with reality and turn it into a seamless functioning and sustainable care system,” DeMarco said in an e-mail. “That’s why they hire change agents from the outside to help construct a vision, help pick the right teams to launch that vision and then integrate people’s thinking about the system and where it is changing and where it is not changing.”

Common themes running through the recent summit on the Creating Clinically and Financially Integrated Delivery Systems, organized by World Congress, included the need for physician leadership to help create value-based networks, addressing lingering negative effects of fee-for-service payment systems, facing the shortcomings of health information technology, and accommodating the rise of consumerism in healthcare.

To the last point, Robert Furno, MD, chief medical mfficer for the Centers for Medicare & Medicaid Services’ (CMS) Region V in Chicago, said some healthcare organizations are addressing transportation and access concerns by picking patients up at their homes and by bringing their specialists to community clinics certain days each week.

'Most Critical Lever'

“Consumer engagement is the most critical lever we have,” said John Burich, vice president of strategy and business development for Passport Health Plan, a Kentucky Medicaid benefits administrator. Burich suggested healthcare organizations use Netflix as a model for consumer engagement.

“It’s all about personalized programs,” Burich said.

Burich explained how Netflix learns its customers’ preferences by mining data from a variety of sources while healthcare organizations continue to rely only on medical data, which does not necessarily present a useful or complete picture of who their patients are.

“Doing the same thing over and over again is not the best strategy, but this industry seems to be comfortable with that,” Burich said.

Meanwhile, cuts in funding have forced Medicaid plans to recast themselves as social welfare programs. This new mindset calls for saving downstream costs by addressing the social determinants of health, such education and environmental factors that contribute to poor health.

Michael Kasper, CEO of DuPage Medical Group (DMG), an independent physician group with almost 600 members, offered contrarian points of view on the growing trends of physician employment and provider-owned health plans.

“Physician employment has never worked,” Kasper said. “I don’t know if it’s going to be different this time.”

DMG uses what Kasper called an “owner-operator” model. Physicians often view their medical group merely as a “compensation engine,” Kasper said, so the DMG strategy was to “move doctors from ‘me’ to ‘we’” by creating an environment where the value of their equity in the group could grow as much as their work compensation.

Similarly, other speakers noted that shared savings programs or quality bonuses of $5,000 to $10,000 rarely change physician behavior, but larger payments beyond $20,000 can make an impact.

Alexis Levy, director of management consultant Healthscape Advisors, noted in her presentation that providers need to understand the business case for change. A good way to do this is to provide metrics of where they are today, what will happen if changes are successful, and where they’ll be if they do nothing.

'Lightning in a Bottle'

Kasper said most provider-led health plans will ultimately be exercises in futility. The only such plans with sustainable success were Kaiser Permanente in California and Intermountain Healthcare in Utah, according to Kasper, who described these examples as “lightning in a bottle.”

DeMarco disagreed. He noted that employer dissatisfaction with current health insurance options represents an opportunity for providers and Kaiser’s and Intermountain’s success were evidence that individualized community-based plans designed to meet the specific community needs can be successful.

Though not provider-based, Burich told how local plans, such as Passport Health Plan, can be successful by emphasizing their connection to the community.

“We know the time zone and who won the game,” Burich said. “We’re never not invited into discussions.”

Inova Health System’s original health plan ran up huge deficits and folded, said Russell Mohawk, CEO for health plans and population health services for Inova. In 2012, Inova tried again by launching Innovation Health Plans through a 50-50 joint venture with Hartford, Conn.-based Aetna.

“It’s been profitable since day one,” Mohawk said. “It’s had its bumps. But, so far, it’s been successful.”

One cause of friction Mohawk noted was how compensation for hospital CEOs still can include fee-for-service incentives, which work against population health and wellness initiatives.

“If we’re doing our jobs, we’re pulling volume out of the hospitals,” Mohawk said.

'Thelma & Louise' trajectory

Issues around local control and physician control also drew the focus of finance healthcare leaders. Kasper, however, didn’t put much stock in this issue.

“I’ve got news for you, no one is in control,” Kasper said. “There are zero constituencies in control.”

In this environment, collaboration and revenue diversification are keys, according to Kasper, who said he tells his board and shareholders that unilateral strategies “will take you on a ‘Thelma & Louise’ trajectory off of a cliff.”


Andis Robeznieks is a freelance writer based in Chicago. Follow Andis on Twitter at @AndisRobeznieks.

Publication Date: Wednesday, September 21, 2016