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Listen to Optum, UHC and Cleveland Clinic discuss bundled payment strategy
So what we wanted to do today is really focus on a couple things. We wanted to talk beyond just BPCIA, we wanted to talk a little bit about the commercial Medicare Advantage space and Medicaid space and how value-based contracting is really influencing there. And so that's going to be our focus today, and the great news is that instead of hearing from us, we're going to hear from some panel members that are here.
So I'd like to introduce the panel and I think you'll enjoy some of the people that are here. So first, we've got Monica Detweiler, she's the senior director of payment innovation for the Cleveland Clinic. I've known Monica for several years, she and I have worked on a couple things together and she's just got a tremendous amount of knowledge in history in this particular.
Second, we've got Ernie Valente, many of you may have heard him in the sessions yesterday. He's a health economist for our advisory services program, really focusing on a lot of the data analytics. But he goes out and helps a lot of organizations both on the payer and provider side, really think about how they want to align their strategy and develop their strategies.
And then the third person is Carla Parmoon and she's director of bundled payments for the United Healthcare and has been working closely to develop both retrospective and prospective bundle programs with a lot of key providers in a lot of different markets.
So we're hoping that there'll be less of me today and more of a payer and provider perspective.
Before we get started, I want to maybe ask one or two questions here, how many of you have come from payer organizations in the room? Very good and how many are coming from provider organizations? How many are both, anybody both? Or neither. Very good.
So what we want to do, the way we'd like to do this session today a little bit is why don't we do a little bit of perspectives just in case some of you weren't there, we'll try not to overlap very much but there is going to be a tiny bit of overlap with what talked a little bit about yesterday. But our perspective is really think about the payment innovation journey, so whether you're moving down one path or another path on your payment, setting your strategy is an important component.
And you look at this slide and you see things like, oh, network configuration, I'm a provider, why does that matter? In a lot of these payment methodologies, you have to think a little bit about who your partners are because a lot of times it's collaborating between more than just your kind of home base or home area.
So when you think about these things, sometimes you say, oh, whenever they say network I kind of zone out because it's payer. I think when you start thinking about alternative payment methods, you say, oh, I need to think about that as my partners, my downstream partners or my upstream partners.
So we think setting your appropriate strategy, for instance, what is the membership or what are the patients that you're serving? Is there a particular demographic that may lead you to one payment methodology over another reimbursement methodology?
Aligning the right incentive. So again, I would look at this both from a payer and provider perspective, when you think about incentives, if you're a provider, you actually have to think about how do I incent downstream as well? You want to make sure that as these new methodologies are being implemented that you've got the right cadence and strategy and reimbursement associated with that.
So once you've developed your strategy, then you start to move into administration. So many of us, we want to start in our pilot programs, you've got to be able to ... you might have Excel spreadsheets and other things to align to this, but you've really got to think about how you're going to do your payment methodology, how you're going to get the incentives out, how you're going to measure it, not only at the end of the contractual period, but throughout the life of that contractual period.
Because whether you're a payer or a provider, you want to know throughout the program how you are trending against that success criteria. And for several reasons, one, the biggest one being that you want to make sure that if you're seeing a trend that can be addressed early on in the contract, that you still have time to be able to address it. Maybe we put in programs to do some outreach to some of the targeted membership or other areas.
So when we think about, there's a natural extension from moving from strategy into administration and then ultimately to payment. So we look at that as our journey.
This is a little bit of a refresher from yesterday, but our view of the world is that there's really two types of payment models. On the left-hand side, it's really your patient-centric model and what we mean by that is that you are currently in some type of episode or some type of event. I want to make sure that I get the best care and the right care to that patient, all the way through that episode, so that they can have that quality of life that they want as they exit the episode. So it's also affectionately known as bundle payments and episodes.
On the right-hand side, it's more about population based and what we mean by that is there are certain behaviors that we would like to see across a spectrum of a population. So if you are a payer and maybe you're a particular marketplace in a particular line of business that you want to align to, you say, you know what? I'd love to see my influenza shot increased from 65% to 72% and how do we get there across this population?
Likewise if you're a provider, it's looking at do you have a particular employer group or other thing that is driving maybe some requests on where they would like to see some action taken? Are there a set of measures that they are driving towards? Maybe I want to make sure that the diabetic population has an increase in the A1C program compliance.
So there's lots of different ways, but I think the way we look at it, there's very specific, once I'm in an episode, how do I really align to that patient care? And then from a population base, how do I line across a population?
