LUMINA Podcasts

As healthcare providers engage in payer contract negotiations, understanding their contractual reimbursement rates compared to the market has never been more crucial. In this episode of Value-Based Care Insights, we sit down with Damon Morse, an expert in payer rate analyses, to discuss the challenges healthcare providers face with payer contract negotiations, and the strategies required to level discussions. Gain insights into how thorough analysis and strategic positioning can ensure fair reimbursement for provider organizations and support organizational growth.

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Medicare Advantage has been the subject of significant attention lately among provider organizations due to its distinctive demands that influence traditional practice operations norms. In this episode of Value-Based Care Insights, we sit down with Sarah Hartley, an expert in health information management, to discuss some of the hurdles with new Medicare Advantage contracts, along with the efforts needed to align providers and patients. Gain insights into the administrative challenges, diverse strategies for effective patient data management, and the essential cultural shift required to promote collaboration between provider organizations and payers.

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Forty-five years after a Chicago hospital pioneered an integrated network strategy, the healthcare landscape has undergone a significant shift towards prioritizing preventative care. In this episode of Value-Based Care Insights, Jeffry Peters, an expert on medical group strategy, along with Michael Antoniades, President of the University of Chicago Medicine, explore the groundbreaking challenges and strategies that revolutionized healthcare delivery, and how they are still being tackled today. Gain insights on the evolving focus towards preventative care, the measures used to evaluate healthcare delivery, and the pivotal role of primary care in bolstering the entire healthcare ecosystem.

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Within the healthcare industry, effective organizational culture requires building trust, nurturing collaboration, and positioning leaders to drive strategic and impactful change. In this episode of Value-Based Care Insights, we sit down with Dr. Eric Velazquez, Professor of Medicine at Yale, alongside Doug McKinley, a clinical psychologist and leadership coach. Together, they explore the challenges and opportunities of strengthening the workplace culture in order to improve organizational effectiveness, financial performance, and overall patient care. Gain insights on the importance of vision alignment, a healthy culture, team collaboration, and the delicate balance between “steering the ship” and delegating responsibility.

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Behavioral health is pivotal for overall patient well-being, yet healthcare providers are just beginning to recognize the significance of lifestyle factors and social determinants in delivering this sort of whole-person patient-centric care. In this episode of Value-Based Care Insights, host Dan Marino sits down with Dr. Matthew Burg, a clinical health psychologist at Yale, to explore how social determinants and behavioral medicine are addressing the clinical needs of patients. Gain insights into the challenges and opportunities involved in integrating behavioral health into patient care, in prioritizing quality outcomes over services, and in recognizing the importance of preventative measures to establish a more comprehensive patient-centric care delivery system.  

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Improving patient outcomes requires a close look at the latest innovations in healthcare. In this episode of Value-Based Care Insights, we sit down with Dr. Jason Spangler, CEO of the Innovation and Value Initiative, a non-profit organization focused on advancing the science of determining the merit of various clinical innovations. Dr. Spangler sheds light on health technology assessments (HTAs), their history, and how they help leaders decide which new technologies or devices provide interventional benefits to patients that includes clinical outcomes and cost analysis. Listen to gain insights into how HTAs consider clinical outcomes, the incorporation of health equity, and how social determinants provide a broader understanding of the benefits that shape healthcare decisions. 

• A health technology assessment (HTA) is a comprehensive analysis that evaluates the cost-effectiveness and clinical and societal impact of new healthcare technologies and innovations.  
• HTAs have to take into consideration many different kinds of value, from traditional quantitative clinical outcomes to more nuanced preventative measures and patients’ personal values.
• Technology plays a significant role in shaping the efficiency and cost dynamics of population health, with various assessments offering healthcare leaders deeper insights into where the benefits lie.  

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With the recent push for healthcare reform, state governments started to issue crucial legislation to redesign the Medicaid program. In this episode of Value-Based Care Insights, we explore the new terms and conditions of New York’s 1115 demonstration waivers. With Vanessa Guzman, CEO of SmartRise Health, we share insights into the $6 billion initiative focusing on health equity, workforce investments, and the general support of Medicaid programs. Discover how the New York program sets a precedent for other states, addresses DEI initiatives, and strategically allocates funds to improve the care delivery infrastructure and overall patient outcomes.  

• The waivers allocate $6 billion for health equity reform emphasizing workforce investments to create a “Healthcare Equity Regional Organization” to enhance resources and accountability, particularly in underserved areas.  
• This legislation strategically allocates funds to tackle social determinants of health, emphasizing a holistic approach for immediate impact and long-term sustainability.  
• As one of the first states to enact such legislation, New York has demonstrated a commitment to social reimbursement to address diverse healthcare needs and reshape policies nationwide. 

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One of the critical bellwethers of a healthcare organization's success in strategic planning is how well the health system leaders work with their boards. In this episode of Value-Based Care Insights, we sit down with Ivan Mitchell and Ann Scott Blouin to identify 2024 healthcare trends, their impact on provider organizations, and how executive leaders can engage with their board of directors. Gain insights on the top trends that are the greatest hurdles for healthcare providers and the importance of collaborative leadership.

