Roberts suggested that ownership of a health plan has been the key ingredient in Geisinger’s ability to succeed under value-based contracts.
“We've had a health plan since the 1980s, and that’s given us the opportunity to cultivate and grow our model over an extended period of time,” Roberts said. “Having said that, in the 1980s there was not a lot of governmental business; it was mostly commercial. Today, I would submit the greatest areas of opportunity are in the government-sponsored plans, whether they're Medicare Advantage, ACOs or Managed Medicaid. States have continued to move away from traditional fee-for-service Medicaid because they just don't have the infrastructure to efficiently manage Medicaid beneficiaries’ care. And they've seen that, by actively outsourcing that care to managed care organizations, they can get better control over their costs, even if it’s not to the full extent that they may want.
Owning a health plan is only one of the key factors that organizations need to address to be successful under risk contracts. Roberts also emphasized two other important factors.
“You also need to understand the risks that you're taking, and that requires data,” he said. “It also requires underwriting, actuarial and benefit-design expertise, among many other important functions. That’s the upfront part. Importantly, providers have to recognize — and this sounds really simple — in risk-based arrangements, you can't deliver fee-for-service medicine that's focused on units as the productivity and incentive measure. You must be able to deliver effective, high-quality care, and do so more efficiently to be successful.”
Roberts also explored the rationale for deciding to move forward that addresses the very reasonable aversion many providers have to taking on risk when they don’t have to do so.
“If I tell you I want you to take risk, your first question should be, ‘How am I going to be compensated for taking that risk?’ That's called a risk premium, and it's fundamental to nearly every form of insurance.
But Roberts raised another, perhaps even more important question: “If you say to me, ‘I want you to take risk,’ then my first question is, ‘Why?’ If I'm a physician and I'm not in the business of evaluating and assuming risk, and if there is no incentive for me, why should I take risk?” It’s only natural. If someone asks, ‘Do you want to take this risk? We're not going to give you anything for it,’ then, why would I?
“But I think the other part is not so much thinking about it in the context of risk but thinking about it in the context of the reward. The benefit should be, the patient receives better overall care and a better experience.
“For example, in the case of Medicare Advantage representing an aged population, it must be recognized that a physician can’t spend just 10 minutes with the patient. Our experience shows, to really understand the patient’s conditions and comorbidities, you must be willing to spend more time with those patients.
“For our Medicare Advantage patient population, we give extended primary care visits. It's important for at least two reasons. One is to make sure the physician understands the patient’s conditions, comorbidities and other matters. The second is to fully document that patient’s care and conditions. Care and condition in the documentation is what translates into a risk adjustment factor, and that's the basis on which Medicare Advantage premiums are adjusted and paid. That is the risk adjustment I referenced. Spending a little more time with the patient to document what they have enables you to provide the care they need — and also get paid consistent with the care that you're providing.”
It's about embracing change
“Our commitment to value-based care starts with our system’s vision to embrace change,” said Steve Oglesby, CFO, vice president and treasurer for Baptist Health in Louisville, Kentucky. “We know change is coming in. So we have taken on the culture of embracing change, and it's also a focus on systemness. What that means is that we consider the impact of value-based movement in arrangements and payments on the entire system, including hospital operations, our medical group, our clinically integrated network [CIN] in our ACO and so forth.