the valued plan partner

Health Plan Chief Medical Officer Roundtable

The Valued Plan Partner

How to help providers prosper with downside risk

July 2019

Rachel Sokol, Jasmine DeSilva

© 2019 Advisory Board • All rights reserved • advisory.com

6

Introducing the CMO Roundtable

Who We Are and How We Can Serve Your Organization

Source: CMOR research and analysis.

Research Terrain

High-touch Care

Management

Leading the Value

Transition

Realized

Pharmacy Savings

Analytics-Driven

Enterprise

Program Mission

The Chief Medical Officer Roundtable

convenes CMOs from diverse health plans

around the common purpose of transforming

health care for the better.

The Roundtable offers:

- a trusted community of CMOs

- best practices that work

- CMOs and their teams help with executing

on those best practices

- analysis of key market developments

- cross-industry collaboration

Issue digests featuring insights on

the evolution of key agenda items

Custom reports on various

research topics (e.g., value-based

care, care management, SDOH)

Telephone consults upon request

Research interviews to help shape

CMOR upcoming research

Ongoing Support

http://www.advisory.com/


7

Transitioning to Risk Is the CMO’s #1 Priority

But VBC Activity Is Heavily Concentrated in Upside Models


1) I.e., upside only.

2) i.e., upside and downside.

CMOs designating

research topic as

“immediately

valuable and not

available elsewhere”

73%

Ranking by CMOs as

top choice in a list of

40 potential selections#1

“The Road to Downside

Risk” Tops List of CMO

Strategic Priorities

Median percent of patient population

currently in a downside risk arrangement

among participating providers18%

Overall Participation in Value-Based Models

9%

43%31%

17%

Fee-for-service only

Upside-only Upside + Downside

Downside-only

CMOR Path to Value Survey (Nov 2018)

n=101



8

We’ve Reached A Population Health Tipping Point

(And It’s Not the One You’re Thinking Of)

Source: “Public health insurance exchanges: insights from the Deloitte Center for Health Solutions 2015 Survey of US Health

Care Consumers”, Deloitte, 2015; “Seventy percent of Americans support 'Medicare for all' in new poll,” The Hill, 2018;

“World Insurance Report,” Capgemini, 2018, available at: https://worldinsurancereport.com/; CMOR research and analysis.

If We Don’t Bend the Cost Curve, Someone Else Will

Public Solution

Surveyed Americans support

a Medicare for All policy

(August 2018)

70%

Of consumers think plans

put profits over patients

84%

Private Solution

Consumers would buy an

insurance product from a

large tech firm rather than

a traditional insurer

30%

Consumer Sentiments on Plans

As the scapegoat, we can’t get hated

any more than we already are.

Manager at a 10M+ member plan


https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hix-consumer-survey.pdf

https://thehill.com/policy/healthcare/403248-poll-seventy-percent-of-americans-support-medicare-for-all

https://worldinsurancereport.com/


9

CMOR Survey Solicited Plan, Provider Perspectives

Total of 134 Participants from 125 Unique Organizations


1) Partial responses are counted if the participant completed at least 50% of the survey.

• Survey was administered September

25 to October 18 via a web-based platform.

• Invitations to participate were sent to health

plan executives, hospital and health system

leaders, medical groups, independent

physician practices, and other health care

clinicians and administrators.

• The sample is comprised of a total of

134 respondents, including:

Survey Methodology

Total health plan responses

28 complete, 5 partial1

31 organizations33

101Total provider responses

74 complete, 27 partial1

94 organizations

Respondent Characteristics for

Data Cuts and Analysis

All respondent

characteristics

• Job title

• Location (region)

• Degree of market

consolidation

• Degree of market adoption

of value-based care

• Plan type

• Business lines

• TenureHealth plan-specific

characteristics

• Practice setting

• Specialty

• Payer mix

• Compensation models

• Reimbursement models

Provider-specific

characteristics



10

Plans Say the Rate Limiting Factor Is the Provider

Plans Skeptical That Most Providers Are Ready for Population Health


38%44%

58%61%

66%71%

n=31 health plan respondents

Plans Rating Providers “Ineffective” at

Population Health Competencies


Leadership

buy-in

Contract

management

Care

management

Data and

analytics

Network

management

Utilization

management

“Data doesn’t have a lot of

value if providers don’t

have the right analytics.”

“I don’t want providers to

have all the risk. They’re

not ready.”