• Achieving short-term goals while maintaining a focus on long-term objectives requires healthcare provider organizations to actively engage and collaborate with health system leaders and boards.
• Challenges in Medicare Advantage, such as misalignment and administrative issues, may pose a threat to provider organizations.
• Improving financial performance requires hospitals to align incentives, engage physicians in decision-making, and leverage tools such as telehealth to address labor shortages and ensure equitable access to care.

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Daniel J. Marino: 

Welcome to value-based care insights. I'm your host, Daniel Marino. In today's episode, we're going to spend some time talking about some of the challenges that we see as we enter into 2024, I had an opportunity to write an article kind of highlighting. Some of what I see is, is these key trends as moving in 2024. I've done this for the last, probably 7, 8 years. And I often do it by reflecting on what we've seen in in 2023 or the years prior. And then how health systems, how healthcare leaders either reacting to it or what they may face as we enter into this New year. But as I was writing this this year's article, and reflecting on some of the work and the conversations that I've had with healthcare leaders, one of the things that really, that that dawned on me that was an important element was really around effective governance. In 2023 we had an opportunity to do quite a few strategic planning sessions or engagements, and had done a number of board retreats and it and kind of a critical element, as I reflect back on successes of organizations as they've navigated through the challenges of 2023 is how well health system leaders had worked with their boards and effective governance being really a critical component in allowing these organizations to realize some of the opportunities, but also manage through some of the challenges. My article focuses on 8 key trends that we see facing healthcare providers, but it also identifies some insights that healthcare leaders, as well as healthcare boards should consider as they work together to plan some of these exec some of these initiatives.  

Well, I'm really excited today to have as my guest a prominent CEO Ivan Mitchell. He is Chief Executive Officer of Great Plains Health in North Platte, Nebraska, and I'm also joined today by Ann Blouin, a prominent board member, former healthcare executive nursing leader, and a longtime mentor of me. Very excited to have both you, Ann, Ivan, with us today on the program. Welcome. 

Ann Blouin:

Thank you. 

Ivan Mitchell: 

Good to be here.

Daniel J. Marino:

So I think maybe we can. We can start with you as you reflect back on 2023.Talk a little bit about what you see are some of the things that have been really important to you and to your team. And have you worked with your board to kind of navigate through some of the challengeswithin your market. You know, you're in the rural health space. There'sbeen obviously some challenges that you've had, but some opportunities that you've been able to achieve. Talk a little bit about that working relationship with your board.

Ivan Mitchell:

Well, we'revery lucky. Here is an independent nonprofit organization that's locally owned and operated.We just haveWe got great board engagements.as you've said, we've had some real challenging times in healthcare recently. And soI think that from the management perspective, We've tried to do our best to help our board understand kind of what's going on. You know, sharing that in in 2022over 50% of hospitals lost money and just kind of some of the challenges that we have with theworkforce. Medicare advantage some of the pay or mix changes and transitions. And so I think it's important for leadership teams to keep their boardup to date on what's going on in the industry. There were monthly flash reports that shared how hospital financials were doing and just making sure that that's out in front of your board, so that they canif you make a recommendation toward them that they have a good understanding of what'sout there, and what the situations are that we're dealing with right now per second. 

Daniel J. Marino:

Yeah, no, I absolutely agree. I keep in the board engage and using them as a as a resource is key, and you've been on both sides of the fence, you you've been a a healthcare leader for a number of years. And now you're on, you know, at least 5 provider boards.What do you see askind of the success, Ormaybe the role of the board member in supporting the healthcare leaders. As we're navigating through these challenges.

Ann Blouin:

I think that's a great question, Dan, and I think Ivan sort of laid out the importance of board engagement. One of the biggest challenges I'm seeing in boards is being able to balance the focus on the short-term challenges, which are many, as you've pointed out in your article.And the longer term strategic planning, where does the organization want to go? It's tough to do strategic planning, Covid sort of put us all kind of gave us all a little slap across the face, and said, Holy cow! You know things are very different now.But the Board's role from a governance perspective is to help support management that do management but support management in their activities in the short-term challenges. Understand themWell, 140pose appropriate questions, but never take the board's eye off the long-term strategic planning. 

Daniel J. Marino:

Right,Sothey're really incorporating them as a is almost a unified front right in the strategic planningprocess. So I want to, I want to focus our discussion today on what I see are 3 really key trends that we're going to have to work through in in 2024. I think the first one is really around Medicare advantage, we saw in in 2023 the biggest increase in Medicare advantage covered lives the biggest growth across the country, I think, you know, heading into 2024. about close to, you know, 55, maybe close to 60% of Medicare eligible patients are eligible. Beneficiaries are involved in some Medicare advantage plan.The second topic that I'd like to talk a little bit about is going to be around medical group financial performance and the impact on hospitals and health systems. And third is the transition and the growingfocus on in in home care if you will.

