Podcast: The Convergence of Providers and Payers
Chilmark’s founder and president John Moore recently took some time to speak with the producer of the Relentless Health Value podcast, Stacey Richter, to discuss current strategies of one of the biggest trends in healthcare right now, provider-payer convergence.
The discussion begins by outlining how convergence is unique compared to the many other changes and initiatives sweeping through American healthcare. Most organizations enter into these partnerships as an answer to high administrative costs, the wave of recent consolidations, and unsuccessful provider-sponsored health plans. Most importantly, a successful convergence partnership requires a deep understanding and commitment to the local market served and trust between the organizations. John also outlines some of the challenges to creating successful partnerships and suggestions to overcome or avoid them entirely. For widespread convergence success, health care organizations (payers and providers) will need to systematize both the business processes and IT infrastructure to support data sharing and actionability.
Listen here and be sure to scroll to the end of this post to see some of the content discussed:
00:00 Convergence and the delivery of health care.
02:20 “How do we deliver greater value?”
03:00 Why establishing health plans within a provider organization is often not the best idea.
04:30 How you can get around needing prior authorization and subsequently cut costs.
05:50 The motivation for a payer and provider to form a partnership.
08:00 Why consolidation doesn’t necessarily drive down costs.
08:50 Payer-provider population health management.
09:20 Understanding where the patient might be going outside of the network to get their health care.
10:00 What does it take to be good at collaboration?
10:30 “What is the opportunity here?”
10:40 “Is there a level of trust between the payer and provider?”
18:00 Advice for payers looking to partner with providers.
18:50 Look for someone wanting to deliver high-value care.
19:30 “Trust, then verify.”
23:00 New and interesting innovations coming out of current convergences.
24:00 Things still being worked out in the market today.
25:25 The innovator’s dilemma.
26:30 “How do you scale quickly?”
27:20 “Is that scalable?”
30:20 The path forward for most markets in the United States.
Throughout the program, John and Stacey touch on several Chilmark publications, available here:
John emphasizes how prior authorization requirements are driving up admistrative costs for both providers and payers. Even outside of a full convergence partnership, both parties can begin to work together to reduce these costs and share the benefits.
As a population health management becomes more essential to healthcare, robust solutions are incresingly important for sharing and analyzing data from several sources, including payers, for sustainable value-based reimbursements.
Stacey mentions how difficult, yet important successful behavioral change can be for improving overall health. This report covers both factors driving adoption plus profiles for leading solutions for a variety of conditions and users.
John talks a little about his predictions for the future of the CVS-Aetna healthcare offerings in the podcast, including how MinuteClinics might become the first point of care. Read more in our blog about MinuteClinics, the implications for Epic Systems’ EHR, and challenges both companies face as they ambitiously attempt to transform how Americans seek healthcare.
Matt Guldin · 1 year ago
John Moore lll · 2 months ago
Matt Guldin · 3 months ago
Ken Kleinberg · 3 months ago
PHM Market Trends Report Coming Before HIMSS
The Chilmark Research 2018 Population Health Management Market Trends Report, long in development, will be released immediately before HIMSS in March. This report profiles 25 vendors and describes the technology landscape for enabling a population health management (PHM) strategy.
Why a PHM Market Trends Report Now?
We hesitated to release a report on this emerging market for several years. Until recently, most available solutions were not able to fully address the range of provider requirements for PHM. The earliest solutions focused on the needs of Healthcare Organizations (HCOs) caring for Medicare Shared Savings Program (MSSP) patient panels. Over time, vendors added functionality to support bundles and private payer requirements requiring a good understanding of quality, costs, and utilization.
Another reason we held off with this report had to do with provider readiness. Healthcare delivery organizations needed time to incorporate these capabilities into their processes and workflows. The earliest HCO adopters of PHM relied on a variety of manual processes to conduct their PHM programs. Most HCOs lacked extensive experience with one or more of the constituent functional domains of PHM to fully utilize and benefit from the technology.
By early 2018 vendors had amassed significant experience building, managing, and supporting PHM enabling technology for providers and payers. Virtually all HCOs realize that PHM will be an increasingly important part of their operations and influence a significant percentage of their future revenue streams.
Virtually all HCOs realize that PHM will be an increasingly important part of their operations and influence a significant percentage of their future revenue streams.
