Impact of Value Based Care Trends | With Sean Cavanaugh – Part 1

Jason Crosby

Welcome to Beyond the Stethoscope Vital Conversations with SHP. I’m Jason Crosby. If Strategic HealthCare Partners alongside our principles. Mike Scribner and John crew your hosts for today’s episode today. Our guest is Sean Cavanaugh, chief policy officer and chief commercial officer for Aledade. For last several years have provided the technology and services to independent physicians as part of their successful ACO ventures. Previously he served as the deputy administrator and director of the Center for Medicare at CMS. Sean thanks for joining us today and welcome to the podcast.

Sean Cavanaugh

Thanks for having me, guys.

Jason Crosby
So, with that will jump right on the conversation. We’ll start off with John first.

John Crew

Thanks, this is John, Sean, we do appreciate you being with us today. I do the question. I have first is and I think as Georgia experience as well as nationally. We’re seeing primary care diminished independent primary care physicians diminish. We’re seeing more and more of the young residents coming out or preferring the employment model when you look long term and value-based care models do you see a Direct Line where you would be working eventually with employed physicians in these models?

Sean Cavanaugh

Yeah, I think anybody who’s committed to improving healthcare, which means doing what’s right for the patient’s working within a business model where you get rewarded for?
Preventing hospitalization rather than doing a hospitalization.

I think we’d be willing to work with them and I think anybody should be willing to work with them as you correctly point out you know in my current position, with Aledade. We’ve very much focused on the independent primary care. Doc and that’s because of alignment. We think they’re already there and their mindset.They’re fully aligned with value-based care and doing the right thing by the patient. I think and you’ve probably experienced this for hospitals. I have a lot of sympathy for hospitals. They’re in a difficult position as the world transitions to value-based care if we’re really gonna reduce hospitalizations. How do they change their business model. It’s not as simple as it is for independent physicians. But in the long run? I think they’re going to get there, and I think we’ll be happy to work with them and not just us we’re not the only value-based company out there.

Some already work with hospitals with some success. So, you know if this movement to value-based care is going to work. It’s gonna have to include everybody validates starting with the independent primary care physician because we think there’s where you get the best alignment initially.

Mike Scribner

So, when you think about the independent primary care that most interest Aledade? What are the characteristics of them that kind of lead you to believe that they’re gonna be most successful with BBC in the first place.

Sean Cavanaugh

Mike thanks for that question, we get that question often from insurers as well. Like Are you guys pull you know going in and finding the elite high performing primary care practices and forming like a specialized high value network and we’re no.

You know, we’re not taking just the high performers what we’re looking for is well first of all one thing we look for is some basics people need to be on an electronic health record, which most people are but not everybody. They need to have a pretty good track record as far as program integrity, not prescribing tons of opioids. But those are fairly low bars. Hopefully beyond that, what we’re looking for is practices that are tied to their community that know their patients.

That are looking for a better way to deliver care and are willing to consider the use you know our tools. You know as you know, we provide some data and Analytics. And some workflow tools to the practices what we find is if they give the tools a chance. They love them and then it doesn’t take any coaching to get them to use them. But that’s what we’re looking for someone who’s willing to try something a little bit different and do the right work for their patients and what we find is typically with independent practices, they feel like they’re doing that already.
And so, we’re enhancing their ability to do it.

Mike Scribner
Can you talk a little bit more about the kind of tools that you’ll do provide and the things that enhance the practice’s ability to be successful.

Sean Cavanaugh

Sure, what I usually say is it boils down to two buckets, one is. Who’s not in your practice that should be in your practice today?
Right rather than sitting and waiting for someone to come in. We’re going to give you data that your whole population, but not just dump a bunch of data on you. We’re gonna show you very specifically who just got discharged from the hospital. Yesterday that you should be reaching out to today. There’s all sorts of evidence that patients that could discharge from the hospital if they see their primary care physician within a couple of days much lower readmission rates better for the patient better for Medicare better for the practice.
In fact, I’ll tell you Mike a little story, a true story from you heard at the outset that I used to work at CMS.

