Category: Provider Network Management

Metrics-Based Management: Using Analytics For Strategy Implementation & Business Optimization

By Joe Naughton-Travers, Ed.M.

If you have great staff and great infrastructure, your organization still needs a strong management team—and management practices—to make sure that organizational plans to deliver great performance becomes reality. To do this, management teams need well-designed, real-time performance metrics. In successful organizations, metrics-based management happens in two contexts: managing strategy implementation and optimizing business operations. The key is to ensure you have the right data and the right analytical tools to report these performance metrics.

Managing Strategy Implementation

The use of metrics in implementing a strategic plan is considered a core element of strategic management built around key performance indicators (KPIs). Simply put, KPI’s are the ‘metrics’ that measures progress towards your strategic objectives, as well as whether your organization has achieved them. Some metrics are a direct measures of success. For example, if a strategic objective is to operate at a 10% positive financial margin, then the KPI for this objective is the margin, which is reported at least monthly. In other instances, you may choose process or proxy metrics that measure progress made in various initiatives to accomplish a particular strategic objective.

There are four important steps to selecting these KPIs and managing strategy implementation:

Step #1: Start with your strategic plan.  It should have a short list of quantifiable strategic objectives, initiatives for accomplishing them, timelines, assignments, and budgets.

Step #2: Select metrics for success. These are your key performance indicators (KPIs) calculated from obtainable data that indicate organizational performance in progressing toward and accomplishing strategic objectives. An effective KPI is specific, measurable, and actionable. Use a ‘balanced scorecard’ framework that includes metrics that report financial performance, customer performance, organizational innovation, and effective internal operations.

Step #3: Create a KPI reporting system. Ideally, this is from a business intelligence (BI) or data analytics software application that includes management dashboards to report the metrics, showing a comparison to the performance trend from past to present. Minimally, the KPIs are reported monthly with the trend data as well as against performance targets. This reporting system and its use communicates the importance of the organization’s strategic objectives and the executive team’s focus on them. As Peter Drucker said, “You can’t improve what you don’t measure.”

Step #4:  Coach your staff to use the KPIs. Engage in ongoing monitoring and proactive management using the KPIs with your executive team and staff. Modify the KPI metrics if needed to ensure progress in implementing your organizational strategy.

Much has been written about the development of KPIs and models for selecting both leading and lagging financial and non-financial indicators of performance. The challenge, beyond selecting the measures, is two-fold: developing the ability to routinely report the measures using data from existing software systems or databases (or expanding current information systems to collect the data) and analyzing the KPIs monthly to develop or update organizational strategies to improve performance.

Optimizing Business Operations

Metrics-based management also plays a key role in optimizing business operations for specialty provider organizations. What exactly is business process optimization? It is the management discipline that promotes efficiency and effectiveness of organizational process—employing methods, policies, management practices, software tools, and metrics to optimize an organization’s activities across the business process life cycle.

Optimizing business operations is critical for provider organizations. All aspects of service delivery (referral, admission, routine services, and discharge or transfer) and administrative operations need to run smoothly. Processes should be standardized to be effective and consumer and staff friendly. Data and analytics are critical tools for doing this.

Organizations that have superior process management performance share a few key competencies—corporate strategy that is connected to performance indicators as described above, process and project management expertise, deliberately designed process models that promote service quality, access to information, support of management for process improvement initiatives, and incentive-focused employee compensation.

It sounds simple. But if business process management is so simple, why do so many organizations have bad performance from bad processes? Author Janne Ohtonen, in an article titled, “Enabling strategic growth and improved performance through Business Process Management,” offered some interesting insights. His list of the ten key capabilities needed to be successful with business process management and optimization include:

  1. Co-workers have confidence and trust in each other
  2. There is open communication between employees and managers
  3. Managers share vision and information with employees
  4. The organization is able to respond to changes in markets quickly
  5. Senior management has confidence and trust in managers
  6. There are efficient communication channels for transferring information
  7. The organization has appointed people responsible for processes
  8. The organization extensively uses information systems
  9. No one has to worry about losing his or her job because of process changes
  10. Managers support changes in processes

How does your organization stack up in terms of using data and analytics to drive strategy and to optimize operations? Your team can’t perform or manage without the metrics to support both of these. In fact, I would argue that, beyond strategy, metrics and metrics-based management competency are the most fundamental ingredients for organizational success for providers in today’s market. Why?

