Paying for value: Visions for the future
The integrated delivery system that combines payer and provider under one umbrella organization is often held up as the best model for moving healthcare delivery from fee-for-service medicine to value-based care. But there are other approaches. The Leadership Symposium brought together the CEOs of two of the nation’s leading healthcare organizations to discuss their different approaches. The following is an edited transcript of the discussion between Bernard Tyson, CEO of Kaiser Permanente, the nation’s largest integrated delivery network headquartered in Oakland, Calif., and Dr. John Noseworthy, CEO of the Mayo Clinic, headquartered in Rochester, Minn. The session was moderated by Howard Kern, CEO of Sentara Healthcare, an integrated delivery system based in Norfolk, Va.
Howard Kern: Like many things in healthcare, we look at value-based healthcare as a magic bullet. Many of us know there’s no one silver bullet that’s going to solve all the healthcare challenges. Bernard, how is pay for value looked at in your organization?
Bernard Tyson: We’ve always been somewhat different because we are a pre-payment system and it’s a capitated system. In the 21st century, a fee-for-service system is just not the right chassis. We must figure out how to align incentives in very different ways.
One of the most powerful tools we have at Kaiser Permanente is the ability to invest in quality. We give the resources required to our physicians so they have the incentives to make the right decisions for their patients. It’s not an economically driven system.
The second thing is that we own the whole dollar and we’re responsible for all the risk. If you are working inside of a system like mine, my physician partners know when we engage in discussions about the economics, it’s about what we need to provide the highest quality care possible that is affordable and accessible.
For example, no physician is incented to admit a patient into the hospital because the revenue doesn’t flow like that in our system. And so a physician has a choice: Do I provide urgent care or do I provide hospital care? That’s created by aligned incentives with our physicians.
We’re shifting now to begin to ask more questions about the outcomes of care. We are very much focused on evolving our health system to really look at the social determinants of health. How do I move upstream and deal with the behavior aspects of 11 million members. We work with our members to rethink things like how you’re eating, how you exercise, and how you deal with stress management. That’s where I think we have real opportunities. Call it value-based or whatever you want, but we want to take a holistic view of a person’s life as opposed to only thinking about it in the context of healthcare.
Dr. John Noseworthy: We’re going to be looking at how we evolve value-based payment going forward. It raises this political issue of what will happen to the Medicare
and Medicaid innovation group. Speaking as a physician and as a scientist, you have to test innovation to see if it works. My hope is that some form of that will survive.
Bernard and I oversee very different organizations. As much as possible, we would like to advise patients how to predict and prevent healthcare issues, and we do that as much as we can. But Mayo Clinic is essentially a destination medical center where patients who have serious and complex illnesses come when they can’t get an answer somewhere else. It’s a not-for-profit, salary-based system. The incentives have been muted substantially, but the focus on the patient has never changed.
So we’ve been strong proponents of changing from fee-for-service to some sort of value-based approach for a long time. The problem is many politicians and much of the public has healthcare reform fatigue and assumes we’re done. Yet the science of measuring quality is really just beginning. It’s frustrating to all of us—whether you’re primarily population health, preventive, community practice-based or the exact opposite like us, which sees the sickest of the sick with multiple comorbidities.
There’s nothing in the system to attribute those patients appropriately or to risk-adjust them. As we approach the next phase, we urge that we pause for a minute, not stop. Just like anyone doing an experiment, let’s just slow down a bit and see if we can get the fundamentals right. What is the value for our system, whether it’s your system or our system, and what do our patients need? If you don’t get those fundamentals right, you’re not going to get there.
Kern: How as an industry could we do a better job of building that long-term relationship with the patient?
Tyson: One of the assets we have is that our members stay with us for a long time, on average 12 to 15 years. We are heavy on prevention, early detection and early treatment. We try to maximize the healthy life.
We work hard on aging and functionality in aging. And end-of-life care. But probably most important is the trust our members have toward our physicians. Those relationships are very enduring. So our members tend to have a sense of ownership. I can’t think of an initiative that we will start that we wouldn’t have a patient involved in that initiative.
When we decided to take on the initiative of safe hospitals and building the safest hospitals in the country, we had a family member come and talk to us directly about the experience of their child dying in a hospital when he should not have died. That moves it from being a statistic. The patient experience outcome is critically important.
Kern: As we’ve gone through this transition from fee-for-service to pay-for-value, we’ve seen a parallel track of mergers with high-value organizations. Mayo has resisted that. Why?
Noseworthy: We took a different path on this for whole host of reasons. We looked at what we could do to advance the patient-care interface the best. We decided the best way to improve patient care was to share what we know with other providers so they could apply Mayo’s approach in everyday practice.
We have digitized what Mayo does in thousands of situations and created tools for physicians in rural America and small cities and small academic medical centers and internationally. They may say, “I’ve tried this. I’m stuck with this situation. What would Mayo do with their integrated practice?” So a neurologist can talk to our neurosurgeon and an internist about the case.
We’ve used that to knit together a network of likeminded organizations that were driven to improve quality and reduce the cost of care. We don’t own any of these 45 centers—40 of them are in the U.S. Those groups pay a subscription fee depending on their size and the expected use of the Mayo tools.
Kern: Is there a telehealth or a technology connection?
Noseworthy: It’s important, but isn’t nearly as important as the trust that Bernard talked about. In healthcare, it always comes down to that trust. We all get hung up on the technology. If there’s no trust between the nurses or the physicians, it doesn’t work.
Kern: How important is the issue of behavioral and mental health to moving toward value-based care?
Tyson: This is one of our major focus areas. I call it reattaching the head to the body. We’re experimenting with integrating behavioral health services with primary care. We are running campaigns to deal with the stigma of mental health in our society.
We have done studies inside Kaiser in Colorado where about 30% of presenting cases for back pain or suffering the sniffles that won’t go away include an underlying issue that we have to address. We did this experiment of referring them right there to mental health services.
And it is working. It takes out the stigma. The members feel very comfortable doing it. It’s a critically important and underappreciated area of the medical care system. And it has a tremendous impact on the value of care.
Kern: How does research at Mayo get applied from a value perspective, and how do you see that impacting the overall value of care?
Noseworthy: The key at Mayo is to translate research quickly into patient care. We support cancer care research, of course, and are focused on individualized medicine and regenerative medicine. But we also have a center for the science of healthcare delivery.
How do you drive ways to improve outcomes? This research is basically about transforming the practice. We take three to five of the best ideas each year that come from the bench or from clinical trials, that are just about ready to change how we manage care with a little bit of a nudge. We try to get them into practice as quickly as possible so patients get cutting-edge care.
Dr. John Noseworthy CEO of the Mayo Clinic
Howard Kern CEO of Sentara
Bernard Tyson CEO of Kaiser Permanente