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LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. As we look around the country, and we see a lot of organizations that have started clinically integrated networks many years ago, or have recently started clinical integration and building their networks. Most of that focus has really been on the adult population, and I guess for good reason. You know, the… a lot of the insurance payers are really focusing on developing their value-based agreements based on the performance of our population, whether it would be Medicare, through Medicare Advantage, or just straight commercial. But we can't forget the pediatric population, and as many researchers, have found, early intervention of the pediatric population Has such a huge benefit as this pediatric population evolves into adults, and as we start to really identify, in a preventative manner, if you will, opportunities to catch certain diseases, to catch certain aspects of care, and to prospectively really manage a lot of those issues. But when you look around the country, there's not a lot of successful…pediatric, clinically integrated networks out there. And I think for a couple of reasons, I think it's, one, it's very difficult. I think the second is because the contracts really haven't been structured from the payers as such to provide a lot of incentives around it. Well, I am really excited today to have a strong pediatric, statewide, clinically integrated network, and the executive director join us today. Fortify Health is a pediatric CIN that is in Virginia. And I'm really excited to have Dr. Suzanne Brixey join me on the program. Dr. Brixey is an Executive Director of Fortify Children's Health. She's been a practicing pediatrician for more than 20 years, and has been instrumental, building an integrated network of pediatric services, as well as then driving a lot of these innovative contracts with a lot of the major payers in Virginia. Dr. Brixey, welcome to the program.

 

Suzanne Brixey M.D., Fortify:

Thank you so much for having me, I appreciate the opportunity.

 

Daniel Marino:

So, can you share with our listeners, aspects of Fortify? How many providers, how many physicians you have, and maybe you can talk a little bit about the number of patients, you know, covered lives that are within the group.

 

Suzanne Brixey M.D., Fortify:

Sure! Well, Fortify Children's Health was actually founded back in 2018 as a joint effort between the Children's Hospital, the King's Daughters, and UVA Health Children's. So, it was a really visionary idea, trying to find ways to come together to really support the optimal health and well-being of every infant, child, adolescent, young adult. They really wanted to think about doing something different. And so they invested in with this… with this mission, and that was really what launched the idea of Fortify Children's Health. How can we support children to really collaboratively advance, innovate pediatric population health? And really wanting to be the children's provider network of choice. So pediatricians were thinking about how do you do pediatric population health, how do you do value-based contracting? We wanted to be there to support them.

 

 

Daniel Marino:

You know, early in my career, I had the opportunity to manage a large internal medicine practice, and a number of our physicians were double-board in internal medicine and pediatrics, and the pediatricians that worked with our group were just really passionate about the care that they were providing, yet it was a big challenge for them. I think economically, it was a challenge because pediatrics reimbursement you know, doesn't really drive a lot of high revenue. But the other piece that they found was a bit of a challenge was, although they did a good job of managing the care of the patients when the patient was in their office, it was hard to kind of aggregate that care around quality with other influencers, whether it's social work, dietitians, or even some of the subspecialties within pediatric. How have you worked through that in Fortify?

 

 

Suzanne Brixey M.D., Fortify:

I think that's a fabulous question, because children really are unique. Children are probably the most diverse demographic that we have in the U.S. right now, and the vast majority of these children, 45%, are covered by Medicaid and are living in poverty. And pediatricians, we work really closely with those families, and we understand the impact of adverse events in their early development. We understand how important it is to really focus on those early developmental needs. We understand how important it is to address those social drivers of health as you're moving forward. And we know collectively, I think as a community, that thriving children really reflect the the well-being of their families, of their communities. And as a pediatrician, when I'm working with those families, I hear, see, percolate up, and really screen for these needs for families, but really, in many ways, don't have the infrastructure or the payments to actually support them. So when Fortify comes in to do that, when we are working in relationship with the payers, we really try to highlight the benefit of having healthy children to create a healthy workforce for the community. How we want to really invest now in the importance of well visits, developmental screenings, all those pieces, because it actually allows the parents to go to work, and allows everyone to have a more healthy workforce in the future. So, short-term gains are less meaningful than a long-term healthy goal, but long-term is relative. I know when I give the HPV vaccine, I'm preventing cancer for kids, maybe two decades down the road, but that's a tremendous cost savings that has value that we need to capture.

 

Daniel Marino:

You know, and as you're thinking… as you're talking through that, you know, I've done… I've done a lot of contracting on behalf of physicians and clinically integrated networks, and in particular, for the adult population, and I know even working with some organizations who've been focusing on pediatric services. Preventative care is one of those things that are really important in order to really get out in front of a lot of the conditions, right? Because you're really… through preventative care, you're providing more prospective care. But when you… when you're focusing on a lot of preventative services, it does take away from your ability to manage costs, at least from the payer's perspective, right? And I know it's probably short-sighted, but when you think about it, preventative care, because you're seeing patients maybe every month for a while in their office, you know, that's going to really impact your cost of care. How are you balancing that with the payers? I mean, I would think that that's got to be a bit of a… a bit of a philosophical challenge for you as a pediatrician, but really as driving the economics and the performance of the population.

 

Suzanne Brixey M.D., Fortify:

I agree. I think the value proposition for children, for youth, it differs than what we have as a value proposition for adults, hands down. But I also believe that if we want to create a healthy workforce moving forward, we've got to invest in those children. So critically important. So we really try to spend a lot of time talking about how we know children, if they're in Medicaid, the likelihood of them being in Medicaid for 5 plus years is great. And so, impacts that we make at the earliest years of development, when we're impacting their ability to have positive models in their life, when we're trying to do things to counteract the ACEs that we know are so impactful that impact their brain as we're moving forward into the adult spaces. If we want to impact those pieces to lower the total cost of care for healthcare as a country, those are things that we need to do now, early on, early intervention. It's also sometimes what we'll reference as a two-generational impact, because I'm also identifying the mom with postpartum depression, and I know if I can get her into treatment, she's going to have better attachments with those baby… her baby, and that baby's going to be less likely to have behavioral health issues in their school age or even beyond, because they've attached and bonded well. So this two-generational view that a pediatrician is a really unique way to sort of guide and help support, because we're a trusted member, member, we are a trusted colleague to align with that family is really important, and we try to demonstrate that out with the payer to talk about that. And that's true in the Medicaid as well as in the commercial space. All the vertical integration, I think we are seeing right now within hospitals, payers, what that looks like.

 

Daniel Marino:

Yeah.

 

Suzanne Brixey M.D., Fortify:

And the likelihood of that child touching that payer system multiple times across their lifespan is quite high. So I think there is a need for us as a society to really recognize that investing in children now makes such a difference if we're going to lower the total cost of care moving forward.

 

Daniel Marino:

I couldn't agree with you more. I think… I think the challenge is getting…the payers who recognize that. I mean, do you… do you get the sense that the payers are recognizing this more from a long-term comprehensive perspective, where the work that we're doing now is going to lower the cost of care 10, 15, 20 years down the road? Or are they still focused on episodic-driven cost of care opportunities?

 

Suzanne Brixey M.D., Fortify:

I think we are seeing, sparks of hope as we move forward. I think in the Medicaid space, we're seeing opportunities for some innovation in that regard. Medicaid's tricky, though. It's tricky within pediatrics, specifically, because it is state by state, right? It's federal and state funded, so every state is going to have a different example of what is covered for pediatric care. So a true example of how where you live depends on the quality of care that you're going to receive. And we need more spending in that space, but Medicaid has also been pretty innovative about different ideas for where we're going to move forward. So, there are, many different models, like the 321 impact that has integrated model for parents and children together that really focuses on how are we assessing development? How are we assessing that mom's getting good prenatal care, but also are addressing mom's postpartum depression after birth? How are we making sure that we're getting paid and incentivized to do additional developmental screenings? And that has shown some really great outcomes thus far, moving forward. But again, Medicaid, different than Medicare that you referenced earlier in the program, state by state, and what we need is enhanced funding for Medicaid across the board to roll that out.

 

Daniel Marino:

Yeah, almost more of a comprehensive approach around Medicaid, because, you know, obviously you're managing the pediatric population, you're dealing with a lot of those same challenges, and it needs to be on a comprehensive… from a comprehensive perspective. If you're just tuning in, I am Daniel Marino, and you are listening to Value-Based Care Insights. I am here today with Suzanne Brixey, and we are talking about Fortify Children's Health Network, a pediatric CIN. Fascinating conversation with Dr. Brixey. Dr. Brixey, I'm going to change the conversation a little bit, focusing on your colleagues that are within the network. How have they received the opportunities from Fortify. Can you speak a little bit on some of the quality outcomes that you've been able to recognize as part of the network, and really, and what your physician partners have been able to achieve on behalf of Fortify, but their own practice.

 

Suzanne Brixey M.D., Fortify:

Oh, of course. Well, we have over 1,100 providers in our network right now. 68 independent and hospital-affiliated primary care practices, 64 specialty practices. We have 5 hospitals involved in our network, and we are coming close to 200,000 contracted lives. So, we have a really large group, and I really see our pediatric partners as our primary customer. We need to support them with the data that they need to make better choices every day. I come to work as a pediatrician trying to do the very best I possibly can to serve the kids and families I see, and I can't make better decisions if I don't have better information at my fingertips. And that's really what Fortify tries to do. I, as the leader of this organization, want to provide meaningful, actionable information right at your fingertips so you can make better decisions. And it's so challenging in pediatrics, different than in adult medicine, where I may have a babysitter, an auntie, or a grandma bringing their child, and they're part-time at Dad's home, and part-time here, and you're getting information filtered through many different members who may not know that the babysitter took the child to an urgent care to last week, and they put them on a different medicine, but now they're with grandma, and we're not sure whether the medicine's being administered. So, our clinically integrated network pulls the information from the state HIE, from the EMR, where we're seamlessly integrated, and can provide that information in pediatric registries face forward to the provider, so they can have that information at their fingertips to make better decisions. Which I think is so critically.

 

Daniel Marino:

It's so critically important, because to your point, there's information all over the place, and then having the mechanism to aggregate the information, but to deliver it in such a way to the physicians where they can really use this as a tool within their care model, I think is critically important. But the other piece that I think is really important, and I think you, you know, you touched on it. Is what you do with it, and providing the level of care management and that support to the physicians, because at the end of the day, we can provide all the information we want to the physicians if they don't integrate this in such a way where it helps them become more efficient within their practice. And let's face it, physicians are working too hard as it is. We can't ask them to work harder. That level of care management support, I think, really has to drive the outcomes.

 

Daniel Marino:

How are… how is care management integrated within Fortify?

 

Suzanne Brixey M.D., Fortify:

how care management is critically important to our success as a network, and we have what we, both a centralized team and a hybrid team based on our own Fortify risk stratification. You know, this is one of the things we haven't spoken about, but risk stratification in pediatrics is…critically important, right? And the payers have a model that is driven for adults. And we know in kids, so many more things need to come into play. So even the standardized models that are often proprietary, that we, you know, this black box we can't quite see, but we know in pediatrics how critically important the risk of deaf parents are, right? As we talked about with maternal postpartum depression or other health issues that families facing, how important social drivers of health are. That really is so much more important in terms of how we identify the risk of a child, and those models. Fortify has its own proprietary risk model, risk stratification we use for every single child. That includes the Childhood Opportunity Index. It includes looking at prior hospitalizations, medications, how often they showed up for their well visits, immunizations, and it's a complex group, because we know that makes a difference in terms of the need for these children. And we've seen great success for that. We won, for one of our payers, a Caregiver Recognition Program Award of being one of the top 1% for value-based contracting. It's a reflection of that great work, and we've won the HRSA Maternal and Child Health Promoting Pediatric primary prevention, their P4 challenge.

 

Daniel Marino:

Wonderful.

 

Suzanne Brixey M.D., Fortify:

And that was all about really trying to support providers of who needs a well-trust, who needs an immunization, how can we move that forward? And that level of innovation, we took home the 2025 Virginia Primary Care Innovator of the Year Award from one of our great partners, the Virginia Center for Health Innovation. To speak to that work that we're doing, trying to be innovative, find ways that we can help use our care management, our data, and providing that meaningful information moving forward.

 

Daniel Marino:

Oh, and it… you know, it sounds like through the work that you've done at Fortify, you brought all of those… those pieces together, and I absolutely agree. It does come down to, as a starting point, understanding your population, and understanding the risk stratification of that population. And what it sounds like you've been able to do is, through your risk model, you've identified the patients and really did very focused, directed care to those groups of patients who need the care, right? And I think, if anything, not only has it supported your quality, but I have to think it's supported your ability to really do a better job or do a good job on managing the overall cost of care.

 

Suzanne Brixey M.D., Fortify:

I think it's really important to think about how you define total cost of care as well, though, right? So when we're keeping children healthy. We're keeping their parents at work, right? When we're keeping children healthy, there's a overall shift for are we lowering the cost of care for that individual child versus how are we impacting the overall society, right? Are we focusing just on that child's medical needs? Are we addressing the health, mental health, social needs of the entire family, and how that impacts our economy, our society, our nation moving forward.

 

Daniel Marino:

So, as you're talking about that, a quick question that I want to…run by you, because I think this is really important. Really, since COVID, but even a little bit before that. We've seen a lot of behavioral health, a lot of increases in mental health support, for patients. And, you know, again, access is an issue, there's a lot of conversation around utilization. Can you talk a little bit about how you really integrated behavioral health services, mental health services, into the overall care plan and model for Fortify? Because I think if you're not careful, this could definitely really have some adverse effects in terms of what your model is, especially if you're seeing a tendency for overutilization. How are you managing through some of that?

 

Suzanne Brixey M.D., Fortify:

You know, it's interesting when you talk about over-utilization, as one of the key, as we've looked at some of the data, one of the key drivers for ED utilization is often maternal mental health concerns. And so, this is really a complex piece. I think value-based strategies have to promote integration of behavioral health, and actually social services, both in primary care and specialty care. I think it is needed. Fortify is part of a really innovative program that was brought together by the Virginia Center for Health and Innovation. VCHI has actually worked with Fortify and two of our Medicaid payers, so that we could really engage and embed behavioral health providers into the primary care medical home. And they're doing that by providing, first, infrastructure dollars, and second, additional PMPMs to actually support that in that credentialing. And it's so valuable for me as a pediatrician in my office to have that resource, that when I have a child who comes in who has acute behavioral health needs, and the family is struggling, I can immediately connect them to somebody who can actually help de-escalate, to decrease, to keep that child out of the emergency room or potentially out of hospitalization, depending on their needs, and really wrap around that family and support them. That's needed, but we also need to address their transportation issues so they can come back to us. You know, for a child with diabetes, I need to address that they don't have working electricity because they can't keep their insulin appropriately stored. All those things are really important in how we provide robust care for children.

 

Daniel Marino:

Well, and what you've just described, that's the foundation of clinically integrated care. You need to be able to connect the dots in providing that right level of resourcing. And I loved what you mentioned around the integration of behavioral health, because even from a personal standpoint with my own kids. Having that comprehensive, integrated perspective, tying all of those components together is just… it's so critical. Let's talk a little bit about your infrastructure. I know you're evolving, I know you're growing, which, you know, congratulations to you and to your colleagues. I also know that you've got a position open that you're sort of recruiting for, and I thought I'd maybe give you an opportunity to kind of speak to that for a second.

 

Suzanne Brixey M.D., Fortify:

Thank you for the opportunity. You know, Fortify is such an innovative organization. When we started, we had 5 members. We've grown now to well over 30. It is a really exciting, in many ways, startup organization, because there's no playbook for how do you do pediatric value-based care. So we're using the expertise of pediatricians but wanting pediatricians to have a voice at the table, and I need to lean on somebody who has that contracting experience as well, so we can bring those innovative ideas together. So right now, we have a position open for a director of strategic financing and Contracting who's willing to be creative with us, who's willing to think about all the neat models for how we can actually bring together this two-generational model, how we can make sure we're incentivizing well visits that are so critical for all that early childhood focus that we want to spend time and effort on, and make sure we get credit for that, and really think about how do we redefine the traditional definition of value for our payers, you know, to broaden that scope of, do we reduce healthcare spending this year, or how are we capturing the improvement in child development, caregiver health, all the family stability and those long-term outcomes. So I'm looking for somebody who could be that partner with us to help us do that.

 

Daniel Marino:

Well, I think there's got to be some strong folks out there that share your vision of blazing new trails in pediatric medicine. I give you a lot of credit for the work that you're doing. It's truly impressive what you and your colleagues within Fortify Health have been able to do. It's quite exciting, and…You know, major kudos to a lot of the work that you're doing. If any of our listeners today are, say, interested in connecting with you or learning a little bit more about Fortify, maybe, you know, supporting their own pediatricians or their pediatric population with new innovative models in their own organization. Can you direct us to the website, or maybe your contact information, or something in that regard?

 

Suzanne Brixey M.D., Fortify:

Sure, our website's a great place to go, and it also has contact email information right on it, but FortifyChildrens.org, and that would be a great place, and you're always welcome to reach out to me at sbrixey@FortifyChildren's as well.

 

Daniel Marino:

Well, Dr. Brixey, I can't thank you enough for coming on and sharing your story, and much luck and continued success for Fortify and to your colleagues. You clearly are doing great work.

 

Suzanne Brixey M.D., Fortify:
Thank you so much, appreciate the opportunity.

 

Daniel Marino:

And I want to thank all of our listeners for tuning in. If you're interested in learning a little bit more, about this topic or any of the topics that we cover here on Value-Based Care Insights. please, go to luminaHP.com/insights, or ECGMC.com for more information. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. In June, early June, HFMA, Healthcare Financial Management Association, had their annual conference. And I'm not sure how many of our listeners have attended the HFMA conference in the past. I've had the pleasure of attending HFMA conferences for probably a good 20 years or so, and been very fortunate to speak at quite a few of them, and I'll tell you, it's a fantastic conference. You know, I think from a business perspective, I always get a lot out of the conference. There's always some really great trends, great themes, great discussions that occur with a lot of the industry leaders. And what I often find about conferences such as HFMA, is it, is it does get a lot of really strong thought leadership together and really working through some of these challenging problems or issues that we all tend to struggle with day in and day out. And there's no better way of solving that than maybe listening to how others have approached that problem or really networking with your peers. So I want to recap a little bit of the HFMA conference, and I'm really excited today to have, someone from HFMA join us. Katie Gilfillan is Director of Healthcare Finance Policy at HFMA. She leads the national initiatives focused on value-based payment transformation, healthcare finance strategy and policy. She's worked at HFMA for a number of years. Excited to have you in the program. Welcome, Katie.

 

Katie Gilfillan:

Thank you for having me, Dan. I'm glad to be here and excited to talk about this with you.

 

Daniel Marino:

Well, and congratulations to you and your colleagues for a wonderful conference. I understand you had about 3,500 attendees or so at the conference this year.

 

Katie Gilfillan:

That's right. Yes. Great attendance. Provider organizations, physician organizations, our business partners. So, a good crowd there, talking about a lot of different things that are happening in healthcare finance today.

 

Daniel Marino:

You know, one of the things that I've found that has been great with HFMA over the years is it used to be just focused really in the finance sector with CFOs and particularly CFOs of hospitals, but you really expanded that to where now physician leaders are part of it and you get a lot of medical group, operations folks that are part of it, and even the payers that are part of it. And I give a lot of credit to HFMA, and really expanding the network and the participation. I think it's just a fantastic way to cover a lot of these topics of the day.

 

Katie Gilfillan:

That's right. And I think it's really reflective of the changes that are going on in the industry that across the C suite you need different representation to really ensure that the business model underlying, you know, hospital and physician practice operations and healthcare in generalis managed by the entire organization, so.

 

Daniel Marino:

Yeah, I agree. I agree. So, thinking back on the conference that you had in June. Reflecting on it, what were a couple of the key themes that you've seen that were maybe good, either good discussion points or maybe good takeaways as part of the conference?

 

Katie Gilfillan:

There were a few, themes that were very ubiquitous across the sessions, at our event this year. One being, you know, we've talked about value-based care for a long time, and a lot ofAnd you know, we've thought about it as kind of a contracting strategy, but it's really become more about operating model transformation. So that would be one main theme. The other is, you know, organizations are thinking about their investment strategy and how that supports care model transformation.And then AI, of course, was a major theme throughout nearly every session at our event, and how AI can be used to better manage patient care. And then finally, we were hearing a lot about affordability. So organizations are facing increasing pressure to improve outcomes while also reducing the cost burden to the patients that they serve.

 

Daniel Marino:

Yeah, you know, I think these are all key topics that I know in conversations that I'm having with folks, there's certainly thinking about that, you know, definitely around some of the investment strategies. But let's touch on the first one that you brought up because obviously that's an area that's near and dear to my heart. When you think about value-based care, you know, I agree with you. I think we've evolved over time from value-based care initially being a contracting strategy where the payers really pushed some type of a performance base or an incentive that laid on top of a fee-for-service contract or chassis, if you will. But it has really evolved to more of an operating model, right? Where you need to have the infrastructure in place in order to drive the success around a contract, but also then to identify the new contract parameters. What were some of the key themes or the key discussion points that some of the leaders who attended, what did they bring to the table around that topic?

 

Katie Gilfillan:

Yeah, I think a lot of what was talked about is that success really depends on redesigning clinical operations, redesigning physician incentives, care coordination, and then finance, you know, being involved in all that so they can better support, you know, better outcomes and lower total cost of care. So, moving away from my contract-by-contract sort of mindset and thinking about their full portfolio of value-based care, and then really building the operating model so that it supports that. So, thinking about. You know, hospital at home programs, care management, their post-acute networks, their ambulatory strategy, access points within their system, ensuring that physicians are aligned and building a culture in a workforce, that supports overall an operating model that would be successful in value-based care. I think about an example from one organization where they had multiple contracts with multiple payers and each requiring different quality metrics. And rather than asking their physicians to kind of navigate all these different measures with every payer, they standardized their clinical dashboards, and their workflows across these contracts. So that, instead of allowing each payer then to kind of have their own unique reporting structure, their own metrics, they developed these standard set of metrics, and then they went to the payers and they said you can adopt our framework that we have, or you can choose from a limited set of metrics. And then they knew that their physicians were, you know, working towards this consistent workflow, this dashboard, the physicians were clear in what they were doing, and it didn't matter what the contract said.