I’ve seen executive teams of organizations with all sorts of other competencies—but with no access to timely performance metrics or the ability to use them—fail to optimize performance. Without real-time performance metrics for your management team:

  • Identification of performance issues is often delayed
  • Organizational performance relative to competitors is more a matter of opinion than a measured achievement
  • The identification of performance problems requires constant observation—and is often anecdotal
  • The “causes” of poor performance are harder to identify (and often the subject of disputes between team members)
  • It is difficult to sort out persistent performance problems and separate “trends” from short-term issues
  • It is challenging to prioritize operational improvement initiatives and investments

I could go on…

If current performance data is not the focus of your management team meetings, it will be more difficult for your team to respond to evolving consumer and payer demands, a rapidly changing health care market, or emerging competitive threats. I liken it to flying blind; the airline pilot without the dashboard.

Key elements of an organization with metric-based, performance-driven culture:

  1. Visible metrics—both customer-centric and organizational—and the data and analytical tools for reporting them routinely
  2. Actionable insights based on rich data and identification of the actions needed to improve performance
  3. Clear team member accountability for specific performance metrics
  4. Real-time performance feedback at all levels of the organization
  5. Targeted coaching based on performance data with individualized goals to improve team member performance
  6. Recognition of great performance
  7. An interactive strategy and budgeting process
  8. Nimble and data-driven service line reengineering and development

So, collect the data and teach staff how to use metrics and analytics to improve your business operations and achieve your strategic objectives. Metrics-based management is one of those “must develop” competencies for health and human service organizations. Organizational performance—including financial, service, quality, compliance, etc.—matters more to the sustainability and success of organizations every passing year.

Merger & Acquisition Volume In The Health Services Sector Up 56% In 2021 Over 2020

The number of mergers and acquisitions in the health services sector for the 12 months ended November 15, 2021 was 56% higher than the previous year. Aggregate deal volume rose from 1,138 deals in 2020 to 1,773 for the 12 months ended May 15, 2021. Aggregate deal value in the health services sector rose 227%, from $62 billion in 2020 to $203 billion for the 12 months ended May 15, 2021. The share of “mega deals” valued at $5 billion or more rose from $11 billion in 2020 to $107 billion in 2021. In 2020, mega deals represented 18% of the total $62 billion deal volume. In 2021, mega deals represented 53% of the total $203 billion deal volume.

During 2021, the five subsectors with the highest deal volume were long-term care, physician medical groups, home health and hospice, behavioral health, and laboratory/imaging and dialysis. Additional details were as follows:

  1. Long-term care: There were 445 deals in the sector valued at $18.6 billion, representing 25% of total deal volume, and 9% of aggregate value.
  2. Physician medical groups: There were 407 deals in the sector valued at $5.5 billion, representing 23% of total deal volume, and 3% of aggregate value.
  3. Home health and hospice: There were 137 deals in the sector valued at $12.7 billion, representing 8% of total deal volume, and 6% of aggregate value.
  4. Behavioral health: There were 114 deals in the sector valued at $5.7 billion, representing 6% of total deal volume, and 3% of aggregate value.
  5. Laboratory/imaging and dialysis: There were 102 deals in the sector valued at $27.1 billion, representing 6% of total deal volume, and 13% of aggregate value.

Between 2020 and 2021, the deal volume doubled in three subsectors: rehabilitation, physician medical groups, and managed care.

  1. Rehabilitation: The 81 deals in 2021 represented a 145% increase over the number of deals in this sector in 2020. The $3.4 billion deal value in 2021 was 408% above the value in 2020.
  2. Physician medical groups: The 407 deals in 2021 represented a 119% increase over the number of deals in this sector in 2020. The $5.5 billion deal value in 2021 was 55% above the value in 2020.
  3. Managed care: The 47 deals in 2021 represented a 114% increase over the number of deals in this sector in 2020. The $7.2 deal value in 2021 was 2% above the value in 2020.

For the behavioral health sector, the 114 deals in 2021 were 56% above the 2020 volume. The 2021 $5.7 billion deal value was 103% above the 2020 deal value.

These statistics were reported in “Health Services: Deals 2022 Outlook” by researchers at PricewaterhouseCoopers, LLP. The analysis is based on merger and acquisition data tracked by LevinPro HC and LevinPro LTC, and through S&P Capital IQ.

The full text of “Health Services: Deals 2022 Outlook” was published in December 2021 by PricewaterhouseCoopers, LLP. A free copy is available online at https://www.pwc.com/us/en/industries/health-industries/library/health-services-deals-insights.html (accessed January 4, 2022).