But before we get to that, let's touch on Medicare advantage. Ivan, you know, within the rural community no secret. There's been a lot of challenges with Medicare advantage. Lot of articles A lot of research has been done. That kind of speaks to, you know, some of the quality opportunities that have come out of Medicare advantage contracts, but a lot of the a lot of the challenges that that's occurring. And for the most part those challenges have really been as a result of misalignment with the plans and creating a bit of a financial challenge for many of the hospitals. Where do you see Medicare advantage going in particularly rural healthcare as we move into 2024? 

Ivan Mitchell:

Great question. I think you've seen a lot of therenowned healthcare system start to make a change, and you see, Mayo Clinic withdraw from Medicare advantage contracts using scripts healthcare. So you know, all medicare advantage.And I think that's going to be a trend that you're going to see rural healthcare was kind of slow to adopt medicare advantage and good for them theyshould have beenyou know. Here we did end up adding tocontracts. And we we're in network with 2 Medicare advantage plans, and we will be looking at options to exit the markets by the end of this year, if we possibly can. So that's I think we're getting out of it.

Daniel J. Marino:

Yeah. And there's a lot that are no, no doubt about that. Has the challenge been, from your perspective,has it been the reimbursement? I mean most of it is that medicare rates, anyways. Or has it been the administrative challenge? Has it been the lack of pre certifications? Do you feel like it's been more of an administrative burden on your physicians and your providers.Where can you, you know, maybe draw the biggest challenge from some of these medicare advantage contracts.

Ivan Mitchell:

Yeah, I think you'reaccurate. We administrate improvement. We have the Medicare advantage. Contracts will say we will pay you medicare rates. The data at our facility is the link with stay for Medicare advantage. Patient is 2 days longer than a traditional Medicare patient.So if you go from an average length to stay from 4 days to 6 days. Medicare pays what's called a Drg. A diagnosis related group.I just increased my cost by 50%, and I decreased my capacity and access.Along with that, you know, you lose money on Medicare patients, anyway, 80 to 85% of the costs. So what you've done is you've taken a kind of a safety net program, and you've added all of the bad behaviors of the insurance company into a program that doesn't meet your costs. And so it is. It has been a drain on us and, as you said, the incentives are aligned and we've seenvery poor behavior from the insurance industry, and I don't. I don't see that changing.  

Daniel J. Marino:

Yeah, no, I agree with you. I think we'regonna continue to see more and morehealth systems back out ofofmedicare advantage contracts. And it'sit'sgonna be interesting to watch, too, because Cms sees Medicare advantage as a big initiative. They want to get out of the thethe position or out of the thethe place of managing a lot of the Medicare beneficiaries. And from a board perspective, though I think it it, I don't know what are what are your thoughts. It seems to me. It kind of puts the board atthe difficult position because they have relationships with the community. You want to take care of these Medicare patients. But yetyou've got this fiduciary responsibility to the hospital. 

Ann Blouin:

Yeah, I think there are 3 areas from a governance or a board perspective that the board needs to be thoughtful around. One is from a patient serving the community. There are a large number of people that when they sign up for Medicare advantage they either just pay attention to the TV ads, or they look at the price, and they look at everything being included. You know, it sounds so good from a cost perspective and out-of-pocket cost. And so people don't realize when they sign up for medicare advantage exactly what they're getting and what they would not be getting compared to traditional medicare fee for service. And it's a complex thing that that, frankly, is not very well understood and explained to the to the average person in the community. So that's one area is the disappointment and confusion that people have.  

The second area is from a legislative standpoint. State and local government officials, I think, can be called upon to Ivan's point to try to leverage, to understand fairness and equity in payment structures. Because the problem is that if you're losing money on every single Medicare advantage you can see why Mayo and others, want to, you know, get out of it. So leveraging relationships with local legislators, I think, is one strategy the Board can adapt.  

And then, thirdly. I think that a careful understanding of what will happen with people who are in Medicare advantage plans from the Board's perspective. What happens to those community members? Do they are they able to get back into a Medicare plan. How do they do that? It's not. It's not something that's easy to do. So there's some mechanical pieces that I think obviously the health system gets stuck with frankly, the denials of claims are very significant, and to Ivan's point consumes a lot of administrative time.  

Daniel J. Marino:

A lot of administrative time, and, like, you know, as you both mentioned, you don't make a high margin Medicare patients, anyways, in some cases it's even a loss. So when you have the merge administrative burdens that it even makes it a little bit more challenging.  

If you're just tuning in, I am Daniel Marino, you're listening to value based care insights. I am here today talking with Ivan Mitchell, CEO of Great Plains Health, and Ann Blouin, board member of many health of many boards provided boards. We are talking about the importance of effective governance, and navigating some of the headwinds or the challenges that we see in in 2024. It kind of building on Medicare advantage, and the challenges with or the implications to the financial performance of hospitals and health systems.  

