Turning Competition Into Alignment in North Carolina: Former Blue Cross NC CEO Reflects on State’s Value-Based Care Journey

Throughout North Carolina these days, significant progress is being made by healthcare stakeholders to push forward on value-based care initiatives in a variety of ways. In a recent Healthcare Innovation article, Senior Editor David Raths described some of these efforts that center around a core goal among state leaders: changing their focus from paying for healthcare to paying for health.

Indeed, top healthcare leaders from the Tar Heel State representing the provider, payer, and government perspectives, spoke at the Health Care Payment Learning & Action Network (LAN) Summit in Washington, D.C. in October about how the two largest payers, Blue Cross Blue Shield of North Carolina (BCBSNC), and Medicaid, and the large health systems, are aligning across three dimensions: vision and goals, incentives, and investments in infrastructure.

Raths specifically reported on Blue Cross’ ambitious goals for moving providers to risk. “By the year 2023 every Blue Cross member will have a provider that is 100 accountable for total cost of care and quality, with downside risk. We think we can get halfway there by next year,” said Rahul Rajkumar, M.D., senior vice president and chief medical officer of BCBSNC.

Back in 2017, Brad Wilson, then-president and CEO of BCBSNC, announced he’d be retiring after nearly eight years at the helm during which he led the company through a period of rapid healthcare change. For instance, under Wilson’s tenure, BCBSNC was one of the first major U.S. insurers to create a price transparency tool that the general public could use to compare in-network pricing for specific procedures by provider and location. What’s more, Wilson helped begin North Carolina’s transition to value-based care, launching innovations such as bundled payments for orthopedic procedures, while adding quality of care incentives to every hospital contract in the state.

Wilson, a native North Carolinian who now does strategic healthcare consulting, and also is an advisory board member of health IT company CitiusTech, recently spoke with Healthcare Innovation about the value-based progress North Carolina has made, the keys to success in this area, what important work still remains, and more. Below are excerpts of that discussion.

Can you give an overview of the healthcare transformation the state has gone through in the past decade?

I came into a leadership role at BCBSNC six weeks before the Affordable Care Act (ACA) was signed into law in March 2010. At that time, there was already somewhat of a revolution underway in healthcare, but the passage of the ACA was an accelerant that brought the urgency around transformative and material change to the forefront even more so than before. What I found out at the onset of my leadership opportunity at BCBSNC was that there was some confusion, fear and anxiety, but also an opportunity for innovation and creativity as never before.

As I engaged healthcare leaders across our state, I could see, feel and hear an appetite for doing things differently. In those early days, no one was quite clear on what those things were or should be, but it began the process that I think we are now seeing lots of results from: people moving away from legacy ideas and the shackles of the past to really apply creative and innovative thinking about how to best serve the needs of patients.

Bundled payments are one good example of an early value-based care initiative that was [evolved] over time. What’s that about? Higher quality and lower cost, with more certainty around an episode of care and a financial construct to support that. Looking at that in isolation, that is a value-based care component. Fast forward, we’re now in a place where we are beginning to truly understand and improve upon on the phrase ‘value-based care.’ Now we are seeing far more pervasive components of the care continuum being captured and defined within that context. We are still at the beginning of this journey. While considerable progress has been made, particularly in our state, as it relates to the move from fee-for-service to value-based care, we still have a long way to go and things we haven’t thought of yet will be thought of and deployed.

What have been the keys to experiencing some value-based care success in this state specifically?

When any revolution is underway, leaders emerge that define the shape and course of that revolution. Going back to 2010, as I was traveling around the state talking with the leaders of provider organizations—of large and small systems, and private practices—I found that a number of those leaders understood that change was inevitable. We were fortunate to have a good number of forward-thinking healthcare leaders, even in the early days; and it was a distinct minority, but that was OK.

And the leadership team at BCBSNC falls into that category; we were ready, willing and able to collaborate for change, and to move away from an attitude which had been pervasive in the healthcare ecosystem—that we are all competitors, that when we gather around a table, our role is to keep folks on the other side of the table at arm’s length and negotiate with a focus on our own self interests. But you can’t have a meaningful value-based care conversation if that’s the definition of the conversation. So we were fortunate enough to have forward-thinking healthcare leaders who brought together a spirit of collaboration to the transformation conversations that were necessary, and from that we began to shape things that could be done and deployed, learn from them, and then continue to improve upon that.

Embedded in that, we had to focus on rewarding outcomes. We worked hard to identify those things that could be measured with a degree of certainty and confidence so that we knew we were focused on the right things, and the things we are all doing were in fact yielding higher quality. Bundled payments were an example of that, and with this [approach], we believed that people would become comfortable that this new model of care would work.

Since I have left BCBSNC, we have seen a continued acceleration, thanks to the work of [new] leadership, leading health systems in the state, and Mandy Cohen, M.D., Secretary of the North Carolina Department of Health and Human Services (NCDHHS), who have continued that collaborative spirit and effort to bring things to patient care that are now yielding measurable results. Less than a year ago, BCBSNC and five health systems in the state announced the launch of Blue Premier, a transformative accountable care initiative that I believe shows the material progress that now exists in the market, built upon all the evolutionary work that came before.

Can you discuss the importance of payer-provider collaboration when developing these value-based care initiatives?

It’s critically important. The other payers in the state, relative to Blue Cross, are all obviously competitors. But we do share the same goals of higher quality and lower costs for the patients that each of these institutions serve. In the competitive nature of a marketplace, with too much collaboration between competitors, you can run into regulatory and statutory concerns there. So you want to keep a healthy dose of true competition in that context.

But relative to payers, it’s critical to work with providers to make sure there’s a philosophical alignment, alignment around goals, alignment around a pathway to achieve those goals, and then alignment around those consequences, with rewards and accountability for successes and failures. If you don’t have that, if it’s all not in sync, you will sub-optimize the relationship.

An example of this is Blue Premier, as the agreements that were put in place with those large systems aligned shared accountability, shared risk, and clarity on goals. And the five agreements in place that hold all of that together all contain those common agreements so that providers will in fact share in cost savings if they meet the criteria and have the measurable quality improvements, and everyone will share in the losses if all that comes up short. So, what used to be competing parties are now aligned and there’s now a common interest that has developed as a result of these relationships.

What is the most important work in this area that still remains?

One area is a continuing maturation and ability to collect, analyze and deploy data in real time for the benefit of the patient. Lots of improvement has taken place in that whole sphere—data sharing is a lot easier now than it used to be when everyone thought that their particular basket of data was a competitive advantage in all things. But there is a lot more work left to do.

Here in North Carolina, we also have to figure out how to deploy value-based care in rural areas, as most of the successes in our state are primarily in more metropolitan areas. But North Carolina is still about 50/50 in terms of its urban/rural population, so we need to deploy this for everyone’s benefit.

In our state, we are just moving toward managed care for Medicaid, and that’s an exciting innovation in how that program is run and deployed. It unfortunately appears that its ultimate deployment will be delayed, so getting that back on schedule is critically important for the delivery of higher-quality care to that particular patient population.