For more information, contact: Ryan Cangialosi, Senior Director, PricewaterhouseCoopers, LLP, 2121 North Pearl Street, Suite 2000, Dallas, Texas 75201; 347-443-2157; Email: ryan.a.cangialosi@pwc.com; Website: https://www.pwc.com/

Massachusetts FQHC Centers Surpass One Million Telehealth Visits

The Massachusetts Federally Qualified Health Center (FQHC) Telehealth Consortium’s 35 community health center members have conducted more than one million telemedicine visits since the start of coronavirus disease 2019 (COVID-19) in March of 2020. This achievement comes at the same time the Consortium has passed the halfway mark of its Phase II $12 million fundraising goal – thanks to a major grant from the Gordon and Betty Moore Foundation – to attain sustainable telehealth capacity at health centers and address health disparities in the communities served by them.

Consortium data measuring telehealth use between May 2020 and May 2021 show that telemedicine visits have provided safe and convenient access to primary care for communities of color, which have been disproportionately impacted by COVID-19. Of the 767, 234 Massachusetts health center consumers who accessed primary care via telemedicine visits during that year-long period, more than 52% were white, nearly 21% were Black/African American, more than 6% identified as more than one race, more than 5% were Asian/Pacific Islander, and 1% were Native American. Of those identified by ethnicity, nearly 31% were Latinx/Hispanic.

According to the data, the same held true for behavioral health care services. Of the total number of consumers taking part in behavioral health telehealth visits during the same one-year period, nearly 56% were white, more than 23% were Black/African American, more than 5% were of more than one race, 4.65% were Asian/Pacific islander, and less than 1% were Native American. By ethnicity, 31% again identified as Latinx/Hispanic.

Phase II of the Consortium’s campaign is focused on ensuring that FQHCs have what they need to fully develop, deploy, sustain, and integrate telehealth modalities into primary and behavioral care, while also addressing the digital divide in their communities. This includes providing better access to broadband and remote monitoring equipment, increased digital literacy training, peer learning, outreach in communities that health centers serve, and online dissemination of best practices.

Phase II of the campaign launched in the fall of 2020 with $1,040,000 received from an anonymous donor to create skilled bandwidth at nine pilot sites required to integrate advanced, durable, and mature telehealth capabilities into member FQHCs. Another $3.1 million grant awarded by the U.S. Federal Communications Commission (FCC) in January as part of the FCC Connected Care Pilot Program is providing equipment and hot spots for consumer broadband access. The grant from the Gordon and Betty Moore Foundation ($878,000) is designed to increase the number of consumers with controlled hypertension, particularly for African American/Black consumers, and to test the additional value of telehealth navigators and clinical intervention over federal funding of remote monitoring.

The Consortium is a partnership of Community Care Cooperative (C3), the accountable care organization (ACO) that advances community-based care for MassHealth members, and the Massachusetts League of Community Health Centers, the state-based association of health centers.

Community Care Cooperative (C3) is a not-for-profit ACO that leverages the proven best practices of ACOs throughout the country and is the only ACO in Massachusetts founded and governed by Federally Qualified Health Centers (FQHC) and exclusively focused on advancing integrated and coordinated community-based care for MassHealth members. C3 works with its 18 member FQHCs to strengthen health centers across the state, and continued growth enables C3 to better serve MassHealth members across the Commonwealth. To view a list of C3 health centers, click here.

The Massachusetts League of Community Health Centers (the League) is a not-for-profit membership organization supporting and representing the Commonwealth’s 52 community health centers, which offer primary and preventive care to more than one million residents. The League serves as an information resource on community-based primary care to policymakers, opinion leaders, and the media. It provides a wide range of technical assistance to its health center members, including advocacy on health policy issues, support for workforce development, clinical care and technology initiatives, and guidance to state leaders and community-based organizations seeking to open health centers.

The Gordon and Betty Moore Foundation fosters path-breaking scientific discovery, environmental conservation, consumer care improvements, and preservation of the special character of the Bay Area.

This was reported by The Massachusetts FQHC Telehealth Consortium on August 24, 2021.

Contact information: Abby Akoury, Chief of Staff, Community Care Cooperative, 75 Federal Street, 7th Floor, Boston, Massachusetts 02110; 857-302-4261; Email: aakoury@c3aco.org; Website: https://www.communitycarecooperative.org/

Contact information: The Massachusetts League of Community Health Centers, 40 Court Street, 10th Floor, Boston, Massachusetts 02108; 617-426-2225; Email: massleague@massleague.org; Website: https://massleague.org/

Contact information: The Gordon and Betty Moore Foundation, 1661 Page Mill Rd, Palo Alto, CA 94304; 650-213-3000; Email: communications@moore.org; Website: https://www.moore.org/

WellSpan Health & Gateway Health Launch Value-Based Partnership For Medicaid Members

On July 29, 2021, Gateway Health, a Pennsylvania Medicaid managed care plan, and WellSpan Health a health system in central Pennsylvania launched a value-based partnership focused on connecting Gateway Health members with primary care professionals. Gateway Health and WellSpan are proactively contacting Gateway Health’s Medicaid members who visit the health system through emergency or urgent care visits, but do not have a relationship with a primary care provider organization. WellSpan case managers will work one-on-one with the Gateway members to address barriers, such as transportation and cost, to establishing an appropriate primary care relationship. Financial details about the partnership have not been disclosed. The goal is to reduce the number of potentially preventable emergency department visits among Gateway members.