 

Daniel Marino:

Well, and I tell you what you pointed out is is definitely an evolution. As organizations think about advancing both their clinical and operational models and around value-based care. Because a lot of times at first, you know, and even today, right, the payers come to the organizations and say, here's how we're gonna measure quality. Here are the HEDIS measures we're gonna look at. And each one are a little bit different, especially when you get into the commercial contracts. And before you know it, you end up having, you know, over a hundred different quality elements that you're trying to track. And it's unmanageable. One question that I had, though, as you were kind of talking, you know, when you think about value-based care, and especially clinical integration. There's always this balance between having physicians and the clinical folks lead it and drive some of the performance versus the finance folks thinking about the ROI and the financial benefit that comes out of it. Was some of those topics incorporated into the discussions around the value-based care operating model?

 

Katie Gilfillan:

First of all, you know, finance helps…to define the strategy, but physicians and operational leaders are really the ones that are kind of bringing that strategy to life every day. And so I think, you know, sophisticated organizations and sophisticated finance leaders are moving beyond sort of evaluating every intervention or standalone ROI, and they're thinking more in terms of how does this investment you know you know, help…give us the capability to create value across the organization. So rather than kind of looking it at, you know, at the P&L, at the department level, they're thinking, how are these investments really supporting the operating model that we're trying to achieve? So I think you're seeing more alignment between finance and clinicians. And in kind of driving success in value-based care and being able to kind of move along that risk continuum.

 

Daniel Marino:

Yeah, yeah, I agree. And I think the more that that alignment between finance and clinical operations occur, you know, that's where you really start to see a lot of the, or really the value drivers of value performance. Let's pivot to the second one that you had mentioned, investment strategy. Right? You know, capital investments, capital dollars versus the operating dollars. Most organizations across the country, if not every healthcare organization across the country, is really working through this, or really struggling with it. Where do you put your dollars? You know, there's not an unlimited black box of money sitting somewhere that you can tap into. What were a couple of the key elements as organizations were working through the investment strategy components? What were some of those things that came out of the meeting?

 

Katie Gilfillan:

Yeah, I think, you know, the value of the investments, are now shifting more towards, you know, preventing unnecessary utilization, improving long-term outcomes, things like care management, behavioral health, Ambulatory expansion, digital health, AI, home-based care, those things that are supportive of moving upstream in the patient care continuum, preventing, you know, higher cost episodes from happening, preventing expensive emergency department visits. So evaluating investments that support long term value-based care success. It sounds like.

 

Daniel Marino:

It's a lot of those things that are changing the care delivery models, right? You know, as you mentioned, the technology and investing in care management and a lot of those areas. I'm happy to hear that because, you know, I think for many within the finance committee, the community rather, they've struggled a little bit with how to incorporate some of those dollars into new care delivery technologies, if you will, that are really driving some of the performance outcomes.

 

Katie Gilfillan:

Yeah, I have an example. There was an organization that had invested in a lot of home based services. So home infusion, home health, palliative care at home, hospital at home. And so they had made these investments which were very satisfying to patients to be able to receive care in the home, but created some complexity and maybe some confusion about moving between these different types of care models and so they made an additional investment into educating their staff, their care managers, and their patients. To kind of explain what these different care models are and how they can access the services in them and what that means for them, and then they really kind of optimize that home care strategy, and we're really able to kind of maximize the benefit of this larger investment by making a small investment just in that workflow redesign and the care redesign.

 

Daniel Marino:

Yeah, wow! That's a great example. And you can tell how kind of incorporating that in. They probably saw a different way of seeing of tracking those performance outcomes, but tying it into the financial improvement and the overall opportunities for the organization. That's a great example. If you're just tuning in, I'm Daniel Marino. You're listening to Value-Based Care Insights, and we are recapping the recent HFMA Annual Conference. I'm here with Katie Gilfillin, and Director of Healthcare Finance Policy at HFMA, and, we're talking through many of the key topics, key themes that were covered there within the conference. So, Katie, I want to turn to one of the other areas, kind of building on what you had mentioned with the investment strategy and a lot of the care models. And that's the integration of AI with the with access and with the care models.

 

Katie Gilfillan:

Yeah. Okay.

 

Daniel Marino:

These days, obviously, can't go to a conference without talking about artificial intelligence in one way, shape, or form. I've had the opportunity to attend a number of conferences just within the last year, and I can tell you every vendor that is out there has AI somewhere in their banners. What were some of the themes that you saw coming out of the conference related to AI? Anything interesting, different, unusual, or at least, you know, exciting as you kind of reflect on it?

 

Katie Gilfillan:

Yeah. So I agree. AI is in every conversation we have as it relates to healthcare now. And I would say the past few years, largely at our events, AI is very focused on creating efficiencies in the revenue cycle, clinical documentation, ensuring claims are paid efficiently. And, you know, addressing things like prior authorization. But this year, I feel like the conversation is now expanding to how AI can proactively improve patient access and care management and population health. As organizations are taking on, you know, more financial risk, they're thinking about, again, their in their investment portfolio and what that looks like as they move into more value-based care? Are, you know, are these AI investments helping with care management, predictive analytics? Are they able to help identify patients who may be rising risk and intervene at the appropriate time and get them into the care setting that's most appropriate to address them? So AI is following, I think, the economic model as organizations are being paid for outcomes and lowering total cost of care. And quality, AI tools are gonna follow, and that's where the investments will follow. So I think we're starting to see that shift towards thinking about technology in support of that.

 

Daniel Marino:

Yeah, I would agree with you there. Anything with regard to AI and you, you mentioned care management and I've, and talked a lot about how AI can really help aggregate information and, and help care managers. Anything with regards to, let's say, covering patient access, or even patient navigation, where we're maybe redirecting patients you know, into certain providers or helping to become more proactive or prospective in the care that we're delivering. Anything come out of the conference there?

 

Katie Gilfillan:

One of the, I guess one of the sessions I'd like to talk about, we did have a CMSchief AI and tech officer attend. His name is Jacob Schiff, and he is leading a model which conveniently is called the access model.

 

Katie Gilfillan:

And that is the model that rewards based on, patient outcomes and management of chronic conditions. So, it provides the digital tools to providers and patients in order to manage conditions like diabetes, hypertension, obesity, behavioral health conditions, and heart disease. And by providing those tools, patients are better able to monitor their condition, clinicians are better able to monitor their conditions and manage those conditions. In a proactive way, and then, you know, kind of creating that. So you can't always get into your primary care office, and you may not need to be in your primary care physician's office. You can manage that at home, and if you have a digital tool that reminds you to manage your care, that can be done remotely. And so this is a federal initiative that is really pushing more towards that, you know, digital tool, AI enabled outreach to engage patients and keep them, you know, healthy.

 

Daniel Marino:

Yeah, I've heard a little bit about that program, so I'm glad you brought that up. I definitely would wanna look into that a little bit further. I really feel like the integration of AI within some of these digital tools, within some of these technologies is really gonna help to personalize the care to the patients because like you said, access is a challenge. Every organization probably across the country is struggling with access, getting patients in when they need to get in. And if you can start to create or leverage this technology to meet the patients really where they are, right, and deliver the physician or the providers to the patients really based on what their needs are. Not every patient has to go into the office, right? But we've got to figure out what that right structure is, because at the end of the day, the patient still has a need, and that need needs to be addressed. So, it's exciting to see where that direction is going. Talk a little bit about the last one, interesting that, yeah, I guess it isn't all that, that interesting or that, that, surprising that the concept of making care more affordable came up, right? I think we talk a lot about that. We talk a lot about providing healthcare equity and ensuring that we're delivering care to everyone who needs that care, and again, making that delivery of care affordable. What were a couple of the key points that came out of that concept of care, affordability, affordability.

 

Katie Gilfillan:

Yeah, so as I mentioned, you know, providers are really feeling the pressure of addressing the issue of affordability as costs have risen and continuing to provide that access to patients. If it's not affordable, the patient's not going to be able to access it. So really value-based care is an affordability strategy for patients. Under a traditional fee-for-service model, you might think about the encounter and what that costs, and is it a profitable service line for a hospital? But under value-based care, the question becomes whether that service is making care more accessible and more affordable for patients. So, one example might be, a patient with diabetes, and, the cost of an A1C test might be too much for them. And you think of it as a discrete service, and it's a necessary service. But if the cost is too high and the patient doesn't have access to it long-term, that could be a very expensive, you know, hospital admission or exacerbation of a condition for that patient. But if you think of it as a care strategy, investing in, You know, providing that service for that patient can be, you know, when you think about total cost of care and you think about patient access and affordability. Having access to that test, makes a lot more sense.

 

Daniel Marino:

Oh, absolutely, because you're able to provide that proactive service to the patient, and, you know, that had to be a fascinating discussion to be part of. I'll tell you, we're working with one organization right now, and they're really focused on preventative care, and it's a pediatric group, and the pediatric group has, frankly, high utilization in preventative care. But that is part of their care philosophy, and their approach is that if we drive that care through prevention, it's going to save patient costs down the road. It's going to help us get in front of those issues around, say, juvenile diabetes, or issues around juvenile hypertension, or things like that. But the interesting part about that is some of the payers have been pushing back a little bit, because prevention drives a little bit of short-term cost. So…Part of it, and I think what you're talking about is really that balance, right, between the short-term cost versus the long-term opportunity. And in value-based care, we have to really think of both of those.

 

Katie Gilfillan:

Exactly, exactly. And I think, you know, that's the right mindset of that practice to think we're thinking of, you know, the investment now, but not looking at the ROI in the short term, but in the long term.

 

Daniel Marino:

Yeah, absolutely. Well, Katie, thanks for coming on. A great conversation. A lot of, I bet you we just probably barely scratched the surface on the topics that were discussed. Certainly at the conference, like I said, you usually have a whole broad view of different topics. If any of our listeners are sort of interested in finding out a little bit more about HFMA or maybe some of the things that, were discussed at the conference, can you direct folks to the website? What's maybe you can help?

 

Katie Gilfillan:

Yeah, the website, so it's Healthcare Financial Management Association, so hfma.org is our website, and they certainly can reach out to me directly if you'd like. My email is K-G-I-L-F-I-L-L-A-N at hfma.org. And I am happy to kind of navigate the website with anyone who's interested in finding some resources. We have a number of events, we have education, we have policy resources, we have webinars, we have podcasts and articles. All kind of talking about these things that we talked about today, plus many other things. So if anybody wants to reach out to me or take a look at our website and has any questions, I'm happy to have a conversation.

 

Daniel Marino:

Great. Well, thank you so much. And again, I would encourage a lot of our listeners to visit the HFMA website, because I agree with you, a lot of great information. I go on there quite regularly. Well, thank you again for coming on, really appreciate it, and again, congratulations to you and your colleagues for a fantastic conference, and keep up the good work, looking forward to another great conference next year.

 

Katie Gilfillan:

Thank you for having me.

 

Daniel Marino:

Special thanks to many of our listeners for tuning in. If you're interested in learning a little bit more about this topic, or any of the topics that we discuss on Value-Based Care Insights, please visit luminahp.com/insights or you can visit ecgmc.com for all the information on this topic and many others. I want to thank again our listeners for tuning in. Until our next Insight, I am Daniel Marino bringing you 30 minutes of value to your day. Take care. Bye.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. In today's episode, we're going to dive into Medicare Advantage, and in particular, some of the challenges that hospitals and healthcare systems are having with Medicare Advantage commercial organizations, just the structure overall. As many of us know, a lot of the systems, or a few of the systems around the country, have chosen not to participate in Medicare Advantage, and there's a number of reasons for that, but for the most part, it seems like the predominant reasons are related to the administrative cost, for hospitals and health systems as they are work through pre-authorizations as they work through these denied claims, and just the negative impact that has been placed on patients related to, you know, the pre-authorization process, not to mention the erosion of cash flow. Interestingly enough, the OIG came out with a study recently where they evaluated, 2024 Medicare Advantage activities and the denied claims and ID rates related to that, and what they found was over 20%, I think it was close to about 23%, of pre-authorized services were denied. But the interesting thing about that is, after a period of time, when the healthcare providers went back through and appealed those, 95% were approved. And the only thing that tells me is that we've added all of this extra cost to the system, because somebody's got to work these denied claims. It's been a major impact on patients, and again, it just… it creates inefficiencies and impacts the cash flow all the way around for healthcare providers and for our patients and our consumers.

Well, I'm really excited today to have a long-standing colleague of mine. Ivan Mitchell. He is the Chief Executive Officer of Great Plains Health. He's been the CEO for a number of years, a fellow in the American College of Healthcare Executives, and interestingly enough, Great Plains Health, about a year and a half ago or so, were one of those organizations who made the decision to terminate their Medicare Advantage contracts. Really excited to have you part of the discussion today. Ivan, welcome to the program.

 

Ivan Mitchell:

Dan, great. Happy to be here.

 

Daniel Marino:

So, Ivan, maybe we can dive into this. What were some of the factors that, I guess, led you and your colleagues and Great Plains Health to terminate your Medicare Advantage contracts?

 

Ivan Mitchell:

Yeah, it's… it was kind of an evolution, and we started… we had jumped into quite a few value-based agreements with some payers, and part of the…You know, part of the reason we went into these contracts was to try to manage costs, and one of the stipulations they had in place was to join, and to go and network with some of their Medicare Advantage products. And so, we had two, plans that we went and networked with, with Medicare Advantage. And it was… they were pretty small numbers at first, and, you know, it was, it was going okay. We were… we were seeing some issues. And during that time, we started to see some of the national plans and providers that decided to stop accepting Medicare Advantage. And some of the ones that stood out to us, you saw Mayo Clinic, you saw Scripps Healthcare System, a large provider in San Diego. And so we started kind of sharing this with our board, with our medical staff, as we got complaints about delayed care and a lot of work with prior authorization. But the big issue that came to us is the largest employer in our community ended up moving all of their retirees from traditional Medicare with a supplement to a national Medicare Advantage plan and It was really interesting, they never talked to us about this. We had one of our nurses bring this in and say, hey, my dad got this in the mail, is this an issue? And we were looking at it, and we were not in network with that Medicare Advantage carrier, so we were really concerned, and so, we kind of started going through this process of evaluating it, looking at this, letting them know we're not in-network. It was really interesting that National Plan got on a bunch of phone calls with us, and they said, we shared our concerns with Medicare Advantage, showing them all of these people are not accepting it anymore, showing the OIG report that came out years ago that talked about delays and denials of care. And we said, we're just really worried about this. And they said, well, this is not a typical Medicare Advantage plan, it's a super-duper national plan. If you're out of network, there's no prior authorizations, there are no issues that you're going to run into, and so we said, well, we're a little concerned, but we're going to go ahead and trust you. And so we did not go in network with this plan, but we started accepting it in 2024. And in February, I remember this in particular, we had a patient who was in pretty good health prior, ended up getting really sick, ended up being intubated, you know, went through septic issues, and went through a full recovery, was, but due to the time she was intubated and whatnot, really qualified, and under traditional Medicare guidelines, would have qualified to go to a rehabilitation hospital. And we have a really… we have a great one in Nebraska, a Madonna Rehab Hospital, and we called them up, they said we got space, they accepted the patient, we got ready to transfer them, and they said, well, this is a Medicare Advantage patient, we have to get a prior authorization. And we said, well this is a super-duper national plan, and we don't need prior authorization. They said that it'll go through, and they said, well, sorry for us, we're not going to take them without a prior authorization. So that was interesting to us, so we went through the prior authorization process, and what was more interesting is we kept getting denials.

 

Daniel Marino:

Wow.

 

Ivan Mitchell:

Denial, denial. Had to take… had to take it to a peer-to-peer. And our physician, who had a full day of clinic, you know, busy physician, had a full day of clinic, had to do a prior authorization. They would only do it between 8 and 5, Monday through Friday, when his clinic was going. Made him sit on the phone on hold for a half an hour, and and got denied, with that peer-to-peer after wasting all that time. We went again, and still got denied, and it was really frustrating. Because they wouldn't give us a reason. They would say, well, the patient's still in acute status. And we said, yes, they need acute rehab status, they are done with acute care hospitalization status.

 

Daniel Marino:

Even what Medicare would say, you know, I mean, the natural progression, natural transition is to put them into acute rehab.

 

Ivan Mitchell:

Yeah, exactly, and so that was our, so we ended up… we ended up holding on to this patient for… unnecessarily for an additional 6 weeks. The reason for that…we're required to provide a safe discharge. Taking this patient anywhere other than acute rehab was not a safe discharge, so this patient was stuck for 6 weeks. And we have an average length of stay of about 4 days. So… a few things here. Number one, most hospitals and health systems don't have an abundance of nurses, and we are the only hospital our size in about a 100-mile region, and so that patient staying an extra 6 weeks denied care at our average length of stay for 10 additional patients. So you had 10 patients who had to travel over 100 miles… 100 miles per care, and we were… we were turning away other transfers during this time, you know, we… we were having census issues, so you think about the impact to the patient there, it's just substantial.

 

Daniel Marino:

I mean, the financial impact to your organization, when you think about…You know, the individual that's supporting trying to get this pre-authorized, not to mention, then, the physician who you brought in, in a peer-to-peer situation, you know, and… and…I can only imagine what the financial impact was.

 

Ivan Mitchell:

Yeah, and of course, you know, I was the administrator on call one time during this time, met with that family, and, you know, they were pretty angry, as you can imagine. And then… but, you know, we took good care of them at our hospital, but on the financial side, 6 weeks of care unnecessarily, we've allowed the commercial insurances to, to abuse the Medicare payment policy, and so we got paid a DRG, diagnosis-related group, for that stay. Whether that patient stayed 3 days or 30 days, we got paid the same, and so they left in our hospital for 6 weeks. 24-hour nursing care. We did the best we could, you know, we are not a rehab hospital, we're not that, you know, we're not at that level, we don't have that status, but we did the best we could with rehab, which is expensive. Physician coverage every day, you know, meals, medications, all that stuff, none of that was reimbursed, and so…So basically, this, this, this got us angry, and we called up the…a company the next day and said, alright, we're going to give you a long runway, but we are not accepting this in 2025, and we will be out of network, and not only will we be out of network, we will not allow patients on Medicare Advantage to schedule with our specialists, and so we took a really hard approach.

 

Daniel Marino:

Well, it sounds like that was really… that was really the straw that broke the camel's back. I mean, I would assume that there were a number of things that kind of led up to this, you know. You know, in talking with you prior, there were some… certainly some areas of frustration with Medicare Advantage that you had, but this was definitely the tipping point.

 

Ivan Mitchell:

Yeah, we had some general frustration, you know, maybe some smaller things here or there, but, you know, we looked at this, and we just said, this is just so bad for…the patients, for the healthcare system in general. You know, we, so that was the story in particular, and you know, it's really interesting, so we told them that, you know, I said, I want a, I want a meeting with all of those leaders who came and told me about the super-duper national plan where we wouldn't have these issues, and of course. None of them will get a phone… on a phone call with me after, you know, they're all of a sudden gone away, and, you know, not available, or not working there, or anything like that anymore, which is…Garbage, you know? And it's so frustrating, because these people that are coming and telling me, they're not the ones meeting with the family, explaining to them why they can't get care. It's us. We're the ones stuck dealing with the situation, paying for all this care that we're not getting reimbursed for. You know, they're shuffling papers. They're providing no good or service. It really is a, it really is, honestly, it's kind of parasitic to the healthcare system, and so that was, so for us, that was the process, and we said at that point out, we're not taking it anymore.

 

Daniel Marino:

They really place you in the middle, you know, really being able to have it to serve the patient, because, I mean, you're gonna… you're gonna deliver good care, you know, you're a small community hospital, your mission is to serve the patient, so really kind of puts you in a very difficult, difficult position. If you're just tuning in, this is Daniel Mourinho, you're listening to Valley Based Care Insights. I am here with Ivan Mitchell, Chief Executive Officer at Great Plains Health, having a fascinating conversation on his, path towards leaving Medicare Advantage, and sort of the things that led up to the decision. So, Ivan, let me ask a couple other questions. Now you made this decision to, transition out of Medicare Advantage. Obviously, there's, you know, you probably have experienced it in your community, the same as nationally. Medicare Advantage has started to grow. The payers have done a nice job of marketing to Medicare beneficiaries. What was the communication like with patients? Were they upset? Did they understand? I mean, I assume you had to do some level of education to the patients to kind of get them to either re-enroll in traditional Medicare. Or help them find another provider. What did that look like?

 

Ivan Mitchell:

Yeah, so we had a long runway, which was nice. We made the decision early on, I think we notified the payers in March or April, and we ended up doing quite a bit. We did a lot on social media. We did letters directly to anyone on a Medicare Advantage plan. I held multiple symposiums and open community forums and meetings at our local community college, and tried to get as many people as we could to attend, so…We did a lot, and as much as we possibly could. It was challenging, and I would say it was mixed. There were some people, when we kind of walked through the process that understood it. There was so much out there with the healthcare systems that stopped taking Medicare Advantage with the OIG report, with the report on people being denied post-acute care, so we had a lot of stuff that was, that was from other entities, so it wasn't just us. I think the challenge is that sometimes when you hear that a health system's no longer going to accept something, it's, well, look at that greedy healthcare system, or look at that.

 

Daniel Marino:

Right, right, right.

 

Ivan Mitchell:

And so trying to, even from that story, you know, if we continue to accept Medicare Advantage, we… we called, two health systems, one in Brookings, South Dakota, and one in Stillwater, Oklahoma, that were more our size that stopped accepting Medicare Advantage. And it was interesting, we asked them, we sat down with their CFO, and they said, well, when we calculated everything out, delays, denials, down coding, all of these things, one said we estimated we were getting 16% less than traditional Medicare, and the other said we were getting 17%.

 

Daniel Marino:

Wow.

 

Ivan Mitchell:

We didn't go to that level, but we didn't go to that level, but we, came to the conclusion that it was over double digits. It was over 10%. We didn't get. So I think probably that 16% to 17% is probably about accurate, and then if you think about it, so you're getting… you don't make money on Medicare anyway, and then taking another 16% or 17% cut. And then we were thinking of all of the patients. There would be a half dozen to a dozen patients just stuck in our hospital that really didn't need care, you know, that really didn't need to be there. And a lot of them, it's only a one or two-day delay, and that might not sound like a very big deal, but if you go from a 4-day length of stay to a 5-day length of stay, you just increase my cost 25%. And I have a 3% operating margin. So, I mean, it's just… it was just non-sustainable. And so those were… those were the things that we looked at and explained. We had a lot of public meetings, a lot of public discussion. And I can even give you the results of that. So we had, just in… of course, we had it in, Lincoln County. So, we ended up, We ended up having… it was over a couple of thousand, enrollees in Medicare Advantage. We had 2,212 enrollees in 2024. And, our Medicare… that time, our traditional Medicare and Medicare Advantage payer mix was 44.67%, so in 2025, That 2,212 members, Went down to about 400 that we no longer would accept their plan. We did end up staying in network with the dual DSNP plans, so we did end up continuing to see those. We thought that dealing with Medicaid's such a pain anyway, you know, so we did stay in the DSNP enrollees, but basically there were about 400 people who decided to stay on their Medicare Advantage plan that we only treat now through the ER. We don't treat them through outpatient care, through our specialists.