Uncertainty About Value-Based Healthcare Makes Providers Pause
PHM’s close association with value-based care and payments cements its reputation as both a key strategy and technology enabler for transforming the U.S. healthcare system to achieve the goals of the Triple Aim. The PHM market’s growth closely mirrors the growth in value-based reimbursement (VBR). The pace of transformation to the payment system has not been smooth, and the Centers for Medicare and Medicaid Services (CMS) has sent mixed signals about its future in 2017. The business mandate for providers to embrace PHM slowed in the last 12-18 months. Provider concerns about revenue or market share losses have dampened enthusiasm for changing the fee-for-service (FFS) status quo. But the overall trend is moving in one direction: Away from FFS.
While uncertainty about the fate of value-based payments restrained provider’s embrace of PHM, the number of accountable care organizations (ACO), clinically integrated networks (CIN), and other risk-bearing programs continues to grow. Providers of all sizes have come to terms with the inevitable move to value-based contracting. ACOs will serve 10.5 million Medicare patients this year, a 17% increase over 2017. Delivering care to this expanding panel of patients requires providers, and in particular primary care providers, to organize themselves to make their PHM efforts successful. A variety of community based organizations, such as regional or state-level health information exchange organizations and to some extent payers, are also beginning to see the need to build and run PHM programs for, or in concert with, their provider partners.
Evolving Perception of PHM and the Four Technology Domains
PHM means different things to different people in 2018. Vendors built on products for pay-for-performance (P4P) programs to support CMS’ original set of ACO programs. Vendors, as a result of both organic development and acquisitions, now offer more PHM related functionality then they did a few years ago. While it is too early to say that PHM requires an established and fixed set of capabilities, the general outlines of the technology to enable a PHM strategy are broadly understood to fall into four technology domains:
Most of the vendors in this report have special expertise with one or a few of these domains.
As recently as a few years ago, analytics products provided the key enabling function for most PHM programs. While this functionality has an indispensable role in PHM programs, its core functionality – cost and utilization analytics and clinical quality monitoring – is arguably the most mature aspect of existing PHM solutions. Attention has shifted somewhat to care management. The value proposition for care management stems from a perception that these workflows are the “tip of the spear” for PHM generally. Care management products are often the central tool for organizing and running PHM programs on a day-to-day basis. Payer-oriented solutions with case, utilization, and/or disease management legacy have transferable skills for clinically oriented PHM. These vendors are beginning to make inroads into provider markets. Care management capabilities are less mature than analytics but are undergoing the most rapid pace of change by vendors.
The least mature aspect of PHM from a functional standpoint is patient engagement. In most of the solutions described in this report, the care management product supports some level of interaction between patients and a care team, mostly relying on a patient portal or app. Telephonic interaction with patients still seems to be the dominant method for most providers.
Data aggregation and data source management are core competencies for PHM. They form the foundation for all of the other domains of PHM. Managing diverse data sources is complex in all PHM sub-markets and for every organization developing PHM programs. Transactions, messages, documents, and files flow in from different organizations. These sources need to be reconciled, deduped, monitored for quality, and have all of their various records matched to patients, providers, organizations, health plans, and contracts. Organizations express this data using a multitude of formats and vocabularies. Vendors must constantly monitor these transfers and streams for quality, timeliness, and completeness. Every vendor in this report has skills in this regard but they differ in the scale at which they can operate. The number of organizations and sources from which they can ingest and process data is shaping up to be an important differentiator for providers. This set of capabilities is marked by fairly mature technologies and techniques but they are being deployed against a rapidly expanding universe of health-related information.
EHR Vendors Do Not Own the PHM Market
No vendor today has anything like a “PHM Platform.” The largest EHR vendors aspire to develop such an offering and have the resources to pull it off. Hospitals and health system turn to these vendors for all of their PHM needs, but it is not unusual for them to assemble their own solution from a variety of vendors supplemented with internally developed capabilities.
But these offerings come with price tags with little appeal outside of the large HCOs. Independent physician practices, most with limited budgets and no significant IT development staffs, are more interested in turnkey capabilities from a single vendor. Often this means their EHR vendor, but just as often it means an independent vendor with a full range of PHM capabilities. While EHR vendors are fielding increasingly full-featured solutions, they have not cornered the market.