Through this value-based partnership, Gateway Health and WellSpan aim to deliver an enhanced level of care, improve health outcomes, and lower health care costs for Gateway Health’s Medicaid members receiving care at WellSpan’s 200-plus health care locations. The partnership will utilize data insights and value-based programs to proactively manage the health care needs for more than 24,000 Gateway Health Medicaid members living in South Central Pennsylvania.

This partnership expands on an existing relationship between Gateway Health and WellSpan. For the past 18 months, they have partnered together for better maternal care and coverage through Foundations Pregnancy Support Services, a program offering coordinated, comprehensive care for mothers and their children with opioid use disorder. WellSpan partners with other Medicaid insurers to provide this support. However, WellSpan said that the commitment and innovative partnership with Gateway Health has resulted in more than double the number of members enrolled than with any other insurer.

Gateway Health was founded in 1992 as a Medicaid managed care plan. It currently provides Medicaid and Medicare Advantage plans. It covers health care services for nearly 340,000 members annually.

Non-profit WellSpan Health is an integrated health system that serves the communities of central Pennsylvania and northern Maryland. It has more than 1,600 employed physicians and advance practice professionals; a regional behavioral health organization; a home care organization; eight hospitals, and more than 200 consumer care locations.

For more information, contact:

Babylon, A World Leading, Digital-First, Value-Based Care Company, Announces Plans To Become A Public Company Via $4.2 Billion Merger With Alkuri Global Acquisition Corp.

Babylon Holdings Limited (Babylon), a world leading, digital-first value-based care company, and Alkuri Global Acquisition Corp. (Alkuri Global), a special purpose acquisition company, announced that they have entered into a definitive merger agreement. Upon closing of the transaction, the combined company will operate as Babylon and plans to trade on Nasdaq under the new symbol “BBLN”. The transaction reflects an initial pro forma equity value of approximately $4.2 billion. The transaction is expected to close in the second half of 2021.

Babylon was founded in 2013, with the mission to put accessible and affordable quality healthcare in the hands of every person on Earth. Babylon is poised to re-engineer the $10 trillion global healthcare market to better align systemwide incentives and shift the focus from reactive sick care to preventative healthcare, resulting in better member health, improved member experience and reduced costs. Babylon helps consumers through two primary channels — Babylon 360, its digital-first value-based care service; and Babylon Cloud Services, a suite of digital self-care tools that enables consumers and primary care professionals to gain insights and information either through Babylon directly or through Babylon’s roster of top-tier partners. Combined, those services cover 24 million people across the United States, Canada, Europe, Africa and 13 countries in Asia. In 2020, the company had approximately 6 million consumer interactions. Moreover, Babylon has a 95% user retention rate and a 5-star rating from more than 90% of its users.

Supported by capital raised through the transaction, Babylon will continue to expand its services both with existing and new consumers. Babylon has achieved strong traction in the U.S. market and is focused on building on this momentum by rapidly scaling its operations.

The transaction is expected to deliver up to $575 million of gross proceeds to fund Babylon’s pro forma balance sheet, including the contribution of up to $345 million of cash held in Alkuri Global’s trust account assuming no redemptions. The combination is further supported by a $230 million private placement (the PIPE) – funded over 85% from new, external institutional investors including AMF Pensionsförsäkring, Sectoral Asset Management and Swedbank Robur with strategic investor Palantir – at $10.00 per share. There is additional participation from Ali Parsa, Alkuri Sponsor LLC and existing Babylon investors Kinnevik and VNV Global. In addition, Babylon previously acquired an option to purchase Higi, a consumer health engagement company, and intends to acquire the remaining Higi equity stake it does not already own. The major investors in Higi, including 7wire Ventures, Flare Capital Partners and William Wrigley, Jr., have agreed to accept shares in lieu of a portion of cash consideration if Babylon exercises its option. This agreement is expected to reduce Babylon’s cash needs by approximately $40 million.