 

Daniel Marino:

So about those…1,800 transitioned then over traditional Medicare, and I'm assuming, you know, you probably kept them within your physician panel within your healthcare community.

 

Ivan Mitchell:

Yeah, yeah, that was… that was… and it looks like that's what happened. So, I was concerned. I kind of felt like we would probably lose some volume when this happened, but just to give you an idea, in 2025, our payer mix between traditional Medicare and Medicare Advantage actually increased, to 45.53%, 1%. And then, to give you an idea, our admissions from year to year, went up 3.7%. And then our patient days only increased 1.6%, so that kind of goes to show you how… so admissions went up quite a bit, patient days basically went up less than our admissions went up. Surgery's increased about 1%, cath lab procedures went up 7.2%, imaging went up 1.9%, lab and path went up 6.4%, and adjusted discharges, which takes your inpatient and outpatient, went up 1.6%. So I was thinking we were going to see…You know, a decrease of a few percent. But we did not. We actually grew, and because we weren't caring for patients that didn't need to be there anymore.

 

Daniel Marino:

That's clearly a good business decision, and like you said, you just did a great job on being able to redirect it and educated the patients, you know, which really helped solidify the value, I think, that Great Plains Health was providing.

 

Ivan Mitchell:

Yeah, I mean, that was kind of what we were hoping for. I kind of felt like it would… I kind of felt like our volumes would go down a few percent, but not only… you know, you feel bad saying no to anyone that you're denying care, but… but as we were looking at the data, we were actually able to care for more people because we stopped taking Medicare Advantage, so…

 

Daniel Marino:

I just wanted to kind of ask your opinion. Given, obviously your experiences there then, and what you saw, and obviously you did a great job of talking to your colleagues, I'm sure it wasn't an easy decision. But going forward, how do things need to change? Like, if, if a Medicare Advantage, payer came to you and said, you know, look, we want to try it again, we'd love to have you join our network. You know, what would be some of the requirements that you would need to see in order to ensure that the care is being delivered at the right level, and all of these costs and inefficiencies, you know, frankly, either are reduced or they go away.

 

Ivan Mitchell:

Yeah, I think that's the key. From my perspective, the problem we have is that incentives are not aligned, and so…There are a couple of Medicare Advantage plans, and they're typically provider-run plans. You know, you'll talk to Kaiser, to Intermountain, Sanford, and a few others that, you know, if you think about it, they are not going to leave a patient in the highest cost of care setting so that they can save money from paying for a skilled day, you know what I mean? But when you're an insurer, and you don't have both sides of the coin, you're saving money by…trapping people in a hospital that you're not paying for, you know? So, I think that somehow, someway, those incentives have to be aligned. They're probably going to be most aligned in a provider-administered Medicare Advantage plan. So, we're…I really do feel bad. I would like to have one option for our region, and so those people that did stick in Medicare Advantage, if we had an option that they were able to switch to a Medicare Advantage plan and have that work for them. So we are evaluating. There is a small regional provider plan that, that is out there. We're kind of analyzing that at this point. There are a couple of things that are interesting in rural areas called cost plans, where it's kind of Medicare Advantage light. You know, Part A is traditional Medicare, and Part B is provided by the private insurer, so…Those are the two plans we're looking at right now. I think I really would like to, you know, have one option, and then just really manage that, and that way people can kind of, you know, jump into that if they prefer a Medicare Advantage option.

 

Daniel Marino:

So, within Great Plains Health, you have a pretty successful, clinically integrated network. You've done a nice job of kind of aligning incentives with your physicians, with the hospital, and have created, you know, some pretty good relationships on the commercial side with the payers. Do you see, you know, getting kind of building off of that aligned incentive theme that you had mentioned, do you see using the CIN as a mechanism to maybe align with a local, I don't know, provider-sponsored MA plan, or a way to be able to leverage a lot of the work that you've done in your CIN to create that aligned incentive?

 

Ivan Mitchell:

I think so, and that, yeah, kind of really is the purpose of the CIN, is to coordinate with your independent providers and your employed providers to, you know, to eliminate duplication, to get rid of administrative waste. To provide the appropriate care at the appropriate time versus care that might be more expensive or inappropriate at that time. So I think that is going to be the model, where you have a payer and the provider group with aligned incentives to care for the patient in the most appropriate way possible, and so I think that is where you're going to see a path forward.

 

Daniel Marino:

Yeah, I would agree with you. You know, and CINs who are really high performing have created a tremendous amount of efficiencies within the care that's being delivered, and not just clinical efficiencies, but administrative and business efficiencies, efficiencies as well. And I think to build that into the model where you do have those aligned incentives, but you're doing it at the right cost point, delivering at the highest level of care, that's what's really going to… going to drive it. So, where are you going from here? Are you kind of looking at, entering back into the MA market? Are you sort of just feeling it out, just to say what's out there? Is there a particular direction? I mean, clearly you don't have to do anything right now. It sounds like the model that you have in place and the approach that you've taken clearly has worked.

 

Ivan Mitchell:

Yeah, so I think right now we're just doing some analysis. You know, I kind of shared with you 24 to 25 volumes. So far in 2026, we're actually even seeing higher volumes and an even higher growth rate than we did the prior year. So we've had kind of that discussion as to why go back into it and have the potential to be abused, I guess you could say. So as of right now, I think we're kind of holding steady, but again, I think we would really like to have one option out there that's available for our community and region. We're going to be very careful about selecting that option. We're gonna make sure that, it's locked in to where patients are treated appropriately, and their care is not delayed or denied inappropriately. So, so we're kind of holding steady at this point.

 

Daniel Marino:

Yeah, well, hindsight is always 20-20, and you had some great lessons learned that clearly, you know, you leveraged and you sort of built on as you thought about what direction you wanted to go, and I'm sure as you start to consider getting involved in an MA plan down the road, those things will be certainly taken into consideration. Well, Ivan, thanks for coming on the program and sharing your story. Fascinating, and I give you a lot of credit you on your business approach, certainly, you know, a leader in the… across the country, certainly in the rural health space, in the community health space, on driving a lot of the change that needs to happen in Medicare Advantage. But thanks again for coming on the program.

 

Ivan Mitchell:

Thanks a lot, appreciate it.

 

Daniel Marino:

And for all of our listeners, thank you for tuning in. If you're interested in learning a little more about this topic, or any of the topics that we talk about here on Value-Based Care Insights, please visit luminaHP.com/insights, or ECGMC.com as well. Till our next insight, I am Daniel Marino, providing 30 minutes of value to your day. Take care.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. Many hospitals. As they begin to think about their financial performance, or focus on creating efficiencies within the hospital, and even beyond that surgical services and what occurs in the OR, is critical to their performance. In many of the organizations that we've worked with over the, you know, probably the last 15 to 20 years. The impact of surgical services, the revenue impact is somewhere around 65% to even 70%. So it's imperative that the efficiencies of surgical services, of perioperative services, is maximized as much as possible in order for organizations to keep costs down, but also maximize the revenue potential. So, as you think about improving surgical services and perioperative performance. Leadership and governance is a critical component, and is often an area which is overlooked. A lot of times, organizations think about, really just having the directors of nursing drive a lot of the operational processes, and although that's important, leadership related to the surgeons, and particularly the integration of anesthesia, is really a driving force, and especially anesthesia. Anesthesia sees all areas of surgical services, and oftentimes their impact, their ability to influence, is really underutilized. And what we found is organizations who are the best in class, who've really optimized perioperative services Have strong integration of their anesthesiologists within all of surgical services.

Well, I'm excited today to have a strong anesthesia physician leader, Dr. Angel Martino Herrera working with us today, and a little bit of her background. She's a obstetric anesthesiologist. She worked with physicians in hospitals all over the country. She specializes in a lot of operational performance, operational excellence, and really helping organizations put in place strong perioperative and surgical governance. Angel, welcome to the program!

 

Dr. Angel:

Thank you so much, Dan. I'm really happy to be here.

 

Daniel Marino:

So, Angel, let's dive into this. I really want to dive into the whole leadership aspect of perioperative services. Why do you feel like, or what do you see in terms of the lack of, real strong surgical leadership, or really strong anesthesia leadership, driving perioperative performance? Why isn't… why hasn't it gained more attention?

 

Dr. Angel:

Well, I think that's a really interesting question to start things out with. There are some really obvious answers that are circulating right now inside of the healthcare space, but one of the things that oftentimes gets overlooked and comes up in so many conversations, but doesn't get highlighted as the main reason, is culture and mindset. And so, what we see as I talk with CEOs and CFOs and COOs, and whether it's in an anesthesia management company, or in a health system or an individual hospital, what we hear them saying so often is, it didn't used to be this way. And so there is a change that's been happening over the years that's kind of culminating in this very, very increased growth of cost with a shrinking payer reimbursement, and so you have all of these cost pressures that exist inside of an area that didn't used to be, require… didn't used to require management in the same way it does today. And that's where I think…

 

Daniel Marino:

I think a lot of times, you know, it used to be the director of nursing or the chief nursing officer that really drove a lot of leadership and perioperative services, so it was very process-driven, but. you know, as we start to think about the impact to our patients, the complexity of cases that are occurring, the integration of surgical leadership, and in particular the integration of anesthesia leadership, is just so critical. So, when you think about the culture, do you feel like there's that misalignment between maybe anesthesia and the surgical leadership to really drive that level of performance?

 

Dr. Angel:

I think in a lot of places, there still is. We see a lot of movement towards realigning those services, which I think is a really positive change in a lot of systems. However, there is still a gross misrepresentation of the value of the anesthesiologist in the perioperative space. And I think that that's where systems who are seeing really great success in moving the needle in their efficiencies are really noticing that when they put those OR governance committees together, having an anesthesiologist at the table with your surgeon, your perioperative director, that is really bringing a lot of value. And then, additionally, anesthesia services are being asked to evaluate the efficiency and the scalability of their coverage models as well, and that's not something that we really ever had to do with such great intricacy in the past. Anesthesia was frequently just a service provided to the surgeon and the hospital, they were readily available, you kind of moved things around, and now with the cost pressures that exists, we really don't have the luxury of just having people waiting on hand for cases. And so we see that the data, as it's coming through with our AI intelligence and all of our dashboards and all of these ways that we're really circulating in the OR efficiency realm, we see that leadership really becoming more and more imperative.

 

Daniel Marino:

So, to that point, a couple months ago, we did an assessment of a… for a hospital and a health system, a large surgical services evaluation. And, you know, the hospital was really struggling with inefficiencies, and, you know, they had problems with their block time, and they needed to open up capacity, and, you know, they were looking to the anesthesiologists and the anesthesia group to expand their coverage, and that sort of thing. And what we found was it wasn't necessarily a coverage issue, it was really an inefficient… inefficiency capacity issue. So when we went to the anesthesiologists, and we got their opinion. It was amazing how anesthesia and the medical director for anesthesia had a lot of great ideas and a lot of great solutions, and it was really because they're managing the pre-anesthesia testing, pre-surgical evaluation that's occurring, they're in the OR, and they're… they understand the impact in the recovery phase. So, with all of those elements in there, I mean, do you feel like, you know, maybe it's just an evolution that anesthesiologists will assume this role? Or is it more politics as to why they haven't assumed this role? The politics between the anesthesia… anesthesia and the surgical groups? Where do you think that fits in?

 

Dr. Angel:

That's such an interesting question, because it's probably a little bit of both, depending on which system you are functioning in. But what I find so fascinating a lot of times, as a physician, anesthesiologist, and then someone who stepped into more leadership roles in the last few years, is that when…like, people describe the life that we live inside of the OR, and so when you're saying… when you come to the anesthesiologist as a consultant or an administrator, and you're asking for input, they're just telling you about their everyday life and what they see happen, and sometimes that's so… it just so easily flows in the conversation that it's… it's, like, refreshing and surprising all at the same time, and so I think that there is so much value in having those conversations from the leadership perspective, whether you are an individual hospital system, and that your C-suite is engaging with your anesthesia local providers, or whether it's a system, a health system, engaging with a nationally-based anesthesia management company. no matter the level of the conversation, the conversation needs to happen, because they are the ones living in and out in your hospital, whether it's in the OR or in the off-site locations, and they see what is happening. And so, giving them that seat at the table, with the appropriate data, with the appropriate governance and leadership structure in place to actually make something happen when things are said and observed. And then systems are set up, and then frequently challenged, because we all know what it looks like inside those perioperative spaces to make a decision, but then sometimes somebody doesn't like that decision, and so you have to have someone standing behind it. All of those things are the regular day-to-day of an anesthesiologist, and so.

 

Daniel Marino:

So… so when… with anesthesia being so involved in so many areas of perioperative services, why don't… why don't you feel like… why hasn't this been recognized? Why is it… why has it been taken so long, you know, in my mind, has it, for anesthesia to really be elevated into that… into that governance role?

 

Dr. Angel:

Yeah, I think it goes back at the beginning of the conversation. Really, it's a change in the culture and mindset of how hospitals and surgical services typically work. And then secondly, anesthesia is… is classically a behind-the-surgical drapes kind of specialty, and that's where we've lived and operated most of our life, and so there aren't very many anesthesiologists who want to take part in many of these discussions. Now, that being said, there are plenty that do, but I'm just talking about percentage-wise. This is a definite shift in the value that we see being added as anesthesiologists do step up into these leadership roles. And then hospitals also have to develop these governance systems, where it used to be a surgeon would just walk in and be like, hey, I got a case, I need to do it. And we'd be like, okay, let's find somebody to do that case, let's go. And now, as you described. When health systems are coming to the table with an increase in a subsidy request, or a high cost of running their ORs, or diminishing margins, they start to look at, why do I have so many more anesthesiologists, or CRNAs, or costs from this, management company coming through. And, of course, workforce shortages drive that. And there's obviously the payer things that we talked about at the beginning, but ultimately, when you start looking at that data, you start realizing, oh, I really need to tighten my ship in so many other areas. And so, as they develop those governances for productivity, operating room efficiencies. All of those things really play strongly into that governance structure with surgical, nursing, administrative, and anesthesia at the table.

 

Daniel Marino:

If you're just tuning in, I'm Daniel Marino, and you're listening to Value-Based Care Insights. We are… I'm here today with Dr. Angel Martino-Horrall, and we're talking about the impact or the importance of anesthesia and anesthesia leadership and perioperative services. So, Angel, I want to kind of dive into, maybe, your thought, having to work with leaders, you know, perioperative leaders all over the country. What's the ideal anesthesia leadership? What does it look like? You know, as we start to think about moving into more of that paradigm shift, right, where anesthesia would have a seat at the table, but a stronger voice with regards to perioperative governance. What does that ideal anesthesia leadership look like?

 

Dr. Angel:

Well, there's no one-size-fits-all inside of any one health system, but ultimately, what it takes is an anesthesia leader, depending on the size of the system, either at each local facility, or if you only have one, then you have one facility. And oftentimes, in very large systems, you have leaders that sit in each area. OB anesthesia is a very common one, cardiac, your ASCs, all of these different places that oftentimes function under one health system, and often even one anesthesia group, have varying levels of leadership in each site. And so, I think establishing that, both as an anesthesiologist and a CRNA for leadership in that dyad role, and then if you add the third member of a triad into the operations. So, you have an administrative or operator, you have a CRNA leader, and you have a physician leader, and those three can really function as a cohesive unit in driving the anesthesia side of the efficiency. Then when you have those leaders meeting regularly with your perioperative nurse, your surgical services director, and then someone from your C-suite and someone that sits at the head of the surgery department, all of those are coming together to establish the guidelines with which they are going to implement your surgical services.

 

Daniel Marino:

But as you're describing that, and I agree with all of those elements, I guess the one… one piece that sort of is… seems to me that's kind of missing is that impact to the surgeons, right? So…So is it ideal to have, if we're thinking about this ideal perioperative governance structure, so to speak, I mean, are there instances where, you know, you'd have the medical director of anesthesia closely aligned with the medical director of surgery, or some type of a connectiveness there with the chief of surgery, or something that they can sort of work with their peers to push it along, or… could anesthesia fill that role?

 

Dr. Angel:

Sure, that's a great question as well. First, there's always a relationship there, because you're talking in the ORs with your surgical colleagues, and then most facilities, they have a medical executive committee where the chief of anesthesia and the chief of surgery are sitting in the same room together at the end meetings. And so, of course, the value of that relationship just goes practically with… I mean, there's so much value inside of that relationship. So, 100%. The interesting thing about these governance committees, though, when it comes to surgical leadership and anesthesia leadership, is that oftentimes. The surgeon is very focused on the cases that need to be done, where, as you described earlier, anesthesia is frequently the first in, in the pre-op area, with the testing, and then with the preparing the patients for the OR, then there's the intra-op, and then there's the PACU time, and… or wherever the patient is going in their post-operative care. And so, as a whole. Anesthesia is very well seated to lead in the perioperative throughput for efficiencies in an entire health system, even more so sometimes than the specific surgery components.

 

Daniel Marino:

Oh, I agree with you, and I think, you know, as we've worked with many different hospitals around the country, aligning ourselves with anesthesia has been critically important because of the connectedness that they have through all parts of perioperative services. I couldn't agree with you more. I'm gonna switch a little bit and talk about, kind of guiding some of the performance improvement. One of the things that's definitely impressed me about the work that you've done, is you're very data-driven. You've done a lot of work with reports, you use reports and use data to kind of drive process, which is certainly, you know, a solution that we've put in place, and I fully agree with. When you think about data and you think about reporting, you know, again, are there different views of data or different views of reporting that are more geared towards anesthesia leadership to drive perioperative services? And then some that are geared towards surgical services, and then how do you pull that together?

 

Dr. Angel:

So this is such a, like, a mission-critical question to every organization in how they are actually defining the data that they are coming in with. Because when you look purely at an OR and how it's defining its efficiencies and its productivity, that can look very different than how an anesthesia service line is. So when the anesthesiologist shows up to the C-suite with their data on operating efficiencies, which oftentimes includes all of the NORA sites, in addition to just the operating room, their numbers can look very different, even though they have the same definition up on the screen. And so, really pulling in that alignment for… and transparency. So it's alignment and it's transparency. It's a willingness to show up and say, like, hey, here's where we're seeing inefficiencies. And that takes a lot of trust in an organization on both sides of the fence. But making sure the data is good data, first of all, that whatever mechanism you're using for gleaning or overlaying or if you're getting it directly, making sure that your data is good data, and then aligning your definitions to make sure that you're all speaking the same language when you're showing up to make those discussions is critical.

 

Daniel Marino:

Yeah, I couldn't agree with you more. And especially all those indicators, you know, we've got our standard set of indicators, which I know, you know, you've put in place, the on-time starts, and block time utilization, and all of that. And a lot of time, it sort of highlights some challenges that the surgeons have, but often when you dive into it, they're not specific… they're not surgeon-related at all. It's really around process, and it's really around, or the opportunity comes out as to how anesthesia could then begin to influence that in support of the surgeons to create that level of efficiencies.

 

Dr. Angel:

Absolutely.

 

Daniel Marino:

You see, a lot of that, and, you know, so how does that wrap into some of the governance structure and the support of anesthesia, kind of driving that leadership change, if you will?

 

Dr. Angel:

So, one of the ways that you're describing and leaning towards is in, like, the pre-op testing. And so, same-day cancellations is another one of those key indicators, I think, that we are looking at for some of our success metrics. And this is where, again, an anesthesia perioperative clinic and testing is so critical as a joint service to our surgical colleagues, and then to our hospital, our nurses, our nursing leadership, our pre- and post-op care and delivery and throughput. All of those… all of those data points are critical, and without appropriate anesthesia leadership, having a seat at the table to influence those decisions, in a meaningful way that actually matters for the facility, not just that, you know, crosses or checks a box, but that actually drives a decision that can be made that actually turns a financial indicator into a positive. Like, those are the seats that you really need. And that actually takes time stepping away from the OR, and it circles back a little bit to your question earlier about why doesn't this happen? A lot of times, you're so busy running the board and taking care of patients that even if the meeting does happen that you got an invite to, you're not sitting at it. And so that's on anesthesia to really step up to the plate and really take seriously, those roles, and the value that they bring to the table.

 

Daniel Marino:

But I agree with you. I think as anesthesia starts to not only take the lead on pre-surgical evaluation and expanding the value of pre-anesthesia testing, but to really talk through how that's going to influence the efficiencies in the OR, and then the post-recovery, I mean, they're helping the surgeons right then and there. So, I think as a starting point the more anesthesia can really drive that change becomes critically important, especially when you talk about value-based care and the performance outcomes related to it. It all starts with what occurs from pre-surgical evaluation, pre-anesthesia testing, how you're using that information to drive the change.

 

Dr. Angel:

100%, and anesthesia is and always will be a service-oriented profession, and so I think that that's where we can really shine. One of the things that I have loved seeing in some of the places that I've been able to work is allowing them to see that when they're making these positive changes and positive decisions, if they're not doing it in the right time frame, you're actually not driving cost efficiencies. And so we've seen so many times where they will cancel the case the day before, and you're like, great, I paid my locums person, and they have a 72-hour, you know, a term in order to be able to… you still have to pay them. I'm like, so you have to know the timing of making these decisions is just as important as the fact that you're making them in the first place. And that's where, again, having someone that can sit at the table, whether you're bringing in an outside consultant, or whether you have the privilege of having someone in-house that can do that for you. No matter how it's being made, all of those aspects come into play when you're actually trying to drive the bottom line.

 

Daniel Marino:

For many hospitals around the country, they are focusing on improving their perioperative services, surgical services, make it more efficient, you know, reduce costs, improve revenue. For our listeners today, what advice would you give them on where to start on looking at leadership on surgical service governance to really bringing together, or maybe creating more of an influence from anesthesia and better aligning it with the surgeons? Any thoughts?