Not all providers and payers have fully embraced value-based care and payments but the need for, and interest in, enabling solutions for PHM continues to grow. Armed with this report, providers can distinguish between the capabilities and services needed to help them meet their complex information and workflow needs for multi-disciplinary, multi-organizational teams striving to optimize the health of populations. This report will help providers sort through the different vendors and solutions in this confusing market.
Plainly Speaking: A hitchhiker’s guide to the [Healthcare IT] galaxy
I am always struck by how industries evolve language for the benefit of, and use by, its members. But membership has its privileges and its drawbacks. While simplifying ways for insiders to communicate, it excludes, or at least distances itself from, those not part of its club.
Such is the state of healthcare IT, breeding an entire cottage industry of acronyms worthy of their own syllabus. Health IT is one link in the healthcare supply chain of interoperable links, and its value lies in its ability to push and receive information to and from its fellow linked parties. Perhaps if challenges and achievements in health IT were discussed in plain English, it would be easier for physicians, employers and the consumer public to digest. Our representatives in DC could also better understand how legislation helps or hinders patient care; the repeal of Net Neutrality is a timely example of the health industry failing to persuasively advocate.
Perhaps if challenges and achievements in health IT were discussed in plain English, it would be easier for physicians, employers, [our DC representatives] and the consumer public to digest.
Being somewhat versed in this code, when my physician couldn’t locate my patient record, I asked him when he subscribed to his current vendor. As the lightbulb went off in his head, he quickly navigated to a “separate patient records portal prior to EMR” subscription and found me, explaining the 30-minute delay. Further conversation revealed my practitioner was unfamiliar with much of the acronyms health IT relies on (e.g., HIE for Health Information Exchange, HISP for Health Information Service Provider), and reported he is frustrated that his EMR vendor can not integrate his practice’s earlier patient records, nor does it provide follow-on training to him and his predominantly new staff. He added that his vendor offers no means of direct communication nor does his Accountable Care Organization have a channel or procedure for him to report deficiencies. Consequently, his pain points remain, as does a lack of guidance to his to his staff on its usage. I can’t verify the accuracy of his statements, but the fact that he believed them to be true indicates little chance of resolving his needs, his office turnover declining, or preventing more of his patients from needlessly waiting while donned in paper gowns.
Like much of the population, I am cramming in my family members’ visits before year-end to use up my HSA dollars. As a new member of the Chilmark team, I have a few questions, in addition to my usual, of the doctors I visit. So far, the same experience noted above was reported by two other physicians. A couple more on my schedule before the year is out and I may wind up with a straight flush!
The EMR vendor’s relationship is with the larger ACO entity, but patient care is in the individual practices by the professionals administering care, and the few I spoke with reportedly felt their workflow issues remained unaddressed. All were surprised and genuinely appreciative that I sought their opinions and experiences in accessing the data they require. We should be mindful that by creating our vernacular for health IT professionals, we do not omit other stakeholders in the conversation whose participation is required for improved and engaged patient care.
Author’s Caveat: This is just my casual survey from a suburb outside NYC but I am eager for others to conduct and comment on their own.
Patient Experience and Satisfaction Aren’t the Same as Engagement
Healthcare’s inexorable march toward value-based care has brought with it a focus on what’s best for the patient. Instead of routinely pushing people from one billable appointment to another, providers of all types are, to varying degrees, beginning to understand that more care doesn’t necessarily equal better care.
This shift in policy and philosophy is certainly welcome, and long overdue, but healthcare organizations (HCOs) must be sure to push their good intentions in the right direction.
Take, for instance, the hospital waiting room. The longtime dumping ground of year-old magazines, well-worn chairs, and grainy television sets has been transformed into a bright, comfortable, and almost welcoming place. Swanky waiting rooms have spread throughout the hospital, too; patients can sit in comfort as they await exams or consultations in various internal departments.
You’d have a hard time finding anyone who prefers the older, dingier waiting rooms. But the esoteric improvements mask a more fundamental issue: HCOs are focusing too much attention on patient experience and satisfaction, trying to compete with hotels, and not enough on honest-to-goodness engagement. Instead of spending so much time, money, and resources on making waiting comfortable, hospitals should address why patients are waiting.