“Engaging providers in

value-based care is an

investment that doesn’t

always pay off.”

“Not all providers have the

infrastructure, staffing,

skill, or commitment.”

Quotes from Plan Interviews



11

It’s Not for Lack of Trying

Plans Have Already Invested Time and Money to Support Providers

Sources: “Finding the value in value-based care”, Change Healthcare, 2018; “2018 Healthcare IT

Demand Survey”, Damo Consulting, 2018; Sweany, Caitlin, and Micklos, Jeff, “Economic Investment

and the Journey to Health Care Value, NEJM Catalyst, Nov 28, 2017; CMOR research and analysis.

1) 50% of survey respondents were technology solutions and services firms.

2) Including IT, analytics, and human resources.

Plans that have and will invest

more administrative staff to

support episode-of-care VBC

66%VBC initiatives ranked the

biggest driver of health care

technology spending1

Spent by BCBS Michigan

to set up the operations

of its VBC programs2

$100M+

Sample Plan Investments in Value-Based Care

#1


https://inspire.changehealthcare.com/StateOfVBCReport?utm_source=prnewswire.com&utm_medium=press+release&utm_term=none&utm_content=none&utm_campaign=1806_PA_HQX_State+of+Value-Based+Care_Press+Release_MKTGt&utm_id=7015A000001dVzUQAU&utm_stage=top&utm_product=HealthQx+%C2%AE&utm_solution=Value-Based+Care+&+Payments&utm_audience=payer+solutions&utm_asset=white+paper

https://www.damoconsulting.net/wp-content/uploads/2018/02/2018-Healthcare-IT-demand-survey-Data-and-Analytics-to-Drive-Healthcare-IT-Spend-in-2018.pdf

https://catalyst.nejm.org/economic-investment-journey-health-care-value-part-ii/


12

Are Plans the Problem?

Providers Don’t See Plans as Reliable Partners in Risk-Based Models


71%

20%

Plans Providers

51 pt

difference

“How effective are health plans at operationally supporting

frontline clinicians to take on downside risk?”

n=86 provider respondents; 28 plan respondents


Percent selecting “very effective/somewhat effective” in a 4-pt Likert scale



13

Survey Results Show…

Providers Want Better Incentives, Insights from Data, and Reduced PA


“Which of the following would make physicians more willing to participate in downside

risk arrangements (i.e., shared risk, global payment, capitation) with private payers?”

2.74

2.77

3.03

3.04

3.18

3.19

3.30

3.33

3.38

3.58

Education from payers…

Embedded staff from…

Patient dashboards…

Provider relations team…

Benchmarking data…

Tools from payers to…

Analytics tools from…

Removal of select prior…

Preferred health plan…

Increase in bonus…Increase in bonus potential

Preferred health plan network status

Removal of select prior

authorization requirements

Tools to segment and predict risk

Tools from payers to streamline

documentation and reporting activities

Peer benchmarking data from payers

Dedicated provider relations team

Clinical and financial patient

dashboards from payers

Embedded health plan staff to

support providers

Education from payers

1; Not at all likely 2; Not too likely 3; Somewhat likely 4; Very likely

n=74 provider respondentsCMOR Path to Value Survey (Nov 2018)



14

Bridging the Way to Becoming a Trusted Partner

Successful Plans Need to Act as Advocates, Not Adversaries in VBC

Provider Perspective

The Disconnect in Plan and Provider VBC Perspectives

Financial

Informational

Operational


Plan Perspective

Reward with

Reduced PA

Find the Signal

in the Noise

Enhance the

“Value” of VBC

Plans try to take a

portion of my earnings

Plans don’t actually

care if I succeed or not

Plans force me to do

redundant work

Providers are resistant to

risk their profit margins

Providers ask for

information they don’t need

Providers need restrictions

on unnecessary utilization

Plan VBC

Support



15

Roadmap for Discussion


Three Approaches to Solve the Unsolvable Challenges

3Enhance the “Value”

of Value-Based Care

• Increase panel size

growth for providers

• Apply behavioral

economics principles

to optimize the

perceived value of

financial incentives

2Find the Signal in

the Noise

• Identify alternative data

sources that satisfy

provider demands

• Aggregate sensitive data

to mask competitive

intelligence

1Reward Providers with

Reduced Prior Auth

• Sunset unnecessary

PA codes to reduce

plan admin burden

• Reward providers that

align with plan goals by

offering less stringent

PA standards



16

Turn the Stick into a Carrot

Physicians See PA Reform as a Valuable Incentive for VBC Participation

Source: CMOR Path to Value Survey Report, November 2018, Advisory Board; CMOR research and analysis.

