Migrating to a Successful Value-Based Model

The US health care system is looking at an unsustainable financial future within the decades-old, fee-for-service model. An aging population is driving increased demand for services, even as the cost of health care rises and health care spending becomes an ever-larger chunk of the nation’s gross domestic product.

One of the most promising solutions to this impending crisis is the industry’s transition to value-based care—a model that requires providers to be accountable for outcomes, not just fee-for-service volume. Health systems today know they must get on board the “value” train for future success and sustainability, but many don't have a line of sight into models that deliver the desired results.

Northeast Georgia Health System (NGHS) is a not-for-profit community health system dedicated to improving the health and quality of life of people across Northeast Georgia. NGHS cares for more than a million people across 19+ counties through 4 hospitals, employed multispecialty and cardiology groups, and a larger medical staff of more than 1200 providers representing 65 specialties. Our clinically integrated network (CIN), HP2, is comprised of physicians and advanced practice practitioners from Northeast Georgia Physicians Group, Longstreet Clinic, Georgia Heart Institute, and other independent practices throughout the region. NGHS and HP2 recently partnered with Lumeris to evolve the work our hospitals and clinics do, away from fee-for-service and toward a value-based model that incentivizes outcomes instead of procedures.

Our goal for this partnership is to ensure safer, more affordable, personalized care delivery for the people we serve. While we are early in our journey, NGHS, through HP2, aims to accelerate its work to expand value-based payment programs, optimize care models, develop population health management strategies, and engage physicians and consumers. It’s encouraging that our initial foray into value has been met with remarkable success, despite the challenge of bringing so many stakeholders into this process.

The HP2 value-based model is built on multiple tiers: technology that drives better decision-making through analytics and risk-adjustment tools; insurance capabilities and infrastructures that enable the health system to participate in the Centers for Medicare and Medicaid Services (CMS) Direct Contracting (soon to be ACO REACH) incentive program, part of the CMS Center for Medicare and Medicaid Innovation (Innovation Center); and physician governance strategies that ensure greater individualized attention to a beneficiary’s needs. The natural result is lower costs and improved quality and clinical outcomes.

Often, getting started on this path is the hardest part for today’s health systems. At HP2, we’ve identified strategies that have been key to our success and should prove useful to other health care networks beginning their journey to value-based care.

#1 Be sure your company’s board and top leadership is engaged and committed from day one.

If you’re redirecting and refocusing core business practices, it’s not enough to have business managers think of this as an operations or accounting process tweak. Moving to a value-based model requires a unified vision that centers on population health, one that considers the demographic and epidemiological characteristics of an entire region you’re serving in addition to the individuals who show up for help at the doctor’s office. Change needs to start at the top and must bring all stakeholders together. 

#2 Plan carefully and incrementally—build a glide path to risk.

Be careful about making sweeping changes all at once. When changing your business model, consider making discrete and measurable changes along the way. In our case, we had been planning our move since 2016, so all the value-based contracts were structured as multi-year, multi-party deals. A track record of year-over-year performance improvement gave us the confidence we needed to expand.

#3 Build metrics to measure and track your work along the way.

Value-based care has both obvious and not-so-obvious financial benefits that emerge as a model matures. Here, for example, are 3 results HP2 achieved that aren’t strictly financial, and still provided some eye-opening insight into the greater opportunity: In our first year, readmissions declined by 3% from the previous year; our annual wellness visit completion rate improved from 44% to 66% in that calendar year; and today, our ACO tracks 18% lower than the national fee-for-service spend.

#4 Involve and engage physicians fully in ways you might not have imagined before.

Early on, we had to figure out how best to manage an $18,000 bundle for total knee and hip replacements. As a finance guy, I met with all the orthopedic surgeons and put up a blinded historical report of costs and utilization of various treatments we’d been involved in. One physician raised his hand and said, “The first thing you need to do is unblind that.”

So, at the next meeting, physicians were presented with a report that showed Dr Smith all the way down to Dr Wilson. There were surprises, but most notably, it didn’t create infighting. Unblinding our reports created synergy, collaboration, and accelerated professional development.

#5 Build and nurture your relationships with local employers and health plans.

It’s very important to help all stakeholders understand the tremendous advantages of a value-based health care model. We want to maintain solid relationships with employers and health plans in our region who are making the health insurance purchasing decisions. I have a tremendous number of regional CEOs on speed dial and speak to them regularly about the benefits of the HP2 model, in terms of both financial impact and employee health and productivity.  

#6 Consider the role of education as you grow staff and build a future pipeline of employees. 

We developed a graduate medical education program that helped build sustainability into our model over the long term. On one hand, building a graduate medical education program gave us close contact with clinical staff who were getting ready for full-time practice and created a pipeline to employment. On the other hand, we developed a program to have those graduates work in clinic while being shadowed by physicians at reduced cost, which both gave them real-time experience and saved the health network money. 

Building a business plan with principles such as these in mind will help your network to shift focus to outcomes instead of procedures. That’s something to take pride in, too: It’s essentially the health care physicians want for their own families.