Man­ag­ing ex­pec­ta­tions

Tar­wa­ter talks Med­i­caid ex­pan­sion, ini­tia­tives

Modern Healthcare - - THE WEEK IN HEALTHCARE -

Edi­tor’s note: As CEO of Caroli­nas Health­Care Sys­tem, Char­lotte, N.C., Michael Tar­wa­ter leads one of the largest pub­lic hos­pi­tal sys­tems in the U.S. and faces car­ry­ing out its mis­sion in two states that have shunned the cov­er­age ex­pan­sions of the Pa­tient Pro­tec­tion and Af­ford­able Care Act. With $4 bil­lion in op­er­at­ing rev­enue last year, the or­ga­ni­za­tion owns, leases or man­ages 19 hos­pi­tals in North Carolina—in­clud­ing the 874-bed Caroli­nas Med­i­cal Cen­ter in Char­lotte—and an­other four in South Carolina. Mod­ern Health­care re­porter Mau­reen McKin­ney spoke with Tar­wa­ter about the fed­eral health­care re­form law, other changes afoot in North Carolina’s Med­i­caid pro­gram, and the sys­tem’s par­tic­i­pa­tion in new pay­ment mod­els and qual­ity ini­tia­tives. Here is an edited ex­cerpt:

Mau­reen McKin­ney: North Carolina blocked the Med­i­caid ex­pan­sion that is part of the health­care re­form law. Tell me how your fa­cil­i­ties and the pa­tient pop­u­la­tions that you serve will be af­fected by that?

Michael Tar­wa­ter: I think it is pretty clear that that means there is money that is go­ing to be left on the ta­ble, not avail­able for the ex­pan­sion of Med­i­caid in North Carolina. It is go­ing to be more than $4 bil­lion over the next 10 years. With the pas­sage of the ACA in 2010, provider pay­ments from Medi­care be­gan to be cut and that’s con­tin­ued. And what we see from this point go­ing for­ward is that’s an­other $7.4 bil­lion for North Carolina Hos­pi­tals.

McKin­ney: Last month, Gov. Pat McCrory of North Carolina also pro­posed sweep­ing changes to the state’s Med­i­caid sys­tem that in­cor­po­rate the use of th­ese com­pre­hen­sive-care or­ga­ni­za­tions that will man­age care for Med­i­caid ben­e­fi­cia­ries. Tell me how it might af­fect your health­care sys­tem.

Tar­wa­ter: The gover­nor, first of all, has goals that he has set, which we all agree with. And they would be the things that you might guess: That we would do a bet­ter job of man­ag­ing the care of the peo­ple who are un­der the Med­i­caid pro­gram and try to make the pro­gram more ef­fi­cient, more pre­dictable. The plan that he pro­poses to put in place is that you would have out-of-state in­vestorowned, man­aged-care com­pa­nies come in and take re­spon­si­bil­ity for that care. But we put an al­ter­na­tive on the ta­ble that we be­lieve meets the stated goals that the gover­nor has for Med­i­caid in North Carolina and it is through a com­mu­nity care net­work, a

pri­mary-care driven, provider-driven net­work that would man­age the care of those pa­tients. It is a pro­gram that was pi­loted in North Carolina. There is in­fra­struc­ture al­ready in place.

McKin­ney: You re­cently an­nounced a col­lab­o­ra­tive agree­ment with Aetna.

Tar­wa­ter: We are do­ing more and more to work with third-party pay­ers, and Aetna is one ex­am­ple that rather than just the tra­di­tional provider role that we play as a sys­tem— and be­cause of the depth and breadth of the con­tin­uum of care that Caroli­nas Health­Care Sys­tem has—we are able to play a closer role in re­ally man­ag­ing the care with the payer. And there are in­cen­tives for the payer, the

pa­tient and the provider in a part­ner­ship like this to re­ally try not to just fix peo­ple when they are sick, but to try and keep them healthy and keep them from need­ing those ser­vices that we typ­i­cally as­so­ciate with health­care providers.

McKin­ney: Are there other ac­count­able care or­ga­ni­za­tion-like shared-sav­ings mod­els that you are look­ing at within your health­care sys­tem right now?

Tar­wa­ter: I wouldn’t put nec­es­sar­ily an ACO label or a shared-sav­ings label on them, but in terms of in­no­va­tive ways to work with both pay­ers and en­gage pa­tients and en­gage the com­mu­nity with the goal of im­prov­ing the over­all health and re­duc­ing uti­liza­tion and low­er­ing costs, there are a num­ber of other things go­ing on. We have a sim­i­lar ven­ture with Coven­try, a dif­fer­ent group. One is a large em­ployer group, and one is a small em­ployer group, and I think you’ll see us do more and more of those types of things. From an ACO per­spec­tive, we look at our­selves in terms of readi­ness to per­form the generic ACO func­tions, and we think we are in pretty good shape to do that. We think we have all the parts and pieces.

McKin­ney: And how is Caroli­nas Health­Care par­tic­i­pat­ing in the Part­ner­ship for Pa­tients? Are you part of a hos­pi­tal en­gage­ment net­work?

Tar­wa­ter: We ac­tu­ally are a hos­pi­tal en­gage­ment net­work. We thought that with the size of our sys­tem and the ge­o­graphic dis­tri­bu­tion and den­sity of our sys­tem that it made sense for us to ap­ply. We were one of just a hand­ful of sys­tems that were awarded a HEN con­tract. And we’ve made good progress look­ing at our per­for­mance against the aver­age of the oth­ers.

McKin­ney: Do you think that the HEN tar­gets—a 40% re­duc­tion in hos­pi­tal-ac­quired con­di­tions, 20% re­duc­tion in read­mis­sions by the end of this year—are re­al­is­tic?

Tar­wa­ter: It’s hard to say be­cause I think that HENs across the coun­try are ap­proach­ing this dif­fer­ently. They are cer­tainly shar­ing best prac­tices and ev­ery­body will be ex­posed to new and bet­ter ideas. I think on the read­mis­sion rates we are go­ing to come close. Hos­pi­tal-ac­quired con­di­tions, I think it would be bet­ter to set an as­pi­ra­tional goal that you might come close but not quite get there, than it would to set goals that are a cake­walk. This re­ally stretches the in­dus­try to do some­thing im­por­tant and dra­matic.

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