And why this is important is that as we talk today, we don't want to focus just exclusively on bundles. Yesterday there was a little bit of an emphasis on the BPCI, but we want to make sure that we cover both perspectives.
But I'll pause here for a second and I'd like to see how many of you are participating or thinking about participating in the next six months in a patient centric or a bundle program? Okay, a couple. How about population programs, how many of you are currently ... okay, very good.
So with that kind of backdrop and that framework, why don't we get to our experts and let's talk to them a little bit about their thoughts on this? So I think what we'd like to do is we're going to talk to them a little bit about how they define their strategy, first of all, then we're going to move into how they implement it and what some of the considerations and thoughts that you might want to have as you're going to implement a program. And then we're going to talk a little bit about the deployment process. So once you're deployed, how do you operationalize those pieces?
So that's kind of the flow that we will take today. All right, so with that backdrop, Monica, maybe I can start with you. Cleveland Clinic's been around in the advanced payment models for years and years. But there was a process of kind of starting and kind of building a strategy from a provider perspective. Can you talk a little bit about how you guys initially created your programs and what were some of the considerations that you need to happen?
Yeah, so at the Cleveland Clinic we've been operating under various types of alternative payment models for decades now. We do transplants, we do many other payment models as well. But over the past eight or so years, has been a very large focus around value-based care. And so really trying to ensure that we understand what type of value are we actually delivering to those patients? So how are we improving outcomes, improving access at the same time as reducing the total cost of care?
And then on the financial side, pairing that with various financial vehicles, be it pay for performance contracts, total cost of care contracts, narrow networks, bundle payments. And really try to link those two together. So that one doesn't outstrip the other. Because the Cleveland Clinic, of course, we're known worldwide for our specialty care, but we also have a significant primary care practice. And we also have rationalized over the past few years, how do we modify our primary care practice to be more population-based? Meaning keeping Northeast Ohio healthy.
And so also with that strategy, also putting in place to commiserate value-based contracts. So we participate in contracts with commercial payers, we participate in contracts with Medicare Advantage payers, we participate in many of the Medicare Centers for Medicare and Medicaid innovation programs. We are a track one plus Medicare Shared savings ACO and we participate in programs with our states. So there's a pretty large episode program with our state, as well as a very large patient-centered medical home program as well.
So tying those two together and basically, as we make changes in the clinical model, re-evaluating the financial model. And then also where we see opportunities in the financial model, to then tie into the clinical model to see what's possible.
Who did you have to partner with, within your own organization to get these programs off the ground? Who were the key people?
Yeah, better question is who we don't partner with, that is probably easier. So I'm in the finance division, so I report in through our CFO's organization and I probably spend 90% of my time and my team probably spends 90% of our time interfacing with clinical leaders throughout the organization.
So we've structured what we've called a clinical contracting committee, where essentially every value based program flows through this committee and is staffed with leaders in our population health group, leaders in our various specialty areas, government, relations, quality, nursing from a care management standpoint, hospital leadership. And we get together once a month to make decisions, but we're getting together almost every day of the week. Some subset of that group is coming together and we evaluate every single value-based contract for, does this match our strategy, are we able to meet the requirements of that value-based contractor, really have open and honest conversations?
Because it's a big difference if we sign a contract, let's say, for a total cost of care agreement or pay for performance and we're required to do 10% high risk management on that population, versus us being able to say, okay, these are the patients in this population we feel are high-risk. Because that's a much different effort with likely different effectiveness.
And so then we also empower our contract managers with that information, so that they can go back and work with our payer partners on modifying agreements accordingly or bringing forward new agreements. And so also our clinical contractor group from the clinical side brings forth new initiatives that they have or different gaps that they're seeing. And we work with them on business case development, we work with them on trying to structure financial strategies per population, and then drilling into the various payers that we work with.
So this is a very rigorous process and deliberate process that we've taken on, but I will say it has made a difference, because instead of value-based contracting being the realm of finance division or managed care, is seen as an effort for the entire Cleveland Clinic.
That sounds good. It seems like your campus there's a lot of geese hanging around. They were included in that clip.
Everyone's seen it.
Carla, I'd love to hear a little bit, I know you've had a focus over the last couple years on the bundle payment programs with United. Can you maybe talk a little bit about where you thought about just kind of developing this strategy and then maybe a little bit about how you started to then execute and pilot that program?
Sure, so United sort of took a three-prong approach towards our strategy with bundled payments and value-based contracting. Obviously, the first prong of that approach has to do with the member and as a consumer and making sure that they can afford healthcare. In addition to that, we also looked at it from the employer perspective, because if you think about it from an historical point of view, employers would have to rely on things such as the benefit plans or member cost share, in order to limit their costs.
