On January 26, 2023, Navina Medical Advisor and former director of CareOne, Dr. Timothy Dudley, participated in a panel at HealthCare Value Week along with Anders Gilberg, SVP at MGMA; Hugh Lytle, Founder and CEO at Equality Health; and Kristen McGovern, Partner at Sirona Strategies, who moderated the conversation.
The edited and condensed conversation below includes highlights from their discussion, “Barriers and Opportunities for Independent Physicians in Value-based Care.”
Kristen McGovern: Independent practices are not a single thing. They don't all look alike, and in fact most of them look very different depending on their communities, their ownership, their makeup, their size and any number of different factors upon which a practice can differ but still be considered an independent practice. That's one of the great opportunities here, but also one of the challenges when you think about the building blocks of value-based care and what resources are needed; it may vary from independent practice to independent practice. Let’s start by talking a little bit about the independent practice and physician landscape, what that looks like and how has that changed?
Anders Gilberg: The pandemic was extremely challenging for all practices, not just independent practices. The one thing that perhaps is unique to independent practices is that they don't necessarily carry over reserves year to year. And so the pandemic was very challenging for them. Around May 2020, those practices were seeing a huge plunge in their volumes. So for many of our practices—independent and otherwise—and especially if they were receiving some kind of per member per month payment, value-based care provided some stability during the pandemic.
That was early in the pandemic, and there were some additional challenges coming out of it. We lost a little ground during the pandemic. The benchmarks got skewed in terms of some of the measurements for ACOs and other value-based care arrangements.
Staffing is probably the key challenge and it's related to value-based care in this way. For many practices that want to move from fee-for-service to value-based care, staffing remains the biggest challenge. Value-based care requires a different use of staff—using staff as nurse navigators or care coordinators or things that are not traditionally paid for under-fee-for-service.
Hugh Lytle: We (Equality Health) deal a lot with the small independent primary physicians because they tend to take Medicaid to be able to make ends meet and are generally located in underserved areas of care. 80% of their population is at 100% of the federal poverty level; over 55% of their entire panel is on Medicaid fee-for-service. That's an average of $48 a visit. They have to have 25 visits a day just to break even. On top of that, if they are participating on their own in value-based without our MSO services, they are doing it with over 12 different managed care contracts with different cost and quality targets per contract. And 50% of the membership they have has never even been attributed to their practice; they're getting scored against people they're not even seeing. So it's a pretty challenging environment out there, fee-for-service or value-based, for our network.
KM: Thinking about the independent practice landscape in two buckets— independent practices that have already made the move to value based care, and independent practices that are still doing fee-for-service and haven't made the move but see the promises and some of the benefits—what would you say are the biggest opportunities for those who haven't moved to get started, and for those who have moved to deepen their value based care arrangements?
Timothy Dudley: I think that payers are increasingly willing to be better partners with providers, so there's an opportunity to contact the payers in your neighborhood and just engage in a conversation, if you haven't already. And there's a glide path to value-based care that you can jump on. So you can start with just pay-for-performance and then move slowly into shared savings, and maybe start with just upside and then gradually move to some downside risk and then ultimately maybe even to some capitation.
So starting the conversation with payers is one opportunity if you haven't already. If you're already in a pay-for-performance contract and your group is large enough, then maybe start thinking about moving to the next step.
And information technology has evolved quite a bit, so that might be a partial solution at least to some of the staffing issues. There's a lot of conversation about the digital front door and remote patient monitoring, which will allow us to circumvent some of our staffing issues if we carefully and efficiently adopt some health information technology.
HL: From our perspective, we take risk on behalf of our physicians. So letting the rope out slowly, teaching them how to fish. We start with data and analytics—one of the toughest things is getting the data right from multiple health plans and being able to know what's going on with their given panel.
Technology is critical to getting to the source of truth, because a lot of times EMRs, while important, aren't necessarily giving the right cost or quality targets that actually score with the help plan. And then finally complex support; our whole goal is to help the independent physician focused on the sickest patients.
AG: One of the challenges is that MGMA data [in the 1980s] showed that among practices of all sizes, practices that were all fee-for-service were very successful. Their revenue was among the top. And practices that were almost all capitation were also very successful. It was the ones in between that were struggling because the incentives didn't align. You had a “foot in both canoes” situation, and I still feel that is the case. So the opportunity is moving away from fee-for-service into more value-based care arrangements and making sure that your payer mix can support not just one payer with a value-based care arrangement but multiple payers who would support that. So your workflows can be aligned along with your contracts and payment incentives, and you can thrive both from a financial and quality basis.
HL: Standardization is the only way we're going to make this work. You can't have 20,000 snowflakes out there trying different value-based programs and make this work. So I agree, we have to rip the band aid off at some level and get moving.
KG: Are there other building blocks that need to be in place to start on the value-based care journey? At what point on the glide path do those building blocks come in?
TD: Specific building blocks are pretty well-defined in Thomas Bodenheimer's work, and I recommend that everyone read The 10 Building Blocks of High Performing Primary Care. Engaged leadership is the first one. Looking at your practice, make sure that everybody's aligned. In all of this though, we want to be mindful of the fact that burnout among clinicians is still a really big deal and we have to be very careful about death by a thousand clicks. So everything that we do should be done in a very efficient manner. We want to talk about minimally disruptive medicine, so we have to be very careful as we start down this path that we provide goods and services, that we teach team based care, and that we don't continue to burn out our clinicians by adding more and more tasks.
HL: I mentioned the component tree of how we support the practice workflow technology integration between the EMR and the payer data as well as the ambulatory support. Having the right mindset, having clear goals established, and partnering with someone who knows how payers think.
TD: We've got to have some standardization. We've got to have some standardization of benefits, of quality metrics, of fee schedules. And I just don't see that moving very quickly from the commercial payers especially. There has to be some kind of legislation to say, hey, let's all get on the wagon here. Let's agree on a path forward. It doesn't mean that we all have to all do it the same way, but let’s start down the road, let’s really value primary care and invest in social determinants and equity.
KG: If everything is standardized, where does innovation come in?
TD: That’s a great question. I think you can standardize around the big things that we have evidence for and then you can let innovation emerge around other things. We have really good evidence that in certain circumstances, remote patient monitoring works really well. We have really good evidence that tele-health works really well for behavioral health. So where the evidence exists, let's pay attention. And where the evidence doesn't exist, then you can experiment.
KG: One last question: if I were to ask you where you see independent practices in 3 to 5 years, I'd love to know what you say.
AG: Some of the smaller independent practices are going to be the most able to engage in value-based care. We all know there's been considerable consolidation. The pandemic actually exacerbated that consolidation, but sometimes the pendulum, just as it did many years ago, it swings in terms of consolidation.
We’re seeing practices moving out of some of the deals they made in prior years. They don't want to be part of a larger system where they're told what to do. They want to be more entrepreneurial and to investigate and participate in value-based care arrangements.
I definitely see an opportunity for independent practices, especially with technology and other opportunities, partnering with third parties to support data collection, reporting and if we can improve upon some of the things we talked about today, there is a real role for independent practices and they will thrive over the next 5, 10 years.
TD: I see it as trying to find that sweet spot where practices of a certain size can still feel nimble and entrepreneurial if that's what they want to do, yet have the partnerships to be able to link arms with the appropriate services that they need. I think we'll probably also see increased partnership with the payers themselves, so called provider organizations.
HL: I think the independent providers who are independent today are that way for a reason. And there will be fatigue of corporate medicine. I think the future is bright for independent physicians. They’ve had a rough road over the past five years, but I think good days are ahead.