Risky Business: Embracing Value-based Models to Reap Rewards

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As risk-sharing agreements become more common, hospitals and physicians are focusing on teamwork and attention to metrics.  

Until a few years ago, cardiologists at Wake Forest Baptist Health in Winston-Salem, N.C., were competitive with one another. When patients were referred to the hospital, general cardiologists, cardiac surgeons and vascular surgeons each would want to see patients and get reimbursed for treating them, sometimes creating a contentious situation. Referring physicians and patients didn't know whom to contact, according to David Zhao, MD, executive director of the hospital’s heart and vascular center.

Since adopting a patient-centered service line approach, though, Wake Forest physicians have embraced a collaborative approach. The shift has reduced antagonism and confusion about who will treat patients.

“Now you don’t really need to worry about it,” says­ Zhao. “You just make one single phone call and we'll get everybody together to provide care for the patient, what’s best for him. There are a lot of benefits.”

The change that Zhao has overseen has come as the healthcare industry moves toward a value-based system in which hospitals and physicians are more often rewarded for delivering high-quality care and keeping costs in check. The focus on a team-based approach has helped the heart and vascular center’s volume grow at a rate of 5 to 7 percent per year.

Last year, Wake Forest was selected to participate in Medicare’s episode payment models for acute myocardial infarction (AMI) and coronary artery bypass graft surgery. Under those bundled payment programs, which were set to begin in 2018, the Centers for Medicare & Medicaid Services (CMS) would provide hospitals with a fixed amount of money to treat patients from the time they were hospitalized until 90 days following discharge. In August, the federal government indicated it would cancel those programs in part, CMS said, because they would have forced acute care hospitals in 98 metropolitan areas to participate rather than give them a choice.

Still, Wake Forest and other hospitals across the country are preparing for the years ahead when they expect they will be required to take on more financial risk and sign reimbursement contracts with the government and private payers tied to outcomes and value.

“I think it’s inevitable,” Zhao says of more risk sharing. “I’m pretty certain eventually it’s going to be the case.”

David Zhao, MD, Wake Forest Baptist Health, Winston-Salem, N.C.
 - David Zhao

Preparing for MACRA

The passage of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) in 2015 helped pave the way for the future, and many hospitals examined their practices. MACRA replaced the sustainable growth rate formula with the Merit-based Incentive Payment System (MIPS) and advanced Alternative Payment Models (APMs), both of which tie reimbursement for Medicare patients to quality metrics. CMS plans to use retrospective data from this year to determine payments for 2019.

With that in mind, Wake Forest studied its previous performance on certain quality measures to determine if it needed to make changes before it began participating in MIPS. “With MACRA in place, from a reimbursement standpoint, certainly the quality becomes critical and important in how we get rewarded by insurance and to a larger degree how patients will come to us or not come to us,” Zhao says. “We certainly are doing things to try to improve, but overall looking at our data in the past, we’re actually in a very good place.”

John A. Spertus, MD, Saint Luke’s Mid America Heart Institute, Kansas City, Mo.
 - JohnSpertus
Leaders at Saint Luke’s Mid America Heart Institute in Kansas City, Mo., have been preparing for MACRA and the inevitably of more risk sharing as well. They have worked with the American College of Cardiology (ACC) to develop risk models and precision medicine tools to potentially help hospitals understand if patients are at risk for certain complications. If so, they can alter their approach to care for specific situations.

Saint Luke’s has already used risk models from the ACC’s National Cardiovascular Data Registry to tailor treatments for patients undergoing angioplasty to prevent acute kidney injury and bleeding events. The hospital also is developing pathways for AMI care and cardiac surgery and focusing more attention on patient-reported outcomes and quality-of-life measures to give patients more input in their care. In addition, case managers, attending cardiologists, interventional cardiologists and discharge-planning teams work together to assess patients’ needs.

“We’re doing a lot more of all of that these days,” says John A. Spertus, MD, a cardiologist and the clinical director of outcomes research at Saint Luke’s Mid America Heart Institute. “It’s a very exciting area because it’s not like we want to target one thing. We’re trying to address multiple opportunities to improve the value of healthcare.”