And so this generated an interest in more value-based care, value based types of services. So what we would see was the interest in the accountable care organizations, centers of excellence type of arrangements and obviously bundled payments.
Then we also saw an interest from providers. So that was that third prong approach towards our strategy, which is under bundled payments, they could use it as an opportunity to distinguish themselves in the market. Or it was an opportunity for potential referral sources, things like that.
And then also in many cases, it's an opportunity to introduce them to different types of risk proposals and things like that. So we continue down that path and we've developed both retrospective and prospective types of bundles. And so there's been actually several considerations that we've had to look to as we rolled them out.
And I would say probably the biggest consideration that we wanted to look at is the data. So when you're looking at bundles, the key cornerstone of working with your providers is making sure that the data is correct and that it helps to define the bundle, it helps to define your value-based opportunities and it drives your ability to ultimately transform healthcare.
Thank you. Ernie, so you've worked kind of on both sides of the organizations with a lot of payers and providers setting their strategy. What do you think is ... have you seen any patterns of what has been common? Things that have shocked the organization. So when they get into this, they probably have been thinking one way. Is there anything that has been epiphanies to some of these organizations as they set their strategy?
Yeah, I think first of all, in the sake of full disclosure, I'm an ex health plan guys so I'm far more familiar with the payer side than I am the provider side in the development of strategy. I've seen it done over and over in the payer organizations, and I'm a little bit newer to the provider side.
And Monica gave an eloquent response about the providers, the impact on providers. So my response is going to be a little payer heavy.
But I think a lot of these programs get done off the sides of people's desks, I think initially and I would think that payer organizations in my experience underestimate the lift for getting a program like this into place. And I think second, they implement programs because they've read a really good article in Modern Healthcare and they don't really think about how different programs map to different strategies.
So they end up not getting the result they wanted to get, because they're using a hammer where they really need a saw. And in fact, health plans typically have many types of value based programs in place simultaneously, and thinking through the overlap of the programs, and sometimes if they're not thought through clearly, different value based programs can work at cross purposes. And I think that also happens very frequently, although the industry in my experience is wising up and the research literature is helping us along by providing us with good information about what works under what conditions and what doesn't.
So I think really those things, how much it takes to do it and then really what do I want to implement to drive the results that I am hoping to achieve?
Very good. I'd like to pose a question out there to you guys. So when you guys were putting together strategies in some of your programs, any learnings or major lessons that you weren't thinking about going into the program that you came out of thinking? Anybody have any thoughts there? Very good.
Why don't we move? So we've talked a little bit about then setting up your strategy right and collaboration was a common theme that we heard. Not only collaboration internally with your own organizations, but collaboration when you're reaching out to your payer partners or to your other downstream providers that you're coordinating with. And it sounds like that's really a common theme, it's cast a broad net, bring everybody in and constantly provide that feedback and look at those things.
So as we move to implementation, why don't we talk a little bit about that and Carla maybe you could talk just a little bit about some of the different considerations that you guys ran into as you started to implement both your retrospective and prospective ones?
Sure, so quite a few, but we were able to work through them. So I would say on the retrospective side again as I alluded to before, the key is the data and making sure that you are collaborative with providers and health plans on making sure that the data is in fact accurate and that it's in a format that's useful to providers. So that they're able to actually ultimately transform care.
I would also say that it's important to understand that the relationship needs to get off the contract paper and into the processes. So as you look at your value-based programs and I think this has been a theme throughout the program, which is you really need to think about your care processes and things that you can do, in order to improve them and make transformation opportunities that are available.
Some examples on the retrospective side that we looked at was, are there opportunities to evaluate non par type spend? Or are there opportunities to evaluate the type of spend that you might see with one particular specialist, that might have an impact on rates and things like that?
On the prospective side, it's important to think about and there's multiple programs out there, but on the prospective side a provider is in fact taking risk for a prospective bundle. And so when you're thinking about rolling out programs such as this, you obviously want to make sure that because they have risk, you want to make sure that they have the right licensure requirements. So as a provider, you're going to make sure you know you have your right state requirements and that you have the appropriate licensure that's needed for that.
In addition to that, you're also going to want to give some consideration on how the claims are going to be paid. And so again, there's multiple different programs out there, but if you think about it from a health plan perspective you want to give consideration, is this claims delegation or is this not? Because you do have some providers that will be paying downstream claims, so that's something else you want to think about.