Another trend that we're going to see in 2024 is the continued obviously employment of physicians by hospitals, maybe even by private equity and the competition with private equity. But hospitals, they're going to continue to look at the financial performance of their employee medical group. Many hospitals in 2022, 2023, focused on tightening their belt right reducing some of their cost structure, trying to right size the ship, so to speak. There certainly was a focus in 2023 about improving that financial performance. And we feel it's going to continue as we move into this new year, Ivan, when you think about where your group is, and maybe other rural healthcare providers as your employing physicians that are part of your community. Where do you think the biggest opportunity is, is it in maybe the compensation structure? Is it in renegotiating? Some of your professional payer contracts? Is it maybe creating access and efficiencies for your physicians and any anything that you can draw on.

Ivan Mitchell:

Yeah, this is challenging topic. I think that we talked about how Medicare advantage had misaligned incentives. And so I think the key with your physicians is, you need to make sure that your incentives are aligned. I think, ensuring that I know that the position has kind of a panel. a seat at the table, but you know, if the hospital does well, they do well and have some performance based incentives hooked into that. And I've noticed every time we've done that here with our physicians, you know, we'll typically bring them on a guarantee for so many years. And after that practice is built up. When we do a production quality incentive. Every time we move someone into a position to where our incentives are aligned, that that behavior follows. And so I think that's always the best opportunity, I think, of the medical group side. You know, we have a real labor issue, and you know we II don't know the country that you look at how many people try to get into medical school. They can't get into medical school, and the amount of under supply that we have with physicians. I shared that I worked at healthcare.  

Rob Allen was the regional VP of the time. He's currently the CEO of the Company, and I was listening to a to a podcast he was on. And he said that they're in Idaho, Utah, Nevada, and Colorado, Montana. You said, if in around healthcare hires, every single medical graduate from those 4 States or 5 States. it will not replace the supply of those positions that will be retiring. And you know, in around healthcare. They're in Colorado. You have UC health, you have banner. You have all these other organizations that are there. So I think the financial performance of simple, simple economics supply and demand. We're going to see some additional foreign trained doctors that we need to recruit hopefully. That will increase. But it is very frustrating. You have your best paying jobs in your country. We are feeling and scenario that we have in place, and I think the financial performance is going to continue to deteriorate. 

Daniel J. Marino:

Yeah, great point. And I'vespoke many times about the lack of supply. Absolutely. It's contributed to access challenges that we'vehad, you know. I'm sure, in your organization as well. But I'd love your point on aligning incentives, and I'm a firm believer of that right. Have physicians at the table partner with the physicians, create a structure that aligns the incentives. Ann, when you, when you think about it from a from a board perspective. Talk a little bit about that alignment. How could the board support? That Is it around, maybe supporting, creating that stronger alignment with the medical staff. Is it making sure that that physician leadersare integrated in in some form or fashion within the board structure. Any thoughts come to mind?

Ann Blouin:

Yeah, 3 areas one is, I totally agree with Ivan and you, Dan, on the alignment. And I think transparency in that alignment so that they understand exactly how they're being paid, what they're being compensated for, what the productivity standards are. I think that's critical, so that there isn't a feeling of secret secrecy, there is a feeling of trust. 

Secondly, is, I do believe, physicians should be on boards. I think that having a physician, one or 2 physician representatives on a board depending upon the size of the board. who are well respected in the community. I think that is a critical aspect of that alignment and trust and developing respect. 

And then the third area is, the board can help by asking questions around. How can we reduce the hassle for physicians, administrative hassle the managed care documentation hassle that physicians experience. Obviously lots of health systems have begun to use more effectively advanced practice providers, physician assistants and nurse practitioners to expand. The physicians reach and effectiveness and have those advanced practice providers see lower acuity patients, so the physician can concentrate his or her efforts on higher acuity activities. That makes a lot of sense. I think use of telehealth is a is a question the Board should be raising in areas, as Ivan points out, like psychiatry. Where there are, there is a critical nationwide shortage of psychiatrists, and has been for a long time. So I think, not only looking at the supply side, but looking at the demand side. What can we do? As people are aging as the baby boomers are getting older and older and need more physician services. What can we do to assist with that demand? In addition to continuing the recruitment and retention activities on the supply side.  

Daniel J. Marino:

Yeah, I agree with you. I think you know, as we pointed out. The supply of physicians of providers in general. I think we're a long way from increasing that supply in order to meet the demand. So the only way that we're really going to be able to do that is is, we have to incorporate innovation. We have to incorporate technologies. Frankly, we have to change the care model right? That is, allowing us to think a little bit more innovative on how we can deliver the right level of care to patients.  

Which kind of brings us to my third topic. Then in in 2023, of course, artificial intelligence, the increase in technology it has, it's created, you know, different types of care models expanded the care models, incorporated technology into the care models. We saw reasonable growth of home based care. That would allow us to kind of manage through some of these challenges. I I believe, as we look into 2024, and certainly related to the aging baby boomers and some of the requirements that they want in their own care and the delivery of that. I think we're going to see things like, you know, sniffs it at the home hospital at the home different types of models that will incorporate different care delivery systems if you will, different technologies and so forth. Ivan is as as a hospital health system leader. Where are you in in in that level of thinking? Is that part of your strategic planning process? Is it? Is it something that you're kind of, you know, taking a wait and see based on the needs of your community. What are your thoughts there? 