 

Dr. Angel:

Oh, yes, I have tons of thoughts. I'm trying to think of how to start that conversation. One of the things that I think is really important, if we just step back for one… one brief moment from that question, is that a lot of times, healthcare systems lose people chasing efficiency. And that's where I do think that culture and emotional intelligence paired with that operational discipline is really critical. And so having the right people at the table is just as important as the fact that you're developing your leadership and governance structure in the first place. And so many times, I have seen organizations change anesthesia leadership, and ultimately, it's just the same things happening inside of the OR with a different name on it, and so you really have to have the right people in place, and the right support system backing it from the C-suite to know that this is not just a facelift. It's actually, we're making transformational change, and it's gonna get stood behind by… Right.

 

Daniel Marino:

Great point. I mean, clearly that transformational change, as you mentioned, coming from the C-suite and really providing that right level of support with the right individual is absolutely key. Well, Angel, thank you so much for coming on today. This is a great discussion. I'd love to dive into this a little bit more. I think, you know, the attributes of leadership and in surgical services governance, in perioperative governance, the role of anesthesia, you know, I think we've just… just scratched the tip of the iceberg there. You know, any final piece of advice for any of our listeners?

 

Dr. Angel:

I would say that as you are looking towards your anesthesia governance and your perioperative governance, transparency in the data and in the shared goals behind every system is really critical. And then also showing the value for your clinicians and the clinician engagement, coming alongside of the operations. Just goes a long way inside of building whatever kind of governance structure for your perioperative services that you're looking for.

 

Daniel Marino:

Well, great point. I mean, that becomes a foundation of your culture transformation, right?

 

Dr. Angel:

Absolutely.

 

Daniel Marino:

It does. Well, Angel, thank you very much. If any of our listeners today are interested in maybe following up with you, asking some more questions, you clearly have a lot of experience with perioperative governance, can you share your email or maybe your LinkedIn address?

 

Dr. Angel:

Absolutely. I am available at Dr. AngelMartinoHorrell at linked… on LinkedIn. Dr. Angel Martino will get you there. I do understand that's a pretty long name, but I'm the only one out there, so you'll find me on LinkedIn. And then, I have a website, Halo-consultants.com. It's healthcare and anesthesia Leadership and Operations. And so, you are welcome to contact me there as well.

 

Daniel Marino:

Great. Well, thank you again, Angel, for coming on. Love the conversation, really appreciate all your insights.

 

Dr. Angel:

Thank you so much, Dan.

 

Daniel Marino:

And for any of our listeners tuning in, if you're interested in learning a little bit more about this topic or other topics, please visit luminaHP.com or eCGMC.com. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Thank you. Take care 

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. Many hospitals, struggle time and time again with managing a lot of the activities in the emergency department, and everything from overcrowding, to long wait times, to impact, related to readmissions. Certainly on the value-based care side, many hospitals and health systems are thinking about different alternatives that help to provide, additional urgent or emergent-type support to patients, certainly having patients go to urgent care, or at least being able to provide some other… some other alternatives for emerging care and so forth. But it doesn't… hasn't really done a lot to solve the problem with overcrowding. And, you know, there's a whole host of reasons for that. I think some of it, you know, potentially is the care model. I think some of it is the lack of primary care physicians, a shortage of primary care physicians. Some of it is just need. I mean, patients, you know, have a condition, they have a clinical need, and they don't know where else to go, so they go to the emergency department. Well, I'm excited today to have my colleague, Marty Lucenti, join me in the conversation. Marty is a national… nationally recognized expert in emergency department operations. He's worked with organizations all over the country on emergency medicine delivery, optimization. He not only is an emergency medicine physician, but he has a PhD in mechanical engineering as well. Marty, welcome to the program.

 

Marty Lucenti

Thanks for having me, Dan.

 

Daniel Marino:

So, Marty, let's dive into this. When, you know, working with organizations around the country, what are you seeing as the big challenge, or maybe the big drivers related to overcrowding in emergency departments?

 

Marty Lucenti

You know, I think… I think the starting point when you start to look at overcrowding in the emergency room, it's really important to start with, you know, what do you see emerge as the patterns of utilization in the emergency room? What does the emergency room of today provide for the health system? Quite honestly, when you take a look at what the emergency room does now. I like to refer to it as the emergency room has slowly and predominantly transformed itself into an acute diagnostic center. And because much of the original physical footprints were originally designed with the primary concept of an emergency room. This is where you go when you have a life-threatening emergency. A lot of the capacity designs were done with that in mind. But when you actually look at, you know, the populations that actually present to the emergency room. The emergency room forms a much broader, you know, set of services for the health system. When you look at the populations within an emergency room, there is that group that is, you know, has a life-threatening injury or illness, but that only represents about 25 to 30% of the ER visits. There’s another 25% that are relatively low acuity, but that low acuity often requires some uniqueness of scope of practice. You know, the misperceptions office about low-acuity emergency room visits is they could have gone to an urgent care, they could have gone to a primary care, when oftentimes even the low acuity visits in the emergency room. We’re actually referred over, by urgent cares, or family practice or, you know, primary care providers, just because of scope of practice. You know, don't do incision and drains, not comfortable. Doing some light sedation on a child to do suture repairs, and so forth. So that represents another 20-25% of the emergency room. But the area that has become the dominant center of mass of patient care in the emergency room is actually this complex patient population. Patients who have either medical complexity, have a lot of comorbidity issues, or have a complicated problem. They're not acutely decompensating, they're not in the process of dying, but they're getting sicker, and they've got… and in order to really fully evaluate them. There’s a lot of diagnostics and potentially a series of different scopes of practice, specialty perspectives that need to be interjected. And that actually represents almost 50% of emergency visits. So it's an interesting constellation of, you know, of presentations that come to the emergency room. Very few emergency rooms were fully designed with that full responsibility.

 

Daniel Marino:

Sure.

 

Marty Lucenti

The other… the other part to look at, Dan, is the single greatest predictor of an overcrowded emergency room is a full hospital.

 

Daniel Marino:

Yeah. Well, you see that all the time. I mean, a lot of times. You know, when the census in the hospital is, you know, above 90%, you know, then all of a sudden the hospital's scrambling, and maybe, you know, they're discharging and getting the… transitioning the patient out, only to come to find out that maybe the post-follow-up, post-discharge transitions care, really, those protocols aren't in place, or the processes aren't in place as strong as they should be, so what happens? The patient shows up at the emergency department.

 

Marty Lucenti

Yeah, and you used a number 90%, which is… which shows me, you know, a little bit about cueing theory, because you start to get balking when you get above 85-90%, so there's… your number told me that you've got a little bit of a background, but you're exactly right, Dan. And so, when you think about an emergency room, if you planned your resource model for everybody to come in, get 3 or 4 hours of care, and leave. And then you have people waiting 2-3 days for an inpatient bed, and you're… more and more of your resources are transferred over to providing additional inpatient care because your inpatient services is over full, it really creates a strain. Once again, I'll remind everybody, the single greatest predictor of an overcrowded emergency room is a full hospital. But it's that constellation. Yeah.

 

Daniel Marino:

Yeah, absolutely. So let me ask the question. In your experience, though, when you look at that… again, I'm gonna use kind of a physician analogy here. When you're looking at diagnosing the problem of overcrowding, right, is it, you know, what I'm hearing you say is it may not necessarily be that there's patients who are going there that shouldn't go there. Some of it could be as a result of just the poor processes that we have in place, the poor throughput that we have in place. Is that true? Is that what you're saying? And if so, you know, how do we manage one or the other?

 

Marty Lucenti

Yeah, you know, here's what I would say is… is it's one… so, Dan, you're… you're dead… you're dead on, although you will see most people who try to fix this problem just believe that they can efficiency themselves into solving this, you know, this acute care capacity crisis. What I would tell you is the flaw generally starts before the process engineering, it actually starts with the resource planning and understanding stochastic or variable demand. We do so much planning based on averages, but… but these are queuing systems that have arrival patterns with distributions that have variability. And so. You know, you've got to be able to use some of those statistical constructs from, you know, high-reliable system design to make sure that you've got enough resources to adequately meet the demand.

 

 

Daniel Marino:

So let me dive into that a little bit, because I want to put this into kind of a, you know, a practical approach here. So are you saying that as you start to think historically about the patients who are presented to the emergency department. We should be looking at what the, you know, the emitting ER diagnosis is, and, you know, begin to maybe risk stratify the patients, so we can better almost create the care model based on, historically, profiles of patients who have come there. Is that what you're sort of referring to?

 

Marty Lucenti

So, what I'm saying is, you know, take a look at your arrival pattern. So, like, when I fix an emergency room. So know, whether it's an inpatient hospital or it's an emergency room, this is a traditional queuing system challenge. It's a capacity demand matching algorithm, right? So when I look at an emergency room, I have to have enough docs, nurses, and care spaces to take care of all the patients that arrive. So I study the demand by hour of day, day of week, week of month of year, and I understand that distribution, not just the average, but the 75th or 90th percentile. If I want to be safe and reliable, I’ve got to be able to deal with my 90th percentile demand. Within that construct, Dan, you've got to understand the district, you know, the various types of presentations, the levels of acuity that come, and then exactly what you want to do is have designed care pathways for different levels. People want… different types of patients want very, very different things, right? If you're a high acu… if you're a high acuity patient, right? If you're a high-acuity patient, there's only one thing you care about. Please, save my life, right? You're not… you're not worried about comfort, you're not worried whether you've got a TV, you're not worried about communication, just save my life. Likewise you know, if you've got a minor problem. Really what you care about is getting discharged as quickly and move on with the rest of your life. So, the care space design and so forth are very different for those subpopulations. And then that middle group, which I talked about, the 50th percentile, who have a lot of coexist, you know, pre-existing medical issues that may or may not be deteriorating that need a very big workup. Those people really do care about comfort, because they're going to be there for a while. They were already uncomfortable with the chronic illnesses they're dealing with, and their, you know, the challenges of trying to navigate the outpatient space that haven't given them the answers they're looking for. And so. You’re exactly right, and you need to know all of those things with a probability distribution.

 

Daniel Marino:

If you're just tuning in, I'm Daniel Marino, and you are listening to Value-Based Care Insights. I am here talking today with Dr. Marty Lucenti, and we're talking about addressing the overcrowding issue in the emergency department. So, Marty, I'm a big proponent of risk stratifying populations, and risk stratifying the patients, and I've felt like through the work that I've done with hospitals all over the country, the more that you know about the patient, the more you know about the risk factors that are driving the needs of the patient, the more proactive you can be in delivering the exact care that they need. When you think about, let's say, the high trauma patients, or the patients that are the rising risk patients, or the patients, you know, that are coming in, as you've kind of mentioned, those high acuity patients. How does the data figure into that? Because again, you know, you're not necessarily planning for the emergency medicine visits, they just… patients just show up, right? So how do you integrate that level of data, that level of informed knowledge into the care model so you're actually able to deliver that care and create the efficiencies that hopefully you're able to gain out of, you know, addressing the overcrowding issues?

 

Marty Lucenti:

Yeah, no, you know, that's a really good question, and you know, healthcare has spent a lot of money, really, trying to get to some of those solutions. If you look at it, centralization of electronic medical records so that the second I actually identify you, I am immediately fed all that information. Think about, you know, a lot of trauma is, you know, trauma is generally a young person's game. Most of the people we see in trauma are young, but there's a decent population that are geriatric trauma. And when I'm… when I'm dealing with geriatric trauma, trauma is a… is a, you know, traumatic, shock is usually a hypovolemic, they're losing blood. But there are other kinds of shock, cardiogenic, and so forth. And so there's some special considerations when you're dealing with trauma patients, if they've got, you know, pre-existing congestive heart failure, and some of the traditional approaches would not work. So, you know, having a robust, you know, EMR with shared access so that the second you scan somebody in, that information is being fed to you is incredibly valuable.

 

Daniel Marino:

Oh, yeah.

 

Marty Lucenti

You’ve seen health systems across the country have spent a lot of money, you know, actually… they know in… they know in the, you know, in their, you know, in their soul that having all that information in one place easily, easily, easily accessible is going to lead to better outcomes. And I think it's on this front, right, in those… in time-critical moments, the quicker you can assimilate all that information and calculate it into your diagnostic and therapeutic interventions, incredibly helpful.

 

Daniel Marino:

It absolutely is. I mean, that's where, really, the efficiency and the care comes in, and we make sure we're providing the right level of care for the patient that needs it. Talk a little bit in terms of what you've seen around the country with some of these innovative models. You know, in some cases, when I've had the opportunity to go in and to assess workflow in the emergency department, you know, I've… we've assessed kind of the overcrowding issue and kind of the throughput of it. You know, you can't… you know, oftentimes, and again, I'm not a physician, but oftentimes I think that a lot of the workup and a lot of the activities that are being done isn't necessarily focused on patient need. It could be focused on a protocol, it could be liability factors that come into play, too, making sure that we're doing all these tests to rule out certain, you know, this, that, or the other that comes in. But I don't really see that as innovative models, right? I think it's more of just standard operating procedures. What do you see are some of these innovative models that are combining the knowledge, the data, the innovative, you know, throughput and care models that are really helping to take these emergency departments to more of a high-performing standard.

 

Marty Lucenti:

Yeah. You know, so the first problem you always have to solve is that capacity demand problem, right? And if you have enough resources to just serve that first function, which is, you know, keep people alive who have emergencies, you're going to be problematic on all the other patient populations that are, you know, that you have to provide care to. So solve that problem. But that's when, after that, Dan, it starts to get to be really interesting, which is, how do you design your emergency room, and what should your emergency room do? You know, there are folks… and you have to decide whether you're going to be sort of operate as a traditional emergency room, which is basically make sure they're not having an emergency. If they're not having an emergency room, discharge them with lots of follow-up visits, you know, and try to get plugged into the outpatient care. Or you can take the other approach, which is, this is an outpatient facility, and I'm going to… I'm going to give you the answer now. I'm going to put together that which would take 3 weeks, you know, for you to get, you know, to, you know, efficiencies. And when you look at value-based care, there's a lot of emphasis, you know, on efficiencies and quality. You know, what I find, you know, when I talk with specialists is the errors that I see in medicine are errors of omission, or… which is… means… are predominantly, I didn't… things that didn't get done, or should have been done quicker, right? Right. You know, so the answer is, most people, you know, if you try to do a complicated workup in the primary care or outpatient facility, it's 5 different places with 6 different appointments, and it's hard to get, you know, to get all of those somewhat coordinated. Whereas in the emergency room, you can get all of those things very quickly. If you lean into the concept of an acute diagnostic center and set as a priority that this is where you come for an answer, which is much different than the emergency room that says you're not having an emergency, go away, go try to work this up in the outpatient. You can really create a lot of value to your patient population, reduce suffering, eliminate errors, improve efficiencies, all of those things. And so, when you start to think about those sort of innovations. It’s a philosophical difference in the way you go about approaching a patient who presents to the emergency room.

 

Daniel Marino:

I really like your… if I could build off of a point, I really like what you mentioned about the transition from an emergency department to an acute diagnostic center. Because that sort of changes, then, the mindset, that paradigm shift on how we're treating patients, and what the emergency department really should be doing. But, you know, as you're talking through this, you know, putting my finance hat on, there's an economic impact here, right? And in some cases, the emergency department is an economic engine. Or a hospital. In other cases, maybe not so much, depending upon the payer mix, but nonetheless, it does have some financial implications. How does the finance piece of this fit into it?

 

Marty Lucenti

Well, you know, I think this is a really great question, and we can kind of walk through this, and I'll talk to you to kind of give you… that the answer can be a little bit different depending on the circumstance. So if you look at the operating margin of a hospital, right, an operating margin of a hospital, you know, generally 1%, 2%, 3%. It is an incredibly low margin business, right? So, you honed in, you honed in one of those very first principles when you mentioned 90%. So, I was running an operation that has an incredibly low margin, I want it to be completely full. I can't have any excess capacity so that I'm reliable, because it makes my… it cuts my margin, gets tighter and tighter. And so, being full with a waiting room, right, being full with a waiting room makes some financial sense, to the hospital, doesn't it? Right?

 

Daniel Marino:

Absolutely.

 

Marty Lucenti

The patient is right down in the emergency room. Not only that, Dan, but when you actually, depending on the circumstance, right, full with a waiting room, alright, so once you're full with a waiting room, start to think about this. You have 3 different sources of patience. You have patients that come from the ER, patients that get admitted to the hospital from the OR, and patients that are transferred in for specialty care. What do you make… what do hospitals make the most money on? Which… which patient populations?

 

Daniel Marino:

Well, I would imagine patients that, you know, come from the emergency department and getting admitted into the hospital.

 

Marty Lucenti:

No, that's the lowest margin patient. That patient… that is the poorest insured, and the lowest, lowest problem mix, of those. So you make the most money off your OR patients, the second most off your transfer patients, and the final is the ER patients. So start to think about it as if, once I get full, I back up into the ER, it does actually, in some sense, create a little bit of a negative feedback to your lowest margin point of entry to your facility, doesn't it?

 

Daniel Marino:

Yeah, you're absolutely right, right, because that's where the contribution margin's gonna come in. So, maybe it's then designing, as you mentioned, the acute… the ED is an acute diagnostic center that helps to manage some of those trauma patients, and almost thinking about maybe the medical side of emergency department different than the procedural side of the emergency department, so then you are able to kind of address those trauma cases quickly and efficiently.

 

Marty Lucenti

Yeah, you know, what I generally do on that, so once you get to that, like, what you start to do is what I usually will do in those circumstances. So, right, this is a full house. This is, you know, this is most downtown academic medical centers. They're full with the ER backed up with borders. What I generally do is try to hybridize that, which is, basically, I make… I make the ER both an ER and an ops unit, and they're not physical locations, but they're… but their status is within the same physical space. So that I try to… I try to reduce the admissions… I try to reduce the emissions by 25% by keeping the patients and being really efficient at getting them the CAT scans, MRIs, the consults, and avoid a 2- or 3-day admission by being ultra-effective, ultra-quick at getting diagnostics and consults in an op status, so that I can… so that I can… I can filter off 25% of the admissions. They’re thus saving, you know, thus decreasing my tomorrow's… tomorrow's challenges.

 

Daniel Marino:

Yeah.

 

Marty Lucenti

Take the opposite approach, though, Dan. You’re a hospital that's… You know, that's 30-40%, you know, occupied, that's having financial trouble you’ll see them use their ER as a mechanism to grow desirables. So a lot of times when I work with, you know, for-profit organizations, you know, they look at the ER completely the opposite. They don't, you know, they don't start a negative feedback to their ER because they're already full and they're trying to enrich their problem mix. They look at it the other way. This is my point of entry for a lot of relatively lucrative stuff, to grow my inpatient volume and so forth. So once again, it's not… the ER isn't one piece… there isn't one answer to how you configure an emergency room. You actually have to configure that emergency room to be most effective in the broader care system that you're providing your community.

 

Daniel Marino:

Yeah, well, that's a great point, and really based on, you know, historically what the needs are of the community, needs are of the patients, and so forth. Well, Marty, this has been great, and I think we just barely scratched the surface on this. You know, as many organizations, they're continuing to work through efficiencies in the emergency department, address overcrowding, all of those issues. If any of our listeners are interested in contacting you, can you share your contact information or your LinkedIn address?

 

Marty Lucenti

Sure, sure, it's… it's… you can… it's mjlucenti@ECG.com is my email.

 

Daniel Marino:

Wonderful. Well, I appreciate it, Marty, this is great, and, you know, I'd love to, maybe down the road, talk about some specific case studies. You know, this is such an important topic, and it touches so many different areas. You know, maybe sometime down the road I'll have you back in, but I'd love to kind of dive into some specific case studies with some outcomes. I think that would be really interesting.

 

 

Marty Lucenti

Absolutely, would love to dive in deeper. Yep.

 

Daniel Marino:

Wonderful. Well, thank you for coming on. I really appreciate it. And a special thank you to all of our listeners for tuning in. If you're interested in learning about this topic, or any of the topics that we've discussed on Value-Based Care Insights, please log into LuminaHP.com/insights, or visit ecgmc.com for a lot of other information, and quite a few of the topics that we've discussed. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. In today's episode, we're going to reflect on a really good conference that occurred in early April, and it's the… it's the Beckers Conference. It was the 16th annual meeting that they had in Chicago at the Hyatt Regency, and often on the show, I do like to reflect on conferences, especially those that seem like there's really some strong takeaways and some strong topics that were discussed. The conference was extremely well attended, and my kudos to the Beckers folks. There was about 3,500 executive leaders that attended, and over 900 speakers, most of those were both, advisory professionals, but a lot of folks that, you know, leaders, operational leaders that are working through a lot of the day-to-day activities. It was just great to hear a lot of the feedback there. But there were a couple of really key themes that I thought were takeaways. Obviously, we talked about AI. AI, seems I can't go to a conference these days without talking about artificial intelligence and how to operationally deploy it, and I thought, you know, the Becker's team did a good job of kind of identifying some good topics there. There was a lot of discussion around margin improvement, margin recovery in the hospital, in the ambulatory setting. But two of the areas that… that I thought, in my opinion, kind of, really struck home, one was around designing workforce, and really the workforce of the future, concepts around stabilization, how AI sort of is incorporated in there, you know, of course, talking… working through some things related to burnout mitigation and wellness and so forth. And then the second topic was around executive clinical leadership and the development of executive clinical leaders. There were a lot of physician leaders, a lot of clinical leaders who attended. As a matter of fact, I had the opportunity to sit on a panel, with a couple of, actually 3 very strong physician leaders, and the discussions that, that we had, out of that, and it was really value-based care driven, was, was exceptional.

Well, I'm really excited today to have two of my colleagues, who attended the conference, provide their feedback, their thoughts. Amanda Adams is a healthcare strategy and finance executive. She has more than 20 years of experience and has worked with hospitals and health systems all over the country. She's done a lot of work with not only improving financial performance, but also supporting a lot of leaders in leadership development. I'm also joined by Jessica Wells, national expert… leader of medical education and learning. She's done quite a bit of work in workforce innovation, workforce development, and just creating a lot of stabilization of workforce within hospitals and health systems. Amanda, Jessica, welcome to the program.

 

Amanda Adams:

Thank you.

 

Jessica Wells:

Thanks for having us.

 

Daniel Marino:

So, Jessica, maybe we could start with you. Give me your thoughts on the meeting. What was one or two of your big takeaways?