In addition, when you think about prospective bundles basically you take that historical data and you roll it all up into one particular payment rate and so you want to give consideration as to how that impacts member liability. Because if you have a bundle that's in place for 90 days, how is that copay going to impact the member? How is that coinsurance going to impact that member? So you're going to want to give a lot of consideration to the regulatory elements of the whole program.
And then lastly I would say is understanding or ensuring that the member understands the impact that they're going through. Because I think throughout this conversation or throughout these different breakout sessions, what we're learning is that it's more than just the pair, it's more than just the provider. But we really need to consider the member and the role that they play in the transformation process for healthcare.
And I think what I've seen, both of your organizations are very patient centric in the way you're looking at implementing these things. And I just kind of go back to my own experiences as a patient or family members as a patient, having the amount of information in front of me just allows me to make a better choice. Now I still may make the exact same choice that I did before, the closest hospital is maybe the one I go to, but at least I had an opportunity to make that evaluation and kind of choose from there. I think those really important parts.
So Monica, yesterday we talked a lot about the BPCIA advance program, not 2.0 but the advanced program and we had a focus kind of on that. But I know you've done a lot of work on the commercial side, so as you were implementing with different directors of employer and even different payer relationships, what did you find in ... this could be across the board, doesn't have to be bundle specific, what did you find were some of the differences between like CMS and in the commercial and what were some of the drivers there?
So let's take bundles first. So with the CMS BPCI advanced program, although it's called the bundle payment, this the same with oncology care management program from CMS, is that although it's called a bundle payment program, is really a mini cap. Because there's very little that's excluded from that 90-day period in BPCIA, as well as BPCI classic but BPCIA is even more extreme. And then also for oncology care management, which is a bundle, but there's very little that's excluded for that six month period that bundle runs for.
Whereas on commercial side, you're very deliberate as to what's really attributed to that index event that's driving the bundle. And so you can say this is a bundle for cabbage and this is the care that's related to the cabbage procedure. These are the types of complications that we, the provider, should take risk for because if a patient develops these complications within a certain time period, it's assignable back to that original index period. So very different philosophies, although they're both called bundle payment programs.
And then also with the CMS programs, you're usually benchmarked against yourself with some additional adjustments. Whereas in commercial bundle payment programs, a payer may want to benchmark you against the region, they may want to benchmark you against like peers. And so you may not necessarily be competing to improve your historical performance to current. You may be working to improve yourself to your peers or to your region or some other construct. Or you may already be far advanced of your peers and you walk into a program where there's built-in opportunity. So although like I was saying, both are called bundled payment programs, they're very different.
And so then from a provider standpoint when we're looking at this, we think about what's the implementation? And so from a standpoint of, if this is a, we'll call an inclusionary bundle, meaning just a care that's related to the index event, we're very focused on that service line that's delivering the care and ensuring that we have direct resources within that service line to really be able to support those patients very directly, to prevent those, hopefully those avoidable complications. And help the patient navigate through that episode of care, whether it's a few weeks or a month or longer.
But then on the BPCI side, the CMS side we're doing the same thing, but also we're thinking through, well, let's say zero to 30, most of the complications that are assignable back to the index event are going to occur. And that's really the responsibility of let's say the institute, we're formed into institutes at the Cleveland Clinic so all of our physicians belong to an institute dependent upon the body part that they're treating.
So the institute is very activated in that period, but then day 31 to 90 is really more of a pop health strategy, more of a post acute strategy. So also being able to focus in, do you have the right network of skilled nursing facilities, home health orgs? Do you have the right number of other support personnel to help navigate that patient through that 90? And how do you tie back into that patient's primary care practice if they're with you at the clinic? Or let's say you may need to tie into that patient's primary care practice that's outside of the clinic or outside of our clinically integrated network.
So the implementation from a care model standpoint starts to look very different between those two programs.
Very interesting. Both of you have mentioned data as being a critical component, data helps you set your strategy, but then once you enter in your strategy, there's a lot of data that can help you then figure out, where do I really focus the laser pointer?
Ernie, if you don't mind, maybe I could just talk to you a little bit about, what do you think are common data things, evaluations that organizations should take? And maybe give perspective of both from a bundle and from a population.
Sure, I think again in the philosophy of designing a value-based payment program that truly addresses the business impact you want to have, evaluation of the implementation of those programs flows naturally from that. So as you mentioned earlier, you may want to implement a P4P program to get your Medicare stars numbers up. So understanding and measuring the ongoing impact of your P4P program on those component measures would be a natural outgrowth of that.