Ivan Mitchell:

Yeah, I think you'regoing to see.And moving healthcare to home base care. And II think you've already seen that just from the inpatient to outpatient transition, you know, surgeries where people used to stay a week and go home same day, and really taking care of by their families. So I think you've already seen kind of a transition going that direction.We at Great plains health we had until this year we have home health and hospice. As well as home medical equipment under our umbrella. We still have home medical equipment. We ended up partnering with a company, another nonprofit called better health.They run nursing homes, and we actually transfer our home health and most hospice services over to them.Over the last 10 years we had lost about $300,000 a year in front of the Hospice. You know, it's a small team, 16 peopleyou have one biller. When that biller turns over it'sit's a totally different billing model. And it's very unique. 

Daniel J. Marino:

So home health Hospice care. I mean, that'sit's very specialized, if you will. So yeah, that makes sense. But I but I also feel like it has to be integrated.Right has to be almosta transparent component of your care model.Soyou're not necessarily seeing the challenges with readmissions, andyou know, over utilization of the emergency room, there's a smooth transition from a queue to the post, acute and to the home environment.

Ivan Mitchell:

Yeah, I agree. You know, we were pretty selective with our partner.I've seen places sell toventure capital. The united healthcare. Some of these other areas, and it kind of seems like their model wastaking a loss on home to get them on Medicare advantage plans or or things.So anything you'regoing to see it. We have seen a lot of health systems do the hospital at home model.You know. And I think you'regoing toprobably see some success there. Most of the hospital at home programs have not been extremely successful. They've been very low census. Andyou know, Haven't really done well at this point. But for us it'son our strategic plan. I think, that for organization our size. Our goal is to once we see best practices that are out there to partner and implement those as quick as we can.So that's kind of wherewe've gone. We think we found a a good partner for help, home, health, and hospital services. Well, and we'll keep our eyes open for the for the next transition best practices that are out there. 

Daniel J. Marino:

So, Ann, as you know, as as a nurse and as a former nursing leader. You know any any quick thoughts on home based care. You see, this is a good thing?

Ann Blouin:

Yeah, yes, I do. And I just was at. I'm on the I Chi Board Institute for Healthcare Improvement Board and went to an innovative session on hospital at home that was conducted by Kaiser Permanente, and Mayo, and it was fascinating. I don't think there's going to be a large super large volume of patients that will qualify for hospital at home. They are selective clinically, certain types of patients are better served, but they may be served in a sniff versus at home and during Covid, one of the boards I sit on, which is a skilled nursing facility Company and assisted living, actually took highly acute hospital patients to decant the emergency departments and the and the critical care units, and became much more acutely focused in the skilled nursing area, upskill and train. So I think there is something here. Cms is pushing us toward this as an industry, because they want to reduce costs. They have a you know they have an interesting perspective there, and their measurements are beginning to look at continuum based measures as opposed. You know, population-based as opposed to all acute care core measures. 

The last thing I'll say about that is that the board needs to understand may need an investment because hospital at home doesn't come without expenses associated with those support services. Whether that's supply chain, human resources. When you're in the hospital, you can reach around and grab another physician or nurse and get some things done very different. If you're in a home environment.  

Daniel J. Marino:

Sure, absolutely. Well, Ivan, Ann, this has been a great discussion, you know never long enough. II we certainly can talkfor quite some time around a number of these issues.And butI think one of the key things is, as you both brought out. The importance of having the healthcare leaders working with their boards and the board supporting the healthcare organizations is just is just critical.It'sgoing to be an interesting 2024. I'm looking forward to see how things move forward and where our industry goes. I want to wish you both a very happy and prosperous 2024. Thanks again for coming on the program. 

Ann Blouin:

Thank you.

Daniel J. Marino:

And for our listeners. I want to wish you all a healthy and prosperous 2024. And until our 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

With post-acute care, providers face various challenges, ranging from reimbursement struggles to meeting the evolving demands of an aging population. Hal Katz, a partner with Husch Blackwell, lends his expertise to shed light on how post-acute providers can navigate these challenges and advance into value-based care (VBC). Gain insights on transforming post-acute care models, establishing integrated networks and how providers can flourish in the VBC ecosystem.

• As providers transition into value-based care, a primary obstacle is to organize post-acute care providers into collaborative networks that prioritize cooperation and integration.
• Post-acute providers, as they move towards value-based care, must navigate diverse obstacles such as funding, payer reimbursement, employment considerations, and effective patient care management.
• Under private equity, a successful integrated network requires payer contract alignment and firm partnerships with health plans and acute care providers.