When I was at CMS, there were studies coming out showing just that transitional care works patient gets discharged from hospital. Some see their PCP. They do better than those who don’t. We created a new billing code in Medicare called transitional care management. That’s specifically pays for practices to see those patients and pays pretty well. I think compared to some other visits. Then we waited two years and we looked at the data. And no one was using the code. So, you know the greatest plans coming to failure so I went around to the physician groups and I asked them. Why isn’t anybody using the code the first thing I heard from you know the family physicians. The Internist was we don’t know when our patients been discharged from the hospital? How are we supposed to do that?

So sometimes it’s as simple as that tapping into the local HIE tapping into directly to the hospitals and not just you know, creating a very simple way for the practice come in turn on their computer in the morning get a list of patients who left the hospital yesterday their phone numbers and it worked. List called these people bring them in.
So, like I said the first thing is giving you an understanding what’s happening in the patients who aren’t in the practice. A lot of data analytics to show you which ones really could use some help if you reached out to them.

The second bucket is: Who is we know who’s coming in your practice today and who’s in a value-based contract? What’s the most important thing for you to know about these patients? What are the quality gaps they haven’t had fill? What hospitalizations have they had recently? What specialists are they seeing? How many times have PCP knew you were seeing 3 cardiologists he or she couldn’t do something about that.

So, we get we give this 360 degree view to PCP’s and then we let them do what they do best which is provide great primary care, we don’t interfere with how they practice medicine. They know what’s best but we’re making sure they’re seeing the right patients at the right time.

John Crew

Sean to that effect, data to be actionable data needs to be as current as it can you share a little bit about how you received data and then how you disseminate that back to practices as real time as possible.

Sean Cavanaugh

Yeah, John, you’re exactly right you know the ability to take timely action is only as good as the data you’ve got. First of all, the tool. We give practices and we literally give it to them called the validate a it. Ingests data from numerous sources, so first of all we get claims data from the payers. We have partnerships with and sometimes that’s Medicare or sometimes it’s a commercial insurer. We get notifications as I said of admissions and discharges and transfers from the local hi. You’re directly from hospitals. We get lab results from the major lab companies.
Just massive and you know script Part D results on drug utilization. Massive amounts of data but as you said. We’re constantly fighting is the battle to get it faster and more accurate because finding something out claims data can be two months lagged.

Ironically, one of the things we found in a little bit proud of this having come out of CMS is the data. We get the fastest from a payer on a claims data tends to come from Medicare itself and we’ve been talking to the big insurers united.

Aetna and those guys and saying come on, guys you gotta be able to beat the government right? The thing is, they have these huge legacy systems that they’re all working to upgrade. But what we try to convince them is it’s in your interest too. The sooner these doctors know what’s going on with the patients, the better the care your members will get but we do have at times. We can only be as fast as the payer partners, but we try to get as timely data as possible.

John Crew

Thank you.

Mike Scribner

Sean as the ACO’s have matured that you guys operate. Has it been more difficult to when you get past the low hanging fruit? Is it a little bit tougher to plow the ground to continue to have success or does it catch a flow that just continues to improve?

Sean Cavanaugh

Yeah, that’s a very fair question. If we’re only getting low hanging fruit. There’s more low hanging fruit than I thought because we’re still improving even our earliest ACOs, which started in 2015. They’re still getting incremental improvements, they’re getting I think part of what you see is it takes time, like anybody who’s thinking that this will turn around in a dime is wrong.
When we look, we did a study and we’ve updated it several times. We looked at 5 different ACO. We started in five very different states across the country back in 2016 and we followed them every year. Since then, and what we’ve this is a study. This is not using CMS data. This Is Us doing all Medicare claims data matching those people against similar beneficiaries in their community and we see consistently every year, the same result and continuing to grow which is.

People in an Aledade ACO get more primary care so I think we’re up to in the 5th year, 4th year. It’s 35 more than similar beneficiaries in the community. 35% more primary care and what that leads to is about 14% fewer Ed visits about 15% fewer inpatient visits. Umm I forget the exact number around SNF visits. We haven’t plateaued yet it is plausible. But that’s why one of the things we’re thinking about is like? What’s the second engine like? How do we expand the ability of these practices to do more physicians and their staff only have so much time in the day are there services we could augment to help them so.