 

Jessica Wells:

Yeah, thanks. Same for having us. I agree with you, Becker's was a… it was huge. One, you can almost see and hear so much of what's going on. I spend a lot of my time mostly on the academic medical center track, and so while, yes, everybody was talking about margin improvement, margin recovery, we also were talking quite a bit around, in the academic medical center side, or in the teaching health center side. This idea around what does it mean to train the next generation of the healthcare workforce was becoming quite broad around, okay, but what does that really mean? Because just training individuals doesn't necessarily mean you're training the right workforce, or what's the care model of the future that we need to be training towards? And then secondarily, having an academic and research mission in the pressures that we're seeing within the models, what is that that actually now have different pressures for these institutions in this particular regulatory environment coming up that creates different types of models? What does it actually mean to be integrated as a health system or integrated as an academic center? And so, those started coming up as just quite a big pressure point for what is it… what does that change necessitate, or what do those leaders need to be, or what do you need to be able to… to… to really succeed in the… in the next generation of our health system?

 

Daniel Marino:

Well it's the change in the balance, right? Especially when you're thinking about the different missions of the academic environment. I mean, that certainly comes into play. So, Amanda, you sat on a panel, and supported a panel around executive clinical leadership. What was some of your big takeaways from the discussion and the panel that you sat on?

 

Amanda Adams:

Thanks, Dan. Yes, I, had the honor of moderating the panel that was the next evolution in clinical leadership. So, we had two CMOs and two chief quality officers, all of them MDs in different markets. I think the takeaway was just in how to train up physicians to be in clinical leadership positions, and what they need to learn now, and how they need to learn it, and it's not just a stopping point of, take a break, go get an MBA, and come back, and you're a physician leader now. It needs to be integrated in what's needed for the organization. So there were some tidbits on how you can begin to position yourself as a clinical leader and taking on more responsibility in the organization, reframing what they're thinking about in clinical leadership, and what does that gain that? Not just another administrator, but… but how does that integrate you with your Physician Foundation and your physician, and create that, authority and camaraderie and negotiating power when you are promoting clinical leaders. I also went to another interesting panel on rural healthcare, thinking I was gonna… we were going to talk a lot about financials, but we ended up talking a lot about workforce, and at the other end of the spectrum, and just younger folks and getting them engaged. So there's just a lot of touched on training at all different levels.

 

Daniel Marino:

Well, and all the evolution of the workforce that goes into, kind of, supporting growth and the growth of, you know, in many of the rural environments, the human capital and the investment in the human capital is the largest challenge that many of these institutions have. So when you think back, and I attended a number of the sessions, and as I mentioned, I sat on a few of the panels. Financial performance and really expanding the financial performance, was a common thing. Growth was a common thing. And, Jessica, you touched a little bit on this in some of your initial thoughts, but when you think about the workforce and, you know, the staffing, the teams that they have in place, the workforce in general, I mean, that's the largest asset, really, an organization has. And yet many of the… what I sensed was many of the leaders in the discussions were around. Ensuring that the workforce is prepared to take on the challenges that we're seeing. How was that discussed? Was… was… give me some thoughts in terms of. How some of the development of the workforce, the growth of the workforce, the initiatives that are in place, how are leaders thinking about that to get the workforce ready to take on these challenges, maybe to overcome some of these challenges, and make sure that the organization is financially growing?

 

Jessica Wells:

Yeah, that's a… it's a really great question. What we're starting to see is an evolution from the academic requirements of our workforce being an academic problem instead of it being an us problem. So, it used to be that we would matriculate learners to graduate. And then when they would graduate, that would become the clinical workforce. And now we're starting to see when we move this back into the curriculum, we're now able to start to graduate folks that are actual model-ready, or bedside-ready. And so when we are working together and moving that back into the curriculum side, now we're becoming much more nimble at what does that mean, and that becomes more of an integration strategy. And so, when we combine the academic and the clinical environment together, that's the winning solution. But when we have these two different sides of the house that are operating clinical and we're operating academic independently, that's not working. And innovation, when we do it together, that is when we're starting to see that as a winning solution, but it's being… it's a slow… it's a slow transition for folks to recognize that this is actually what we have to do to create that workforce that is actually going to be what we need in the future. So we have to get earlier on in that kind of time frame.

 

Daniel Marino:

Absolutely, and, you know, one of the things… I sat on a similar panel as you were just describing, or I attended a similar panel, I didn't sit on it, but defining kind of the path towards that integration, as you've described, with the academic mission versus the clinical mission, or the research mission versus the clinical mission, you know, for academics, that's a big challenge, right? And what many organizations are seeing, and this came out, was they have teams of members who do different things. And one of the questions from one of the attendees was, how do we better leverage that expertise so it goes across the different, you know, the different missions? And not only is that important in the academic side, but it's particularly important when you think about the community hospitals and health systems, and even rural hospitals and health systems.

 

Jessica Wells:

Yeah, and truth be told, incremental integration doesn't work either. You can't just pick and choose where you're going to have integration, or where you're going to collaborate on things, you have to stop doing it that way, because that's actually not creating that aligned functionalities to it. Your data systems are… when your data systems don't actually talk together, when the governance is so different, and when you don't have an alignment on any of that, then there's actually just two different operating systems that think that they're functioning in two different silos. And then when they want to work together, they choose when that works. And that's exactly what we are seeing as not the way that it actually functions together. And then you just have folks who sometimes work together and sometimes don't, and that doesn't work for any of your actual folks who are supposed to be working together. And so what we see and what we help our clients do is to break down all those barriers to actually integrate and to truly create that functionality that works together, so that there is no bifurcation between what is academic and what is clinical? It is one environment.

 

Daniel Marino:

Yeah, it just becomes a single environment, and they're kind of sharing those resources across the different environment, really around the common goal, if you will. If you're just tuning in, I'm Daniel Marino, and you're listening to Value-Based Care Insights. I'm here with Amanda Adams and Jessica Wells, two colleagues of mine, and we are reflecting on the Beckers Healthcare Conference that occurred earlier in April. Amanda, I want to turn to you, because, you know, you had mentioned another common theme there that I've seen was really around advancing rural health, and In rural health, obviously they, you know, there's a lot of challenges to just the rural health market, certainly the one big beautiful bill, some of the reduction in some of the funding, changes and shifts in supporting Medicaid and so forth. But, you know, one of the things that I saw coming out of that was the evolution of developing the leaders specific to rural health, and the growth of those leaders within the rural health environment. And although there's a lot of nuances that are specific to just rural health, being able to understand and translate what's occurring in the larger healthcare setting to a rural health environment is really important. When you think about that, and from what you heard around rural health and that development, how is that… what are some of the organizations or the big takeaways that you heard around development of leadership, or some of the change agent, or even some of the big initiatives that many of these systems are doing to move their organizations forward?

 

Amanda Adams:

And I'm glad you mentioned the, the, one big beautiful bill. The, rural health system cannot wait to figure out what's going to happen with the funding for rural health, and… and for that to trickle down, and what really is the final impact with Medicaid. They need to do something now, and their staff, if you have someone in a rural health system, and it's a couple people that are out, that could be half of your, one of your programs. So the staffs are really, spread pretty thin, and they're, working… some of the initiatives they're working on and focusing on are upskilling while people are in one job, looking at what they can do in the future. Jessica talked about silos, and we've talked a little bit about how there's sort of these milestones of education. You achieve this degree, and now you do this thing. But, shifting to a continuous learning environment, that people are training for the next job while in the current job. They're cross-training, particularly in rural environments, so they can help each other out when staff, when some departments are understaffed. If you're waiting for the regulation, and for the money to begin flowing in a different way, and you're trying to keep up with that, you might be closing programs. And once a program is closed in the rural health system, it's really hard to start that back up again. So upskilling and cross-training, also what kind of partnerships can be developed? The systems of the rural health hospitals are partnering both with larger systems to help with some of those resources. They're partnering with virtual care organizations to, on both ends of the spectrum, from the primary care perspective, to help that primary care crunch if we don't have enough primary care physicians or APTs.

 

Daniel Marino:

And even providing a larger breadth of services, right, that goes across that whole continuum. One of the sessions that I attended, and we had talked about this in the value-based care area that I was in. Was the, how some critical access hospitals, how some rural community hospitals are starting to integrate with these larger systems within a clinically integrated environment, and really moving away from being able to provide as many services or, you know, as we can to the community, but really focusing on those two or three impactful services that the hospital can provide, but then integrating, then, the other support services within a larger clinically integrated network or an organized system of care. How was that addressed in the session? Did you see a lot of those strategic alignment discussions around integration, around network development, around, you know, the advancement of providing shared services of some sort?

Amanda Adams: Yes, and transportation is a big issue, so thus we're leaning into virtual care and getting subspecialty care online so people are not having to drive hours to get to that program if it's not part of the rural hospital. And not only are they partnering with the larger health systems, they're partnering with each other, because there may not be that opportunity at a health system, and that may be very, very far away. And if they partner with each other, and not necessarily kind of carve up the services, but really identify who is providing, perhaps, subspecialty in one area versus a different hospital, focusing in another area. They can create a little bit more of a catchment area for those patients that don't have an opportunity to travel. These hospitals have very high payer makes in Medicaid and Medicare. This is not a population that can just hop in their car or get on a plane.

 

Daniel Marino:

No, and sometimes it's a good couple hundred miles away as you'd be able to, you know, to connect. And, you know, I think transportation challenge… I mean, that's an issue, right? And I think that's where virtual health certainly comes into play. Jessica, I'm going to turn back to you and kind of building on a couple of things that you said, particularly around that level of integration. And tying it to another theme that I… that I heard, in a number of the sessions, and that's really around incentives and compensation design. Particularly in the academic setting, you know, this, I think always… it's a continued challenge, right? What's the right compensation model? How do we ensure that we're building a model that incentivizes our, our physicians, our scientists, our teams across the different, you know, missions, if you will. What were some of the big takeaways that you picked up on related to workforce alignment, incentive creation, and just overall compensation design?

 

Jessica Wells:

Yeah, it is always a challenge, because sometimes if you don't have an aligned emissions, we sometimes can have contradictory models that, at the risk of the other, can be competitive. And that can, not on purpose, but can then put it… put things at odds. And we want to be very mindful that if we're not paying attention to one mission or the other, then we're inadvertently creating a competition amongst the time and tension that we're wanting to do. So we have to recognize that if we do have a mission that, in essence, has multiple areas, teaching, research and our clinical excellence accordingly, then we have to recognize that our compensation models have to recognize the parity of that, and to compensate accordingly. So if our… if our models don't do that, then there's actually just a de-incentivization according to that. And that's not… that's not what we want. We want to make sure that we have a value attached to that. And sometimes that's hard to do if we don't, again, don't have line of sight, and we don't kind of connect those environments together. And when we have those siloed environments, that actually is when that does also occur. When we're compartmentalizing each one of those areas independently, then we're actually not seeing all the way across, and we want to try to carve all that out. Fortunately, the providers, or those who are teachers, or researchers, or who have multiple hats that they're trying to wear, they actually see that across as being, I've got 3 masters, but nobody understands what each one is doing across, and so they start to compete against each other. And so we want to actually look at that more holistically as an organization, and that's what we need to be able to help drive towards, because that's actually all together the same. Foundationally, optimal clinical environments then have optimal teaching and optimal research all together.

 

Daniel Marino:

It all comes together, yeah.

 

Jessica Wells:

Right. And now when we have, like, these really innovative models of payments, like value-based care payment models, or others, we have to recognize that that also is part of our payment structures. How does that actually create more incentives for everybody who provides care as well? So, it's… it's quite complex, but we can do it when we start to look at it as a more holistic environment, as opposed to trying to carve it all up independently.

 

Daniel Marino:

So, when you were, when you were talking through that, did, were any of the sessions kind of giving advice on where to start, right? Because when you're working with compensation models, particularly as you're starting to create that level of incentives, you know, to your point, it's complicated, right? There's a lot of different areas there. So, you know, and many academic organizations are, you know, they're currently working through this. Where's the starting point?

 

Jessica Wells:

I'm gonna… it sounds like a broken record, but you gotta remove the silos. You can't have the beeftrans that traditionally we were built on. I mean, we just…We kind of were… we grew up that way in the United States. We just… we had academic missions, we had research missions, and we had clinical missions. And while they were all underneath one roof, we acted and functioned in a lot of scenarios as three different, or if we had partnerships in which we had one side of the house who managed and owned part of the mission, and we have other parts of the house that own and manage other parts of the mission, we still create and manage them as different parts of the mission.

 

Daniel Marino:

Organizations, yeah, yeah, separate silos.

 

Jessica Wells:

Correct, but think about the… our, you know, our teachers, and our researchers, and our clinicians who are sitting in the middle, and that's a really difficult place to… how do they… how do they understand it, and how do they… they just want to do a really great job, and they just want clarity on what does it mean, and to feel valued for the work that they do. And the learners who are sitting in the middle, who are your future workforce, they can feel that tension sometimes.

 

Daniel Marino:

Sure. Well, it really then starts with leadership, right? Starts from the top, and I think you know, as I've said, form follows function, so if you're able to break down those silos and have it integrated, you know, I think, to your point, I mean, then you're in a much better position to incentivize that level of behavior, that level of support, that level of activity that's going to drive the success. Amanda, I want to turn to you real quick. You know, as you were sitting in some of your sessions, either, you know, facilitating the panel or hearing a couple of the other things, were there… were there a couple of strong pieces of advice that you thought really resonated with a number of the of the attendees, and, you know, really focus as big takeaways for the other providers that were in the audience.

 

Amanda Adams:

I want to touch just a second on AI, because as you mentioned, it came up absolutely everywhere, and that was maybe the biggest deer in headlights. What do we do? How do we handle it? So, in focusing on that and what that means to your workforce, where are the places that it can be used to, help identify the bottlenecks of your patient care and figure out where your staffing needs to go. It can build models to help you be really dynamic with your staffing levels if you have a pretty thin staff. What administrative tasks, like scheduling and that first level of call, taking in calls, how can it help? And not in a way of taking over jobs, but in a way of creating, a better environment for your people. You're just talking about compensation, and you can't separate compensation from incentives. Just focus on the money, you're going to lose your people. Right. So how can… how can you make their lives better, and give them that purpose at the end of the day without burning them all out.

 

Daniel Marino:

Yeah, I kind of get the impression with AI, everybody's kind of figuring… trying to figure out, you know, what's that… what's that quick path, right? What's the… you know, everybody talks about it, and everybody is trying to figure it all out. I think one of… with some of the folks I was at the meeting, they're like, okay, well, we're… we're tired of hearing about what AI can do. We want to experience the results. So, I think we're going to see more and more, and talk more and more about that. Well, ladies, this has been wonderful. I appreciate you sharing your insights, and it sounds like there were some really big takeaways for you all, and some thoughts going forward. If any of our listeners that are tuning in today, would like to contact you, or maybe follow up, share some of, you know, hear a little more of your insights, would you mind sharing some of your contact information? Amanda, maybe you could start?

 

Amanda Adams:

I don't mind at all. You can find me on LinkedIn. There's a lot of Amanda Adams, but if you do LinkedIn.com/N/AmandaW.Adams, you should get to me. And you know you're the right person if you see ECG in my, work history.

 

Daniel Marino:

Wonderful. Jessica?

 

Jessica Wells:

Yeah, same thing. There aren't that many Jessica Wells, though, so fortunately, that's easy to find me, but also my ECG email is jcwells@ecgmc.com. So, thanks so much for having us, we really appreciate it.

 

Daniel Marino:

Well, a special thanks to both of you, really appreciate you joining and sharing your thoughts, and again, a big thank you to a lot of our listeners for tuning in. If anybody is interested in learning a little bit more about this topic or other topics, please visit luminaHP.com/insights and ECGMC.com For this and information on many other topics. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. On today's program, we're going to dive into physician compensation, and not really talking about the models per se, but really talking around the growing challenges, the growing complexities that we're seeing in physician compensation, especially as organizations are continuing to grow, and continuing to employ physicians and other providers. One of the things that we often hear, or that I often hear when I talk to physicians, and even with CFOs, is incentives, the goals, aren't necessarily aligned. And I've always believed that form follows function. You need to have a good structure in place, and that we need to have the right level of incentives that create the right level of behaviors that align performance around all of our goals. If all of those things align then, you know, you've got people who are happy, you're able to hit your financial targets, and, you know, the organization and the individual can prosper. Easier said than done, though. In a lot of the compensation models, they have become very complex. You know, in some cases, a lot of them are very RVU, productivity-focused. We're starting to see elements of compensation that are driving efficiency and reducing costs. We're seeing components in there that maybe are more and more aligned with value-based care, and especially as organizationsassume some level of risk, those elements have to be built into the compensation model. And not only is the compensation model becoming more complex. How we manage that compensation with the physicians to ensure mutually aligned success is something that I think many organizations are struggling with, and frankly, I believe are under-resourcing within these large hospitals and with these health systems.

So, I'm really excited today to have two experts in the field, two great guys that have been working in this space for quite some time. Jon Morris is a colleague of mine, who has tremendous amount of experience working with large physician enterprises. He has 15 years of experience helping organizations design high-performing, incentive-driven incentive models, and has done a great job of putting these compensation structures in place. My second guest is Alex Krouse. Alex is an Associate General Counsel of a large health system in the Midwest. He's focused on aligning a lot of the legal strategies with the financial and the performance components, tying that into compensation for physicians. He is also the board chair of the AAPCP, which is an organization that provides support to physicians around, and to leaders around compensation. Alex, Jon, welcome to the program!

 

Alex Krouse:

Thanks for having us.

 

Daniel Marino:

So, Jon, maybe we could start with you. Given your experience working with physician enterprises, seeing, you know, being part of a system that has really experienced a lot of growth, bringing on new physicians. What have been a couple of the challenges that you've seen around the growth of compensation and really alignment around the compensation models with the goals of the organization?

 

Jon:

Well, you know, I… I think, I feel like I've seen a lot of organizations, at this point. You know, 10 years in consulting, 5 years on the leadership side. For a large Catholic health system, and then coming back to consulting now, I have a slightly different perspective, you know, approaching these problems, having, you know, been on both the side of advising people on how to deal with the problems, and then actually dealing with them myself. You know, so… It's, I would say that I'm trying to, you know, in my approach to things, and as I advise clients through issues, really strip things back to, you know, why are our organizations functioning this way? And the more I look at it, I think about how physician employment has developed over time.

 

Daniel Marino:

Right. Well, it has. I mean, it's really… it's changed. I mean, it used to be straight salary. Then it's gone into building these employment models around RVU-based, strictly productivity, and now you're seeing a lot of value-based care influences, where quality is being tied in, efficiency, cost reduction, all of these things, creating quite the complex structure of compensation.

 

Jon:

Sure, and you know, the organizations have gotten more complex, too, and I think that's one of the biggest issues that people overlook, is 20 years ago, fewer than 50% of physicians were employed, and now you have over 80%, you know, employed. So the scale of these issues have gotten much larger, where.

 

Daniel Marino:

Absolutely.

 

Jon:

You could be managing these things in Excel workbooks with a small team, and it wasn't that big of a deal at that scale, but now where you have health systems that have kind of continuously merged and acquired other systems and gotten bigger and bigger, and have a larger, you know, group of employed physicians, the complexities just kind of multiply.

Daniel Marino: Yeah. It's gotten more challenging, absolutely. Alex, let me turn to you for a second. You know, working with a large health system and speaking with your colleagues, you know, I think one of the things that I've seen, and I think you've begun to work through this, is, I think the health systems are under-resourced. And they have, really, a lack of structure to really, not only build the right level of compensation, and aligning the goals with the compensation model, but making sure that the ongoing administrative support is there to allow for that success over time.

 

Alex Krouse:

Yeah. Yeah, well, and I think to your point, I mean, from an organizational standpoint. The biggest mistake I think health systems make Is treating provider compensation as a compensation problem. Now, I know that sounds kind of odd. But provider compensation is actually just a phrase that represents what I view as enterprise governance, operations, financial, and workforce strategy, all in one bundle. And so, the organizations, quite frankly, that are managing this best are ones that are building mature infrastructures, rather than just simply, you know, kind of tweaking the compensation formula every year. And part of that is, and we can get into this. Part of that is complexity of models. And part of it is… The infrastructure to support that complexity, and that strategy. Alex Krouse: So, those are kind of the two pieces that I view this as.

 

Daniel Marino:

So when you… when you think about…the infrastructure that goes into not only building the compensation model but also then administering it and making sure that it's successful ongoing, right? Because things change, and the compensation model should evolve with the changing environment. You know, I sort of think you've got to have a strong financial team to do the financial modeling, right? You've got to have the legal support there to make sure that it's reflecting… the model is legally reflecting what has been discussed from a business and, you know, from a structure standpoint. What are some of the other elements, though, from an infrastructure standpoint, that you're seeing that maybe organizations are missing, or that should take into consideration as they're really driving these models?

 

Alex Krouse:

Yeah, yeah, well, and I'd like to hear Jon's thoughts on this as well, because I know, you know, he spent a lot of time working on this. I mean, I think big picture, an integrated provider compensation, and maybe that's… we're narrowing it a little bit, but a provider compensation and workforce strategy department. It needs to exist within organizations. Now, certainly, it can't be, we can't lose sight of big versus small organization. But I think one of the historical problems we've had in this space is…Well, finance does this, operations does this, legal makes sure, you know, we're following the Stark Law, and then.

 

Daniel Marino:

Yeah, everybody has their silo and their bucket, right?

 

Alex Krouse:

Yeah, yeah, let's talk about that, but…This… what we're talking about today from an infrastructure standpoint, really sits at the intersection of all of that. Yeah. And so organizations need to rethink their workforce…through this lens, and I don't know, I mean, Jon, I know we've talked about this a lot.

 

Jon:

I mean, that's 100%… Where my mind is at, too, you know. People always think of it as just provider compensation, but that's really just the tip of the iceberg, and these organizations have usually a bundle of people in the back office, kind of filling in the gaps in between all the different departmental silos. And the…

 

Daniel Marino:

Why don't… let me ask a quick question here, Jon. Why don't think organizations have moved forward with becoming… creating more of an integrated model? Is it because this is the way they've always done it? I mean, is it really that big of a paradigm shift?

 

Jon:

Well, I think it's a few things. One, I don't think there's any shortage of crises to manage in healthcare right now.

 

Daniel Marino:

Well, that is true.