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Daniel J. Marino: 

Welcome to Value-Based care insights. I'm your host, Daniel Marino. In today's episode I want to spend some time talking about value-based care, as it relates to the post-acute environment, post-acute providers, definitely have been challenged over the last number of years. And I think most of the challenge really comes in in the level of reimbursement. Most acute providers are have contracts with either Medicare or Medicaid. Few of the commercials but they're really challenged. All of them, I think, are under some level of financial pressures. And yet they're such a critical part of the value based care, ecosystem. Especially as we start to see. A number of retiring baby boomers who are who have some level of post-acute needs. And out of that. We're seeing some real changes to the care models. So, for instance, many of the baby boomers really want this at home care. So we're starting to see some of these resources shift to more of a sniff at the At home model, if you will, or a hospital at home or home health, you know, really picking up steam, but all of which has a significant value proposition to it and supports value based care. But the question really comes down to how you structure these arrangements in such a way that it allows the post-acute providers to maybe share in some internal resources to leverage that level of expertise, and just to create more of an integrated model and delivery of care. 

Well, I'm really excited today to have a guest with us. He's been on the program before. A great guy. I've worked with him very closely on a few different client engagements. Hell, cats. Hal is a partner with Husch Blackwell. He leads the healthcare practice, and works with number of organizations around the country very knowledgeable in in this as well as other aspects of Provider Integration Network. So Hal, welcome to the program. 

Hal Katz:

Dan, always great to be with. You, always love the chance to be on your show.and of course, to work with you out in the industry. Thank you. Thank you. Thank you. 

Daniel J. Marino: 

Well, thanks, Hal, for that. I appreciate it. So in in, in working with some of the post, acute providers, you know, and especially as they're giving consideration to moving into value-based care. What are some of the challenges that you're seeing?

Hal Katz:

You set it up nicely, Dan. the points that you laid out are definitely some of the same things that I'm seeing in terms of challenges, be it funding and reimbursement, staffing challenges, complexity of the industry, how that's changingas well as the conditions that patients are experiencing. And then, lastly. patients are becoming very picky. What? Where they want their service, how they want their service. Sothe it'sa very competitivemarket lots of pressures within the space from payers, health systems and the consumer individual consumer. 

Daniel J. Marino:

Yeah. And it's such a critical component of really the care model. Right? So especially when you seepatients who have some level of an acute care visit right? And they're getting discharged. Many of them are being discharged to some level of a post. Acute facility, whether it's skilled nursing, or a senior level facility, or even a rehab facility, so that integration becomes so critical, and I see such a divergence, if you willon the different care models. Right? So there, there's that lack of true, integrated clinical care thatthat's occurring between the post-acute environmentand the hospitals. Are, are you seeing as these networks are starting to be formed? Or maybe this is the reason why these networks are being starting to be formed, to create a little bit more integration, a little more synergy between the post and queue providers and the queue care providers.

Hal Katz:

Dan, I am, for all the reasons we've just laid out.These providers are having to identify the other types ofcare support needed to get the patient what the patient needsto ensure that there are these smooth transitions of care from a more acute facility to the post-acute setting. They can't do it on their own. Historically, that'swhat's happened. They've just tried to go out and hire people to provide those services in house and they've looked across the healthcare space, and they've seen this network model. They've seen how ancillary providers it be therapistsand other social services have been pulled in through independent contractor types of arrangements, to help manage the needs of the patient and to meet the quality standards that are that are expected for the patient outcomes. And that model has been successful. So now we see the post-acute space experimenting with networks clinically integrated networks.I would say. We'reon the earlier stages of that model. But we are quickly seeing markets across the country have more and more activity using that CIN approach.

Daniel J. Marino:

So when and I am a I'm a huge proponent. As I've talked about in this program time and time again huge proponent of integrated provider networks and clinically integrated models. II just think, in my experience I've seen so much value coming out of that when you have the providers come together to really begin to efficiently manage patients. It reduces the cost of care, produces some incredible, incredible outcomes.  

When we look at forming these clinically integrated networks in the post-acute space where are they starting. Is it home health providers coming together to form a home health cin? Is it the skilled nursing facilities coming together to form a cin. Or maybe it's a number of the post-acute providers coming together to find a to almost produce a very longitudinal based cin. Where are you seeing the starting point? 

Hal Katz:

Dan,It's really market specific, I mean you,you know that so well on health care. You see, in one market you've seen one market. It depends on the sophistication of the players in that market, the degree in which they? They have a managed care market, be it Medicare managed care, Medicare advantage specifically. The acopenetration, be it Medicare or otherwise. And what types of value-based arrangements the hospitals are entering into in that market.So it really depends. We can see situations where the hospital, the health system is actually the convener for a cin to aestablished, fairly sophisticated post-acute care provider leading the way to bring in other post-acute care providers to create the network and identify what other supporting providers should be included as participating providers in the network. 

Daniel J. Marino:

Yeah. Well, you, I mean, you clearly have to have one anchor organization right? That that has the vision and is driving a lot of it. And as you mentioned, I mean, I think you know hospitals are in a unique position to possibly do that. Are you seeing private equity getting involved as the catalyst to creating these networks?Or is it really more of the post to queue providers? Or, you know, maybe the hospitals kind of leading the way?