Similarly in a total cost arrangement, I believe the philosophy there typically from a payer perspective is to set kind of a bogey out there for the provider and say we don't care how you get there, but get there. So understanding the dynamics of that and making sure that there really is evidence that providers are shaping their behavior to achieve the cost containment that you expect to see from a total cost kind of contract and not just benefiting from a risk shift or volume change or that you've negotiated a better price with a facility they use and lo and behold, now they're hitting their numbers. You really do want to see evidence in that activity that they're reducing some of the avoidable events that you hope to see them reduce.
And with a bundled payment program, for example, that's very targeted. It's easy to see the impact on cost, even if it's a prospective program. It's by definition included and if it's a retrospective program, you can see over time the changes in cost, in the context of a well-designed episode. But more of what you've got to look at there is am I having some indirect impact that I'm not aware of, that overall globally is impeding my overall cost reduction?
So for example, the old volume, it drives volume, which is a criticism you hear in bundled payment all the time. Yeah, you're paying less per unit, but that's motivating providers to do more units. So you need to keep kind of unintended consequences under guard also.
Very good and you mentioned about defining programs. I'm from Dallas and in the state of Texas, we're finding that the state Medicaid program is not necessarily dictating how you get into these programs or what programs you necessarily get into. They just want you to participate.
And we're finding that some organizations, both on the payer side, the MCO side as well as the provider side, they're saying, hey, are there programs that you've already put in place that we can leverage so that we're not going to reinvent the wheel for a completely different line of business? So it doesn't mean that you can just take them, dust them off and put them in place, but there are lots of foundational pieces that can move from one program to another. And so as you're developing and moving into other regions or lines of business, you might want to look for those opportunities to see what you can kind of repurpose there as well.
All three of you have talked about the importance of patients and Monica I'll tell you, I've heard you speak several times and one of the things that I have appreciated the most is the focus that the clinic has had on really defining that patient centric care that is out there, during the implementation, can you talk a little bit about some of the different components that you put in place to help those patients kind of move through those programs?
Yes, so if I could talk a little bit about how we separate the care model from the market. So as we enter into these financial programs and we modify the care model, we try to ensure that the care that the patients are receiving is as much as possible payer agnostic at the point of care.
And so with that, we have many layers within our care model that help enable us to do that, but then at the same time, be able to serve the various needs of the various contracts we may be in. If it's a bundle, if it's a total cost of care, pay for performance, so on.
And so we at the Cleveland Clinic have what we call and many people call, care paths, and so for various disease states there is a care path that's defined, that's really understanding how should patients progress through the care model, dependent upon whatever disease state that they may have. And this care path is deployed at the point of care, there's key success factors, we have key metrics. Other items that have to be met for the care path, but then at the same time, we understand that each site of care may be slightly different.
And so the people at those sites of care implement the care path, as well as we have of course an EMR and we try to technology enable the care path as much as possible to reduce the burden for the providers, that frees up their time to be able to spend more time with patients. So that's a component.
We also in that care path have also care management that's built in. And so that's really that navigation for those patients to ensure that they have the appropriate education, let's say, preoperatively wherever possible. And then also to be able to navigate that patient through the entire episode of care. And then also if it's more of a chronic disease, we also have chronic disease managers within the clinic that help those patients be able to manage their disease states and that helps with closing gaps for star measures and overall, really helping the patients to stay healthy.
And then also we're very focused in our access, so basically ensuring that the patients receive the right care at the right time at the most convenient location. So we've been very bullish on telehealth. So we have telehealth platforms where patients could just pull up their phone and pull up the app on their phone and be automatically connected with a physician. We strive for it to be a Cleveland Clinic physician at most times.
And then also for follow-up care, being able to ... instead of having frail patients come out to see a physician, being able to maybe do follow-up care via the phone, do follow-up care from a home health. We also have physicians that go out into patients' homes, so we have hospital at home programs, we have house calls programs, so where a physician goes out to visit with really frail, high-risk patients. So we're really trying to envision a care model around what's most effective for that patient to achieve the best health for them as possible?
We're also working quite a bit with data to be able to mine and understand what's likely to happen to this patient if interventions do not occur. And also data to help inform, what is the type of best intervention? I was just meeting with our leader of our spine program and they just completed an AI program that with a very high degree of accuracy, it's like above 90%, can predict how well a patient will do with spine surgeries. So we already see like patients that come to us needing spine surgery about 30% at a time, they really don't need spine surgery. But still even with that other 70%, there still can be variant outcomes.
So we're really working to be able to help the patient be as empowered as possible with their healthcare decisions and also with the physicians and the caregivers to help them navigate through. And that's really what contributes to the success of our various value-based programs.