 

Jon:

I can understand if you're, you know, a CEO or a president of… or someone in operations managing and responsible for, you know, the ultimate bottom line performance of an organization, that you're not immediately thinking about, man, I really gotta get my team doing better than managing this work in spreadsheets or something. You know, it's a…Not the top of mind thing, but that it's, I think, surprising how impactful you know, that piece of the business really is to performance, and that's where I'm trying to actually draw real, you know, numbers to that. If you have a certain percentage of your physicians who are actually leaving the organization early, and your attrition's higher because it's cumbersome to work there. They're not getting clear or transparent communication about their pay, or they don't understand how they're paid, or just processing everyday things about their employment is difficult. You know, you might think that that's an HR issue, but a lot of the times, some of those problems that they experience, or frustrations that they're having in the organization, are coming from provider employment issues, and it could cause them to sometimes want to leave early, and every single physician who leaves an organization has a major, cost impact to, to, to, you know, the bottom line, and that's something that…you know. I think few organizations really track enough and do something about. The second reason, I think, is just that this space is pretty new. Like, when you think about how new work RVUs are in the context of history, and how that's really sort of propelled the beginning of this industry as a whole, like, why do we have physician compensation experts? A lot of it has to do with… it's because it's more complex than…managing salaries, right? But…

 

Daniel Marino:

Well, it tracks… it tracks to some level of performance, which, at the end of the day, most of our hospitals and health systems, I mean, they start out, and many still are, very fee-for-service driven, so…

 

Jon:

Absolutely. I think…the other thing is, it's a little young, and there haven't yet been major milestones made in bringing it all together the right way. Like, I… out of all the, you know, organizations I've advised or worked in in healthcare, I don't think anybody has it fully figured out. There's some who are definitely further along than others, and, you know, on the level of maturity in managing that work, but I don't think anybody has it figured out yet. I don't think that, like, there's really anyone who's like, yep, this is the gold standard. Everything should look like this, you know?

 

Daniel Marino:

If they figured it out today, it changes tomorrow, and then they're reinventing themselves.

 

Alex Krouse:

And one thing quick that I wanted to mention with this is, you know, why… number one, we are seeing the evolution of this. So, you know, just do a quick job search for physician compensation or provider compensation, and you're gonna see…anywhere from SVP, VP roles to analyst roles, so systems are doing this, you know, and the biggest organizations in the country are doing this, but you gotta think about it this way, and maybe an analogy is good. You know, if you think about cybersecurity in large corporations. A decade ago, different departments handled different pieces of that. You had IT managing the software systems, legal handling breaches, you know, HR managed the training related to it. Now you have chief information security officers. Because it doesn't make sense…

 

Daniel Marino:

It's all brought together, yeah.

 

Alex Krouse:

Correct. And so, I think now we are seeing a recognition of…Hey, you really shouldn't have…payroll over here, the strategy and design over here, the compliance aspects, this, let's bring it all together. And that's… that department is gonna partner with your physician leaders, your operational leaders, to really advance the strategy of the organization. In a, I think a very, different way than it historically has been.

 

Daniel Marino:

Absolutely, and I tell you, that makes so much sense, because physicians drive the clinical activity within hospitals and health systems. They are the connector between what patients need and driving that level of performance, and I think providing that level of support, absolutely key. I mean, it just makes perfect sense. If you're just tuning in, I'm Daniel Marino, you're listening to Value-Based Care Insights. I am here with Jon Morris, an industry expert, an advisor, working with many organizations across the country on physician compensation models. I'm also here with Alex Krouse, Associate General Counsel of a large health system in the Midwest. So I'm going to dive into one element that I think is important. When you're thinking about compensation models, there's some elements of that that have to be standardized, there's some elements that can be customized, right? How does the structure that we're talking about support that in such a way that you're creating an incentive-based model that's really fulfilling not only the goals of the organization, but really what the goals are and the aspirations of the physician? Alex, let's start with you.

 

Alex Krouse:

Well, so, I mean, I think one issue is, historically, organizations have built comp models for a world that really no longer exists. Meaning, the pure production era was where most physicians' care was, you know, episodic, procedural, fee-for-service, team-based care wasn't nearly as mature as it is today. APPs, 10 years ago, people didn't even, you know, recognize the term APP. Sure. So when Jon mentions new. Work RVUs aren't just new, the entire paradigm of where we are working within really is new, you know? I mean, it's… it's brand new, so…Physicians are being asked to do more, lead teams, work alongside with APPs, improve quality metrics, access. I mean, I just threw out 4 things where Work RVU wasn't one of them, and that's complex to manage.

 

Daniel Marino:

Yeah, it absolutely is. And Jon, you know, so when you've looked at this, how have you… have you… have you solved for both of those issues, right? The standardization versus customization, and really…But to make sure it's aligned.

 

Jon:

It's a constant battle. And I mean, I… because, I mean…we sometimes get engaged where people want to build, like, a new cutting-edge model, right? And then you look at…Okay, well, how much of your payer mix is tied to value-based care?Right? Well, it's still 90 plus percent fee-for-service, right? Does it really make sense to put in a new cutting-edge model, then?

 

Daniel Marino:

Or conversely, I was working with one organization, they had 30% of their revenue tied to value-based care and risk-based models, yet their compensation, their employee compensation model, 90-95% RVU-based. And what they were seeing was they were failing on the value-based contract performance because of overutilization, and it was that chair? Right?

 

Jon:

It is, and it is really hard to strike the right balance, but…I always start there, you know, let's think about how you're making money right now. Think about what your goals are, and how you want to, you know. What kind of patient experience you want to provide, and what, you know, your strategy is long-term versus short-term, and let's build a model that supports that idea. And then, second, how are you running your model? You know, what kind of team do you have to run it? Because if you build something that's too complex to actually administer, that doesn't help anybody. It makes things a lot worse. So, you know, especially when you have post-M&A or post-transaction type situations, where you're coming in and redesigning a compensation program. Or merging two together, you know, that's a really important time to really take a step back and say, is structural simplicity actually even more important than incentivizing all these things, you know? And in my opinion, the answer to that question is leaning yes more often than not, because if you're trying to administer a model that's too complex, and you have a team that's too small to support it, you're always just gonna be dealing with turnover issues and your own organization, and trying to keep it running.

 

Daniel Marino:

Alex, how much in these compensation models that you're seeing, how much is the physician shortage coming into play. How is it influencing the models? You know, one organization that I was working through, they, of course, are going out and they're recruiting primary care physicians, and of course, they're competing with every other health system in the country for the same primary group of primary care physicians, and their solution was, well, let's just build the incentives into the compensation model so, you know, we get these primary care physicians looking our way. How much does that influence the model, or should it influence the model?

 

Alex Krouse:

Well, I mean, I think you have… I mean, we've had the physician shortage as a general… concept has existed, you know, forever. We've not been in the non-shortage no space. Now, I think organizations, you know. I think one question is, there's obviously, without a doubt, a question of, you need to get physicians in the door.

 

Daniel Marino:

Yeah.

 

Alex Krouse:

You need to bring them into the organization, but I also think there is not enough focus, and I do think this is where Comp models are important, instability. Most individuals want stability in their work, stability in those incentives, predictability. So we… I think one mechanism is…as opposed to variability and complexity in models, you really need to have models that are built more around stability. So, I'll give you just some specific examples. you're gonna see higher base salaries, not pure work RVU models, you know, so that offers a stable base, but that…You're also going to see models where you don't have 10 different metrics in the bonus structure, because if you've got… if you're incentivizing everything, you're incentivizing nothing. And you're also focused on, I think, you know, and some do it through physician compensation committees. But some do it just through, you know, just having an open door of, let's talk with the physicians, let's talk with the advanced practice providers, not about how much we're paying, but what is working within these models. And I think when we talk about shortage of physicians. You're gonna have physicians gravitate towards that type of environment when you've…Kind of built transparency and stability within your models.

 

Daniel Marino:

So, Jon, have you seen that? Are you… is that what you're seeing within… when you're… when you're working with the health system? Is the stability factor, is that…Is it becoming even more important?

 

Jon:

I think what… I think what Alex is, what Alex is talking about here is… is very true, and…I would say is that I see it, most prominently when I'm looking at, generational differences between physicians. The new generation of physicians, and obviously that's also relevant and important when we talk about physician shortages, because the youngest generation of physicians is coming in to replace the generation that's leaving the workforce. And, you know. That is leaving a big gap in, to Alex's point, I see a lot of them more interested in stability, and I think there's a lot of good reasons for it. I mean, they have a lot of student debt, they have, you know, increased housing prices, all sorts of other things that they just want to make sure, am I going to be able to afford a life based on this, and what does that.

 

Daniel Marino:

Well, and a lot of the younger generations of physicians, I mean, they're interested in work-life balance, right?

 

Jon:

I know that, too. Call pay's been an issue on that front. You know, and getting call coverage, because…the physicians who have been in the workforce for a longer time will tell you that there is no work-life balance when you're on call. And, you know, the best you can do is try to get that panel up to a large enough number that you can kind of split the burden, you know, in a way that's a little better. I think that's… that's a good point.

 

Daniel Marino:

So, Alex, I want to give you a chance to talk about the APCP. You know, you've done a lot of work, you and Jon, on kind of developing this as a resource structure. Talk a little bit about what it does and some of the focuses and the support that you're providing to other healthcare leaders.

 

Alex Krouse:

Yeah, yeah, absolutely. So, the AAPCP is the American Association of Provider Compensation Professionals. You can find us at providercompensation.org. We are the leading national association focused exclusively on provider compensation and workforce strategy across healthcare. So, our members, you know, 225 healthcare organizations, large private practices, large health systems, alongside members from many of the leading consulting and valuation firms in the country. We have, not been around long, but, you know, as kind of Jon mentioned before, a lot of this is coming together, more recently. What we do is…we offer a space for these professionals. We have a national conference, each year in Nashville. We also have created, the first credential worldwide in provider compensation valuation, which is not just simply picking a number in a certain survey, but really is a holistic review of that arrangement. So, for anyone interested in getting involved, there's several ways to, you know, engage. Organizations become members and attend the conference and can participate. Individuals working in this space get the credential and education, and yeah, it's been…

 

Daniel Marino:

I commend you and Jon for being a part of this organization and creating that level of resourcing, because I think, you know, as we've talked about here, it's under-supported, it's something that is really needed, and I think if we're going to continue to drive strong partnerships with our physicians, we have to think about a different type of a model, different type of support structure to align around everything we've talked about. Well, gentlemen, thank you so much for joining today. Just real quick, I'll go to each one of you. If any of our listeners today are interested in getting in touch with you, how could they do it? Your LinkedIn address, or share your email, or something in that regard? Jon?

 

Jon:

Yeah, so, I mean, you can find me on LinkedIn, Jon Morris at ECG Management Consulting. And, you know, I'm pretty active on there, happy to connect to anybody who wants to talk.

 

Daniel Marino:

Wonderful. Alex?

 

Alex Krouse:

Yeah, I'd say the same thing. Find me on LinkedIn, Alex Krouse, send me a message, connect with me, follow me, happy to help.

 

Daniel Marino:

Wonderful. Well, thank you, gentlemen, for joining us today. Great discussion, and I think we've only scratched the top of the iceberg. So, thank you again, I really appreciate it, and a special thank you to all of our listeners for tuning in. Until our next Insight, I'm Daniel Marino, bringing you 30 minutes of value to your day. Take care.

As healthcare continues to evolve, conversations from HIMSS 2026 offer a clear glimpse into what’s ahead. In this episode of Value-Based Care Insights, host Daniel Marino is joined by healthcare strategist and The AI Shift host Tom Foley to unpack the conference’s biggest themes.

Together, they explore how artificial intelligence (AI) is advancing into real clinical use, the persistent challenges of interoperability and data fragmentation, and the growing role of patient empowerment through wearables and remote monitoring. From AI-driven care delivery to the realities of data quality and integration, the discussion highlights both opportunities and gaps healthcare organizations must navigate.

Whether you're evaluating AI, strengthening your data strategy, or rethinking care beyond the hospital, this episode offers practical insight into moving from innovation to real impact.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. Well, a couple weeks back, actually in early March, was the HIMSS meeting. I believe it was March 9th through the 12th. And although I didn't go this year, last year I went, and I thought it was fascinating. You know, AI was really starting to take off, and I think every vendor that was at HIMSS had AI in either their name, or somewhere within their booth, and so forth. And last year, if any of our listeners remember. We did a pretty nice overview on sort of the key takeaways of HIMSS, and the trends that were coming out of HIMSS that maybe providers needed to focus on. And then based on some of the requests that we had this year, we thought we would do it again. And although I wasn't there this year, one of my colleagues, actually one of the radio hosts that is on Healthcare Now Radio, was in attendance. So I'd like to introduce Tom Foley. Tom is, the host of the AI Shift, he is on Healthcare Now Radio, as well as have on-demand podcast, and was at HIMSS, and looking forward to kind of having, hearing your thoughts. Tom, welcome to the program.

 

Tom Foley:

Dan, thank you very much. Glad to be here.

 

Daniel Marino:

So, Tom, give me your thoughts. You know, last year, you know, as usual, HIMSS had a lot of vendors, there were some great conversations going on. What was your impression of the overall theme of HIMSS? What were some of your big takeaways?

 

Tom Foley:

Yeah, first off, I have to say, HIMSS was, was great. It is always great. It's great to have that annual, sometimes there's people you only see at HIMSS. In that context, from a networking perspective, and it was reinvigorating to catch up and chat and, and really get the, the lay of the land from other people's perspectives, so… But, you know, HIMSS itself, I think, to your earlier point, AI was actually, you know, naturally, a hot topic. If you didn't have AI someplace in your booth, you probably didn't get a lot of attention. But patient empowerment and mobility also, I think, rang through a lot of the messaging, and that's where I focused a lot of my time on the booths that I did go and visit.

 

Daniel Marino:

Yeah, when… last year, I had a lot of conversation, interviewed a few people, you know, around AI, and it was just… you know, I kind of see it as its infancy stage, you know, last year, and obviously, AI and the whole development of it, use of AI, I mean, is just, you know… just has come so far just in the last year. So when you think about it. Where there are a couple of really key AI elements that you saw in some of the technologies? For instance, AI related to maybe clinical pathways, or last year there was a lot of AI capabilities that were starting to evolve around some of the business processes. Was there a particular area there that really caught your attention?

 

Tom Foley:

Yeah, I think AI is definitely coming into the forefront. You know, so when you ask yourself AI, it's a broad… it's a broad.

 

Daniel Marino:

Sure.

 

Tom Foley:

Right? And healthcare is huge, right? So, to your point, you know, ambient listening might have been the theme of AI last year, right? Or, you know, how do I use AI in claims management, or X, Y, and Z element of the business? Where I think now AI is now front and center in the context of how do we enhance the delivery of care? And that was… that was exciting, because that is… that's really where… you know, the greatest challenges in the context of, I have, you know, we have… the market challenge is I can't hire physicians fast enough, there's not enough of them, can't hire nurses fast enough, there's not enough of them. But I got more… I have more sicker patients today than I did yesterday, so AI is a natural, platform to bring to the forefront and help solve that problem.

 

Daniel Marino:

One of the questions I asked a few of the vendors last year was, as we start to look at data, how are we going to process data faster to really begin to make sense of it? And to your point, when we start to think about patient risk, when we start to think about how we can aggregate the care maybe more efficiently, you know, that… I think everybody agrees that's going to be a huge benefit of artificial intelligence. Did you… did you have a chance to look at the differences between, say, the EHRs, Epic, Cerner, and so forth, that are processing all of this data related to clinical workflows? Or was it more that maybe the other third-party solution vendors, were they more advanced on being able to aggregate some of that data and maybe push it forward in terms of maybe, I don't know, innovative clinical workflows or something in that regard?

 

Tom Foley:

It's a great question, and when you talk about AI in and of itself…you have to ask, specifically when you talk about being in the clinical forefront, How does AI work in context of understanding that patient. If I was in an EHR, the context would be… what's in the EHR, when we all know that no EHR, stores 100% of the patient's record. Because I have 9… I'm a… I have 5 chronic conditions, and I see 9 different doctors, so they're not all in the same health system, and they're not all in the same EHR. What I felt was most interesting was the interoperability lab. Now, some folks might say, hey, the Interoperability lab has been at HIMSS for years, right? So, but now is the time, if you're gonna talk about AI, you gotta talk about interoperability.

 

Daniel Marino:

Sure, right.

 

Tom Foley:

And that was really the most interesting part, because, you know, I don't… I don't take this the wrong way, and I have several friends that work at EHR vendor… with the EHR vendors, but I'm not relying on an EHR vendor to solve this problem. And so…But, you know, if I'm gonna… but now is the time to look at, strategically, how am I bringing in data? From trusted third-party sources. And as we all know, the federal government has this QHIN TEFCA effort, which is good, but we also have Care Quality out there, we also have Commonwealth out there, and we also have other credible data sources, right? So QHIN hasn't picked up fast enough. F or me, in the context of how do I… how do I leverage that in order to… strategically, in order to affect, contextualization and personalization of the medical record in… in the EHR.

 

Daniel Marino:

That's what a lot of organizations are struggling with, because there is data all over the place. I think AI is allowing for us to more quickly normalize the data that is coming in. But obviously the data governance around AI, or AI governance, you know, is absolutely critical in that. But when you think about how you're going to aggregate that data and incorporate it into the care plan, the care models, you know, what to do with those level of insights. I think organizations are still struggling with that. Providers are still struggling with that. And I think some of it is managing, maybe, the bias that comes out of it. I think some of it is making sure that we have all of the information that's going to drive the results. Were any of those topics addressed at all? You know, that's a concern by a lot of folks.

 

Tom Foley:

Yeah, it is definitely a concern, and I… and you're right, there's not one, there's not a silver, lining here, right? You have to…there are some good vendors out there that will help aggregate the data, but they still, in and of themselves, don't get it all, right? And we still have some rules around what AIS is versus treatment, and there are still, I hate to say it because there's legal connotations here, but there are still some blockers in the neighborhood. And, so… we… we aren't… we aren't just there yet. And we have to do a better job even of, record matching, And things of that nature.Yeah, the data… the data's still dirty. And, but, and the, and the, and the data's… Proliferated, in too many locations to really get… to think that you're gonna get 100%… 100% of the data.

 

Daniel Marino:

Yeah. So did… did you see any, as you were walking around and talking to some of the, the AI vendors. Did you see anything, any solutions that really caught your eye, that were maybe really innovative, or something that, whether it would be in, you know, managing patients around risk, or maybe, I don't know, interoperability, related to data, or even how to manage, some of the, I don't know, surgical processing that occurs, you know, of patients in the ORs.

 

Tom Foley:

Yeah...innovative, that's a… that's a tough word, and… No, because.

 

Daniel Marino:

Because if I ask any of the vendors, they're gonna say they're all innovative.

 

Tom Foley:

Yeah, exactly, exactly. So, listen, when… listen, there are some very good vendors out there that are… that are working hard on the toughest challenge, in the… in the market, and that is interoperability. Having been very involved with HIEs and even direct messaging during the, the MU2, days and beyond, it is the… it is the hardest, part of the equation. So, but… but, so, we still lack, we still lack very significantly record matching, and we still lack, total access to data, because I still have to go to the repositories, the common repositories, right? The Commonwealths do a good job. Care Quality does a good job. The QHens do a good job. SureScripts does a good job, but I need… I need them all, and more,if I was really to affect the effort that I was trying to trying to, achieve here. So, I, I still say that the market still has a long way to go on the interoperability front, but I… listen, I was around, pre-High Tech Act. And if there was ever a… and I don't… I am not… I am not a government mandate guy, but…I will say, if there was ever a mandate. You got… everybody's gotta… everybody's gotta join QHIN

 

Daniel Marino:

Yeah, everybody's got to align.

 

Tom Foley:

They gotta align… no alignment, no strategy, no ex… and then, therefore, no execution, and that ultimately hurts patient care.

 

Daniel Marino:

If you're just tuning in, I am Daniel Marino, you're listening to Value-Based Care Insights. I am here reflecting on the HIMSS meeting that occurred, beginning of March, here talking with Tom Foley, host of The AI Shift. Tom, you had brought up one area, and I'd love to dive a little in, because this is, this is a focus that many physicians, many providers are really, are really looking at in terms of augmenting their care model, and that is around patient engagement, patient empowerment, really the whole mobility aspect there. And there's been so much focus on the use of wearables, on being able to incorporate that into a lot of the care models that providers are looking at, certainly as you think about recovery and just getting more information there to the providers so they can kind of help the patients, you know, through any type of condition that they have. I think some of that is also integrated with AI, but some of it is just standalone, right? It's just new technology. Were there some key areas there that you saw were kind of exciting around mobility, wearables, patient empowerment, any of that?

 

Tom Foley:

Yeah, I think, I think we're getting smarter in this space, and, you know, because at the end of the day, we talk about outcomes. And in order to affect outcomes, so that's another buzzword, outcomes, but the pathway to outcomes…is… is challenging, because you can't get the outcomes unless you get the behavioral change first.And then behavioral change comes on recognizing that there's a compliance issue here, and change doesn't come without change. But at the end of the day, change occurs when people start to be educated. So, the idea… so, a wearable, a lightweight wearable, if you will. Maybe it's a ring, maybe it's a CGM device, maybe it's a… A watch. A watch that, that is, you know, FDA cleared, if you will. There's a lot of watches out there that do a lot… that measure a lot of different things, but, you know. if you were in a doctor's office, you'd use an FDA-cleared device, not anything else. So, but the point is, is that those are… those data points now… become, it's like a lab result, I look at it. You know, when a blood pressure comes in, that's a result. It might not mean anything… it actually might mean something in and of itself, but put it in context of trends, right? It might be within range, but if I did that over a course of time, I might see, actually, a curve going up, right? Everything's in a good range, but anticipating that there's an event going to occur is very… is very powerful. So I think the whole remote monitoring model is becoming more mature in what type of devices that I use that are lightweight. I don't need a backpack to carry around a scale, a blood pressure cuff, a glucose monitor, a pulse ox, right? There are things that are lightweight and ride your skin, if you will. And through the, through the use of, like, a ring, or a CGM device, or a watch, things you use.