Assuming no redemptions, taking existing cash and transaction fees into account, Babylon is expected to have approximately $540 million net cash on its balance sheet following the transaction, which will be used to pursue organic growth strategies as well as attractive and opportunistic acquisitions. The transaction reflects an initial pro forma equity value of approximately $4.2 billion and enterprise value of approximately $3.6 billion. Existing Babylon shareholders will roll 100% of their equity into the combined company and will own approximately 84% of the pro forma company at closing.

The transaction, which has been unanimously approved by the Boards of Directors of both Babylon and Alkuri Global, is expected to close in the second half of 2021, subject to approval by Alkuri Global’s stockholders and other customary closing conditions, including any applicable regulatory approvals. Following the closing of the proposed business combination, Babylon will retain its experienced management team. Dr. Parsa will continue to serve as Chief Executive Officer and Chairman of the Board. An Alkuri Global representative will join the Babylon Board of Directors.

Ardea Partners LP is serving as financial advisor, Citi is serving as financial and capital markets advisor, and Wilson Sonsini Goodrich & Rosati, P.C., Allen & Overy LLP and Walkers (Jersey) LLP are serving as legal counsel to Babylon. Jefferies is serving as exclusive financial advisor and Winston & Strawn LLP is serving as legal counsel to Alkuri Global. Jefferies, Citi, and Pareto Securities AB served as placement agents on the PIPE.

Babylon is a world leading, digital-first, value-based care company whose mission is to make high-quality healthcare accessible and affordable for everyone on Earth. Babylon is re-engineering healthcare, shifting the focus from sick care to preventative healthcare so that consumers experience better health, and reduced costs. This is achieved by leveraging a highly scalable, digital-first platform combined with high quality, virtual clinical operations to provide all-in-one, personalized healthcare. Babylon endeavors to keep consumers at the peak of health and get them back on their feet as quickly as possible, all from their devices, with the aim to promote longer and healthier lives. When sick, Babylon provides assistance to navigate the health system, connecting consumers digitally to the right primary care professional 24/7, at no additional cost. Founded in 2013, Babylon has since delivered millions of clinical consultations and AI interactions, with c.2m clinical consultations and c.3.9m AI interactions in 2020 alone. Babylon works with governments, health provider organizations and insurers across the globe, and support healthcare facilities from small local practices to large hospitals.

Babylon 360 is Babylon’s digital-first value-based care service. Babylon 360 combines cutting-edge AI-powered technology with human medical expertise to help members stay out of the hospital and remain in control of their health. Using a combination of Babylon’s primary care professionals’ expertise and data, Babylon 360 gives members actionable insights and information about their wellbeing, and – by helping members to understand their specific needs – helps them set personalized health goals. If there’s a problem, Babylon 360 gives 24/7 access to a dedicated Personal Care Team, so that consumers can receive the most appropriate care, medication and treatment. A recent survey among Babylon 360 members identified that more than 40% of consultations had resulted in consumers avoiding the emergency room or urgent care visits, generating significant cost savings.

Babylon Cloud Services provides a suite of digital self-care tools that enables consumers and primary care professionals to gain insights and information either through Babylon directly or through Babylon’s roster of top-tier partners. The tools include Babylon’s AI symptom checker, which provides a 24/7 source of health information to consumers when they need it, and Babylon’s Healthcheck, which offers a comprehensive, digital-first health assessment that identifies at-risk conditions and actionable next steps members can take which aim to improve overall health and decrease future risk of disease.

Alkuri Global Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. Alkuri Global intends to favor next-generation technology businesses led by visionary founders and teams leveraging data and artificial intelligence in the areas of Consumer Internet and Marketplaces, Healthtech, Fintech and Mobility.

This was reported by Babylon Health on June 3, 2021.

Contact information: Ali Parsa, Ph.D., Chief Executive Officer, Babylon Health, 60 Sloane Avenue, London United Kingdom; SW3 3DD; +44 (0)20 7100 0762; Email: support@babylonhealth.com; Website: https://www.babylonhealth.com/

Contact information: Alkuri Global Acquisition Corp., 4235 Hillsboro Pike, Suite 300 Nashville, TN 37215; 615-632-0303; Website: https://www.alkuri.com/

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Eleanor Health Announces $20 Million Series B Financing To Address The Growing Need For Value-Based Addiction & Mental Health Treatment

Eleanor Health, the first outpatient addiction and mental health provider organization delivering convenient and comprehensive care through a population and value-based payment structure, announced it has closed an oversubscribed $20 million Series B financing round. The company received significant participation from all existing investors including Town Hall Ventures, Echo Health Ventures, and Mosaic Health Solutions, as well as new participation from Warburg Pincus, a global private equity firm which has invested more than $90 billion in over 930 companies.