The rationale for this misplaced focus isn’t hard to find. In a world of quality metrics, HCAHPS scores, and innumerable “top hospital” rankings, the need and desire to improve experience and satisfaction is certainly understandable. However, a good waiting experience isn’t the same as a good care experience – or, for that matter, a good understanding of how to make the right decisions to improve health and well-being and spend less time waiting to receive care in the first place.
Nice waiting rooms are, well, nice, but they remain a holdover of the fee-for-service world. Think about your auto mechanic. The free Wi-Fi, fresh coffee, and clean bathrooms aren’t there to entice you to leave; they entice you to come back (and spend money) the next time your engine starts making funny noises. If anything, a posh waiting room is a form of revenue cycle management (RCM), since it’s all about bringing repeat customers through the door.
Waiting rooms don’t improve engagement. That’s why Geisinger Health System CEO Dr. David Feinberg wants to “eliminate the waiting room and everything it represents,” namely a way to build up inventory for doctors at the expense of the patient. The larger issue is that value-based, coordinated care will only succeed when patients are truly engaged in their care. Admittedly, this is a struggle.
As it is, HCOs have enough trouble improving the patient experience, according to a recent Kaufman Hall survey. They know they need to do something, but they say they lack the “strategic insight” to figure out what it is, not to mention the capability to implement such a strategy. This survey did not ask if they had had the capability to upgrade their waiting rooms, but I’m willing to bet they did.
Engagement itself is another giant step forward. It’s hard to fund (big-money donors prefer to see their names on a building instead of, say, an app or program) and even harder to implement (the n=1 strategy of precision medicine means that interventions must be specifically tailored to vastly different patient population segments). Plus, engagement technology must link to a larger value-based technology strategy, which itself requires a shift away from the point solutions so prevalent in healthcare and toward solutions that meet specific clinical or operational requirements within healthcare’s new value chain. Most HCOs lack “strategic insight” into what this entails, too.
Whatever the future holds for value-based care, insurance reform, electronic health records, the private practice, the standalone hospital, or the industry as we know it today, the chief goal of practicing healthcare will remain constant: Keeping patients as healthy as possible for as long as possible so they get as much out of their lives as possible. To that end, HCOs would be wise to not keep patients waiting.
Health 2.0: Ten Years On
For my young daughter, 10 yrs is nearly a lifetime – but for myself, nary the blink of an eye. So it felt this week while attending the 10th annual Health 2.0 conference, one part so much time has past, another just a flash. Over those ten years I have had the pleasure and at times frustration of attending nearly every Health 2.0 event.
The pleasure comes from the excitement of seeing so many dedicated people all trying to do their part, in some innovative way, to improve the healthcare system. The energy they exude is contagious. As a result, Health 2.0 often feels like the antithesis to the staid and conservative annual HIMSS conference. I come to this event to see what lies on the horizon, I go to HIMSS to see what is happening now.
But that excitement and a certain naiveté has also been frustrating. Frustration comes from having seen a profound lack of reality among a significant percentage in attendance. Is it the Silicon Valley effect? Too often start-up companies seemed oblivious to the countless challenges present in this convoluted market and lacked a deep understanding of what is needed. But being altogether all in the same place, these energetic founders of young companies all drank from the same fountain – the cheerleading was deafening. Come back two years later and most had fallen to the wayside.
In its early years Health 2.0 was heavily weighted towards frustration. Beyond the naïve-istic cheerleading, there was a lack of diversity, of heterogeneity in the audience. It was an event about, for and ultimately comprised of start-up health companies. There were few, if any providers – maybe a couple on stage at some point.
But as the HITECH Act took hold and federal dollars came in to encourage EHR adoption, broader interest in the digitization of healthcare accelerated. The floodgates opened and investment dollars came pouring in to the digital health space rising from the low $100’s of millions in 2007 to some $5B projected in 2016 much of it going to start-ups.
This investment influx led to more sophistication among the start-up companies attracted to Health 2.0. The organizers responded in kind with the content becoming more robust and the audience more diverse in the ensuing years. The hyperbole has also been turned down several notches. Health 2.0 is now a dynamic conference, with an excellent line-up of speakers and topics discussed. Sure, there remains a certain odd “campiness” to the event, but that is part of its charm.