Hal Katz:

I do have at least one example of private equity helping facilitate a lead agency created network. So the agency, I mean in in this particular situation, there's a lot of alignment with the players. Particularly the a health plan who'svery interested. A national health plan that sees the value of a clinically integrated network focused on thissector and then the post-acute care provider having a private equity investor that wants to fund the creating the creation of the network. And in this situationthere's only a fewpost acute care providers that will also be an owner of the cin. But there is that opportunity to invest. There's really 2 opportunities. They caninvest and participate as a provider, or just participate as a provider.

Daniel J. Marino:

And that's an interesting, interesting model. Because, you know, as you know, it's expensive to create this right? I mean, you've got to build the infrastructure and the infrastructure supports a network and supports the performance. Many post-acuteproviders theydon't have the funds who invested. They don't have the reserve. Soyou know, in my mind, having some level of private equity does come with some opportunities. But I think it also comes with some challenges, and that's where I guess the legal component comes into place as you're starting to structure it.

Hal Katz:

For sure.for sure, negotiating those transaction documents. Governance reserve powers becomes the main focus. When structuring that relationship with the investorrelated for this particular scenario on the capitalconsideration, it helps. When you have a an eager health plan. You know. Often they willbe willing to put up some capital. They will also be willing to pay a per member per month reimbursement rate, so that there is some real revenue that starts to flow immediately into the cin, based on the number of attributed lives in a particular market, so that that helpskind of spread both the risk and the negotiating leverage with the private equity investor. It's not all on them.The cin is also bringing a payer to the table for day, one which you know frankly, is not all always, or even often, the case. Usually you have to build it and hope that they will come in the cin world. But in this particular case, and I think there are other opportunities across the country. You have health plans that are so,They see such value in this sector that they're willing to help facilitate the development of the cin on day one. 

Daniel J. Marino:

If you're just tuning in, I'm Daniel Moreno. You're listening to value-based care insights. I'm here with Hal Katz partner with huschBlackwell. And we are talking about post-acute strategies to advance into value-based care. And I'mgoing to build on that Hal because I think it's an interesting point that you just brought up. One of the big challenges the cin have is to create some type of a tangiblecontractual arrangement with a payer, right? So you can start to get some level of dollars and some revenue flowing into the to the cin. I think you'rethe structure of aligning with the payersbecomereally important. But I think it's also a challenge, right? Soas it's sort of the chicken and the egg. Right? Do you build the entity first and create the infrastructure before you have the contract? Or do you create some level of contract that allows you to invest in the infrastructure. Where are you seeing that really come into play?

Hal Katz:

Again, It's market by market. If there is a market where there is a good relationship or an existing relationship with an acute care provider, you know, call it a larger, acute care provider and a health system or not a health system, but a health plan. Starting those conversations. Is there an interest? If we built this, would you, be interested in a relationship? What would that look like? So you have some sense of whether they'regoing to contract with you if you build it.

Daniel J. Marino:

Yeah, yeah, absolutely. Absolutely. And then II can't help but think, you know. So II feel like that's a great approach, becauseit aligns the interests of the health planand then aligns the interests of the post-acute providers, assuming that it's structured right. But I can't help but think that the hospitals would be a little nervous in that regard? Right? Because all of a sudden they're managing that. Sohow does how do you manage that hospital relationship? Do you create? Then, a separate, almost third contractual relationship with the hospital based on alignment, with maybe theirrisk-based contracts or some of their performance based contracts? Or do you almost create a single contracting mechanism across all of the lives? 

Hal Katz:

Great question, Dan, in the in the few situations that I've been involved in the acute care network has leaned on the health plans, contracts withthe Hospitals. At least in these markets. There, there has been confidence in the care that has been provided and the willingness to coordinate without a more formal or structured arrangement. The cin is impacted based on the performance of the hospital. If hospital costsare higher than what they should have been. they can be impacted. So you know, there, there is some risk there. But so far I have not been  I have not seen those arrangements include a direct contractual relationship between the network and the hospital system.  

Daniel J. Marino:

And there's so much opportunity there for the hospital side, because one of the things that we often see isfrom the hospital perspective. Their readmission rates, visits to the er, you know. Some of that comes as a result of a lack ofclinical efficiencies that occur within the post-acute arena.So by having them collaborate, there is a direct opportunity there. But I guess it really comes down to how you how you create that alignment and who the partners are. 

Hal Katz:

And Dan, if I could just add, I mean there is, you know, almost an equal financial slash, economic opportunity for acute care providers to align witha health system. If that health system hasit's own aco, its ownvalue-based care model that's large enough to support this kind of effort. It can have the same kind of financial benefits as what we're talking about with a payer.

Daniel J. Marino:

Yeah, II agree with you. I agree with you. The post acute environment is heavily regulated, are thereyou know you. And of course, when you build a cin. There are also some regulatory impacts, right related to Ftc requirements and legal aspect around clinical integration and so forth. Do those change? Or are there other things that need to be specifically focused on in the post-acute environment? Given all the regulatory regulations and the regulatory requirements? Or is it pretty much aligned with the general thinking of clinical integration?

