Evolving Clinically Integrated Networks to Prepare for Value-Based Care in 2025

LISTEN TO THE EPISODE:

 

 

 

Daniel Marino:

Welcome to value-based care insights. I am your host, Daniel Marino. Recently I was working with a number of healthcare leaders who were working in a health system, and have a very successful clinically integrated network. And I had the opportunity to work with them on helping them with their strategy finishing out 2024 and had a real interesting discussion with them around where our clinically integrated network, or where their clinically integrated network, needs to go, and how it needs to expand as we move into 2025. And as I thought about that discussion, I thought, you know, that would be a fantastic topic to discuss on our program today, especially as organizations are starting to prepare for a lot of their strategic initiatives as we head into 2025.  

Well, I am excited to have a longtime colleague of mine, Dr. Will Faber, join me on the program today to talk about this topic. Will and I have gone back, probably. Oh, gosh! At least 15, maybe 20 years have worked together on numerous, with numerous organizations, helping them set up their clinically integrated network helping them to improve their network performance and so forth. Will right now is an interim chief Medical Officer for a large CIN that's in the Northwest. Will very excited to have you as part of the program today.  

 

Will Faber:

Great to be back with you, Dan, and thanks for this opportunity. 

 

Daniel Marino:

So will, as, as I mentioned, ending the year ending 2024. It's been interesting to see how value-based care has continued to evolve in this in this past year. And a couple of things if I think back on the year, have sort of resonated with me, I think one is that the commercial plans continue to offer these value-based care products. There's no structure around any of the products that they offer, meaning that, you know, Aetna versus united versus anthem. All have different types of products. I think the second thing that I've noticed is there's been a high growth, continued high growth of Medicare advantage, with many Medicare beneficiaries joining MA the MA world. Yet there's been a lot of pressure from providers around the performance of those plans, and that many of them have backed out. And then I think the 3rd piece that I've seen is that there's been this continued pressure on CINs to move into risk right? And providers community to engage in a lot of their risk contracts with their payers. What are you seeing how any of those 3 things that I mentioned. How are they resonating with you? 

 

Will Faber:

Absolutely well when you and I were setting up clinically integrated networks 10 years ago. It was a relatively small stream compared to fee for service. But you talked about 2024, that was the year when more Americans were more Medicare beneficiaries were in Medicare advantage plans than in straight Medicare, and that trend is not going away. More and more people are going into Medicare advantage, which is a risk product. 

 

Daniel Marino:

Yeah. 

 

Will Faber:

Then you think about Medicaid being managed in almost every State. And then these commercial plans are popping up like mushrooms. They're definitely getting into the value-based care world now, too. So it's a good thing there are CINs because you need a lot of infrastructure to manage these. One of the big observations that I've got over the last 2 years which really hit us hard in 24 is the inflation of healthcare costs, particularly around pharmaceuticals, and we're going to get into that here today in terms of what we should do strategically and tactically about it. But the bottom line for the for your listenership here today is to realize competition amongst these MA plans and amongst the commercial plans have them in such a state that they often offer a 0 premium plan because they're just trying to get market share. But 0 premium means they're not taking any more top line revenue in. And if expenses are going up, which they are, that is, shrinking the pool of available dollars. 

 

Daniel Marino:

Yes. 

 

Will Faber:

One of the big points I'll make we'll come back to it is that more than ever CINs have got to negotiate very assertively with the payers to make sure the provider gets their fair share, or, as you say. The providers are going to lose interest and drop these plans, and we're seeing that in the news every day. 

 

Daniel Marino:

Well, you're absolutely right. And I think from you know, from the plans perspective, you're right. They're offering 0 premium plans to the consumers. So they're not getting any more revenue. The medical costs continue to go up, so they're putting a lot of pressure on the providers and providers are pushing back. I have a number of client organizations around the the country, particularly the rural community, who are basically saying, Look, our denials for services have gone up tremendously. We have to hire one to 3 new FTEs just to manage the pre-certification. It isn't worth it. And so, as organizations think about how they need to position themselves in this next year, I think, for these MA plans, It comes down to the negotiating right. You have to negotiate out some of these pre certs to make it more efficient. You also have to understand how you create more of a collaborative approach with your payers, so you can really drive to performance, not just drive to the bottom line. 

 

Will Faber:

Absolutely. You know, any good business plan is a collaboration where both parties win and the way the traditional risk models were set up, it was relatively easy, because there was more money in the pool. As the pool shrinks it's getting more fierce. And we have to go back and revisit those contracts whenever they come up for renewal. Take a hard look, get professional help. Preferably somebody who's worked for insurances. 