 

Daniel Marino:

And that's such a… that's a good point you bring up, because, you know, the wearables, if done correctly, will provide good data, right? And it'll support the trend. But where I see the intersection of data coming out of the wearables and artificial intelligence is the ability of AI to take that data To aggregate it with other data to allow some type of…modeling, profiling, some type of, proactive you know, output or information that would allow us to become more prospective on that patient's condition, right? Because the data from the wearable is important, to your point, but it's trend data, right? And it helps you kind of understand where you're at within, you know, different thresholds. But boy, if you can aggregate that with other conditional data. Well, then you're at the point where you can actually become more prospective in the care that you're delivering.

 

Tom Foley:

Exactly, so as… as data drives, intelligence, drives awareness, so, and even drives behavioral change. If I was a patient and I started to receive these, these data points myself, I could… I could… I'd be more educated and be more, and start to see a correlation between what… what I'm taking in and what… and what my vitals are, if you will, right? But at the same time AI is more like a health assistant. Remember, we can't hire… we can hire skilled folks in this industry, whether it be a doctor, a nurse, or any other certified resource. We can't hire enough, and we can't hire them faster, because one, they're not there, but two, so how do we… how do we, how do we provide resources that reach out to the patient and say, hey, I got your blood pressure today. And, and it's a little high, you know, hypothetically, and it reminds them maybe, hey, you know, about smoking, about, salt intake, about, you know, X, Y, and Z. You know, again, someone, a very low-cost modality.

 

Daniel Marino:

Yeah. Integration steps right there with some chronic diseases that provides even additional information or insights coming out of it.

 

Tom Foley:

Yeah, exactly. So, and it might be, hey, did you take your medicine?

 

Daniel Marino:

Right. Well, I think this is the AI bots are going to come into play, you know, because they're going to be out there, you know, almost reminding patients or providing additional information, you know, as an output of that. And I'm sure, you know, there was probably a lot of AI bot technology that was roaming all around, pardon my pun around HIMSS.

 

Tom Foley:

Yeah, so, I mean, you know, looking at even AI and medication adherence, as an example, and remote monitoring. Remote therapeutic monitoring, you can measure medication adherence. So, this is where I think we just need to get smarter about how we're doing things. In the context of remote therapeutic monitoring, you're required to get 16 measures in a 30-day period, right?

 

Daniel Marino:

Sure.

 

Tom Foley:

But studies show that you need to be 80% compliant on a medication for the medication to be effective. So, if I'm only measuring 16 days. We can applaud and say, yeah, I was able to create a reimbursement, but the real question is, did the patient get healthier?

 

Daniel Marino:

Right, where the outcomes are, absolutely.

 

Tom Foley:

What were the outcomes there? So, and the behavioral change is to take it, you know, your medications 80% of the time, because medication… lack of compliance leads to 10-30% of hospitalization. That alone is a huge cost saver to the market, just taking your medications as prescribed, and we all know 30 per… what is it, 30%, of scripts are never filled. Right. 50% aren't, compliance is… falls off after the first 6 months. It just goes downhill from there.

 

Daniel Marino:

I'll tell you, that's… so I do a lot of work, obviously, in value-based care and helping organizations with care management and all of those elements. That's a part I'm really looking forward to. I'm starting to see some real traction there, where you can look at some of the data coming out of these wearables, integrating it in with AI, and then creating it as, you know, real actionable, if you will. I think that's…That's where you're really gonna start to see, quite a bit of traction coming out of this, and folks will really take care of that. You know, they're gonna see the benefits of the technology changes.

 

Tom Foley:

Oh, absolutely. I think that AI is the, and I might have some bias here, but I do think AI is the… is the transformational platform that will drive… that will ultimately transform all of how care is delivered. It's not so much about the home anymore. I'm sorry, it's not so much about what happens in the brick and mortar, it’s what's happening in the home. It's how do I extend my brick and mortar into the home? And that is really where an AI agent that acts on patient engagement. And, it's more like, it's more like, instead of looking at it as urgent care and primary care, we need to look at the market as continuous care.

 

Daniel Marino:

Continuous care, right, and that has a big place to play, no doubt about it.

 

Tom Foley:

Yeah, so if we… if we can leverage AI to fill the gaps. AI is not about, taking away jobs. I've seen it far too much. It doesn't take… I've never seen a healthcare job taken away because of AI, but the point is, is that if we can use AI to fill the gaps where the human resources aren't available, we can do… we can really transform, truly transform the way in which, care is delivered.

 

Daniel Marino:

Yeah, I absolutely agree. So when you think about HIMSS this year compared to last year, what do you think has changed? Was there any, you know, was there any different themes? Was there any different… you know, I know even last year there was a big focus on…maybe wellness? Yeah. I remember going to a few of the presentations there. Was that… was that a theme this year, or did you see that the HIMSS leadership kind of reinvented themselves and, you know, every year they kind of have a different theme based on where… where the trends are of the market? Any… anything come to mind?

 

Tom Foley:

Last year was themed on, wellness, and certainly this year's theme was, AI, and I… and if I were, advising HIMSS, I might talk about… ask them to… next year, if they could talk about the continuation of, of care. It's, it's about the, the, the overall care pathway, as opposed to just wellness, as opposed to just AI.

 

Daniel Marino:

Maybe they should bring up AI wellness, right? Because we all may need some wellness around our…

 

Tom Foley:

Exactly. Well, so instead of… instead of criticis… you know, there are those out in the market that are always criticizing the new thing. It might be more so because it is new, and there are risks, but I, in my experience. There's a lot more people approaching the use of AI in a most credible way. And yeah, there's always distractors in the, in the market, but let's leverage it in a most credible manner, and use it wherever it needs to be used, frankly. Whether it be in…

 

Daniel Marino:

I think the theme in this next year, you know, and if I was to give any advice to him, I would definitely focus attention around AI governance, the use of, you know, the appropriateness of the use of AI, and where it could be integrated, because I think, you know, in conversations that I've had with providers, they're struggling with that, right? It's like, how far do you take it? So that would definitely be a strong area of focus, and I know the government's looking at that, you know, they're putting all sorts of new regulations in place.

 

Tom Foley:

Yeah, and sometimes, you know, Sometimes you got to let the market go. And to figure it out, as opposed to rushing to put some guardrails around it. Now, there are… if you're… if you're implementing AI, you're already thinking about safety, I would say. In my experience, they are… and doing it much more rigorously. You know, in my experience using AI, we have… I have doctors, that I was like, geez, I don't know if I would have asked that question, but AI seemed to have asked a very good question here, right?

 

Daniel Marino:

And they compliment you on asking.

 

Tom Foley:

Yeah, exactly, so it's, you know, don't underestimate the power of AI, in the context of things that we're doing, and ask a doctor, ask a doctor who has worked with AI in the delivery of care, what they think, because I… I do think that there are some leaderships in whether it be payers or, you know, there are some progressive payers out there, which is a good thing. You know, you always have this bell curve, right? You had the bleeders out there, right? And I think that we're kind of moving away from the bleeders to the early… more of the early adopters, and I think we're going to start to see the tipping point, where, you know. One, it's safe, you can use AI in delivery of care, and you can use it in an appropriate way.

 

Daniel Marino:

Where it kind of, where it kind of fits in. As we wrap up here, you know, obviously host of the AI Shift, why don't you talk a little bit about, just real quick, your program, and maybe how folks, you know, might want to get ahold of you, or kind of, link up with you if they have any other further questions. You're clearly an AI expert.

 

Tom Foley:

Thank you, I appreciate that, Dan. But, yes, Tom Foley, The AI Shift, it runs on Healthcare Now Radio at, 11 a.m. and 7 p.m. each day, and, and if you're up at 3 o'clock in the morning, certainly take a look, listen then. You can reach me, my LinkedIn profile is, TFoley, and, and it does have the, the program listed in the banner, so you'll know it's the right T. Foley. And yeah, so reach out. I'd love to, I always like to, talk to folks that have, questions or points of interest or perspectives that are different than mine. I, you know, to me.

 

Daniel Marino:

Well, I've listened to your program a couple of times, and a number of times, matter of fact, and you do a nice job. You always have.

 

Tom Foley:

I appreciate that.

 

Daniel Marino:

Well, Tom, we're… we're out of time, but I want to thank you for coming on and sharing your insights, related to HIMS and AI, and, you know, love to have a further conversation about that, maybe sometime, you know, next couple months or down the road. To all of our audience and listeners for tuning in, I want to give a special shout-out and thank you for continuing to listen to Value-Based Care Insights, and until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

As financial pressures intensify across healthcare, payers are rethinking traditional strategies and accelerating their transition to value-based care. In this episode of Value-Based Care Insights, host Daniel Marino speaks with Joe Mangrum, Partner at ECG Management Consultants, about how payers are adapting to rising medical costs, tightening Medicare Advantage margins, and increasing regulatory demands. 

Together, they unpack how payer strategies are shifting from broad network expansion to more selective, high-performing partnerships, with a growing emphasis on disciplined, data-driven decision-making. The discussion highlights the critical role of payer-provider collaboration in managing total cost of care, along with the increasing importance of data sharing, risk stratification, and more mature value-based arrangements. The episode offers practical insights into aligning incentives, strengthening partnerships, and building sustainable care models for the future.

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. In today's episode, we're going to dive into the state of our payer partners. Obviously the payers, big part of what we do in healthcare. It's created both opportunities for a lot of hospitals, health systems, and providers, but also a lot of challenges. I guess the same would hold true when you think about the impact on our patients as well. And it's interesting to consider where the payers are right now with regards to a lot of the activities within our industry. As I was kind of thinking about it. You know, the pressures that are being placed on the payers are really multidimensional. They're really struggling with costs. Combining the increase in costs of care with the… a lot of the inflationary pressures, there's a lot of regulatory disruption that's occurring, particularly with CMS, as we start to move forward with Medicare Advantage. Payers are wanting to shift the risk to the providers, and they're incorporating within their contracts different mechanisms to start to shift that risk. And lastly, there's a lot of changes related to the structure of our industry, and how we start to collaborate with our payers, with our providers, and mostly as it relates to value-based care, or maybe some of those value-based care programs, such as episode-based pricing models and so forth.

Well, I'm really excited today to have, a national expert, strong colleague of ours, Joe Mangrum. Joe is a partner in ECG Management Consultants. He leads the firm's payer services practice and works very closely with both the national and regional payers. Joe, welcome to the program.

 

Joe Mangrum:

Hey, thanks a lot, thanks for having me, looking forward to the discussion today.

 

Daniel Marino:

So, Joe, I know you do a lot of work with the payers, you know, we've all heard a lot of the challenges and the pressures that the payers are having these days. What are you seeing, or what are you hearing as you're having conversations with many of your payer clients?

 

Joe Mangrum:

What we're seeing right now, it's pretty broad-based margin pressure across all payers. So you mentioned the Nationals. I work with a lot of regional and provider-sponsored health plans. It's across the board medical cost trend is running a lot higher than my clients have expected, and I think it's especially true in inpatient. Outpatient and specialty pharmacy really elevated increased costs in pharmacy, and then I think at the same time, Medicare Advantage rates have tightened, right? So there's more scrutiny around risk adjustment, and revenue growth just is not keeping pace with the cost. I think when you put all of it together, what I'm seeing is that my clients have to be a lot more disciplined. So you used to think about growth for growth's sake, you know, let's just get more members. That's not happening anymore. I think I was talking to you the other day about one of my clients we did a very complex revenue analysis, and basically figured out that for every MA member that the plan was adding, they were losing money on a PMPM basis. That's a terrifying position to be in.

 

Daniel Marino:

It is, and it's… it's amazing to think that the payers are in this… in this sort of a predicament, if you will, because for years, many of us, myself included, have thought that the payers have done extremely well, right? You hear their quarterly reports, and how well that they're doing, and, you know, especially during COVID, right? I mean, that was an interesting anomaly, but they had some of the highest reported income that they've ever had in their history. So, to kind of think about them transitioning to where they are now, with really seeing them at quite the financial challenge, it's really an interesting predicament.

 

Joe Mangrum:

Yeah, it is, and there's a lot of scrambling that's happening on the payer side. I think it's obviously hard to change your business model as a larger plan. I think some of the smaller regional plans, they're a little bit more agile, so maybe they're going to fare a little bit better in the next few years, but I'm seeing so much more of a focus on total cost of care, right? A lot more tightening on benefit designs, especially in MA, being more selective about where they grow. I know we'll get into it, but I think there's a lot more doubling down on value-based arrangements from the payers. If you think about it, Dan, a few years ago, 4, 5, 6 years ago. The payers didn't really want to get into value-based care, and now it's the opposite. They're really trying to push it on providers, and I think that there's less acceptance from the providers right now, but it's something they're trying to push more into. And then, again, you know, I talked about risk adjustment and care management. A lot more investment, both in FTEs, resources, but also in technology in those areas. So, you know, a lot of different levers to be pulled, but it remains to be seen how it's all going to work out for them in the next few years.

 

Daniel Marino:

So let's dive a little bit into the cost of care component, because, you know, that's a big one. Both of us have done a lot of payer, contracting support, you know, I've done it on behalf of a lot of the providers, hospitals, health systems, medical groups, and you've supported a lot on the payer side. The thought around total cost of care is something that always comes up. And the perspective of the payers, from the providers at least, is that they want to start reducing cost of care, by really pushing down or placing pressure on utilization. And a lot of times, okay, you can make some strides there, but at the end of the day, if patients need the care, they're going to get the care. If they have to wait, an issue that they have may become exacerbated, and it might cost them more in the long run. So, oftentimes, what we try to push is care efficiency as a mechanism to really drive down cost of care. Where do you feel like the payers are on kind of that balance between putting pressure on utilization, or reducing utilization, versus trying to create care efficiencies within the new care models.

 

Joe Mangrum:

Yeah, I lately have seen a lot less focus on the utilization management, from my side, right? When I'm in the room with the payers, I think it was a lever that was pulled too hard and too often for many years, and the payers are getting a lot more scrutiny from regulators, from the public, right? And so they're pulling back on that. And so, I think what's great for listeners to think about is, what do the payers really want from the providers in these scenarios? And a lot of it is simple. They really want accurate coding and documentation, and so we're seeing a lot more of payers, be willing to move providers into sort of, like, a gold card scenario, right? Where they back off of the utilization a lot, as long as the providers are giving them that accurate coding and documentation, right? So we're seeing a lot more of that in negotiations.

 

Daniel Marino:

Is this… is the gold card, though, structure, is it wrapped around kind of like a high-performing or a higher-performing provider network, if you will? So, obviously, coding accuracy, documentation accuracy, is sort of, you know, it's important, but it's a means to an end from a payer standpoint, because you're able to then get better insights in terms of what's happening with the patients, and making sure that you're really driving the right level of care. But when you think about the gold card, are they creating, through that separate network arrangements that provide additional incentives to the providers who maybe are performing at a higher level?

 

Joe Mangrum:

Yeah, exactly right, Dan. I think, my clients have really been focused on and pushing narrow networks. Very, very, very narrow networks for high-performing providers. So I think it's a part of a lot of plant strategy is to move more into the narrow networks, and

 

Daniel Marino:

Yeah.

 

Joe Mangrum:

Provide those incentives to providers to give them exactly what you're talking about.

 

Daniel Marino:

Well, and that's interesting, because neural networks, for years, didn't really take off. The provider… the payers really kind of push them, and, you know, we thought… I always thought it was a good thing, you know, in developing clinically integrated networks, you get some providers, some physicians who report, you know, perform extremely well, understand the data, are able to kind of change their care models. Others don't. Right? And it's okay if they don't, as long as they meet the minimum threshold. But those that do, that really evolve into that higher-performing group, do have an opportunity to participate in these narrow networks, and probably assume a level of risk and financial performance that they otherwise wouldn't. So, so you're seeing the payers kind of adopting that methodology in their narrow network strategy?

 

Joe Mangrum:

Yeah, I am. I think that the payers, they're sort of running out of those levers that we're talking about, and so, you know, things have really flipped on their head and changed from even 5, 6 years ago, so it's something that I think is going to be more of a strategy going forward for the payers, especially the regional provider-sponsored smaller plans that we talked about earlier.

 

Daniel Marino:

Yeah, that's interesting. You know, and when we think about certainly in the value-based care world, managing populations in the contracted populations that are within, you know, a network or within a health system. Understanding the risk and sort of risk stratification of the populations is really important. Many providers are really focused on delivering care to the specific needs of the patients or to the population, so the elements of risk stratification are just really, really critical in terms of the care models and care management and so forth. How are you seeing payers responding to, risk stratifying their population, or understanding some of the risk drivers related to those populations? Do you feel like they're there yet, or maybe they've really moved forward in incorporating risk into their models?

 

Joe Mangrum:

They're not there yet, admittedly. They're starting to incorporate that risk stratification into the models, I think…It wasn't necessarily part of the standard practices of payers over the last few years, but they're realizing that it has to be now, and you know, it's… a lot of it is normalizing the risk to a PMPM. And so that… that allows, like, a comparison across the populations. It allows you to trend analysis over time. And then for us, as a consulting firm, a lot of what we do is we're able to benchmark the plan and do competitive positioning versus other plans or other providers, right? So, it's… frankly, it's something that they have to learn how to do, or they're going to continue to struggle and be underwater.

 

Daniel Marino:

If you're just tuning in, I am Daniel Marino, and you are listening to Value-Based Care Insights. I'm here talking today with Joe Mangrum. Joe is a partner with ECG and leads a lot of the payer-specific initiatives, working with payers all over the country. So, Joe, one of the areas I do want to dive into a little bit more is around, sort of, the sharing of data. Always been, I think, an interesting topic the payers, I think the perception is that the payers have all of this wonderful claims data and really understand what's occurring, and they're starting to use AI to really evaluate what's occurring with patients and so forth. Many of the providers, many of the physicians, the health systems, and so forth, feel like they're at a disadvantage to the payers because of all of this claims data and this knowledge that they have. Is that really the case, or do the payers kind of feel like they're at that disadvantage as well, because they don't have, maybe, the clinical data?

 

Joe Mangrum:

Yeah, I think that most payers would probably say that. I mean, there's a little bit of a frustration behind doors that payer executives they… we talked about the data and the coding earlier. Obviously, one of the big things is HTC capture, recapture, right? And so there's a frustration that they don't have quote-unquote control over those things. But I think the data is there, and it's just about getting to a point of sharing it. I think it makes sense that we're not there yet, because there was this divide for so long between payers and providers, but what I'm seeing more and more is that payers are realizing that that sharing has to happen, and that they have to provide incentives and opportunities for the providers to share it. One way I've seen it recently happen is that payers are now starting to use Epic in different ways. One example is Epic has a module called Tapestry, right? And it's a claims processing module. It wasn't… it didn't have a lot of market share for many years, but we're starting to see definitely my clients are starting to move more into it, and I think it's a great opportunity to start seeing that… the sharing of data happen more seamlessly.

 

Daniel Marino:

Well, and if it's on the same EPIC system, or at least the modules within Epic, it… it just helps to create a little bit more of that data aggregation, right, that typically has been missed. I know for a lot of the… a lot of the providers that I've worked with, I mean, one of the most difficult parts that they have is aggregating some of the data that's coming back from the payers into their own systems to have it make sense. So, yeah, I'm kind of happy to hear about Tapestry, and I've heard a little bit about it in the past. I've seen it work with a couple of our provider-sponsored health plans. But, as that becomes, I think, a little bit more, let's say, proficient within the industry, I could see that creating a lot of benefits.

 

Joe Mangrum:

Yeah, it's… it's interesting, too, with the payers, you know, probably similar to the providers, but I've seen it so many times on the payer side, where they've moved from system to system, and they don't necessarily sunset the system, and the systems don't talk to each other, and so they have all this data. I mean, really, a treasure trove of data, but sometimes it's hard for them to get their arms around it, and you know, you have to have IT be involved, you have to have medical economics, and all these different teams that don't normally talk to each other on a regular basis. It's hard. It's hard for them to unlock that treasure trove, right? But I think, they're trying to figure out how to do that, and to have more people focused on the data, and know how to run you know, large data queries, SQL, you have to have people who know SQL and,

 

Daniel Marino:

And become more proficient with a lot of the data to really begin to drive that. So, Joe, when you think about the direction of where the payers are going. And, you know, obviously, strategy becomes important, and… but, you know, they're responding to some of the economic challenges as well. When you think about the direction, you mentioned that they're more and more interested in value-based care. What are the top, sort of, two or three initiatives that you're seeing the payers really focusing on? Is it… is it predominantly around cost management? Is it around collaboration? Is it around care management? What would you say are kind of those top initiatives of the payers?

 

Joe Mangrum:

Yeah, I think, what's actually working, the successful plans are doing a couple things. They have strong alignment with a core set of providers, sort of what we talked about earlier with the very narrow networks. Second, they invest in data that providers can actually use. And then third. I would say that they treat value-based care as an enterprise strategy, and not just a pilot. So, when I think back to a couple years ago, there was this idea from the payers of, oh, we gotta get into value-based care, and let's just sign a bunch of value-based arrangements.

 

Daniel Marino:

You're right, all these pay-for-performance deals, it really was, you know, I guess it was the beginning of value-based care arrangements, but it really didn't really… it didn't really move the bar at all.

 

Joe Mangrum:

No, not at all. And so, I think now, they're looking at it as, like I said, an enterprise strategy. When I'm talking to executives at my clients, and they're starting to look at the next 5 years, and what's our enterprise strategy for 5-year plan going to be, that's one of the main tenets of that strategy, is we need to move more people into value-based care, more lives, but it can't just be these arrangements, and they can't be, you know, arrangements that are really just put on the table and not really.

 

Daniel Marino:

Well, they need to be meaningful. They need to be meaningful, right? And if, you know what I've said time and time again is that if the providers and the payers can come to the table. And really have a collaborative relationship, where they're each supporting each other on the sharing of data. Supporting each other on aspects of care management, and having the right financial incentives in place I think you're gonna really start to see cost of care going down. I mean, this kind of circles back to what we originally talked about. I think without that, you're going to continue to see a lot of redundancies, a lot of challenges that are going to occur, and I think at the end of the day, you're going to start to see these costs continue to increase unless efficiencies really kind of take over. Are you seeing that as kind of the mindset of the payers?

 

Joe Mangrum:

Definitely. So, a lot of what my team does, is we focus on managed care, we do contracting, right? We do negotiations, and it's something where, several years ago, I kept using the word contentious. It was this very contentious attitude from both the payers and the providers, take it or leave it. There were a lot of terminations. The past 12 to 18 months seems like a major shift of exactly what you're talking about. We have to figure out how to partner together, and it's sad that it took all the margin pressures on both sides for that to happen, but I'm optimistic about it, because I'm seeing some win-win scenarios happen, and I think over the next 12 to 24 months, you're gonna see that shift continue to happen.