“Payers need to back up on utilization management. If they really want more

partnerships with providers in risk-based arrangements, they need to actually be a partner

and go away from the punitive approach of approving and denying things.”

Director of Managed Care and Payer Relations at Large Medical Center

Providers that highly

value PA removal are

likely to take on risk if

granted PA reduction

100%

Plans Lack

Confidence in Providers

Providers Lack

Confidence in Plans

Providers Willing to Accept

Risk with PA Reduction

Providers rated plans

as “ineffective” at

removing PA

Plans rated providers

as “ineffective” in

utilization management

71% 81%



17

Trust but Verify

Ongoing Monthly Trend Reviews of PA Catches Early Spikes in Utilization


1) Pseudonym.

Sunset unnecessary PA codes

Quickly identifies increases in

utilization or costs

Allows plan to establish triggers to

prevent spikes in utilization

Gives physicians more real-time

feedback, rather than 3-6 month lag

Recognizes high-performers sooner

Indigo Health Plan’s1 PA Removal Process Benefits of Monthly Data Monitoring

Removed PA for codes with

the highest approval rates

and lowest costs

416Total PA codes

removed over 2 years 40%Total reduction in PA

codes over 2 years0Spikes in cost

or utilization

Removed 200-250 codes

in year 1; set 5% target rate

of reduction for year 2

Performed monthly reviews

of cost/utilization data



18

Reward the Rule-Followers

BCBS VT Piloting 3-Tier Approach to Incentivize Evidence-based Care

Source: Blue Cross and Blue Shield of Vermont, Montpelier, VT; CMOR research and analysis.

Tier 1

Gold-

carding

Tier 2

Real-time

approvals

Tier 3

Normal utilization review

• 200-400 providers receive automatic

PA approval

• Plan monitors number of times provider

meets clinical criteria

• If provider doesn’t meet criteria, plan offers

an educational intervention

• Low-performers move to Tier 3

• 4500 of 5000 providers submit

complete PA requests

• 20-100 providers gold-carded for a <3%

impact rate1

• After 18 months, plan performs 10% audit

of clinical cases to ensure compliance

• Providers must be reapproved every 2 years

• Low-performers move to Tier 2

BCBS Vermont’s Imaging UM Structure

Reward providers that align with plan goals

1) Impact rate refers to number of PA cases that were denied for a given provider.



19

Simplify the Process with Real-Time Approvals

UHC Auto-Approves PA for Oncologists Who Adhere to NCCN Guidelines

Source: Newcomer L, “Paradox of Prior Authorization: How Do We Get Value?” American Society

of Clinical Oncology, 14, no. 8 (2018), http://ascopubs.org/doi/pdfdirect/10.1200/JOP.18.00279;

UnitedHealthcare, Minnetonka, MN; CMOR research and analysis.

1) The National Comprehensive Cancer Network created guidelines in oncology that document

evidence-based treatments to ensure patients receive optimal outcomes.

PA Process for Providers

Results from Pilot with

Commercial and Medicaid

Patients in Florida

74%Online cases that were

auto-approved, compared

to 2% denial rate

9.5Minutes saved per online PA

approval, compared to phone

9%Reduction in

chemotherapy cost trend

in Florida, compared to 11%

increase nationally

Oncologist submits

PA through digital

form or on the phone

Request PA

Immediate online approval

triggered if oncologist

chooses any NCCN option

Make a Treatment Decision

Oncologist answers questions

outlined by NCCN1 guidelines

to reach a treatment decision

Answer Questions About Patient

All available NCCN

recommendations are

offered to oncologist

Review All Treatment Options

Reward providers that align with plan goals


http://ascopubs.org/doi/pdfdirect/10.1200/JOP.18.00279


20





of Value-Based Care





to optimize the

perceived value of


2Find the Signal in

the Noise



provider demands


to mask competitive

intelligence


Reduced Prior Auth


PA codes to reduce

plan admin burden




PA standards



21

Providers See Data Access as a Prerequisite to Risk

Analytics Flagged as the Top Choice for Motivating Risk Adoption


“What motivating factor is most likely to increase

physician willingness to take on downside risk?