Eleanor Health will use the capital to meet increased need from communities and demand from payers for population, value-based, whole-person care for individuals with drug addiction and mental health needs. By 2022, Eleanor Health anticipates managing more than 50,000 members under its innovative population-based partnership models.

Within the past two years, the company has shown the following results throughout its physical and virtual footprint:

  • 84% reduction in emergency department and inpatient stays.
  • 70% report improvement in depression and anxiety.
  • 84% improvement in drug addiction.
  • 76% report improvement in social drivers of health.

To date, Eleanor Health operates 18 clinics and a fully virtual model statewide across Louisiana, Massachusetts, New Jersey, North Carolina, Ohio, and Washington, delivering care through population and value-based partnerships with Medicare, Medicaid, and employers. The company plans to scale the business by going deeper in existing markets by executing additional payer contracts to manage new populations and further developing its proprietary analytics and technology platform that will support identification, engagement, and treatment.

Eleanor Health was created in the Oxeon Venture Studio, together with Town Hall Ventures and Mosaic. It remains dedicated to:

  • Providing treatment where most convenient for community members, including in-person care in clinics, community-based care in homes, and a 100% virtual model available from the safety and convenience of home;
  • Delivering comprehensive services including medications for drug addiction, psychiatric evaluation, treatment of co-occurring psychiatric conditions, individual and group therapy, nurse care management, support to address social determinants of health, and peer recovery coaching;
  • Operating on a payment structure that includes accountability to positive health outcomes achieved, including reducing total health care costs, providing unmatched access, and achieving high consumer satisfaction;
  • Employing diverse teams of medical practitioners, nurses, addiction professionals and peer recovery coaches with personal lived experience, to engage and support individuals in achieving their recovery goals;
  • And coordinating care across the health care and social services continuum to improve the consumer journey and increase long-term recovery rates and overall health outcomes for individuals.

This was reported by Eleanor Health on May 17, 2021.

Contact information: Alex Piersiak, Eleanor Health, 155 Federal Street, Suite 700, Boston, MA 02110; 617-909-5022; Email: alexandra.piersiak@eleanorhealth.com; Website: https://www.eleanorhealth.com/

Caron Treatment Centers & Independence Blue Cross Report Value-Based Contract Linked To Lower 90-Day Readmission Rate

Independence Blue Cross (IBC) reported that its value-based arrangement with addiction treatment provider Caron Treatment Centers resulted in a 5.6% 90-day readmission rate during a 2019 pilot. Under the arrangement, IBC paid Caron one single upfront fee for IBC members receiving treatment for addiction disorder, and Caron was at risk for any readmissions that occurred within the first 90 days after discharge.

IBC and Caron reported the pilot outcomes in a presentation at the 2021 Rx Drug Abuse & Heroin Summit. In the presentation, IBC reported that the readmission rates for six other addiction treatment providers in its network ranged from 11.6% to 25.7%. In total, 645 IBC members were treated for addiction during 2019; 71 received treatment at Caron.

Caron entered the value-based arrangement with IBC in 2017. The fee IBC pays Caron was not disclosed. In the presentation, Richard Snyder, M.D., IBC’s chief medical officer said the single payment is more than the rate IBC paid to the other addiction treatment provider organizations. However, he said the total cost of treatment has been about the same because Caron’s readmission rate was lower and IBC was not at-risk for the readmission cost.

Caron Treatment Centers is an internationally recognized non-profit organization that provides addiction and behavioral health care treatment, research, prevention, and addiction medicine education. The organization provides a continuum of care for teens, young adults, women, men, and older adults. Caron’s signature programming provides concierge treatment for executives, health care professionals, older adults and first responders. Caron’s program includes multidisciplinary treatment protocols with a median inpatient stay of 25 days, combined with a long-term disease management plan. Pennsylvania-based Caron provides services in Palm Beach County, Florida; Philadelphia; Washington, D.C.; Atlanta; and New York City. The organization is in-network with Capital BlueCross, Aetna, Highmark, and the Blue Card program, Independence Blue Cross, AmeriHealth Administrators, Independence Administrators, UPMC, Blue Cross Blue Shield, Employer Groups of Penn Medicine, and Tower Health.

IBC is a subsidiary of Independence Health Group, Inc. — independent licensees of the Blue Cross and Blue Shield Association, serving the health insurance needs of Philadelphia and southeastern Pennsylvania. Independence ended 2020 serving 8.1 million members nationwide.

IBC and Caron reported the outcomes at the Rx Drug Abuse & Heroin Summit on April 7, 2021.