 

Daniel Marino:

Right. 

 

Will Faber:

You know there are partners, and I keep reminding the payers that they are partners of shared savings implies a win-win. So you've got to put certain things in your benefit plan that cooperates with what the provider wants to do to curb the cost of care. Another 2 things we're going to talk about here today, I'm sure, is technology. And the other one is how you engage with specialists because so much of the spend now is being controlled by specialists. For years and years I've done population health management where we're working with the primary care doctors to limit utilization per unit. But if the unit cost has gone up 20% in the last 2 years, it totally swamps the effect of carving 1, 2, 3, 5% off of utilization, and a lot of the unit cost spend is in chemotherapy, biological, infusions that are done by rheumatologists and others. And the GLP one drugs. They're killing us. 

 

 Daniel Marino:

Yep. 

 

Will Faber:

Have to work with the payers on some reasonable limits, to that and or new ways to work with the providers, to control that cost of care. 

 

Daniel Marino:

Well, you're absolutely right. Well, you know I've I get asked a lot is  organizations are thinking about their payer strategy as they're thinking about shifting from, let's say, from shared savings to taking on risk what's required. Right? What's the path? And I always I kind of bring it down to the simplest terms. And I say, you know, there's 4 things you really need to focus on. You need to focus on your data and your analytics. Right? You need to understand what's going on and why. And that's what the data is going to tell you. You need to make sure you have a strong network that's aligned right? So all your providers, your specialists, your primary care, even your post-acute providers, have to be aligned in a strong network. But the 3rd and the 4th point that you bring up are critical. We have to engage the specialists different in a risk-based environment than we previously had, and you have to have the infrastructure to support it. Right? You have to have the analytics. You have to have care management, you have to be able to provide the right level of support to the network, and in particular to the specialists. But really, I guess to all the physicians that allows us to create efficiency, to drive down that cost of care. 

 

Will Faber:

Well, yeah. And analytics can tell you a lot in the CIN where I currently work, we got a big Milliman study to show us, basically where the money was going with our specialty providers. And there's a particular cancer center that's way out of line with Milliman standards. 36% above the national spend. Well, in the old days we spent so much focus on the primary care doctors, and you know there's only so many hours of the day to get around to those people. But now we absolutely have to be out in the offices of the specialists with credible data. And of course, if it's not credible, you're going to lose any doctor in the conversation. So you got to do your homework to make sure you're going out with an apples to apples, comparison of their cost. But there's no escaping having those crucial conversations with the specialists, just like we've always had with the primary care. Doctors. 

 

Daniel Marino:

Well, and I think the time is right to do that, especially as organizations are thinking about assuming into risk. We have worked for years as an industry in the value-based care world, working with our primary care, physicians to build their expertise, build their support structure around managing the chronic diseases and that high risk population right? And I sort of say, you know, I sort of describe it this way. That's been the chassis of our value-based performance. But now, if we're going to take it to that next level, we have to do a better job of integrating the specialists, right? We need to think about to your point earlier, how the specialists are influencing the cost of care and how we could. We can change that paradigm, you know, keeping them whole to a certain extent, but changing the thought process, moving from straight fee for service to that you know, that's basically encounter base to making it more performance based in the value-based care world. I don't know if you have any thoughts. What are some of the specialty measures that you're seeing that maybe you know that have been, let's say relevant. Or you know, that have really made a difference to help specialists kind of move from that fee for service to fee for value. 

 

Will Faber:

Well, you know, each of the specialties has a professional society, and they often have quality metrics. I've helped map these to CINs for many years, and some of them are particularly good. Particularly on oncology, where a lot of the a lot of where the spend goes. Today, I'm a big fan of NCCN guidelines. 

 

Daniel Marino:

Sure. 

 

Will Faber:

So things like chemotherapy administered in the last 14 days of life is a great one to talk to, to kind of uncover where certain practices are highly aggressive frequency of imaging protocols for follow up, you know you're going to see them every month. You're going to see them every 6 months. Things like that can make a big difference. But I want to point out a couple other things you can do as a strategy with specialists. If specialists are under coding, and they need to be doing HCC coding just as much, if not more, than the primary care doctors. It makes a huge difference even if they're expending more money on some of these drugs or infusions, or the treatment protocols which, they may argue is state of the art, I'm going to say, yeah. But if you've got a bunch, you know, you're telling me your patients are all stage 4, 3 and 4, and they're sicker. I said, well, then, why is your coding index lower. 

