Providence Population Health Management leads the multi-state health system’s Medicare Shared Savings Program (MSSP) initiative, which is the largest ACO in the country, covering more than 150,000 members. The program has generated over $230 million in cost savings for CMS between 2017 and 2022, and it expects to save CMS more than $200 million over the next two years. Deepak Sadagopan, chief operating officer of Population Health Management at Providence, recently spoke to Healthcare Innovation about what he sees as the key to success in value-based care.
HCI: I was wondering if you could talk a little bit about what you see as some of the keys to success in value-based care. Did it take some course corrections before Providence saw those results?
Sadagopan: We've been in MSSP since 2014 and we've been consistent with our support for the program. The period between 2014 and 2017 — not only for MSSP, but for other risk programs that we were in — was not a great period of performance for us because as an organization we were still learning how total cost of care risk works. As a healthcare delivery system, you don't have the functions and the processes and the systems built in to actually manage risk. The provider side needs to learn to think like a payer to be able to manage risk, and that doesn't come naturally. We're not built to think that way.
MSSP was one of the programs that we used as a pathway to learning how this works in a broader managed care environment, primarily because MSSP had a single standard model of a contract with CMS, and it covered a lot of our operating regions, so it gave us a great pathway to learn about value-based care. That learning materialized in multiple ways. One was, how do you develop partnerships in every region with groups that are committed to enhancing primary care, providing primary care access to these patients or beneficiaries and and evaluate their chronic conditions and provide a pathway to managing this within a primary care environment before it gets worse.
HCI: What kind of partnerships are you talking about?
Sadagopan: At that point it was within Providence itself, among all our primary care groups, understanding which are the most committed medical groups. We had to identify the right medical groups, and then identify the referral partners in each of our regions who are outside Providence. I think understanding the network and interconnectivity of healthcare is one part.
The second part is actually recognizing that a significant portion of healthcare delivery occurs outside the walls of Providence and assimilating all the information and data and associated analysis about total cost of care…..Gaining better visibility through an integrated data and analytics framework has been one of the key parts of this.
HCI: Does that include working with the post-acute care providers?
Sadagopan: Yes, it involves constructing a post-acute network. The traditional mode of hospital operations would be once you discharge the patient, you don't really have visibility into what happens to the patient after that. The single biggest change we've made is reaching out into each one of those skilled nursing facilities and built data connections with each one of them. That has dramatically changed our ability to manage the full spectrum of care. We can say, ‘this patient has been in the SNF for over 37 days that that doesn't sound right. We’ll need to intervene right now and and figure out how to get them home.’
We are able to ask these questions now and make and initiate those interventions outside the walls of our system, which has been so important for us to manage these types of programs.
HCI: Are there other kinds of cultural changes involved?
Sadagopan: When it comes to integrating these value-based care programs into the healthcare delivery system, I would say that not just within Providence, but across the industry, we have an incredible capacity deficit. Today 99% of all the billing and information that we track is through our revenue cycle, through our claims operations. Our billing systems are only wired to push reimbursement through claims. If we get a shared savings payment that we received because we accepted a lower claims payment in exchange for accountability, that doesn't even flow through our natural billing systems; it sits here on the side.
We had to take a step back and say, whoa. Our healthcare economics has changed dramatically. It's not just our P & L’s or our financial performance for our hospitals and medical groups anymore. We need to learn this concept of a risk pool, which is all the patients assigned to our care, and how much resources are assigned by the payer or Medicare into that risk pool in terms of funding, and how much is getting paid for claims, even if we are not getting paid for those claims — how is that risk pool performing? This is the part of thinking like a payer that we don't do. And so one of the biggest changes we've made is actually thinking about integrating value-based care into the mainstream delivery system.
This influences every part of what we do. If you need to allocate more resources to hire community health workers or more behavioral health resources to take care of populations, or mobile care assets to deliver care in remote areas, the funding for all of that comes from recognition of this integrated performance pool, not just what we get from claims.
HCI: Today, approximately 35% of total patients served by Providence are covered under alternative payment models. Do you have goals to see that increase dramatically, and does that 35% number still leave you with that proverbial one-foot-in-each-canoe problem? Do you start to build this muscle memory of working in value-based care arrangements?
Sadagopan: The key part of changing that muscle memory is what I just described — actually recognizing this risk pool economics and placing that front and center of how delivery system leaders really think about the economics of healthcare. That risk pool performance is just as important as the financial sustainability of each of your core lines of business in a hospital system.
The challenge is not how to maintain your balance while standing in two canoes. I think the challenge is how do you bring those two canoes together and attach them so that you don't have to lose your balance in the first place.
HCI: You mentioned that initially it was important to figure out which primary care groups were ready to do this value-based care work first. What about the people who weren't ready initially? What do you do to bring them along?
Sadagopan: I'll use this MSSP program as an example. We have about 30 to 32 TINs [taxpayer identification numbers] that participate in our MSSP program. It's one of the largest in the country.
We take a very data-driven approach, and we say, ‘what is your total cost of care expenditure, and what is the industry benchmark?’ We've grown in our sophistication of assessing the benchmark at an individual level and comparing them against the total cost of care experience and quality outcomes.
For those groups whose benchmarks and quality scores were not adherent, we still kept them as part of the organizational structure of the network. Although we didn't physically include them in the MSSP program, we did everything for them that we do for all the other members, so that they would consistently be a part of every report, every outreach engagement. That helped them learn along with the rest of the group.
The other thing we established was an annual evaluation process, so we would re-evaluate this annually, and every entity that actually meets those benchmarks will be back as part of the network again. Most of those entities that were outside the network for a couple of years made it back into the network in less than three years as a result of that. If you look at our membership graph for our MSSP program, it was down a bit, and now it's picked back up again.
HCI: From a policy perspective, are there things about MSSP or the ACO REACH program that you would like to see CMS change?
Sadagopan: Fom a policy perspective, one of the things we are very excited about is CMMI experimenting with what are called “shadow bundles.” The critical part of any value-based care initiative is how you engage specialists, and that's something that we've been thinking a lot about.
HCI: And there haven't been a lot of APMs directed at specialists…
Sadagopan: Other than bundles. Yes, right. Bundles are a wonderful tool, but the challenge with bundles has been that they aren't sustainable unless they reach a particular volume, which kind of gets you back into pseudo-fee-for-service mode. But bundles provide one very useful attribute, which is that they reduce the variability across episodes. You're not seeing these spikes — that episode A for a knee replacement cost you $50,000 and episode B cost you only $15,000. They even it out within a particular time frame.
If you take the predictability of that episode and incorporate it within a structure like MSSP, what happens is that all the acute-care episodes become less variable and the total cost of care goals then become easier to work with — and as a result of that, quality becomes better because readmissions are going down. If you create shadow bundles within a total cost of care program, engage the specialists within that and provide them with incentives to engage within a total cost of care program, I believe that will provide a great engagement tool for specialists.
CMS and CMMI are looking at ways to reduce the variability across these programs in terms of measurement, in terms of how you consume data for these programs.
HCI: And in terms of multi-payer alignment with commercial payers….
Sadagopan: Yes, right. For example, Providence, out of our 1.7 million patients who are in some form of value-based care arrangement, that spans over 130 unique value-based care contracts, and each contract has multiple cohorts. Not many of those 130 contracts are really identical to each other. Every one of them is different. It creates an administrative complexity challenge for us, because now we've gone from revenue cycle complexity to value-based care administration complexity, which is the opposite of the goal that we're trying to simplify healthcare, not make it more complex. So I think standardizing a set of quality measures and structures for how these programs are administered will make it dramatically simpler for us to administer these within the broader context.