Contact information: Karen Pasternack, Senior Director of Media Relations, Caron Treatment Centers, 243 N. Galen Hall Road, P.O. Box 150, Wernersville, Pennsylvania 19565; 610-413-6938; Email: kpasternack@caron.org; Website: https://www.caron.org/

Contact Information: Diana Quattrone, Corporate Communications Manager, Independence Blue Cross, 1901 Market Street, Philadelphia, PA 19103; 215-241-3113; Email: diana.quattrone@ibx.com; Website: www.ibx.com

The OPEN MINDS Health Plan Partnership Summit: A Guide To Developing & Negotiating Partnership Agreements With Health Plans

This presentation was delivered on October 29, 2020 at The 2020 OPEN MINDS Executive Leadership Retreat. In the presentation, the speakers discussed the development of new partnerships with health plans and new business models for sustainability, including how to understand the needs of payers, reframe the services of typical provider organizations into “solutions” for health plans, negotiate agreements with payers, and build mutually beneficial partnerships with payers in their market.

The presentation speakers included:

  • Paul M. Duck, Senior Associate, OPEN MINDS
  • Robert Bickford, MBA, Deputy Chief Financial Officer, Community Behavioral Health
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How To Build Value-Based Payer Partnerships: Best Practices In Marketing, Negotiating & Contracting With Health Plans

This presentation was delivered by OPEN MINDS Senior Associate Paul M. Duck on August 24, 2020 at The 2020 OPEN MINDS Management Best Practices Institute. In the presentation, Mr. Duck discussed how to develop relationships with the payers in your market, initiate strategic conversations, demonstrate value, and secure and optimize service agreements. He also discussed how to help payers meet their performance requirements, align your programs and services with their goals, and provide data to show that your service lines can deliver quality outcomes with lower costs.

Think Like A Health Plan

Among the top 10 takeaways I shared from The 2020 OPEN MINDS Strategy & Innovation Institute last week (see The Recovery Formula: Strategy + Innovation + Preparing For (Some) Failure), a key one was “Provider organizations and payers CAN work together. Payers are looking for creative ways to meet consumer needs in times of crisis and beyond and welcome ideas and negotiation.”

This was reiterated in the Institute’s Open Forum On Health Plan Measures Of Treatment Efficacy, with Andy K. Kelly, director of provider value optimization at Optum Behavioral Health; Brian Smock, vice president of Magellan Health; Sharon Hicks, senior associate at OPEN MINDS and former chief information officer of Community Behavioral Health; and Joseph P. Naughton-Travers, senior associate at OPEN MINDS. The insights shared by the four panelists reveal what payers are looking for and how they are prepared to negotiate in three key areas—whole person care, outcomes data, and program innovation.

Payers Are Looking For Whole Person Care

Mr. Kelly explained that Optum’s models are centered around improving the delivery of person-centered care. Optum is focused on how to treat the whole person and how to engage and support individuals in the community after service delivery. How to accomplish this? The discussion that followed included two types of models. The first model is focused on co-location of services—behavioral health services in primary care organizations or primary care services in behavioral health organizations. Mr. Smock talked about the opportunity to leverage embedding primary care in specialty care for value-based purchasing—provider organizations can make the case by showing shared savings from treating chronic conditions on the behavioral health side. And Mr. Kelly emphasized that health plan managers appreciate the economies of scale, the efficiencies, and the better outcomes that can be achieved when the “primary care professional can walk down the hallway and talk to the psychiatrist.”

The second model of integrated care is through collaboration. Health plans want to see the full array of services covered under one agreement. But provider organizations don’t have to deliver the full array of services as long as they can work with others across the service delivery system to ensure and coordinate access to care for their consumers. This type of collaboration demands a technology infrastructure that allows for centralized care coordination—and interoperability with all collaborating service organizations. Mr. Smock pointed out that Magellan’s desired outcome with high-need, high-utilization consumers is to reduce inpatient readmissions—and if a collaborative model can get them closer to that outcome, it is welcomed. “We are open to negotiation with provider organizations if there is collaboration,” he said.

Evolving Performance Measures For Evolving Payer VBR Arrangements 

The discussion of models for delivering integrated services moved to the discussion of value-based reimbursement (VBR), incentives, and measures. Two emerging issues in VBR performance incentives were raised. The first was how to develop reimbursement arrangements that take into account the period of time required to realize “savings.” The second was the issue of social determinants and how to determine “performance.”

Ms. Hicks pointed out that for the move to managed long-term services and supports programs, for incentivizing consumer quality of life and increases in consumer functional abilities, the measurement period needs to be longer than a year. “You have to be able to look at long-term conditions over a number of years but our rating systems don’t typically allow that. I can find ways to keep a consumer out of the hospital for one year. But that does not mean I am actually addressing their service needs.”