Richard A. Chazal, MD, Lee Memorial Health System, Fort Myers, Fla.
 - Richard-Chazal

Learning from the past

Although the shift away from fee-for-service reimbursement seems a foregone conclusion, questions remain about exactly how physicians will be compensated in the coming years. Former ACC President Richard A. Chazal, MD, an invasive cardiologist and medical director of Lee Memorial Health System’s heart and vascular institute in Fort Myers, Fla., recalls the 1990s, when capitation models were popular. Under those arrangements, providers often signed contracts with health plans and received payments on a per-member, per-month basis.

Chazal says capitated care was too focused on cost constraints and did not catch on among cardiologists. He believes value-based models and risk-sharing agreements are an improvement because they are based on not just keeping costs down but also promoting high-quality care.

CMS isn’t alone in focusing on quality and costs. Other payers are also starting to strike deals with providers. This year, HeartWell LLP, a medical practice with 23 cardiologists in nine offices in South Florida, signed a value-based, episodes-of-care payment model with Cigna. It was Cigna’s first program for people diagnosed with chronic coronary artery disease, but the insurer has 189 similar arrangements with physician groups in 32 states. Per the agreement’s terms, HeartWell will receive a portion of the savings if its costs are below a certain level and if it meets quality goals, such as reducing hospital readmissions and post-surgery complications.

Although value-based agreements are becoming more accepted and popular, the federal government and private payers will need to use metrics that accurately reflect how well physicians are delivering care and make sure data submission is easy and consistent across practices, Chazal suggests. For instance, tracking readmission rates is a common metric, but the rates may be influenced by factors outside of physicians’ control. He says contracts between physicians and payers must be clear and fair for both sides so they understand how they will be compensated.

“The definitions have to be very crisp and the data have to be very clean,” Chazal explains. “Otherwise, someone could be doing a really good job and not get the credit that they deserve. Physicians are very cognizant of this and understandably weary because we’ve seen examples where either the definition was not really felt to be valid or data submission was so difficult that it was more a matter of playing the game of data submission vs. actually truly delivering high-quality care.”

Valentin Fuster, MD, PhD, editor of the Journal of the American College of Cardiology
 - Valentin-Fuster
Collaborating for quality care

Regardless of the payment structures, Chazal and others know health professionals must collaborate to deal with the changes. Most cardiologists are no longer working alone or running their own practices. Instead, they work with other physicians as well as nurses, nurse practitioners, physician assistants and physician extenders.

When Valentin Fuster, MD, PhD, arrived at Mount Sinai hospital in 1972, 15 cardiologists were employed by the hospital and 65 were in private practice. Today, those numbers have reversed: the hospital employs 100 cardiologists and only 10 are private physicians.

“This is telling you something is changing,” says Fuster, physician-in-chief at the Mount Sinai Medical Hospital, director of Mount Sinai Heart and editor of the Journal of the American College of Cardiology. “You need to work with a team.”

In September 2016, the National Academies of Sciences, Engineering, and Medicine named Fuster co-chair of a committee tasked with helping the new U.S. president address global health initiatives. The group released its report in May and made 14 recommendations, including targeting cardiovascular disease risk factors earlier in life to keep patients healthier and keep long-term expenses down. Fuster and his colleagues found that by 2030, the worldwide costs of treating cardiovascular disease and productivity losses due to cardiovascular disease are expected to reach $1 trillion.

During the past five to 10 years, Fuster has watched as hospitals and physicians become more involved with acute care and discharge patients earlier. He believes physicians, nurses and other clinicians will soon be asked to visit patients at their homes and monitor them from afar. Such arrangements would be less expensive than keeping patients in hospitals and allow providers to maintain contact with patients, which is crucial in keeping them healthy and preventing readmissions. Fuster envisions a future in which risk-sharing agreements are common. As such, physicians must understand the financial impact of the care they deliver.

“Everything is going to make care much more economic,” Fuster says. “I think doctors have to be aware of that and what they’re going to be facing.”