 

Daniel Marino:

Well, and I hope so. I really do, because I feel like, without the full collaboration in place, you know, we're going to continue to see these challenges. So I want to hit one more topic before we end the episode, and that's around Medicare Advantage. You know, obviously there's a really big push from CMS to shift everybody into… into Medicare Advantage, or to get Medicare out of the management of… of… or managing beneficiaries. And, you know, we've talked that the goalpost really is around that 2030, target, moving folks into some type of a structured value-based care arrangement. But when you think about Medicare Advantage, it's hitting still a lot of headwinds, right? There's a lot of operational challenges with that. There's been a lot of issues with denials and so forth. Through some conversations that you're having with the payers, are they recognizing that these are the challenge? And if they are, are you seeing some of them really making some strides to change, sort of, that perspective of how they're integrating Medicare Advantage into their product structures?

 

Joe Mangrum:

Yes, and you mentioned the goalposts, right? So I think, that goalpost has moved several times. For some reason, the 2030 seems like it's sticking, though, and so CMS has said they want… I believe they said they want 100% of all lives in some sort of value-based, risk-based arrangement by 2030. And so, we know what happens in that scenario, is that when CMS pushes it, it goes down to the private commercial payers, right, and they start to really adopt it. And I'm seeing that more and more, right? That the CEOs, especially of the regional plans, they see it on the horizon, and they say, we need to start to have the infrastructure and the resources in place to make sure that we can do that, right? I think that with MA, as a line of business for payers, it's… it's scary right now.

 

Daniel Marino:

It is.

 

Joe Mangrum:

the risk adjustment V28, that is terrifying for a lot of my clients. We're seeing across the country that both payers and systems are pulling out of MA. I mean, Scripps the other day pull completely out of MA. You're seeing more health systems consider it. My clients are talking about it, too. I think if enough payers and providers pull out, CMS is going to have to really reconsider some of the policy changes that it's made, right?

 

Daniel Marino:

Well, and I agree with you. I mean, we've got to put some policy changes in place that provides the right level of incentives, the right level of support, you know, that's good for both the providers and the payers, because if not. I don't see Medicare Advantage advancing. I think if it does, it could be a really good thing for the industry. Well, Joe, I want to thank you for coming on. This has been… this has been great. Maybe real quick. 15, 30 seconds. Any advice you'd give to our listeners, as our provider community is working with the payers, or maybe as the payers are working with the providers?

 

Joe Mangrum:

Yeah, I think if you're a provider, just thinking about what it is that the payer needs to be successful to improve their margins, to get line of sight into total cost of care, which is what they want, and using that to your negotiating advantage, right? And by saying, we can not only promise you these three things that you're looking for. We have evidence that we can do it and do it very well. The payer, when they're sitting across from you at the table, is going to be very interested in that, and it's going to continue fostering that collaboration relationship that Dan and I both talked about. So, I know it's not something that providers really thought about for many years, but I think going forward, it can be a real tool in your toolbox as part of negotiations.

 

Daniel Marino:

Yeah, I agree. I think being honest and focused on what the performance opportunities have been, what organizations have achieved, and really where they are on their journey into value-based care and into risk. Well, Joe, thanks again, I really appreciate it. Lastly, if any of our listeners want to get in touch with you, or maybe have additional questions, can you share your contact information, email, or LinkedIn?

 

Joe Mangrum:

Yeah, anytime anyone wants to talk about payers, or managed care, or value-based care, happy, happy to chat. I'll give you my cell. My work cell is 917-625-8951. Always, always looking forward to hearing from people. So thanks a lot for having me, Dan.

 

Daniel Marino:

Oh, I appreciate it, Joe. Great conversation, and thanks again for coming on. And I want to thank our listeners for tuning in. If you're interested in this topic or any of our topics that we have on Value-Based Care Insights, please feel free to click on Lumina HP, Insights, you'll see all of our topics, as well as eCGMC.com. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.

As the CMS Transforming Episode Accountability Model (TEAM) launched on January 1, 2026, healthcare organizations are now facing the realities of implementation and the pressure to perform. In this episode of Value Based Care Insights, host Daniel Marino speaks with healthcare strategist Heather Flynn Kearney about what organizations are experiencing during the early stages of this mandatory model. 

They discuss TEAM’s goals, why CMS targeted specific high-cost procedures, and how hospitals are managing operational, financial, and clinical challenges. From data limitations and coding accuracy to care coordination and post-acute partnerships, the conversation highlights the core capabilities needed for success. 

Whether you're directly involved in TEAM or preparing for future value-based models, this episode offers practical strategies to improve coordination, reduce variation, and drive better outcomes in episode-based care. 

LISTEN TO THE EPISODE:

 

Daniel Marino:

Welcome to Value-Based Care Insights. I am your host, Daniel Marino. In today's episode, we are… it's kind of a follow-up to an episode that we had, probably late summer, early fall, where we dove into the CMS TEAM model, Transforming Episode Accountable model of care. And, you know, at that time, we had talked about the elements that went into TEAM, we talked about the mandated, organizations, and what their responsibilities are, and so forth. Well, the TEAM model launched officially January 1st. And, again, it's a… it's a 5-year program, that would conclude at the end of 2030. So, part of what we wanted to work through are, again, what are some of the key things that we're seeing right now? Through some of the hospitals and the health systems and the organizations that have been participating in it. And especially as we're working through these first couple of months. What are some of the drivers of success? So, you know, it's important as we think about it to continue to focus on how the information that we get, and the understanding related to CMS, and really what their goals are.

Well, I'm really excited today to have one of my colleagues, Heather Flynn, who is a healthcare strategist. She is an industry expert in understanding policy and sort of the CMS regulations and the drivers, and she has a lot of experience helping organizations put these types of programs in place, and really help to drive some of the success. Heather, welcome to the program.

 

Heather Flynn:

Hi, Dan, great to be here, thanks for having me.

 

Daniel Marino:

So, Heather, let's kind of start at the beginning. Let's talk a little bit for some of our listeners who may not be that familiar with TEAM. What are the key elements that are included in that, and probably more important, what are the goals of CMS as they've started to launch TEAM?

 

Heather Flynn:

Yeah, when you look at CMS's goals around value-based care, they've always been trying to increase coordination, decrease spend, help redesign care processes, and incentivizing more efficiency in care. So, when you try and think about what conditions they're going to focus on, TEAM is not that much of a surprise. It is kind of a next generation of BPCI Advanced and CGR that we've seen in the past. Which continue to target a few things. So, CMS is going to look for areas of high spending in Medicare, they're going to look for areas of high volume, but also high variation, and I think that's what a lot of people forget, what all of this is really aiming towards is to increase standardization. CMS wants predictability around cost, so they're going to target conditions where there's a lot of post-acute care spend that could go one way or the other, and episodes could look really different. They want to push the system to align on a care pathway that kind of makes things a little bit more predictable.

 

Daniel Marino:

So, one of the things I find interesting is the 5 high-cost surgical procedures, or the 5 procedures that they have, right? So, it's the lower extremity joint replacement, the surgical hip femur fracture, spinal fusion, CABG, coronary artery bypass graft, and then major bowel procedures. In your opinion, why did they select these procedures? You know, is it because these are the highest volume ones? Has this created the most cost variation? What have you seen, or what are your thoughts behind why CMS maybe selected these?

 

Heather Flynn:

Yeah, I think it's… I think it's a few things. I think it does check the boxes of high spend, high variation, high volume. But also, with cases like this, there's a clear quote-unquote trigger or start to an episode. It's a very definitive… the procedure is where the episode begins, where when you try and target more, like, chronic conditions, for example, or some other things, it gets a little bit harder to define. So these are really easy episodes to where does it start and where does it end? But it's also where CMS sees a lot of fragmentation of care. So these are procedures where there are a lot of providers involved, there's often multiple care settings involved. So it's an opportunity, again, for them to increase that coordination, increase that efficiency, and try and have the system be more coordinated in how they handle these high-volume, really often cases that hospitals are seeing.

 

Daniel Marino:

So the 741 hospitals that were mandated under the program here, were these the ones that maybe had the highest variation, or how were these… how were these hospitals selected?

 

Heather Flynn:

Yeah, CMS uses a pretty, randomized, as they say, sample of statistical areas in the country, so they try not to select specific hospitals based on their, past experience.

 

Daniel Marino:

Right, their performance.

 

Heather Flynn:

Correct, but what I will say is the downside to that, that a lot of people will push back on the models about, is within a statistical area, you're going to have really large health systems, but you're also going to have really small community systems, which are going to experience this model very differently. They're going to have a lot different capabilities, but they're essentially going to be evaluated similarly and based on each other when you consider regional settings of benchmark prices, for example.

 

Daniel Marino:

Yeah, and, you know, when we've looked at it, it's, you know, for some large health systems. You know, one of my clients is 13 hospitals. Only one of the hospitals is included as the mandatory hospital. So, I think, to your point, it's, you know, maybe the algorithm or the statistical analysis they did to select these, possibly wanting to just get a good, I don't know, structured representation of the different hospitals in the different areas that they can begin to test and drive some of the success.

 

Heather Flynn:

Yeah, we see that a lot across models, and, you know, it's never a perfect science, and that's one of the things that CMS has struggled a lot with. Is they're trying to be simple and straightforward in their methodology, such as a random sampling of core statistical areas, but by doing so, then they can't account for nuances, like what you're mentioning, of what if you have one hospital that's included in an area, but then in a neighboring county, that county's not included. Then you're kind of one foot in, one foot out, and that makes it harder for that system to then manage. But then expecting CMS to account for those complexities then makes the model more complex, harder to understand, harder to administer, so it's a little bit of a balancing act.

 

Daniel Marino:

So, I know we're only 2 months into this, maybe 3 months into this. What are you hearing? How are the hospitals, those that are mandated and working through this, how are they doing? What are they struggling with? What are some of the things that you're hearing?

 

Heather Flynn:

Yeah, I don't think it's… there's nothing revolutionary here. I think it's the same challenges that we've seen with all models, especially mandatory models. It's the operational burden, you know, the upfront investment that's required to manage these patients and manage them well and succeed in the model, so how do you track these episodes? How do you get real-time data? That's really tough. To know what's happening on the episode in real time, and be able to intervene if you need to, because you can't wait for the CMS data, right? By the time CMS gives you data on your episodes, it's too late. So not only tracking the patients data-wise, but also making sure you're capturing everything from a coding perspective. There are some adjustments for high acuity and more complex patients, but only if the hospital are capturing those aspects around the patient. So I think the data and the coding and the documentation is one piece. And then you have this other piece of care management. How do they manage care outside of their walls? How do they coordinate with post-acute care? But also, how do they start this up front and kind of do the pre-op evaluation that helps them set the stage? And have a good plan for this patient, kind of, before the episode even begins.

 

Daniel Marino:

Yeah, I want to dive into care management, but before we do that, I want to go back to what you had mentioned on coding and documentation, because the data is so critical here, and what we see… now, we've helped numerous organizations, numerous physicians kind of improve, for instance, their HCC coding, and still, you know, with many organizations across the country. The capture-recapture rate of HCCs is only about 65-70%, and it puts organizations in a really difficult position. And I can't help but think that those that are included in TEAM, if your coding isn't up to, you know, a reasonable level, certainly with the HCC coding of that 90-95% threshold and the documentation isn't accurate, that really has to be eight ball. And I think you can start to extract your own billing data, maybe the pre-adjudicated claims in order to evaluate it, but if it's not good data, you're not going to be able to really act on it, and you're going to miss that opportunity. Is that what you're seeing with a lot of the hospitals right now, as they're starting to move forward with really understanding the population related to team?

 

Heather Flynn:

Yeah, I mean, data is always a consistent challenge. Not only having data real time that you pull, but also understanding the CMS data that comes out later. I think, again, especially this goes back to those smaller hospitals that might not have these robust data systems in place, and all of a sudden this team model's kind of placed in their lap. And they have to figure out how to track these patients, and especially then, not only with data, but then when you think about when the volume comes into play, it's kind of a double whammy, right, of if you don't have the data, you don't have the coding, but then also, maybe you have a small volume of patients. You lose that law of averages, that those big, health systems have on their side. And it becomes a tricky formula to make it work if you don't have the ability to track patients, to look at the data, but also the volume to account for if one or two patients kind of become a high-spend episode.

 

Daniel Marino:

Yeah, kind of, you know, kind of changed the curve, if you will. If you're just tuning in, I'm Daniel Marino, and you're listening to Value-Based Care Insights. I am today talking with Heather Flynn. Heather is an industry policy expert, and we're talking about the TEAM model and really kind of doing a quick review on the last couple of months as we begin to move forward with kind of really evaluating some of the successes of TEAM. So, Heather, I want to build on one other thing that you mentioned related to the data. Risk stratification of these populations, I think, has to be critically important, right? Because without understanding the risk factors that go into candidates for these procedures. I think it puts you… puts these organizations at a disadvantage related to maybe the pre-surgical evaluation that they need to do, but probably more importantly, planning for the post-surgical recovery. And oftentimes, readmission rates, whether it's through the ED or complications post-surgery aren't as a result of what happens in the OR, it's as a result of other things that are complications to the surgery. So, talk a little bit about some of the challenges, maybe, that organizations have as they're starting to really work through that risk stratification and what they need to do in order to really think about proactively managing these populations.

 

Heather Flynn:

Yeah, I think you make a good point that a lot of the spend, and especially the variability in spend, happens post-discharge. So I think a lot of folks focus on the post-discharge, but to your point, planning for post-discharge is going to happen pre-op. So I think, to your point, it's not only risk stratification in terms of identifying chronic conditions that might come into play, how can you help manage those, but also help promote other healthy behaviors. You know, a lot of times we hear that called prehab, if you will. But also, Setting the patient expectations can be a big factor, too. So not only coding that patient, but talking to the patient and saying, where are you going post-discharge? What will that look like? If you're going home, who will care for you post-discharge? You don't want this to be a surprise that after the procedure, then you're starting to have these discussions about what is post-op going to look like, and where's the best place for that patient to go. So based on that risk stratification, you could either have the conversation about going home and what that home care would look like, or you could start talking about post-acute care, outlining those options, and hopefully having that option selected, again, pre-op. Because the other challenge you see hospitals running into is space with post-acute care providers. You don't want to wait until after the procedure to find out that all of your preferred providers have no space for your patient, and then that results in a longer length of stay, and again, that goes to the quality, scores and impacts that.

 

Daniel Marino:

Well, it fits right into what you had started talking about before, was the whole care management piece of it, right? Because then you become a little bit more prospective on the care that you need to manage with the patient post-recovery, and then where the patient… the best opportunity for the patient to… to recover, whether it's at the home or a post-acute provider. Talk a little bit about the importance of partners, though, to this, because, you know, again, although the hospital, I think, is held primarily accountable to cost and the activities around the episode. You know, the post-acute providers, the SNFs, the rehab facilities, I think have to be critically important to this, because, you know, a large length of stay with a post-acute provider would certainly totally disrupt the whole cost model related to that episode.

 

Heather Flynn:

Yeah, exactly. As I said at the beginning, you know, we're trying to decrease variation here, so you want to standardized your care pathways where you can. So that means working with your post-acute care network to align on care pathways by condition. How are you going to coordinate care? What does data sharing look like? Is that feasible? So you both can be on the same page? That would also enable the hospital to track that patient real time, because once the patient leaves the hospital, you still need to understand where are they in their post-acute care journey. You, you know, the hospital's on the hook for 30 days post-discharge, so that hospital needs to continue following up and have a relationship with their partners to be able to understand is this patient tracking as we would expect, or do we maybe need to reevaluate? And if you don't have those open lines of communication and or the actual data sharing with your post-acute care providers, that becomes a lot more challenging, it becomes a lot more of a manual process of calling the providers and waiting for a callback, and that's when things can easily fall through the cracks.

 

Daniel Marino:

Yeah, that coordination with the post-acute providers and the partners, I think, is critically important, because without that, like I said, then things end up breaking down. Oftentimes, when we work with organizations, the transitions of care really is the difference between success and failure related to achieving some of these readmission goals and so forth, and I think you need to have the partner there that really is aligned around the care plans and the care models. Talk a little bit about quality. How is quality fitting into this? You know, I know It can't just all be about cost, it can't be all about utilization management. You know, certainly efficiency and reducing clinical variation is really important, but quality, obviously the quality of care and making sure that the model and what we put in place has to drive the highest level of quality that we can provide. Where does that fit in on the indicators and the evaluation of TEAM?

 

Heather Flynn:

Yeah, I think quality is… the quality score is overlooked, in my opinion, far too often. I think a lot of people… a lot of folks look at the quality score as, you know, a little adjustment that can, you know, give you a little bit more of a bonus, or perhaps take a little bit away, but especially in TEAM, the quality score is going to be much more impactful than that, and not surprisingly, I think CMS did this on purpose. They are trying to drive quality of care and ensure that while we increase efficiency, we're not compromising quality, we're not increasing readmission rates or hospital-acquired conditions and things like that. So, when you think about the composite quality score that a hospital is going to be assigned in TEAM, it's really powerful. It can sway the reconciliation amount by… Positive or negative 10% in some cases.

 

Daniel Marino:

Wow, yeah, that's quite a bit.

 

Heather Flynn:

When you think about a hospital who might have otherwise had really efficient spending, they might be set to receive a reconciliation bonus or positive payment from CMS, but if they have a negative quality score, or they receive, like, a negative 10% adjustment, for example, on quality, that bonus could now become a repayment amount.

 

Daniel Marino:

Yeah.

 

Heather Flynn:

So you really can't ignore the quality score, and I think that's kind of what comes from the preparation of… we're not only looking right now at what do your readmissions look like? Where are your care pathways? Who are your referral partners? But also, what is your length of stay? What kind of outcomes are you having? If we look at, by condition, what the quality scores are that are included, how are you performing on those currently, and what would we expect that to impact your team participation and success.

 

Daniel Marino:

Well, and that's such a, you know, that's a good point, and sometimes, although, you know, again, quality should always be at the forefront, and I think most of the time it is. It's very easy to get involved in the process of managing the care, instead of thinking about that with how it's going to impact quality, and are we really driving to some of these success indicators? So, you know, we've covered quite a bit. We talked about the data, we talked about care management, we talked about, you know, quality and documentation and coding and so forth. When you think about, you know, there's a lot there, right? So, when you think about the key things that are really important for these… these health systems, you know, the 740 or so that have been mandated, are there two or three recommendations or a couple of things that you would really recommend that the hospitals focus on as they think about moving this forward, really impacting some of their outcomes and their overall performance?

 

Heather Flynn:

Absolutely, and I think some of them we've already talked about, but if we're going to recap, I think where I always recommend health systems begin is know your baseline, know your degree of current risk, or as I call it, your current state assessment. To the extent you can, with the data that you have, understand by condition your volume, your average spend, your variation by surgeon, you know, you can look at this as law of averages, but this differs by surgeon sometimes. Where are your discharge destinations? How are you capturing the data? Are you capturing those comorbidities, or are they often getting missed? And then, as I just mentioned, how would you perform on the quality score today? So let's start by, you know, figuring out where we are right now before we try and change anything. That gives us a sense for what are the highest priority items and the most impactful items that we can… that we can change to be more successful in TEAM. I think a lot of times hospitals can, you know, get bogged down in the details and focus on the small tweaks here and the little upgrades there, but let's figure out what's going to be the most impactful changes that are going to result in the biggest improvement in our performance and TEAM.

 

Daniel Marino:

That's a great point.

 

Heather Flynn:

That would be one, and I would say second would be, again, the data piece. We've tracked on this… talked about this quite a few times, but how are you going to build real-time data visibility? How are you going to track those patients during the episode? But then, take it a step further, and I think part two of this is if you are able to intervene, then how are you going to intervene? So if an episode starts to go off plan, what is your plan B? How are you going to intervene? What tactics are you going to use? And then lastly, we also talked about it, but I can't reiterate enough the importance of your post-acute care network, referral partners, care coordination processes, data sharing to the extent possible. But I think one nuance to this as well that we haven't touched on yet is your post-care network and these care pathways only work if the hospital physicians and surgeons are participating and bought in, and they agree with this. You need their buy-in and their participation to make this whole thing work.

 

Daniel Marino:

Well, and as you were going through this, I mean, that was going to be one of my questions, is where do the surgeons fit in, right? I mean, should, as a best practice, should the hospital think about putting together some type of an integrated governance model that would include hospital and the hospital operators with the surgeons who are driving this, as well as then incorporating maybe some of the post-acute partners.

 

Heather Flynn:

Yeah, I think when hospitals take more of a participatory approach. And everyone is at the table from the start to say, hey, with the surgeons and our post-acute care partners, but also our care management team and our IT folks, what does it… what does the episode look like, and what should this care pathway look like, and how do we all come to the table aligned? I think it's challenging to, behind the scenes, develop a care pathway and try to hand it down. That usually is not as successful.

 

Daniel Marino:

Well, it needs to be physician-led, there's no doubt about that. The physician is really the one that's driving this. Well, Heather, this has been great. Again, it's always fascinating to understand or to kind of dive into a little bit of the drivers and the motives around CMS and doing some of… putting forth some of these programs, and then, you know, again, the hospitals and the health systems are at different places in terms of their capabilities and their infrastructure, so being able to sort of raise those capabilities up to align with the… with what CMS's goals are, I think, always remains the challenge. I appreciate you sharing your insight on this. If any of our listeners are interested in contacting you, maybe learning a little bit more about some of the policies, or maybe just some of your experience that you have in working with some of these hospitals. Can you share your information?

 

Heather Flynn:

Yeah, of course. So on LinkedIn, I'm under Heather Flynn Kearney. You can reach me there, or happy to share my email, which is going to be hmkearney@ecgmc.com. Happy to chat more or share some more insights.

 

Daniel Marino:

Great. Well, thanks again, Heather, for coming on. Really appreciate the conversation, and really appreciate your insights. This is… this was fantastic.

 

Heather Flynn:

Thanks, Dan, it's been great. Great talking to you.

 

Daniel Marino:

And for our listeners, a very special thank you to you all. If you're interested in hearing more about this topic, or maybe some of our other topics, please visit luminaHP.com or ECGMC.com as well. Until our next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care.