1) n=27 plan respondents; forced ranking.

2) n=73 provider respondents; forced ranking.

“Providers need accurate

and timely data with

valuable information...not

data dumps in Excel.”

Hospital executive

“The ultimate prerequisite to

any upside or downside risk is

whether you get claims data

on a monthly basis.”

Physician

“Having claims data makes

providers feel better, but it

doesn’t actually help

them do better.”

Plan executive

What providers actually want if

they could only choose one…

Analytics tools

from payers2

What providers think other

physicians want…

Increase in

bonus potential2

What plans think

physicians want the most…

Increase in

bonus potential1




22

Reinventing Physician Scorecard Delivery

Pharmacist Visits Individual Provider Practices to Discuss Pharmacy Data

Source: Blue Cross and Blue Shield of Vermont, Montpelier, VT; CMOR research and analysis.

BCBS Vermont’s Pharmacist Delivers Pharmacy Data to Providers

Provider Relations

Pharmacist

Provider A Provider B

Sample provider-requested topics:

Present on provider-

requested topics at

practice lunch-and-learns

Share pharmacy scorecard

that compares their costs to

peer benchmarks

Sample scorecard metrics:

• Formulary adherence rates

• Total pharmacy costs

• Formulary diabetes drug options

• Targeting members for MTM2

1,159Providers reached by

pharmacist, 2018Pharmacist Responsibilities

$100K+Saved by BCBSVT from

members participating

in MTM, 2018

69%Success rate in

switching diabetes

medication, 2018

Identify alternative data sources

1) Medication Therapy Management.

Pharmacist

Program Results



23

Don’t Let Perfect (Data) Be the Enemy of Good

CareFirst’s “Completion Factor” Cuts Down Claims Lag by One Month

Example of Provider Budget Report: Jan ’18 - Apr ’18

YTD1 Net Debit $ $6,603,092

Estimated Percent Complete 97.2%

Estimated YTD Net Debit $ Completed $6,791,257

Total Credit $ $7,039,643

Estimated YTD Savings $ $248,386

Estimated YTD Savings % 3.5%

Source: CareFirst, Baltimore, MD; CMOR research and analysis.

Aggregate sensitive data

Completion factor

Actuarial

estimation of paid

claims in a given

time period

compared to

previous year’s

actual paid claims

amount during

same time period Projected savings based

on historical performance

Expected spend using a

base year performance

Actual paid claims amount

Expected claims to be paid

(using completion factor)

24/7 online

web portal

In-person through

practice transformation

consultants

Accessibility of Data

1 month

Reduction in

claims data lag

Improved provider relationships

“We’re past the point of just data

sharing. We’re focused on

influencing behavior change.”

Plan executive

Program Outcomes

1) Year-to-date.

How CareFirst Shares Budget Data with Providers



24





of Value-Based Care





to optimize the

perceived value of


2Find the Signal in

the Noise



provider demands


to mask competitive

intelligence


Reduced Prior Auth


PA codes to reduce

plan admin burden




PA standards



25

Fee-for-Service Is Still the Name of the Game

Physicians Remain Skeptical of Value-Based Models

Source: Feeley T, Mohta N, “New Marketplace Survey: Transitioning Payment Models: Fee-for-Service to Value-Based Care,”

NEJM Catalyst, (2018), https://catalyst.nejm.org/transitioning-fee-for-service-value-based-care/; CMOR research and analysis.

“Value-Based Reimbursement Will Be the

Primary Revenue Model of the Future”

51%

39% 37%

Hospitalexecutives

Clinicalleaders

Clinicians

NEJM1 Catalyst (July 2018)

“Next year, I want my provider organization’s

participation in downside risk to…”

n=90 provider respondents

39%

“Increase”

39%

“Stay the same”

6%

“Decrease”


n=552 provider respondents

1) The New England Journal of Medicine.

16%

“Don’t know”


https://catalyst.nejm.org/transitioning-fee-for-service-value-based-care/


26

Most Providers Just Want a Fair Deal

The Minority Want to Maximize Their Paycheck


Distribution of Increase in Bonus Needed for Providers to Take on Risk

n=22 providers1


0-25% 26-50% 51-75% 76-100%

Providers value

fairness

68%Providers value

maximization

32%

Desired percent

increase in

bonus potential

1) Providers that chose “increase in bonus potential” as their first or second motivator to take on risk.

