Akin said Cone Health deals with this dilemma by cultivating leadership and creating organizational agility to make course corrections and judgment calls to ensure sustainability.
Akin describes it as a learning journey. “It’s like a mountain with no top. I don't think we're ever going to be done learning. We've come a long way, and we've been successful. We've also failed our way to success in some ways; we've been willing to take risks and make mistakes and learn from those.
“Getting into arrangements with our payers where incentives are aligned helps tremendously,” he said. “We're at a point now where over 50% of our contracts have some significant risk-based component.”
The role of physicians
For all three organizations, physician leadership is paramount. Wildman underscored the importance of physician leadership: “I represent UNC Physicians Network. Think of it as the community physician arm of the healthcare system and a separate LLC. We spent the past few years, since 2012, developing programs for physician leadership. We looked at ourselves and said we need to have more physician leaders at the table, guiding the system around different initiatives, value-based payment being one.”
In addition to a physician leadership program developed with the Medical Society of North Carolina, the health system has worked on developing programs around physician well-being. “You can't keep a relationship with physicians if you're not going to consider their day-to-day work has changed,” Wildman said. “The work follows them home, which is a major shift from how they have worked in the past. So we’re developing real rigor and structure around well-being. And that can be from having a scribe program to having forums in which physicians can sit around and just talk.”
Clinical integration also is a critical strategic element for Cone Health, including the fact that the health system’s ACO, Triad HealthCare Network, is physician led. “We were fortunate at the inception of our ACO to have a number of visionary physicians around the table,” Akin said. “We told them that we wanted to support their leadership. It was a bit of a hard sell for some; they were thinking, ‘We'll believe that when we see it.’ But I think we've proven over the past seven or eight years that we were serious in saying we wanted this to be provider-led.”
Like UNC, Cone Health also has partnered to promote physician leadership, by investing in an arrangement with The Center for Creative Leadership, an internationally renowned leadership training organization headquartered in Greensboro. “We created what we call our ‘Physician Leadership Academy,’” Akin said. “And we are now on our seventh cohort of about 20 physicians. These are both independent, private practicing physicians and some who are employed in our own medical group. We train them in leadership science, and there's a strong experiential component. Partnering with physicians and bolstering physician leadership are a huge part of our DNA, and I think it has contributed a lot to the success we've enjoyed with value-based care.”
Krystopolski underscored the importance of providing data and data analysis to support physicians: “We have historically thought that if we give information to physicians, they're going to understand what to do with it. But it’s not enough for us to get it to them; we also have to assist in the interpretation of the data and then help them identify the greatest opportunities, such as where they should focus their patient care efforts. It's going to be a different world.”
Role of the healthcare CFO
All three executives agree that healthcare finance leaders nationwide have an important role to play in the value transformation.
Akin said, “Being an effective CFO today takes a combination of abilities that's probably a departure from the past. It requires understanding the traditional nuts-and-bolts financial aspects of operating an effective health system while also being a visionary and understanding and appreciating where the industry is headed and how things are changing. CFOs need to be prepared to accept uncertainty and a lack of predictability. It can be unnerving for a traditional CFO (and others of us for that matter) to live in a value-based world where you are working to reduce utilization, when you have been accustomed to a world that’s all about compensation for that utilization.”
Wildman also suggested it’s a challenging time for a CFO: “CFOs should be students of the environment they are in and be actively engaged in understanding value-based payment arrangements,” he said. “You must not only understand the fee-for-service world but also make sure that, if this is a sliding bar, you are not sliding over and trying to align resources and make investments into value-based care before there's dollars. Meanwhile, you must ensure the organization is well positioned to make that switch whenever you do get those contracts.”
Krystopolski emphasized the need for CFOs to be able to see the big picture and identify opportunities to invest more or redirect resources. “Building automated solutions for some of the processes that we've historically done manually will be important in supporting the need to redeploy resources,” she said. She emphasized the need to obtain immediate access to financial information to support rapid decision-making and the ability to perform effective modeling.
“As with any change of this magnitude, many operational, financial and patient challenges must be addressed to ensure readiness for value,” Krystopolski said. “These range from undertaking comprehensive communication and education campaigns to retooling technical and operational processes at the point of care to reflect the new environment. I think these challenges are magnified in some of our rural communities due to constraints in resources and supporting capabilities.”
Lessons for other states
All three executives believe other states can learn from North Carolina’s move to value. But they also are open to learning from what’s happening across the nation. “I have never in my 30-year career seen a more challenging time in healthcare, or a time with greater opportunity,” Akin said. “This conversation is inspiring and exciting. Sharing the successes, challenges, opportunities and failures as these models are implemented will provide an opportunity for consistent improvement and alignment in a U.S. system of healthcare that is ripe for transformation.”
For CFOs in other states who are watching developments in North Carolina and thinking about preparing their organizations for a shift to value, Wildman suggested embracing a willingness to pilot in different areas. “The learning curve can be steep, so you want to start by dipping your toes in different areas of risk that aren't too large, so if you fail, the cost of failure is offset by the value of learning.”
He also cautioned against being idle. “Don't wait by the phone for a payer to call you. Actively seek out those partnerships. And in states where payers are not in a lot of the value-based talks, this is a real chance to partner with the payers and get out front and really write it with them, because they are looking for help, as well.”
Wildman advised CFOs to monitor what’s going on in their states, keeping in mind that even though the payers are national, their services are delivered at the state level, and every state and its population offer something different. “Here's an opportunity for those CFOs in other states to start forging a relationship in a way that's meaningful for both sides to understand,” he said.
“Risk arrangements are here to stay," said Wildman. "It's exciting for it to be in North Carolina because we can engage with our patients in ways we couldn't previously under any kind of standard fee-for- service model. I think what care looks like in the future, and how it's delivered, will be in the context of value-based payment arrangements. That’s what’s coming for North Carolina.”
a. McClellan, M.B., Alexander, M., Japinga, M., and Saunders, R.S., “North Carolina: The new frontier for health care transformation,” Health Affairs, Feb. 7, 2019.
Additional perspectives on North Carolina’s move to value
Read highlights of our conversation with Keith Moore, CEO of McManis Consulting in Denver, who provided additional insights based on his experience working with North Carolina providers on value-focused strategies.
6 value-based elements vetted by North Carolina
North Carolina has a confluence of favorable factors helping to pave the way to a predominantly value-based payment system. Those components include providers that continue to show commitment to the value-based approach. The strategies for transitioning to value shared by Cone Health in Greensboro, UNC Health Care in Durham and Atrium Health in Charlotte can provide useful examples for any organization preparing for such a journey.
Looking ahead, if the move to value is to be successful, health systems and physician groups will need to do the following:
- Grow the market share of value-based payments
- Elevate physician leaders
- Find answers to primary care burnout
- Integrate behavioral health further into the care process
- Find ways to leverage virtual visits and artificial intelligence
- Recognize that this is a hard undertaking and it takes time
About Cone Health
- More than 12,000 employees and 1,300 physicians
- 6 hospitals, including The Moses H. Cone Memorial Hospital
- Triad HealthCare Network
- Several ambulatory care, outpatient surgery and urgent care centers
About Triad HealthCare Network
Next Generation ACO performance for 2017:*
- 4th overall for quality with a score of 96.95%†
- 5th for total shared savings with savings of more than $13 Million
*Out of 44 participants; 2017 results are the most recent results released by CMS.
† It is important to note that of the 44 NGACOs, only 16 were in their second year of the program where quality was based on actual performance and not set at 100%.
About UNC Physicians Network
- The physician arm of UNC Health Care*
- More than 300 providers in over 90 specialty areas
- Full range of primary and specialty services
*The larger health system also includes the clinical programs of the UNC School of Medicine and 11 affiliate hospitals and hospital systems across North Carolina.
About Atrium Health
- More than 65,000 employees
- More than 40 hospitals and 900 care locations across North Carolina and South Carolina
- More than 14 million patient encounters each year