It's funny, so it sounds like it's a combination of education not only up front but throughout. It's a little bit of hand-holding throughout the process and it sounds like it's a combination of phone support, it's face-to-face and in person and it's even some in facility components that are part of that. And then it sounds like also then technology and analytics provide that. It's a pretty progressive and comprehensive program.
I will tell you just over working with the BCPI advanced program, I think one of the areas that I've been most pleasantly surprised is the amount of attention to care coordination throughout that program, that everybody across the board is really paying attention to. And maybe it was just that I wasn't laser focused in that area, but it's retrained my brain to think a little bit about how that should look. So I found that pretty cool, as we've gone through this BPCIA program.
So Carla maybe you could talk a little bit about, so on the other side, there's this whole ... things like plan design and other things can help reinforce some of the patterns that a patient can align to. So maybe you can talk a little bit about what you guys were putting in place to support some of those things.
Sure, so at this time, we do have some plan designs that are driven based off of value based type of components. We have an ACO driven type product in place that has been in place for a couple of years now.
But one of the things that we continually see is that the employers are looking for predictive costs. And so what we are looking at from the bundled payment side is that ultimately, will drive some benefit plans to support the use of steerage. And so in our benefit plans, we will have steerage where we're supporting the employers to get their members to these high-performing providers. So it'll be driven based off of that, it'll be driven based off of certain member liability, in order to support bundled payments and along those lines.
So we've talked a bunch about the implementation and it's critical to set a foundation. The question I'd say is now you get into execution. I'm in a program. I've got it live, all those things.
Carla, I'd like to ask, what did you learn out of the gate that you go, oh yeah, of course, this is where we need to kind of laser focus in on once the program went live?
So I would say post go live of the program, probably the most important thing is continued communication. And so as the providers were into their programs and they were working with their patients and putting these processes in place, I think one of the things that we found is we needed to make sure that it's not like Ernie was referring to, basically dropping off three piles of paper and then saying good luck. It is to make sure that that communication stays in place so that we can play a role in evaluating opportunities.
And so as went post live, we found that sharing the data and meeting with the providers and discussing with them different ways in which they could perform under their different types of programs was very helpful. So we would go out there and we would use transformation consultants or we would use our directors and share with the docs and the provider groups different ways.
Some examples that came to mind would be we would talk to them about potential site alternatives. Or we would talk to them about non par opportunities, or even just, if you saw some specialist costs that were out of line with the remaining providers, how would you drill down into that?
So we put in place quarterly meetings, so that we could meet with them and talk to them and help assist them in the transformation of their care processes.
Communication plays a role. The one comment that I'll make as we've gone out to assist organizations, the strive for perfection shouldn't get in the way of deploying a program. So in other words, build processes and other things that allow for exceptions so that you can get into the program with a solid approach, and then it can evolve over time, but you're managing those exceptions. And yeah, there may be a 5 or 10% that you managed manually out of the gate, but that's okay because you can constantly tune and refine and evolve that program. So that's another area.
Totally agree with you. Because in many ways, some of these programs are brand new and so working through them, we've got a lot of knowledge and experience from other programs that we can draw from, but a lot of them are in fact evolving. And so it is using that experience that we've built on to help move the program forward and being able to pivot is needed, in order to make the programs more successful.
Monica, could you talk maybe a little bit about the evolution of your program? You guys have been doing this for several years. What were some of the natural areas where it just evolved into and now you're 2x of what you used to look like from a program?
Thanks for that question. So when we first started off, we sent out our RFP and we were like we definitely need some type of technology. Because we can't deal with a stack of papers that's dropped off. We also knew from our experience with the transplants program that managing this paper-based, Excel-based process was just not sustainable, especially when you're looking at scaling.
But we also started off with probably the hardest model, the most difficult model, which is prospective, from a provider standpoint. Might be easier from a payer standpoint, but from a provider standpoint. And we started off there, we used our employee health plan and we had many great learnings around that.
But we also determined really most payers weren't ready at the time to do bundle payments, less do a perspective bundled payments. And when I'm talking about back then, I'm saying 2012.
And so since then, we've pretty much focused on retrospective, that's more longitudinal. We still do prospective, but prospective is more so for our direct to employer program, which has shorter timeframes. And generally the patients are not local market patients, they're generally coming from out of market, so it's easier to segregate out that the care that they're receiving is just for this episode, as opposed to they may also be going to get a physical or something because they're getting that done in their home market.