Hal Katz:

Great question, Dan. It'spretty much in line with the traditional issues that we face when creating a clinically integrated network. For any other provider type physicians and across the board, and II do want to emphasizethat point, especially when it comes to the antitrust considerations and remind people that getting together solely for the purpose of getting better reimbursement rates is seen by the Federal Trade commission as anti-competitive. SoI'm even in the early exploratory stage of this kind ofbusiness relationship arrangement we strongly advise the parties to avoidusing that kind of description. For this effort, providers can definitely or competitors can definitely get together to explore how to create a business that is going to improve care, improve access, improve competition, respond to market demands, market pressures.But we don't want to in incorrectly frame it as a way ofincreasing reimbursement rates from payers. 

Daniel J. Marino:

Great point. Great point, Hal. Because I think a lot of folks don't take that into consideration, and at the end of the day. The reason why organizations need to do this is they really do need to emphasize, to increase the emphasis on their value. Based performance. Right? So that's managing cost of care, managing quality, managing efficiencies, managingutilization and so forth. I couldn't agree more so in in, in thinking through that, you know, I think, that the key documents, the key legal aspects, is really thinking through. You know. What's the bylaws of the organization, how you'regoing to structure it. And then I would assume, you know, the participation agreements become really critical, right? Defining sort of the rules of the road? 

Hal Katz:

Exactly, exactly, you know, from the participating provider agreement, as you know, to policies and procedures that are put in place to ensure quality measures are obtained, achieved, and how corrective action is implemented. 

Daniel J. Marino:

Yeah. So when so, I recently had a conversation with ahome health organization, they were interested in in sort of forming their home health. CIN. Their challenge was really getting the groups together right. Cause they saw that there were different levels of quality andperformance. And plus, you know, it was predominantly in the home health world. 90% of the reimbursement comes from Medicare. Now some of that is changing as ma is occurring, but commercials haven't historically played a large role.What are you seeing? As as some of the other big challenges with moving this forward, as you're as you're starting to have initial discussions with either home health or skilled nursing or other post-acute providers as they start to think about pulling this together?

Hal Katz:

There has to be a need, of course, in a need, an opportunity. So again, back to the market specifics. The providers have to feel the pressure that that we've described as being the motivation for coming together to create a more competitive product. If we don't have that then it's then it's tough to motivate to create this kind of arrangement. But I would say most providers are at least aware of this trend that's happening, even if it's not in their backyard. They know that this is happening across the country. In in traditional Medicare, medicare advantage moving to commercial.

Daniel J. Marino:

Yeah, moving to risk based contracts. I mean all of those, all of those areas. And I, and I think I mean you're spot on. You have to define the need, and they have to define the value proposition. Right? I mean, sort of as we kind of say, define. Why do you wanna do this as it takes work and takes resources.

Hal Katz:

To your, to your point, Dan, just toto emphasize that it takes a lot of work socan't just be an exercise. If if people don't really believe in in the value, the benefits that will come fromthis hard work. 

Daniel J. Marino:

Yeah, no, that's that'sabsolutely true. Well, if any of our listeners today, any of our providers in particular areinterested in in moving forward with this, and you know what's the one piece of advice maybe you could share with some of our listeners. Where would they start?

Hal Katz:

Great question, Dan. Well, besides hiring someone like you or me, they've got to do their research. So you know one. They have to understand their own organization. How are they doing? What's happening in their market?There, there are great publications out there that have been created by trade associations and advisors like the both of us, that that talk about these issues in more detail, that is the homework, and then, in all seriousness, fi! Finding the right advisorto at least guide them on the options and helping them determine if this makes sense for them. And if sohow to get there.

Daniel J. Marino:

Yeah, no, III agree with you. And I think doing the research and really getting the groups together to almost create the vision. I know a lot of times when I when folks come to me and they say, Well, we want to start as clinically integrated network. I often say, Okay, have you done any type of visioning, you know discussions with some of your partners to sort of find why you want to do it. I mean, that's the first thing. And if you don't have that commitment, there's no sense spending the money on anything or going any further. 

Well, this is great. I really II appreciate the time. Great discussion. I know it's a it's an area that is of real importance to many of our listeners. I, if any of our listeners or folks you know, who may be listening in now or down the road. They want to get a hold of you, Can you share your email address, or maybe direct them to your to your website or anything in that regard.  

Hal Katz:

Absolutely. easily found on LinkedIn how cats with Husch, Blackwell.Of course. Huschblackwell.com is our website. You can also find me there. My email address is Hal.Katz@Huschblackwell.com. My phone numbers (512) 703-5715. And I'd love totalk with anybody who's interested in learning more about this type of business arrangement. 

Daniel J. Marino:

Well, Hal, it's great. And I would definitely encourage our listeners to reach out. You know Hal has. He's got a great approach with working with providers and any type of these value-based contracting, and certainly setting up the entities. Hal, thanks again for joining today. I love having you on the program. Just you bring a wealth of knowledge andgreat conversation. Really appreciate it.

Hal Katz:

Dan, always great to be with you thanks for including me today.

Daniel J. Marino:

And I want to thank everyone today. You, our listeners for tuning in really appreciate it. And until our 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