APG’s Susan Dentzer: the Value-Based World Is Steaming Ahead
Susan Dentzer is president and CEO of APG—America’s Physician Groups—one of the leading nationwide associations representing physicians and medical groups delivering care in value-based contracts. APG has been instrumental in advancing the policy interests of its member physician groups, particularly around ensuring that the conditions under which they deliver care are optimally conducive to creating value and improving the health status of populations.
Susan Dentzer will be the lead keynote speaker at the Healthcare Innovation Capital Area Summit on May 2, to be held at the Ritz-Carlton Tysons Corner in McLean, Virginia, just outside of Washington, D.C. She sat down recently with Healthcare Innovation Editor-in-Chief Mark Hagland to discuss a range of issues facing her association, and how she sees the policy and payment landscape evolving over the near term. Below are excerpts from that interview.
What’s most top of mind for you right now, with regard to the healthcare industry?
What’s top of mind this week [this interview was conducted during the week of March 4] is the cyberattack on Change Healthcare, and the fallout that many of our members have experienced. And this obviously is not a new thought, but more vulnerable now as we’ve successfully digitized healthcare. And in this case, the attackers successfully found the node in the system that was most vulnerable. And we have members who have a lot of dependence on Change Healthcare’s services, including around pharmaceutical claims, or in terms of payers’ dependence on Change Healthcare’s services. And not everybody has been affected, but those that have been affected have been affected pretty dramatically, in terms of a range of tens of millions of dollars. So we’ve been talking with CMS and with the White House, and asking them to do whatever is possible to unfreeze the payment system. Earlier this week, they announced a set of steps largely aimed at Part A payments, and helped our friends in the hospital community; but didn’t deal with Part B or Part C payments. So we’ve asked CMS to try to do what it could.
Unlike others, we didn’t ask for advanced payment, because frankly, not everybody was affected. But we did want them to do everything in their power to unfreeze the system; and they’ve definitely responded. And CMS [the federal Centers for Medicare and Medicaid Services] has made it really clear that UnitedHealth Group needs to help its providers with financial assistance. And this just reminds us of the perils of interoperability and interconnectivity in the healthcare system, and puts the onus on all of us to really prepare for these possibilities. And we need fail-safe backups in the system. That’s a really important issue for the sector to think through; and there will probably be a role in Congress and the agencies.
Overall, we are not where we need to be as an industry, around cybersecurity, correct?
Clearly, I am not a cybersecurity expert. But it’s clear that these attackers were fairly sophisticated. So the onus is on everybody now, to go back and prepare for the inevitable cyber attacks.
What does the value-based and risk-based contracting world look like to you right now?
We believe that the value-based world is alive and well, and needs to be even more alive and well in multiple domains. And we look at the Medicare Shared Savings Program. And the goal of the Biden administration is to get everybody covered by Medicare into accountable models by the end of this decade. We’re probably not going to meet that target at the current pace. And one asks, why? One of the answers is that we need to continue to provide very robust incentives, particularly for smaller physician practices, to join these models. Because the biggest changes in utilization, particularly from the hospital side, and in shared savings, have come through physician-led organizations being involved in the MSSP [Medicare Shared Savings Program] And it’s not a mystery; they have more incentives to avert hospitalizations. So if we need to get more primary care into the MSSP, we’ve got to incentivize the smaller practices. And by the way, those smaller practices are not APG members. But we need to put investment into this. Primary care is starved for funding and has ben for years; many physicians are at or near retirement age, and they’re struggling to survive as it is. So what are we doing here as a country? We know that we need a robust primary care apparatus. And clearly, we need to invest more in primary care.
Another big interest of ours is the Medicare Advantage program as an agent of value-based care. And we are the first to make the point that more Medicare beneficiaries are enrolled now in MA than in the traditional Medicare program. We think the traditional Medicare program is bifurcating between people with the income to pay for supplemental insurance; and other Medicare recipients are not even enrolled in Part A or Part D. There’s a growing segment of those individuals. Not to put too fine a point on it, but it looks like the traditional Medicare program is bifurcating into pretty well-off beneficiaries and desperate beneficiaries.
Now, let’s look at the implications for the MA program. The payment that goes to MA plans is based on the payment going to traditional Medicare providers. However, these programs are evolving. And saying that plans administering to Medicare Advantage, that payment has to be linked to the norms in traditional Medicare makes less and less sense, particularly for this pool of people only in Part A, makes less and less sense, because they don’t have coverage for doctor care or drugs. So that norm for payment makes zero sense. So this whole issue of the benchmarks needs to be revisited. And you can see that this year in the advance notice that CMS put out and that we’ve responded to in comment letters. Health plans noticed that there was a big increase of people enrolled in MA—they had a surge in utilization and spending late last year. No one knows exactly why; it’s possible that this was related to people delaying care during the pandemic. That wasn’t necessarily true in traditional Medicare. And proposing to pay health plans in 2025 based on older patterns, is not helpful. So we’re hoping that CMS will look at what happened in the fourth quarter of last year in the traditional Medicare program, and possibly adjust Medicare Advantage payments accordingly. I’ll just come back to the fact that these have evolved into two very different programs; and public policy has got to find a way to address it.
What should hospital leaders be thinking about right now?
I’ve always thought that you could say anything you wanted about the U.S. healthcare system, and it would be true somewhere. And that applies to hospitals as well. Our sense is that within the hospital sector, there is a range of views on VBC that ranges from, we realize this is coming, and let’s move to meet it, all the way to, let’s fend this off as long as possible, at least until I retire, and every attitude in between. And we knew we’re always going to need hospitals; but they don’t have to look or operate the way they do now. And they don’t have to be predicated on a revenue model based on people getting more elective surgeries than they actually need. We don’t have to run the system that way; we do run the healthcare system that way currently.
Hospital-based health systems really can develop alignment with independent physician groups, though, correct?
Yes. We have member groups that are involved with hospitals in value-based contracts; they know that they, the physician groups, are in the lead in terms of care management of patients. They see higher-risk patients more frequently and take all kinds of steps to avert hospitalization; and if they do end up being admitted, when they’re discharged, they get very involved right away. None of this is rocket science; it’s proven. And hospitals do obtain a portion of the shared savings. And they don’t have to expand facilities for people who don’t need to be there in the first place. So it can be a virtuous cycle; but you’ve got to start with a commitment to the idea that not everybody who gets hospitalized should be.
