Two-sided risk contracts still a challenge for hospitals to manage

Vermont is on the cutting edge of piloting a federal reform program in which a statewide accountable care organization is open to hospitals willing to take capitated risk.

In the voluntary OneCare Vermont ACO, member hospitals will be accountable for the health of their patients in return for a per member, per month fee, according to Judi Fox, CFO of Rutland Regional Medical Center.

OneCare Vermont's extensive network of providers includes several of the state's hospitals, two neighboring New Hampshire hospitals, hundreds of primary and specialty care physicians, rural health clinics, and others facilities, coordinating the healthcare of approximately 102,000 combined Medicare, Medicaid and commercial exchange beneficiaries.

[Also: Risk adjustment and reinsurance are working as intended, says CMS]

Fourteen hospitals are eligible to join the $779 million experiment.

Rutland Regional Medical Center is not yet one of them, Fox said but has a strategy to get there. So far, Rutland has not gotten into risk-based contracts, according to Fox, who spoke at the Healthcare Financial Management Association's Annual National Institute in Orlando this June. 

"We are looking at a risk contract potentially for Jan. 1, 2018, for Medicare and Medicaid patients," Fox said.

First, the provider must understand where the risk lies and develop a comprehensive care management plan.

This year, Rutland formed care-collaboration teams among physicians, case managers, social workers, and others, who must be able to share their information.

Standing in the way are IT challenges. Not only must the system and medical record information be readily available within the Rutland Regional system, it must be accessible to all OneCare participating healthcare organizations, Fox said. 

"It's information about the patients and what you're trying to treat and the sharing of information between caregivers and providers," Fox said. "That's the journey we're on. It's easier to share information within all four walls."

The IT system must also be able to store best-practice protocols that help identify gaps in care, and patients need access to online portals.

It's been a journey and not a cheap one due to the investment in technology. 

"Sharing among care providers within community -- primary care, home health, orthopods and cardiologists -- that is missing right now," Fox said. "We're in the discovery stage."

The reason for taking on the work and the expense is the potential to slow rising costs in the healthcare system. 

If the current trend in medical inflation continues, Fox said, the cost of care in Vermont by 2025 could be more than 50 percent of an average Vermont resident's income. 

"For us, the benefit is the belief that the cost of healthcare is not sustainable," she said. "To be good stewards of the health system in the state, we feel it's something that needs to be addressed."

Nebraska also has a health information exchange that can be accessed by providers and physicians.

The Nebraska Health Information Initiative works with Blue Cross Blue Shield of Nebraska for predictive modeling to identify high-cost, high-need patients, according to Susan Beaton, vice president of Provider Services Care Management and Risk at Blue Cross Blue Shield Nebraska, who also spoke at ANI.

BCBS Nebraska has over 200 value-based contracts. One large organization is taking on downside risk with a Medicare ACO, Beaton said.

More than three years ago, Blue Cross Blue Shield Nebraska moved into comprehensive care management by looking at quality measures, HEDIS scores, gaps in care, and quality. 

Blue Cross Blue Shield began working with 3M, which provided patient data on a dashboard, starting with claims data. It now gives providers a history of all of the hospital, emergency room or specialist visits. 

The collaborative value-based program has generated savings of about $5,700 per member per year for those categorized in the persistent high-needs group and receiving an intervention, Beaton said. 

Seth Frazier, former chief transformation officer for Evolent and now chief strategy officer at Henry Ford Health System, said he sees more and more payers looking to align with providers. 

There's also a renewed interest in providers sponsoring plans, but they've run into financial challenges.

"They want to move forward on value, they're prepared to invest," Frazier said. "They're frustrated there's not enough economic yield."

If payers see that providers can drive value, then the payers can use the partnership to drive the trend, he said. 

"That's the virtuous cycle we're shooting for," Frazier said. "The question in these contracts is always long-term sustainability. For contracts to give enough financial return (requires) providers to invest in analytics. For payers, it's really to try and think through a multi-year path for providers to get to two-sided risk." 

Twitter: @SusanJMorse