 

Daniel Marino:

Right. 

 

Will Faber:

Than the other group over here, because that I mean, that actually brings in more revenue. And I can't skip over how critically important HCC coding is across the entire network. There's some wonderful new products that are coming out technologically to help us capture that. And as everybody knows, on the call, if you're not moving forward. If you're just staying stagnant with HCC coding, and the rest of the world's going forward. You're going backwards, and you're losing revenue to help offset these costs. So HCC coding is important, and you got to support the specialists in that, too. 

 

Daniel Marino:

Yeah, you are absolutely right. Well, if you're just tuning in, I am Daniel Marino, and you're listening to value-based care insights. I am here today with Dr. Will Faber. We're having a great discussion on advancing your clinically integrated network into 2025. So Will, I want to talk a little bit about kind of building on that around the specialty measures and maybe around the specialty integration there. You know, the we've really have relied on our primary care physicians, to sort of be that that quarterback of the care right? And I think it served us well. But as we start to think about integrating specialists and the performance outcomes that are critical in a risk-based contract, and I'll throw a few out at you. And you know these off top of your head right? So you know, focusing on the 30 day readmission rate and making sure you know that is as efficient as possible. Transitions of care, making sure that your transitions are as efficient as possible, making sure that as we're looking at delivering care, not just to the high risk population, but to the rising risk population and that efficiencies that really drive down the cost of care again critical to a risk-based contract. How are you seeing the relationship between primary care and specialists evolving? What are the things that that a CIN has to put in place to ensure that that collaboration is there? 

 

Will Faber:

Well, for one thing, if you're a big enough CIN and a big enough market to enjoy multiple specialists, that's always multiple specialists in the same field is always a great thing, because I go to my primary care, doctors, and say, Do you want some shared savings at the end of the year? Well, then, I want you to know what Milliman says you can send to this specialist that's X above the National Benchmark, or you can send to this one, and we're going to show you that the outcomes are equal. So that's 1 strategy. But lots of CINs are not big enough to have more than one provider in each specialty group. Then you have to go out, as I stated. Well, you want to do this in any case, and work with the specialists. Here's a 3rd thing you can do. In the CIN that I'm in right now. We long ago divided specialists in our incentive compensation distribution from what so-called high impact specialists and low impact specialists. There are some specialists that really don't impact the cost curve very much. But cancer is a great example of something where there's a big impact on total cost of care. So consider segmenting your specialists as well. And then, yeah, big fan of not just asking people to do things, ask people to do things, but also saying, here’s how we're going to support you producing that result for us, and sometimes they need help with their technology to get their workflows better, better HCC capture methodologies, other ways to track their costs and expenses. 

 

Daniel Marino:

Well, I agree with you, I think, getting back to a point you made around the compensation and the incentive design. I really believe that's where it starts. You know, I'm a proponent, and I've said it time and time again on the program. Form follows function, and if you are going to. If you want to achieve a certain behavior, you have to create the right incentive. And for specialists I don't feel like you can put all specialists into one bucket. I feel like you need to create in certain incentives for the medical specialists certain incentives for the surgical specialists, certain incentives for the hospital based specialists. Now, in some cases you need to have those incentives that are network based. But each of the specialty areas influence patients in the cost of care different. And if you can start to align those, I feel that that's how you're really going to achieve those. You know, the goals that you want out of that level of collaboration any thoughts with that? 

 

Will Faber:

Absolutely. So we talked about certain medical specialties where there's a high drug cost. All the payers give us feedback on where the money went, and when it comes to surgery, I think we all know the name of the game is to take anything that can be done safely out of the hospital into an ambulatory surgery center that can often be a win-win for the surgeons, because they're often the co-owners in a joint venture of the ambulatory surgery center. 

 

Daniel Marino:

Right. 

 

Will Faber:

Now the hospital might get a little bit upset with you. But I have a different argument with the CFO of the hospital about the role of the CIN in this whole value-based care world. It's not our fault that patients are choosing value-based care. Don't you want us to manage our value-based care contracts as well as possible, and that involves sometimes taking people out of the hospital. But, again, if you can incentivize surgeons to do more care in an ambulatory surgery center, never decreasing the quality of care, never taking an inappropriate case out of the hospital. Please always hear me on that one. That would be an example of aligning incentives with surgeons. 