So I think that those are some key learnings, and then looking here moving forward, we as an industry, we have to look at how do we reduce the friction? Because at the Cleveland Clinic, we're ready to do more bundles. But many payers are not ... don't have the infrastructure to be able to do it, as Ernie was saying, it can be underestimated on the payer side. Then that leads to member patient dissatisfaction, as well as increased administrative costs.
So I think as an industry, we have to think about how can we move this forward across, not just in a Medicaid space sort of Medicare space, but be able to move deeper into the commercial space? And with that, how can we construct methodologies or processes or standards to reduce the friction? Because the friction is very real. When a payer is faced with administering bundles across multiple providers or providers are now responsible for paying downstream claims, those are just things that don't come naturally on a provider side or on the payer side. But I think if we're able to work together and think through how to make bundles even more transactional and maybe reduce down the unit of basically processing, just like with registration and eligibility or just like with claims, I think that's the next evolution that needs to occur to be able to have more wide scale adoption.
Perfect. Ernie, I'd love to hear your thoughts. You talked to a wide range of organizations, what do they see as success in five years? How would they define it?
I think right now, so the bigger issues, I think there are issues on the provider side and on the payer side, let me take those differently. And I'd just like to remind everybody, when you hear Monica talk about Cleveland Clinic, you're like, I'm going to go to Cleveland Clinic to get everything I need done every in the rest of my life. But many providers are not yet where Cleveland Clinic is. In fact, very few.
And so on the provider side I think, some of the things that Monica ticked off like we do this, we do that, like truly understand the contract and what you're on the hook for. And then be able to structure your organization in a way that will allow you to deliver on what you need to deliver on, to make money.
And I think for providers, I think many of them are still struggling to understand how they need to change their organization to be successful under value-based payment. So in five years for a provider, I think for them a couple of things would be true. There are a small number of very clearly articulated value-based payment programs, because right now, every payer does something different and it's not let 1,000 flowers bloom because they've got to cope with all of that. And really at the point of care, providers don't know if you're Aetna or United or Blue. They're just going to organize the way they organize.
I think they've got a clear mandate from health plans, that's uniform across health plans about what value-based payment is. So they understand it, they understand how their contracts are written, so they know what they need to do to be successful under those contracts and they've made the changes in their organization to be responsive to that. Boom, brave new world on the provider side. So I think that's in general where providers would like to be.
Payers, again want uniformity, because payers, a lot of times you'll define bundles differently in different markets because the providers in those markets are at different levels of readiness to accept the model. And so I think payers also especially large national payers, want the uniformity so that they're not devising completely different interventions in every different market and that aligns with the desire of the providers for uniformity.
And that's why yesterday we talked a little bit about the potential for BPCI advanced and really the kind of robust definition of bundles that's new and different from what we saw in the original BPCI. There's some potential for that to emerge as a national standard in the same way that DRG has emerged as a national standard, which is really just a mini bundle for the facility component of an inpatient stay. I think there's a lot of pressure toward uniformity, as the government gets its stuff together and makes better models, I think there's some potential for those models to be adopted more broadly.
And then really, again, sometimes like I David said, I'm a health economist, so I'm always talking cost, cost. But apparently quality is important too. I think really patient experience, at the root of all this is the AAA. That's [inaudible 00:51:30]. What we really want, we're not doing these things just because there's nothing more fun to do, we're doing these things because we believe if they're done effectively and efficiently, they'll deliver higher quality care at lower cost that will delight ... healthcare is not always delightful, but at least it will leave the patient with a positive experience.
And I think in five years, I think we can be there or closer to there in five years and I think really that's what everybody wants, is to get to that stage.
It's funny, if you've ever had a chance to see Monica speak she's got this two slide thing that really kind of retrained in my brain. One is just a picture of somebody's knee after a beautiful surgery. But the next picture is the person, looks like a very happy, healthy person riding a bike. And that's just a different way to think about things and I think that's what really all three of you have kind of been talking about with these programs.
So we've got about eight or nine minutes left, what I'd love to do is maybe see if there's questions for the panel in that time and if there's spots that you'd like us to elaborate on, or if there are areas that maybe we didn't cover that you'd like to hear, let's open it up for questions. And I'm going to bring this microphone back to you.
We talked a lot about the bundles and whether it's prospective, retrospective. We also talked a little bit about population health which is more total cost of care per member, per month. My question is, have any of your organizations looked at a hybrid and what I mean by that is do a capitation for a bundle. So for example, for joints, because right now bundles typically, even those risks, there's still fee-for-service. You're only going to get paid whether or not you perform that procedure.