Until today, Aledade has always focused our services on the practice. What can we do for the practice. We’ve now created a subsidiary called Aledade Care Solutions, which will be patient focused? What can we do directly for the patient. But this is where there’s an important distinction between US and Optum and some others.

We’re going to do it in partnership with the practice. The practice will get to decide when the Aledade services are used who they’re used for and any data. We collect about patients by servicing them directly. We’ll go directly back to the PCP because we think that’s key keep the PCP in the driver’s seat.

So back to your question Mike. Yeah, there’s probably low hanging fruit out there, but there’s a lot of it. We’re still working on that and as we do like the problem with the phrase low hanging fruit. You forget these are patients. They’re getting better. Care like they’re going to the hospital last so that’s important, but we think with some adding some services and helping the practices directly with patients. We’ll be able to move beyond that, too.

John Crew

Sean when you have markets that aren’t as sophisticated as other in terms of the growth of value-based care, and you come into it. There’s this perception right wrong or indifferent by providers that this is gonna change my workflows within my within my practice. It’s going to be more time consuming. I’m gonna have to hire more people and so I may or may not see a return. I’m sure you’ve been exposed to that? How do you deal with that as you first come in and working with providers to introduce them to the value-based model.

Sean Cavanaugh
First of all, we tell them we, we do have no interest in blowing up your practice and changing making your life, miserable. We’re going to take you stepwise through this. We’re going to take you through different steps. You can do incrementally. We’re not going to throw the whole playbook at you. On Day One so things will change cuz. Let’s be honest, rather than churning patients through the practice like when you need to make more money right now, you’re incentive is to see more patients for shorter period of time.

To see the less difficult patients overtime, not on day one your business model is going to change where you’re going to want to focus on the harder patients. You’re going to want to refer out less when you’re capable of treating them. But that’ll happen gradually over time. The other thing we tell them is there’s some things that help you along the way our practices. When we have them doing more transitional care visits more annual Wellness visits. They see their Medicare fee for service revenue going up day one.

So what we call good fever service like if you’re doing these good preventive seat. Fever service services. You can see practice revenue going up 1015 before you get a set of shared savings check so there is a transition here that we can work with practices. I know you guys have done the same.

It’s not turning things on a dime and it’s not like seeing a drop in revenue, while you wait for a shared savings check there’s a pretty good pathway here.

Mike Scribner

So Sean what do you what do you all typically see as the role of the specialist in that I get that it’s very primary care based and very cornerstone in that world but. What is an effective relationship with various specialists look like?

Sean Cavanaugh

Yeah, that’s a great question one of the things I want to say is. I think the whole country is grappling with that question I know CNS is CMS has been struggling to come up with a specialist strategy and they’re continuing to talk to people what we’ve found that works best is especially in smaller communities where there’s not just a professional but often a personal relationship between the PCP and a specialist is to sit down and have communication about expectations. You know in some of our communities that literally we invite the specialists in and we explain.

We’re doing an ACO here’s why we’re doing it. Here’s what our goals are and the goals of the ACO are really good for the patient and so when the specialist see that they understand like they want what’s good for the patients too. But what we find is PCP’s often go into this conversation, thinking they’re going to lecture specialists. But when if you’re a neutral party in these conversations, you hear the specialists having very good.

Demands of the PCP’s too when you send me a patient be very specific about what you want you know how many specialists get a patient walking in, who said doctor so and so sent me why I don’t know. He just told me to come. See you so improving the communications and understanding what the expectations are I’m sending you to the specialist for this very specific purpose. I wanna hear back what the results are I want an understanding of who’s gonna manage that patient if this is.

If you’re referring to a cardiologist is my turning over management of this problem to the cardiologist or do I just need a second opinion on something? When we’ve seen these two-week communication. We’ve seen some bonds formed that are really fantastic where the specialists now becomes a preferred specialist because they’re seen as a partner and they’ve their business does better. But I’m gonna be frank with you. This is not true everywhere. I think sometimes there’s. A distrust is too strong a word but misunderstanding what the purpose of the ACO is.
The other thing is, and this is where we’re all trying to get better is. It’s really hard to know who’s a true high value specialist. So, the other thing is being transparent about the data. Here’s what you know Aledade. We provide our doctors data on specialists you know outcomes cost.