 

Daniel Marino:

Yeah, I agree. So you know, again, I think you know just a piece of advice for clinically integrated networks as you're moving into 2025, give some real thought to the specialty incentives and the compensation piece, because that's what's really going to help drive some things forward, especially as you're assuming risk. So Will, one of the one thing I want to also get your opinion on. I often get asked how quickly organizations should move into assuming a risk based contract. Right? They're getting a lot of pressure from the payers. I just, we just got done negotiating one contract with a very large payer for one of our clients, and it was a predominant fee for service contract but over 4 years, but in year 3, and then in 4, the payer wanted to include a risk component or an incentive based component to the contract right? And they were throwing out a few more percentage points there. So you know again, it's real. So I guess when you think about it. What are some of the things that can be done to advance or ensure the right level of fee for service growth, as well as those things that will then position us for fee for value. I have a few things that come to mind, but any thoughts that you have? 

 

Will Faber:

Well, some of this is out of our control. People shifting, due to the cost of the premium from straight Medicare to Medicare Advantage is a shift to Downside risk. I mean, it's a shift to risk. And of course CMS has stated that by 2030 all straight Medicare is going to have Downside. There's no getting away from it. And I remind listeners if doctors think they could just jump out of value-based care because it's not so attractive anymore. No, you don't want to go back to Medicare. Then, taking away some of the reimbursement they give you for being in an advanced payment system, and you certainly don't want to do MIPS reporting again. We're in this for the long run. So we got to learn how to make it work. But the other point I make is competition. Again, this changes market to market. And I've said this for years. Your strategy changes according to market realities. Rural systems are playing a completely different game than big metropolitan areas where there's competition. And you just have to make sure you've got a potential payer out there. But I'm not abashed to say that when you've got 3 different Medicare advantage plans in your neighborhood, all vying for the patients that gives you some leverage as a provider to negotiate, because if a rural player says sorry you've made terms where we can never win, and we pull out what that means for payer one, is that all their patients are going to have to find product in payer 2 or 3 that was willing to work with us. So. 

 

Daniel Marino:

Yeah, I agree with you. 

 

Will Faber:

I'm a I’m a doctor. I used to do this just to manage cost effective care on the ones. But now I've become a hard nose negotiator, because these payers have got to either cooperate with us or we're going to have to find another payer. 

 

Daniel Marino:

Well, and I think I think, moving forward with that that philosophy of collaboration with the payer. I mean, you know, that's the big difference between fee for service and fee for value, right? And we. We have to change the conversation to make sure that we are collaborating, and I think we've got to collaborate on some really key areas. I think one collaborating on our transitions of care. As an example, payers have their case managers who are, you know, they know who the high risk patients are. Those case managers are calling patients. For CINs, transitions of care is also an area so that becomes an opportunity to really build it and to establish some level of collaboration. But I think to your point, too, you have to understand what your differentiator is in the market. I think you also have to understand what are the key drivers, but you need as a CIN, as we enter into 2025, and Medicare advantage isn't going away. How do we create more efficiencies within our own CIN to position ourselves around that level of success? 

 

Will Faber:

Absolutely, and I know our time is running out. But to this point, not everything that I'm talking about is being a hard-nosed negotiator. There are lots of win-win strategies, and that's what you're making reference to. You know, payers that are in risk products. Get it that what you do these days is to control total cost of care and to decrease unnecessary readmissions is decreasing. The MLR. That's good. All I'm saying is, if that produces a pool of money, share it fairly with those of us who are helping control those readmissions. 

 

Daniel Marino:

Absolutely well, well, this is. This is fantastic. I know. You know the lot of lot more discussions going to ensue in terms of how CINs and ACOs need to continue to evolve as we move into 2025. I think we're going to continue to see different types of MA plans. MA is going to continue to grow right. We're entering into open enrollment now. So by the end of December we're going to know the number of total enrollees, and I'm sure we're going to see an increase, but also position ourselves around commercials as well. You know, I think that's going to be key. Well, my friend, thank you for coming on always great to talk with you Will, and wish you a lot of success in the work you're doing, so glad that you still have your hands in all of the buckets and doing quite a bit of work in the in the value-based care front. 

 

Will Faber:

Great to talk to you, Dan, and thanks for having me on the show anytime. 

 

Daniel Marino:

Well, thanks again. I appreciate it, and a special thank you to our listeners until the next insight. I am Daniel Marino, bringing you 30 min of value to your day. Take care. 

 

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners