Key takeaways from North Carolina’s move to value-based healthcare
To gain a larger perspective on North Carolina’s statewide movement to value-based care, and what it means for the state, hfm spoke with Keith Moore, MCP, CEO of McManis Consulting in Denver. Moore shared his insights based on his experience working with providers in North Carolina on developing value-focused strategies.
Moore underscored that North Carolina is leading the way in the nation’s move toward value-based payment largely because of the confluence of four forces:
- Several major health systems have made substantial commitments and investments in value-based payments and population health.
- The largest commercial player, North Carolina Blue Cross Blue Shield (Blue Cross NC) is playing an active role.
- The state’s academic organizations and Blue Cross NC have solid personal links to the federal initiatives and the broader policy community.
- The state has expressed its intent to promote a value-based approach, as evidenced by attempts of the state’s treasurer to establish reference-based pricing.
Moore also shared his perspectives on the state’s readiness for the transition to value, key market considerations for organizations embarking on the journey, steps required for moving forward, where best to get started and the role of the CFO in guiding the process.
North Carolina’s readiness for value
The commitment to value in North Carolina is mixed, Moore said, but many are beginning to get excited about it. “When Novant and Atrium joined the Blue Cross NC Premier network, it gave the Blues a chance to have 50% of their members in value-based risk-sharing agreements this year,” Moore said.
Moore also pointed to a significant amount of activity on the payer side, noting that many organizations are moving forward with Medicare Advantage programs, and that the state, having received its Medicaid 1115 Demonstration Waiver from CMS in 2018, is moving forward on its pilot program, called “Healthy Opportunities Pilots,” in which beneficiaries must be enrolled in a managed care plan.[a]
Looking at these and other developments, it seems clear the move to value-based payment will happen in North Carolina, Moore said. “But the question is whether people will get discouraged because it doesn't happen fast enough,” he said. “And the answer, not just in North Carolina but also elsewhere, is that people do get discouraged, because it is not happening fast enough. It's harder than people thought, there's not enough market share initially and there are not quite enough dollars being put into it. Whenever financial gains are made, not enough of those gains are getting back to the clinicians, even if it's just as a “thank you.”
Moore also noted the move to value must consider local environments. “Within North Carolina, for instance, the rural markets are wildly different from the rest of the state,” he said.
“Don’t even think for a moment that the Research Triangle area is the same as a rural part of the state. There are several nodes of clear achievement around the state — in the Research Triangle, and clearly in Charlotte, Winston-Salem and Greensboro,” Moore said. “There need to be further linkages between these urban development nodes and the rural areas so that at the end of the day there can be a complete pattern of care that benefits all.”
“The market dynamics between urban and rural have changed,” Moore said. “There was a day when a rural hospital could sell itself to an urban health system. Now, the urban systems have recognized that's not going to work — that they will lose money if they do that. So these relationships must be carefully worked out across a lot of different issues, such as cross coverage in specialty areas between the urban and rural areas.”
4 steps for moving forward
According to Moore, leading organizations need to take the following four steps if they want to move beyond where they are right now:
1. Increase market share for population health and value-based payments.
2. Focus more on primary care needs and the sustainability of primary care models. A lot of attention should be paid to primary care and to the burnout issue in primary care.
3. Develop a specific rural strategy that can be adjusted to account for differences among rural areas.
4. Leverage tools such as artificial intelligence, telehealth, home visits and behavioral health -- and package these tools together with the service your organization already provides. It’s important to overlay a set of activities in those areas, and they must be well coordinated within an organization. Ideally, there should be some degree of coordination across the state and among some of these areas.
Elevating those advocating for the move to value
“Within health systems, people who are driving the movement in these areas need to be elevated in terms of their importance and their voice within their systems,” Moore said. “The finance people and others throughout the organization need to hear them at a different level of decibels.”
Moore also emphasized the need for physician leaders who devote time talking about the move to value. “These physicians should be saying things like, ‘This is where we have to go and what we want to do, so let's do it, and here's how.’ They should talk about why it's good for the patients, and how it can also be good for the physicians,” Moore said.
“And the physicians — particularly the primary care physicians in their practices and their extenders — must be given the data that they need to move in these areas, along with a sign that it matters,” he said. “Ideally, there will be financial rewards, but in the very least, it should be some significant recognition for those who are doing well. And as a part of a sensitive management system, leaders need to be sensitive to physicians’ daily lives, particularly the number of hours a day spent entering data into the computer versus seeing patients.”
Two questions are key, according to Moore:
- Are physicians going to benefit from it as well as the patients?
- Is the overall system going to benefit?
“Physicians and others involved in delivering care need to have a sense that, yes, over time they will benefit,” he said. Moore also noted that the voice of the primary care network needs to continue to be elevated as a part of the process. “I'm sorry, but I think we're going to have to pay primary care physicians a few bucks more,” he said. “We're going to take a little bit of money and put it into better management around primary care, with a little bit more actually getting to the physicians. I don't think in terms of the total system budget we're talking about a huge amount of money, but it needs to keep moving in the right direction.”
Opportunities for getting started
Another major concern for organizations making the move to value is knowing where to start. Moore suggested that many organizations will find Medicare to be a great starting place. “Getting into Medicare Advantage in some way has been a wonderful step forward for population health,” he said.
Medicaid has posed a challenge, Moore observed, notwithstanding the political differences around Medicaid expansion. “Just by its very nature, Medicaid is more difficult, because you have segments of the population that need different emphasized services. Also different states use different approaches and have differing levels of interest. “But I can put a positive spin on that: We have 50 different states experimenting with what to do in Medicaid, and several states have multiple innovative experiments under way. I think it's a matter of us all listening to who's doing what, and taking the best options and applying them to our local situations.”
Role of the CFO
Whatever approach an organization decides to take, the organization’s CFO should play an integral role, Moore says. “The CFO first needs to make sure that the right level of management and communication is taking place within the primary care community,” he says. “The CFO’s next step should be to look at how that links to the other parts of the clinically integrated network — and the other partnerships that they have — and how those linkages are being nurtured, developed and managed. CFOs can make a huge difference in the management – and ultimately the success or failure -- of value-based payments.”
[a] Hinton, E., Artiga, S. Musumeci, M.B., and Rudowitz, R., “A First Look at North Carolina’s Section 1115 Medicaid Waiver’s Healthy Opportunities Pilots,” Kaiser Family Foundation, May 15, 2019.