And so if you have an entity that may not be able to take risk for an entire population, but they're really good at a specific DRG, do you see that coming in the future as maybe morphing the bundles into a cap for a particular?
So as I stated, at the clinic, we have an ACO program, we also have around a half a million lives that's in some type of value-based program. And so as I was saying also before is that we like to have the care be payer agnostic as well. So on a care model side, the care is payer agnostic but then internally within the clinic what we are driving toward is really to bundle-ize as much of that care as possible to be able to set those budgets to understand, are we really hitting the right targets around total joint replacements or around managing a diabetic? And so thus, we use various grouping methodologies to help us with that.
And so we don't necessarily use the BPCI programs to help with that, but we use other models like Prometheus and other ones to help us understand what's our internal spin and what type of opportunities do we have and what are those potentially avoidable conditions to drive down the total cost of care?
Because when we're interfacing with our clinicians and we sit down and talk to them from a payer language side, saying like, your ED visits per 1,000 was blah, blah, blah, they're like, and? But if we're able to sit down and talk more about this diabetic patient or like your cohort of diabetic patients, it looks like this type of pattern is happening. It looks like these types of complications are happening, it looks like this type of utilization is happening. That's when we're able to better engage with the clinicians to actually start working on care redesigns throughout our system, along with our partner networks as well.
And I would also say we work closely with our ACO team because of that. And so we think that a natural driver to support ACO success is the bundled payments. And so providers who have ACOs ultimately may choose the bundled payment providers because those costs are predictive. And so we agree with your comment and we definitely see that as one of the things down the line.
Yeah, thanks a lot, any other questions? We've got maybe just a couple of minutes left.
So as far as oncology goes with the recent advances and standards of care that happen very quickly, oncologists feel that some of these bundled payment rates aren't updated quickly enough. So how often does that happen and is that reactive to the data that comes out?
Specifically to ... in general, the way that we've approached our rates and stuff like that is we base it off of historical data. And I'm speaking on commercial at this time. So we base it off of historical data and we're still very early in our stages, and so the way that our contracts are built is, what we've done is we've taken 24 months of data and we've said, okay, this is where you guys are looking at as part of the market. And we derived the rate based off of that.
So I don't know, Ernie, if you wanted to add anything on [inaudible 00:57:26] health?
I think just in general, to be honest, what I see mostly in the market is that we're all working so hard to stand this stuff up. The questions about maintenance like that and change and how are we going to sustain this over the long run are really getting puzzled through as necessary.
And so certainly I think there's kind of the routine, what I'll call the routine updating of rates where everybody gets a fee for service increment. Say you've got to recalibrate and do all that, but when there are really profound changes to the care pattern, that's a much bigger job to do and you've got to include clinical advice and you've got to determine whether the new treatment pathway is really effective. And sometimes that's just waiting for the literature.
And so it's much harder and it doesn't happen as quickly and as effectively as it should, but I think it will as we get more ... if you really think about it, that's a bundled program and most bundled payment programs, even ones that cover multiple conditions are still affecting only a fraction of total cost of care.
And so as we sweep more kinds of conditions and services into what gets covered under bundled payment, your issue is going to become more prominent and I think we'll all focus on it and fix it. But right now, I think it is a little bit behind the curve.
And then our experience has been under the oncology care management program with CMS, which is a six month bundle or quasi bundle. And what we found is that the biologics, of course, the prices swing wildly. Not really swing, they climb wildly and basically you look over the program performance period and you see this.
And then also CMS provides us with information at an aggregate level about other providers in our area. And so we always knew but now we have the data to prove that many oncologists in our area, a broad area of Northeast Ohio, they are referring the patients to the clinic once those biologic costs climb.
And so thus, if we look at ourselves compared to the region, we're a lot more expensive, but the question comes back to, is that the right thing for the patient though? Because if that small practice can't sustain the cost of these high-end biologics, but that biologic is going to save that patient's life, it's the right thing to do.
So I think with any type of bundle that has a significant part B drug spend that has rapidly changing biologics, so you can think about rheumatology, ophthalmology, oncology, of course, is going to be extremely difficult, I think, to be able to set a budget around that. And so that's just from our experience.
I want to thank everybody for their time. I want to thank our panelists too, an awesome job. I just want to remind everybody, we'd love to get your feedback because as we plan for subsequent years and all that, we'd love to evolve and become more efficient, better and all that. So please fill out the surveys, we'd like to hear what you would you like us to change. We'd love to hear what you liked and want us to keep doing as well.
So thanks and I hope everybody has a good rest of the day.