While this event has matured and expanded, one thing does strike me as puzzling: Why are there so few of the mainstream vendors of HIT at this event? Is Health 2.0 seen as just some odd side-show to the grander market (e.g. HIMSS)? Is there a country club bubble that more traditional HIT vendors reside in with little desire to look down the street to what may be marching their way? Is it simply a lack of attention, wherewithal or interest to the dominant theme at Health 2.0 – consumer/patient/member engagement and empowerment? If it is the latter that is a sad commentary on incumbent HIT vendors.
As we articulate in our latest report and have done so elsewhere, the future success of population health management programs will be highly contingent upon far deeper consumer engagement. Thus, if I were leading strategy for one of those incumbent HIT companies, I’d surely send someone to Health 2.0 to ensure that my company gets out of the bubble to see what might be next and more importantly, who might be a target for partnership or future acquisition as we develop our consumer, patient or member engagement strategy.
Like the Health 2.0 event, Chilmark Research also got its start in 2007. Together, in our own ways, we are each trying to move the needle in healthcare to ultimately improve the consumer experience. Much has transpired in this brief decade that makes it seem long upon reflection but short in action. The industry is going through a profound transformation. Just as we are moving to digital health, the industry may indeed be slowly pivoting, as athenahealth’s Jonathan Bush stated: to “network health.” Looking ahead, I wish Matthew, Indu and the broader Health 2.0 team another decade of success, joining us in pushing the boundaries to ensure that the this sector meets the promise that a truly network model of health may offer.
Finally, Some Concrete Use Cases for Telehealth
A recent report has gone great lengths to explain how and to what extent telehealth can improve outcomes, and it is well worth a read if your healthcare organization (HCO) plans to explore investments in telehealth services now or in the future.
No, I’m not talking about The Wall Street Journal declaration that telemedicine is transforming healthcare. The top-fold placement of the story was indeed nice, as was the accompanying interview suggesting that technology in general can improve population health, but the article wasn’t exactly news to the healthcare industry. (Not to sound like a hipster, but I wrote my “telemedicine is changing healthcare IT” article back in 2012, before it was cool.)
As it turns out, the report in question is a technical brief from the Agency for Healthcare Research and Quality (AHRQ) that examined 58 research studies to find evidence of telehealth’s effectiveness across both clinical areas and technical functionality. In a nutshell, the interventions with the greatest impact on outcomes tend to target chronic conditions.
The table at right summarizes the findings. Here are four additional observations.
Teladoc’s recent, pricey acquisition of HealthiestYou begins to confirm our prediction that the telehealth market is ripe for consolidation. As the moving and shaking continues, HCOs must avoid the perils of shiny objects that address single episodes of care and instead seek telehealth partners that improve outcomes for chronic patients while controlling costs. The former will make headlines, but the latter will transform healthcare.
Design Healthcare for People at Their Worst
Much of the rhetoric surrounding healthcare innovation is happy. Smiling young people run along a river on a sunny day, then check their FitBits. Smiling parents hold iPads while they connect to a smiling pediatrician over video chat. Smiling nurses use state-of-the-art equipment as they treat plain-faced but nonetheless hopeful patients.
At its core, though, healthcare is not happy. Sick people want to get better, not receive constant reminders that they are sick. Medical professionals want to help patients, not select an ICD-10 code from a pull-down menu. No one wants to think about what it will all cost.
Thus the recent Healthcare Experience Refactored (HxR) conference in Boston challenged those building the healthcare technology of tomorrow to design apps and devices for users who are at their worst, not their best – to bring empathy into the user experience, to make systems simple, and, ultimately, put the “care” back in “healthcare.”
As we all know, it’s a laudable mission but a difficult one. A billion-dollar innovation is a mere drop in the bucket in a $3 trillion (and growing) market. On top of that, the most impactful and necessary innovations – improvements to clinical workflow and data integration – garner little attention alongside this week’s latest fitness apps or wearable tech updates. Consumers (and the media) care less about the accuracy of the heart rate monitor or pedometer because, look, the watch band comes in fuchsia now!
Clinical workflow and data integration matter because the narrative matters. STAT News recently ran a thoughtful piece lamenting the loss of the patient story in healthcare’s rush to implement electronic health record (EHR) systems. Digitization has no doubt benefitted an industry bogged down with paper, but boiling down a patient’s medical history to a series of bullet points and billing codes fails to capture that patient’s motivations, goals, and obstacles in their journey to better health and wellness. It also chills the patient-physician relationship, as the conversation is interrupted to input information or wait for load screens to disappear.
