‘I can tell you our patients are afraid’
“If you think about things from the patient’s point of view, we can better manage people in population segments than we do in the current outdated payment mechanism.”
The healthcare debate currently raging in the nation’s capital is devoid of one key constituent—the patient, according to Dr. Nick Turkal, CEO of Aurora Health Care, a
15-hospital integrated system in Wisconsin. Any conversation around health reform, he said, should center on access, coverage and affordability. Turkal would like to see the debate shift to finding ways of ensuring that patients have access to high-quality care. He recently spoke with Modern Healthcare Managing Editor Matthew Weinstock about the effort to repeal and replace the Affordable Care Act, as well as Aurora’s attempts to retool how care is delivered. The following is an edited transcript.
Modern Healthcare: What concerns do you have for Aurora Health Care and your patient population as the Senate continues working on its version of a bill to repeal and replace the Affordable Care Act?
Dr. Nick Turkal: Obviously, 23 million people losing coverage is a great concern, but I’d like to talk a little more specifically about what concerns us most. The low subsidy levels that exist in the current version of the American Health Care Act are going to make coverage unaffordable for a lot of people. In Wisconsin, we tend to have a disproportionately higher share of older enrollees. We take care of many people who don’t have a lot of means, so the current version (of the AHCA) is very concerning.
The Medicaid cuts are concerning in a different way because Wisconsin is not a full-expansion state. We partially expanded, but that means the subsidies are lower, and it means fewer dollars for taking care of Medicaid recipients.
MH: Can you put that into perspective of what that could mean? Do you expect to see bad debt rise and more charity care? What are the real-world implications?
Turkal: It would be logical to assume that if we see fewer people with coverage or people who are unable to afford coverage that we will end up seeing increases in bad debt and charity care. The other thing that concerns me is going back to people coming to the emergency room in crisis rather than getting the preventive care and primary care that they need. That’s not an efficient way for people to get care.
In Wisconsin, over 50% of the marketplace are at less than 250% of the federal poverty level, so you can see what’s going to happen with fewer people being covered.
MH: One of the other implications in the AHCA is that hospital lobby groups supported the Medicare cuts that occurred in the Affordable Care Act with the promise of more people being insured. The AHCA tries to get at some of that by the higher disproportionate-share hospital payments. Are those sufficient?
Turkal: No. The way the formula would work for those DSH payments, we would not see a lot of benefit, and it would go predominantly to other states. So, it would absolutely not come close to recovering for us what we gave up in the Affordable Care Act.
Now we’re looking at a picture of fewer people covered and lower payments agreed upon for the ACA that are not being restored. Overall, it’s a bad situation for patients and a bad situation for healthcare providers.
MH: You’ve talked about something that’s missing from the current debate—the patient. Can you expand on that?
Turkal: From the patient’s perspective, anything that is done to healthcare ought to address several main areas. First and foremost, it’s coverage and access. People need to be covered and they need to have access to high-quality healthcare providers. Affordability is the next thing. You have seen the statistics of what is happening in the country right now around affordability, so anything that is put in
place needs to be affordable for a large percentage of people; it should not disproportionately disadvantage the poor. And then, finally, we have to provide overall value to patients, and that means high-quality care; it means managing them according to their individual needs.
If you think about things from the patient’s point of view, we can better manage people in population segments than we do in the current outdated payment mechanism. If I had the opportunity to make a recommendation and have everybody in Washington listen, it would be a twostep approach: Stabilize the individual market in the short term, because that protects patients, and then take a look at global reform so that we stop nibbling away at the edges of healthcare reform and do something that significantly helps our patients.
Unfortunately, the legislation as it exists, speaks of patients in the abstract, but these are real people with real issues who need healthcare and I can tell you our patients are afraid.
MH: Afraid of what?
Turkal: Afraid of losing coverage, afraid of unaffordable care, afraid that a pre-existing condition may exclude them from care in the future. And, certainly, if you look at the population of real patients that we care for, so many families are affected in one way or another by behavioral health or substance abuse issues, and some of the changes that propose to eliminate basic minimal requirements in plans could be devastating to families around those issues.
MH: Thinking about the debate that’s going on in Washington and some of the issues you have addressed—affordability, access and this idea of value—how do you approach moving to value knowing that the biggest payer may be cutting back even further?
Turkal: For most of my time as CEO at Aurora, we’ve been about reforming healthcare from the inside. I’m coming up on 11 years as CEO and during that time we have moved our position from the highest cost to the lowest cost and the highest quality in eastern Wisconsin. That formula is what needs to happen in healthcare across the country: higher measurable quality, lower cost. So, we’ve bent the cost curve.
If you look at episodes of care, if you look at commercial populations that we care for, we have become very efficient. There is more efficiency to be had in healthcare systems and we’re anxious to get at that.
In our commercial accountable care organization approach, we have over 90% renewals with the companies that sign up. We tailor healthcare to the needs of those employees. They have seen either flat or single-digit increases in premiums over those past four years.
If you look at Medicare in Wisconsin, the average expenditure per Medicare beneficiary is over $1,000 less than the national average, so we’re more efficient in the way we’re utilizing resources here. I’m anxious to get at this with other populations; we just haven’t grouped them the right way and we haven’t incentivized healthcare systems the right way over the past couple of generations.
MH: Your Medicare ACO has done well too. In 2015, you had $ 5.6 million in savings and about $2.6 million came back to you. What specifically have you done to reorient care in such a way that you have been able to drive that value?
Turkal: The single biggest driver of improving that cost position has been uniform quality across the system. We began over 15 years ago with measuring quality in hospitals and in outpatient settings, incentivizing our physicians and all of our executives around quality outcomes. As we standardized quality and standardized care, the costs have melted away. Then, as we have gotten more sophisticated, particularly in the past five years, we have a uniform electronic health record with Epic, so now we’re able to look at populations, to look at disparities and dig into that data and make things better around both cost and quality.
MH: You must have had some hiccups along the way though, right?
Turkal: Early on, going back about 15 years, I think we did some of the same things that were not effective. We tried to do general education, for example, on diabetes care for our doctors, and what our doctors told us at the time is they know how to do the right care, they need the data on their patients to make it better. So, we reoriented our quality around providing a feedback loop of data to our physicians and nurses and pharmacists so they could act on it.
One of my great sources of pride at Aurora is we have a single physician group across the entire system. That group is responsible for our service lines across all settings.
MH: As you think about how you reimburse your physicians, have you moved away from the relative-value-unit model? Are you looking at more valuebased pay for your doctors?
Turkal: We are. We have a physician plan that allows us to gradually increase incentives for care of populations. We won’t necessarily do that the same with all physicians. That’s part of the finessing of this, to make sure that primarycare physicians first focus on population health. And so, we have a plan that still has a heavy emphasis on RVUs, and as our payment structure changes we will gradually change that plan.
People make the mistake of thinking of this like a point in time or a light switch that you turn on or off around population health, and, in fact, we’re going to be in a mixed model of reimbursement for the foreseeable future.
MH: What percentage of your revenue is tied to an alternative pay model or a value-based model?
Turkal: It’s still the minority of the way we’re paid; 15% of our 2017 net revenue is projected to be in either upside-only or upside-downside risk agreements. Despite that, we’ve emphasized prevention and wellness. We think it’s the right thing to do culturally and the right thing to do for our patients.