But we encourage them to have a discussion with the specialist about it and the typical. PCP doesn’t want to change their specialists like meaning switch, they want their specialists to be the most efficient and the highest quality. So, I guess if I had used one word instead of rambling on, I would have said communication like the communication between the specialists and the PC is so critical and it’s hard because everybody’s so busy taking a step back and talking about? What are we trying to accomplish here together it’s hard?

Mike Scribner

Where do you see the specialist being involved like where do two-part question? Where do you see CMS going in terms of coming up with value-based incentives for them and then what it? Where is Aledade place and is there any sort of financial model around that within the all’s ACO?

Sean Cavanaugh

Yeah, so I’ll answer Aledade first and CMS at Aledade. We’re experimenting we have such a broad network now you know in in 40, some states. Before we roll anything out to all of our practices. We test it in some markets. So, we’re testing a couple of different specialists approaches.

One is you know, there are some companies that have started up that will give you real time consults by phone or technology. That’s one pathway. Another pathway is literally trying to create profile specialists in your community and create. You know a preferred list of those who are signing compacts to work with the ACO who are shown as high value.

But it’s hard work and so we don’t have one single product. We’re rolling out across the country. We’re collaborating with doctors locally trying to see what works. And I think we’re a small part of what CMS is going through now. I’ll tell you when I was at CMS. We got requests from all different specialty societies, who all wanted to a value-based model for themselves, so the Orthopedists had some ideas and the cardiologists and the. And nephrologists and I think what? With CMS quickly learned is it doesn’t have the capacity to create new models for every specialty. It has had its bundled payment for care improvement, which are you know.

Certain hospitalization and post-acute care bundles that are typically special that’s oriented, but that’s been a mixed bag. I have seen them out in the community. This is CMS folks talking to the specialist talking to the ACOs trying to find a path forward. I do think they’re looking for some model where you could embed a bundled specialist model within an ACO.
What gets really hard there is pricing it accurately a number of specialist models that CMS is tried have had either overly generous prices or the rice has been too low and so you’ve seen results all over the map. I think that’s what you’re going to see is them trying to embed some sort of specialist bundles as an option. Or maybe mandatory within ACO. I don’t know, but that seems to be where they’re headed.

John Crew

Showing our in your in your response I caught something that I wanna ask you about in your pilot programs. You mentioned or at least. I thought that you mentioned a model that maybe you’re looking at telemedicine and as part of that downstream in terms of Specialist consults things of that nature did it did, I understand that correctly or is that something that do you see telemedicine playing a role in your models?

Sean Cavanaugh

Yes, I think certainly telemedicine has a role whether it’s extending primary care or improving communications between primary and specialty care.

The specific test that I was referring to is this group that is willing to so if you’re a PCP and you have a question about a patient’s cardiac condition. You can get a specialist console like within 10 minutes and what the results. We’ve seen from that are 2/3 of the time what the specialist is telling the PCP is what you were planning to do makes sense so it’s just.
Reaffirming the instincts of the PCP but giving them some comfort and then there’s just subset where they steer them a different way like. Either you know, escalating the care or saying this person does not have you know you don’t need to refer them to a specialist but it’s giving obviously that’s one level of support. You can give to PCP’s. It’s not a solution to? How do we integrate specialty care primary care better, but it could be an interesting piece of it and what we found in this test just because you asked is there are multiple versions of this. The one our PCP is like the most was the one where they got immediate feedback. Meaning, they didn’t send the patient home and wait 36 hours to get some feedback from a specialist and that’s hard to do, but that’s what they it seems to be essential like to get that feedback while the patient. Still, there, and they can change what they’re gonna do while the patient still in the office. But we have a lot more to learn here. I don’t want to suggest we solve this puzzle.

Mike Scribner

Sean, as y’all have you know sets the breath that that you do? Obviously, we deal with practices that are both urban and rural based? What differences have y’all seen in the operations of your ACO rule versus urban and what allowances have you had to make for that.