Mr. Kelly admitted that a one-year construct is fairly arbitrary for consumers with chronic conditions. At Optum, he said, “We are assimilating experiences from our state-mandated health homes to build our own measures. We are taking pieces from several state plan amendments—about what worked and what didn’t—to create a 36-month program. Twelve months does not cut it for high-risk populations that need wraparound services. One-year results go away quickly. We are looking for year-to-year progression and attribution—and plan to create pilot programs that cover performance over a three-year period.”

Mr. Smock explained that Magellan is looking at longer-term results in their contracting for Assertive Community Treatment (ACT) teams. “It’s been iterative. Programs are not static. We look at gains and what didn’t pan out. We know consumers can make substantial gains and move to less-intensive services but it takes time. We take a longer-term view and look not only at ACT team costs, but also at costs for other levels of care such as medical and emergency department visits. The longer we go, the more robust the data gets to help us figure out how to modify the models in future.”

A question from one of the executive attendees, Chris Wolf, executive vice president at I Am Boundless, shifted the discussion to social determinants of health (SDOH). He asked how SDOH are being incorporated in VBR reimbursement and in performance measurement systems. Ms. Hicks said some payers are giving bonus payments if provider organizations submit descriptors of SDOH in claim forms—payers are collecting SDOH information as diagnoses. (For more on how this is happening in Medicare Advantage plans, see a recording of the Institute keynote address by Allison Rizer, MHP, MBA, former vice president of strategy and health policy of UnitedHealthcare (Emerging Models & New Benefits For Individuals Dually Eligible For Medicare & Medicaid).

Mr. Kelly admitted that health plans are struggling with how to measure SDOH consistently and what to do with the data. “Value-based purchasing programs are based on what we can pull from claims data but that’s a limited view. We don’t know what better looks like on our own. We need provider organizations to make the case to us for additional reimbursement for SDOH,” he said. On the flip side, he said that health plans need to make the claims data available to provider organizations in a more useful form, “Here’s what we’re seeing with your population, help us out. We have to help providers determine the programs they can offer to address SDOH.”

Payers Will Collaborate For The Right Innovation

Payers are looking for provider organizations to come to them with creative programs ideas, said Mr. Smock and Mr. Kelly. If the potential outcomes align with a health plan’s overall goals for treatment, and if the provider organizations are willing to be flexible, they will find a way to make it work. But what about the financial risk? Mr. Naughton-Travers said to the panel, “A provider organization with an innovative model has fears about the downside risk of a model with substantial financial risk. They may want to know if they can get a year of protection before they move to a significant risk-based model. They want to know if they have time to ramp up to collect more data and establish better outcomes.”

All three of the health plan executives said that, for the right program model and proposed reimbursement, they are willing to work with provider organizations on a graduated financial risk model. “Some of these programs do not yield financial savings on day one and you have to find ways to get there. It’s a transformational process,” said Mr. Smock. He explained how Magellan gave a certified community behavioral health center (CCBHC) in Texas a “foundational payment” to help them develop infrastructure, ramp up, get a new program started, and get some reporting in place. Magellan’s desired outcome in supporting the program—a one-stop shop to help consumers get the full array of Medicaid services under one roof—was to reduce inpatient readmissions. If the CCBHC could follow up with consumers within seven days of discharge from inpatient and reduce readmissions, they could earn a monthly bonus based on percentage of reduction.

The strategic takeaways for executives of provider organizations are simple—think like a health plan and understand their goals for consumer care, develop a solid financial model and expected performance estimates for any proposed program, and be willing to collaborate in getting that program launched. As Mr. Naughton-Travers summarized, “Payers are partnering with providers to come up with solutions for better outcomes, to control costs, and get the data to build the model.”

For more on both integrated care and performance measures, check out these resources in The OPEN MINDS Industry Library:

  1. Reducing The Cost Of Reporting 558 Unique Performance Measures
  2. Proving Your Unique Value To Payers: Data Speaks Louder Than Words
  3. Performance Management Is Never ‘Done’
  4. Are You Ready For Whole-Person Care? Know The Performance Measures That Matter
  5. Does Your Organization Stack Up On Key Performance Measures?
  6. Ten Integration Models Reshaping Specialty Service Delivery
  7. The Path From Behavioral Health Carve-Out To Integration
  8. Developing Strategies To Address Integration—The Key Is Market Math & Innovative Value Propositions
  9. Making The Many Models Of Integration Work
  10. Integration—Strategic Threat (& Opportunity) For Specialists

And for the deeper dive on health plan strategy and new program development, browse the recordings and slides from 35+ sessions at The 2020 OPEN MINDS Strategy & Innovation Institute at https://www.openminds.com/live/sessions/.