For too long, the end users of healthcare IT have been treated as an afterthought as paper-based and manual processes are simply replicated using a screen, mouse, and keyboard. With no thought given to workflow or usability, pull-down menus, lists, free-form text fields, and customizations abound – not to mention frustration. That’s why it’s time to kill the patient portal, ditch the cluttered EHR, scrap the standalone schedule, and smash the fax machine.
Healthcare applications and devices in all their forms must be designed for end users, not outdated workflows. They must return joy to the practice of medicine and allow patients to live with their conditions, not cope with them.
Above all, systems should serve patients, physicians, and nurses when they are at their very worst – in the moments following a crushing diagnosis, for example, or the final hours of a double shift in the ED. If users can stand the systems then, there’s no telling what they can do when they are happy.
Bringing Digital Health to Those Who Need It Most
Between my current life as an analyst and my former life as a journalist, I’ve sat in a lot of keynote addresses, conference sessions, and presentations touting the latest and greatest consumer healthcare products. No matter whether I’m impressed, puzzled, or bored, I always ask myself, “Would Mom and Dad use this?”
My parents embody the archetype of technology laggards. Their watches are not smart. Their television is not high-definition. Their internet is wireless and high-speed, but only because it was part of a package deal with their cable provider. Their music is stored on CDs, their movies on DVDs, their photos in physical albums and shoeboxes. Their household appliances do not send data to the cloud. If you want to communicate with them, you must use the Phone feature of your handheld mobile device.
In other words, the answer to the question I always pose is inevitably “No.” Many Americans, I reckon, would answer the same way. And that points to digital health’s biggest problem.
Take the recent Consumer Electronics Show. Amid all the pomp and circumstance, very little from CES applied to people like my parents. Under Armour’s $400 Health Box? It’s for athletes with money to burn, not seniors on Medicare collecting Social Security. Fitness-tracking headphones? The next time my parents carry music anywhere will be the first. A tricked-out medication reminder? Maybe – but can someone taking 10 pills afford 10 smart pill bottles? An app-connected pregnancy test or smart baby monitoring kit? Those ships have sailed long ago.
I focus on the needs of my parents for two reasons. First, they and their peers are the immediate present and future of healthcare – more numerous and longer-living than previous generations and, as a result, in need of healthcare services the likes of which the industry is unprepared to accommodate.
Second, study after study has confirmed that those who occupy the top of the healthcare cost pyramid – those with multiple comorbidities or complex chronic conditions – tend to be older, less affluent, and less health literate than the population at large. Yet digital health appeals to the young, the affluent, and the health literate. Instead of targeting Mom and Dad, startups target people like me – and then wonder why, after several months, we abandon the “solutions” and go on with our lives.
I understand the reticence to develop and market technology solutions to a demographic that’s reluctant to embrace tech in its own right, as Gen Xers and Millennials have done. In 2016, it’s a great way to drive a tech business into the ground.
However, as with so many problems plaguing healthcare, the answer to increased adoption among older, needier patients isn’t more tech, more advanced tech, or even different tech. Just as communication is at the heart of successful care coordination, communication – in the form of education and training tailored to the individual needs and wants of each patient – sits at the heart of successful consumer health adoption and use.
So many digital health solutions assume that simply leading users to water will not only convince them to drink – and convince them of the benefits of drinking – but somehow immediately make them proud, confident, and frequent visitors to their watering hole, even though there are thousands of other watering holes, some even crocodile-free or under a shady tree. That doesn’t work. As an Accenture recently reported, a whopping two percent of hospital patients use mHealth solutions that hospitals have wasted millions of dollars developing or acquiring, in large part because patients don’t know how to use them – if they even know they exist at all.
Which begs the question: Have these health systems even worked closely with their staff on how these apps will facilitate clinical workflows, quality metrics, and outcomes? If the clinical staff is not on board in promoting these apps, patients won’t be either.
Healthcare continues to innovate in parallel paths, with the work of small startups and consumer tech brands (who get tech and consumerism) occupying a completely different space than the work of large healthcare organizations (who get patients). The longer that happens, the longer that events such as CES will be filled with innovations that truly don’t matter in a clinical context and are highly unlikely to ever make it into the hands of patients – like my parents – who actually stand to benefit from them.