Sean Cavanaugh

Yeah, well as I said, so one of the differences is the options for specialists’ options for facility partners. You know in a rural community, you know the options can be less the upside is there may be a personal relationship. There so you might be easier to communicate with the specialist and have that sit down in the talk. We love the rural communities, and we tend to operate more in rural communities than a lot of ACOs and that’s because we work with imprint and practices and when you get into the major metropolitan areas? What you see is heavy consolidation or the practices have been bought up by the Big Health Systems, so that’s one of the differences. We see for us in the near term the opportunity to work in some of the major metro areas is limited.
Going back to your first question, though I don’t think that’s a permanent condition. I think everybody’s gonna be pivoting to value. At some point and we will be working with people employed physicians’ health systems in the larger urban areas. I hope that answers your question, Mike.

Mike Scribner

It does kind of bring me full circle back to question John asked way back at the beginning do you see value-based care and the financial incentives of that being so great as to shift that move toward employment in the 1st place toward independence is. So much more financially attractive in the future that it just shifts that tide in general.

Sean Cavanaugh

Yes, I do see that we’ve seen small aspects of it, so think of the world three ways. You’ve got truly independent. PCP’s you’ve got independent PCPS who’ve joined a hospital CIN and you’ve got people who sold their practice to the hospital. Those people are at phase three different landscapes. We work with the first two quite a few of the physicians. We’ve recruited in the last two recruiting cycles are physicians, who were in that Middle Group. They’ve been independent, but they’ve been working through the hospital CIN.

So certainly, we’re seeing that shift where the hospital hospitals are losing some of their CIN physicians because and again. I hope this is temporary. They don’t feel they had the clinical independence or the voice in that CIN that they would have working with Aledade or other independent groups that are truly physician led.

I think you’ve seen a smaller to a much smaller degree. The more extreme which is the in the third group, the hot employed physicians. The ones who went and either sold or practices or went straight out of training into the hospital citizens and I’m sorry into hospital employment.

But I don’t think that means they’re happy you know; we’ve talked to enough of them and we think there’s an opportunity and we’re exploring this of creating if those physicians saw like a turn key solution where they could come out of hospital employment. What they don’t want to do is look for real estate have to buy an EHR they wanna practice medicine right. Imagine a world where they could walk into an office tomorrow.

They could have in place an EHR staffing and more important value-based contracts for their patients and they could build up a practice from a value orientation from the beginning and they could pay for all that stuff that they were given through future shared savings. I think if someone and you know be frank. There’s something alludes kicked around. If someone developed a model like that. I do think you’d see that third group of employed physicians start to move out cuz. I think they went into employment for legitimate reasons. But I think they missed their clinical autonomy and the ability to do the right thing.

John Crew

Sean, I have a question, in relationships specifically to the MSP MSSP and the successor models. We are seeing at least with our client base. We’re seeing us significant shift of the traditional red, white and blue moving to MMA so we’re seeing a decline in the in the in the traditional model and a significant increase in the ma long term do you see there being continued long term success for models that are associated with strictly with the red, white, and blue.

Sean Cavanaugh

No, I think if you wanna be successful in value-based care if you want to be successful in senior care specifically you’re gonna have to be able to do both, you’re gonna have to be good at. MSP, which is the ACO program but you’re going to have to learn how to work in ma as well. And I think not a lot some practices don’t want to hear that, and I don’t blame them M. The Medicare fee for service patient is their last patient where the insurers not requiring prior auth and all that, but the world is just changing as you said Medicare itself is still growing dramatically with the aging of the baby boomers, so senior care as a field is growing, but as you said the part that’s growing is the MA enrollment.

Those seniors choosing to remain in tradition what I call traditional Medicare or some people call fee for service. They’re actually declining somewhat in an absolute sense, so even as the program as a whole grows.

An absolute number of people in traditional Medicare is going down. So, we’ve encouraged our we’ve been talking to our practice quite a bit at this, if you’re going to be really good at seeing your care. You’re going to have to learn how to do ma and at a clinical level. It’s very similar right. This is the same patients. It’s more, the stars measures getting good at that and getting good at complete and accurate. Diagnosis which is the risk adjustment part of MA.

And as you know that’s where a lot of people trip up there’s some who get tempted and to fraudulent things. We’re very careful to tell our doctors, we’re going to do this, the right way. You know, and we’re coaching them on how to do that today.