Increase panel size


Apply behavioral




27

Use Attribution Models that Grow Provider Panels

Personal Health Assistants Contact Members on Behalf of Provider


1) Pseudonym.

PHAs Call Geographically-Attributed

Members to Schedule Appointments

• Reach out to members who have

not yet been seen by their

geographically-attributed provider

• Directly schedule appointments

with a provider near the member’s

home, naming the “geographically-

attributed” provider first

• Help providers grow their patient

panel in a highly competitive market

Teal Health Plan’s1 Patient Attribution Model

Geographically-attributed

membersContact-attributed

members

Increase panel size growth for providers



28

Applications Pros Cons

Loss Aversion

People outweigh

losses over gains

Prospective

payment

models

Immediate buy-in,

greater sense of

financial stakes

Requirement to

repay losses could

damage plan-

provider relationship

Goal Gradient

Motivation increases

as people get

closer to a goal

Tiered bonus

payouts

Expands

opportunities

beyond highest

performers

Greater

administrative cost

Social Comparison

Peer pressure

encourages people to

adhere to social norms

Peer

benchmarks

Providers compete

to outperform

against peers

Initial transition to

transparency often

met with resistance

A Penny Saved Doesn’t Feel Like a Penny Earned

Apply Behavioral Economics to Enhance the Perceived Value of Incentives

Apply behavioral economics principles


Weighing the Pros and Cons of Using Behavioral Economic Principles



29

Highlight the Losses to Motivate More Wins

Missed Earnings Can Be More Powerful than Actual Earnings

Loss aversion

Source: Health Partners Plans, Philadelphia, PA; CMOR research and analysis.

Health Partners Plans’ Incentive Distribution

Show Providers

Missed Earnings

Package Check with

Data ReportTarget Finance Personnel

MeasureCare

Gaps

Missed

Earnings

Actual

Earnings

Percentile

Rank

Cardiovascular

LDL Control

100/

125$2,500 90th

Pneumonia

Vaccination

Status for

Older Adults

45/90 $4,500 50th

Diabetic Patients

w/ Most

Recent LDL >

100 mg/dl

25/

100$7,500 30th

Clear visual representation

of missed revenue relative

to total opportunity

Network

comparison

incites

competition



30

The Most Impactful Incentives Are the Most Inclusive

Two Paths to Achieving VBC Rewards Invites More Providers into the Fold

Goal gradient

Source: L.A. Care Health Plan, Los Angeles, CA; CMOR research and analysis.

1) Healthcare Effectiveness Data and Information Set.

L.A. Care’s Two Scoring Options for Incentive Payments

Most HEDIS1 measures in the

program improved, 2016-2017

Decrease in L.A. Care’s

readmission rate, 2015-2016

17%

Results of L.A. Care’s P4P Program

Improvement Score

Provider’s performance in the program year

compared to previous year’s performance

2

Attainment Score

Provider’s performance in the program year

compared to peer group performance

1

Provider incentives are based on the higher of their two scores



31

Bridging the Way to Becoming a Trusted Partner


Provider Perspective

The Disconnect in Plan and Provider VBC Perspectives

Financial

Informational

Operational

Plan Perspective

Reward with

Reduced PA

Find the Signal

in the Noise

Enhance the

“Value” of VBC

Plans try to take a

portion of my earnings

Plans don’t actually

care if I succeed or not

Plans force me to do

redundant work

Providers are resistant to

risk their profit margins

Providers ask for

information they don’t need

Providers need restrictions

on unnecessary utilization

Plan VBC

Support



32

CMOR Resources Available On Demand


Path to Value Survey Comprehensive Report

– In-depth analysis of 2018 survey results of plans and provider organizations on

their attitudes on downside risk

Issue Digests on Relevant Health Plan Topics:

– “The cost curve is bending―now what?”

– “Why are providers reluctant to engage in downside risk?”

– “What are the potential costs of cost sharing?:

– “What role should plans serve in addressing social determinants of health to improve

patient outcomes?”

– “How can health plans promote adoption of biosimilars to reduce pharmacy spend?’”

– “How are wearables influencing care outcomes?”

Path to Value Survey – Org-Specific Regional Provider Readiness Analysis

– Top drivers of provider readiness for risk shown in regional market compared to

national sample

For more information on the CMO Roundtable,

please contact: Rachel Sokol [email protected]


mailto:[email protected]