A Managed Care Expert Looks at the Challenges Facing Providers As They Plunge into Risk

As the leaders of hospitals, medical groups, and health systems plunge headlong into risk-based and value-based contracting, the challenges of strategizing around downside risk are becoming more and more complex—particularly those around working effectively with data to ensure contracting success.

For example, as this publication reported in an article published last week, “The announcement on Wednesday, January 10 by senior officials at the federal Centers for Medicare & Medicaid Services (CMS) that the agency will require participants in the Medicare Shared Savings Program (MSSP) will be required to submit applications to the new Pathways to Success part of the Medicare Shared Savings Program (MSSP) by February 19, has roiled accountable care organization (ACO) leaders nationwide.”

As noted in our Jan. 10 report, “On that same day, the Washington, D.C.-based National Association of ACOs (NAACOS) published a press release criticizing CMS for the timeframe involved, following the issuance of the final rule on December 19. In its Wednesday press release, NAACOS stated that “The Centers for Medicare & Medicaid Services (CMS) late Wednesday announced applications to participate in the new Pathways to Success accountable care organization (ACO) program will be due February 19, two months after the agency published a nearly 267-page rule overhauling the Medicare Shared Savings Program. In response, the National Association of ACOs (NAACOS) is calling on CMS to give ACOs till later in March to understand the complex changes and determine participation options with affiliated doctors, hospitals, and other providers before committing to high-stakes decisions.”

Meanwhile, in that same article, this reporter interviewed Jennifer Moore, chief operating officer at MaineHealth ACO in Portland, Maine, and a NAACOS board member. Moore was quoted in NAACOS’s press release as stating that “Setting an application deadline two months after publishing the final rule does not give ACOs that have expiring agreements the necessary time to vet the decision internally or the time to process the many elements of the application. Given the significant changes, ACOs need to engage actuaries to understand how we would fare in downside risk,” she added. “Such an analysis takes time. Without that time, we would have to enter an upside track out of the gate.”

All of these concerns on the minds of the consultants working with provider leaders, including that of Rob Barras, who leads the health solutions practice at the Buffalo, N.Y.-based CTG consulting firm. The Philadelphia-based Barras spoke recently with Healthcare Informatics Editor-in-Chief Mark Hagland about the current landscape around risk-based and value-based contracting. Below are excerpts from that interview.

How long have you been with CTG?

I lead Health Solutions for CTG, and have been here about 10 years, other than a year I spent at the Advisory Board Company from fall 2016 to fall 2017. So, 28-29 years in healthcare IT; long enough to see all kinds of trends.

When you look at ACOs and providers trying to ramp up their data analytics capabilities for value-based contracting, and the challenges facing them, were you surprised at all by the industry’s reaction to CMS’s deadline announcement two weeks ago?

That reaction doesn’t surprise me at all; and probably in six months, they’ll still be concerned about how much downside risk they can take on. Most organizations are just starting to scratch the surface of reaping some level of value. The maturity curve is starting to accelerate relative to the tools available out there on the market; and it’s happening quickly, but not quickly enough. So it’s slowing the adoption of risk-based contracts. That’s why you’re seeing hospitals, medical groups, health systems, and ACOs push back against taking on downside risk.

So it doesn’t surprise me in the least. One of the main challenges for providers is that, over the years, especially in the past five years, they have acquired analytical tools and capabilities that they weren’t ready to leverage. They went from 0 to 60, and they skipped a bunch of steps. The good news is they are going back and redoing some of these steps.  The second piece is that some of the tools are now maturing and in turn, organizations are gaining a lot more visibility into what it is they need to address. So the requirements of value-based care are becoming clearer, while these three developments are working in conjunction, and creating a bit more momentum and readiness for downside risk and value-based care.

What specific things are they having to redo?

One of the things we hear a lot is ‘Well, we signed a contract with a couple of different analytics vendors, but other than some custom reports we’ve built for a specific issue, we really haven’t been able to leverage the capabilities for that specific tool.’ And that’s because you really need to understand the capabilities of that tool; the requirements of those contracts; and as an organization, you need to mature in your understanding and management of data.

So this assumption that data is owned by IT and that operations plays no role in managing and using that data, that’s completely flawed thinking, and organizations outside healthcare are much further along in understanding that. Healthcare is just starting to understand that now. And we work in oil and gas and other industries, and in those industries, they already have data stewards. And they’ve made acquisitions and mergers, and have figured out that you have to standardize data sets and have master data management as a strategy. But healthcare organizations have done it backwards, and so they have seven different definitions of length of stay, for instance.

Provider leaders are looking at downside risk now, asking whether they really can do it or not, correct?

Yes, I think there’s finally a belief by most organizations that this is coming, and there might be some delaying it, but no stopping it. And they’re realizing there has to be a programmatic approach to it. I think it was Rush Health that did a presentation at CHIME where they had gone through the process of mapping out all their contracts—government contracts, commercial contracts, upside, downside risk, bundled payments, everything—and they used a slide showing the mapping of all those contracts. So when I start to go back and have conversations with our clients and prospective clients, I ask them, has your organization done this? It could be COOs, CMOs, etc. And they largely haven’t. They often say, we don’t know who would be responsible for that.

Flash forward a year later, I continue to have those conversations, and the answers are different. It’s, yes, we’ve started to go through those contracts, and we’ve started to put together a governance structure for supporting value-based care. And that is now driving departmental priorities, including in IT, and we’re tying all our projects around those kinds of initiatives—addressing that road map.

We’ve seen a lot of that kind of activity in the past year. So there’s no doubt in my mind, that that’s coming. There is absolutely some momentum building in that direction, and stakeholders are saying, we have to prepare for this, it’s inevitable.

What would your advice be to CIOs, CMIOs, and other senior healthcare IT leaders, around all this?

Certainly mapping out your contracts is an essential first step. We had a great focus group at the CHIME Fall Forum, about 15 CIOs sitting around a table, and we asked what they could do to prepare. And some said, I’ve got a pretty good understanding of those priorities, and I’m starting to prioritize our activities. Others said, I don’t yet have a good understanding of the requirements of our risk-based contracts, but I’m now pushing on my executive team to ascertain those requirements. And that’s important; if I were a CIO, I’d be going to my CEO, COO, CMO, CFO, to find out what elements are most prioritized, and what aren’t.

Do you think that all this activity will meaningfully accelerate in the next couple of years?

I really do believe it will. And I expect that if we scheduled a conference call for a year from today, I believe we’ll be in a significantly more mature state.

Is there anything you’d like to add?

I would add that it’s still a bit of a blind spot for many organizations, the need to go back and look at the fundamentals. The thing is, many of the analytics and EHR vendors, overall, are in favor of you skipping that initial step of data governance and data management fundamentals, because they slow down a vendor’s sales cycle. This is what it does: instead of an organization deciding, we should buy an analytics tool and have IT process, it’s let’s establish a governance model and understand that this is an organizational issue and problem we’re trying to address, and needs a broader team to determine what kinds of tools we need to support our strategic objectives. But it’s the way that IT in healthcare has been for such a long time, that I feel it’s still going to be a problem for some time for so many organizations. That’s why mapping one’s organization’s contracts is such an incredibly important step. Figure out what you’re contracted to do; that will open everyone’s eyes. Creating that framework will establish what everyone needs inside and outside IT.