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Health Care IT Program Discusses Alternative Payment Model Opportunities

A distinguished panel of providers, consultants and IT firms convened on Tuesday, June 21st in New York to share a discussion focused on the convergence of IT spend and new value based purchasing models (“VBP”) coming out of CMS in increasing frequency—ACO, BPCI, CJR and CCM. 

Key Takeaways

The panelists discussed at length the importance of not relying on IT alone but the need to combine IT with services and a new cultural, operational focus on outcomes to achieve better outcomes and lower costs.

Joseph Schulman, the Executive Director of Northwell’s Care Management Solutions highlighted that Northwell is well advanced in VBP and has over 20,000  lives covered by some type of VBP. Northwell has the scale to make significant advances in VBP infrastructure and capability management that perhaps smaller hospitals do not have. Northwell has developed its own proprietary  care management IT platform which has evolved  for use system wide to create efficiencies (versus individual hospital-based solutions); however data analytics and predictive modeling were areas where Northwell like other large systems might be inclined to seek outside vendors. Creating a narrow PAC network of quality providers has also allowed Northwell the ability to achieve longitudinal data access across the continuum. Nevertheless, Northwell has continued to combine key service offerings, such as home health and EMS services, with its IT solutions to leverage for better care management.  

Trenor Williams of Clinovations (an Advisory Board Company) provided some unique insights on how systems can strategically approach some of the new VBP programs. For most systems, the logical step off point is a so-called “Gap” analysis to assess the strengths, weaknesses and needs of the system with respect to VBP. An ROI analysis which includes needed investment, personnel and possible gainshare opportunities with providers is essential before any investment is made or contract executed. Trenor mentioned that even the most sophisticated health systems require consulting services when preparing for the implementation of new VBP models. Most providers understand that outside help is likely necessary.  

Todd Johnson, the CEO of Healthloop, a cloud based care management solution, emphasized the need for patient engagement in any VBP program and the need to create and maintain connectivity among not only providers as to care and care costs, but also allow the patient to follow the care protocol to insure adherence, readmission mitigation and overall patient satisfaction. He cogently relayed cases where patients are anxious to have direct involvement in their care, but do not have the access or tools to do so. Next, Todd spoke in favor of gainsharing with both quality and efficiency metrics as the key long term strategy for systems looking to succeed in VBP—those focused purely on LOS reductions or settings of care were bound to fail over the long run without some emphasis on quality.

All speakers agreed that quality measurement was a critical part to accessing the fraud and abuse waivers under the various VBP programs. However, structuring performance-based pricing in IT solutions was agreed to be a challenge given the difficulty of identifying the source of costs savings and outcomes enhancement—nevertheless the panel agreed that performance-based pricing was strategically important to end purchasers. 

Tony Cheng, the CEO of Archway, a convener and consultant on bundled payment programs including CJR and BPCI, relayed the inability of standard EHR platforms to break out and aggregate the costs of an episode of care across multiple providers. Archway’s software solutions and data analytic services provide the foundation for bundled payment formulations and gainshare arrangements with PAC and other providers. Tony reiterated the theme that operational changes with staff focused on outcomes across providers  is needed to move in tandem with IT solutions for bundles to be effective. Not only is it important to get leadership on board, but incentivizing the physicians participating in the VBP models will also help. 

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About this Author

Christopher J. Donovan, Foley Lardner, Partner, Litigation Lawyer

Christopher J. Donovan is a partner with Foley & Lardner LLP. He focuses his practice on advising companies and their investors and lenders in mergers and acquisitions, recapitalizations, buyouts and restructurings as well as advising on a broad range of commercial arrangements. Mr. Donovan has particular experience in the health service, particularly post-acute, and life sciences sectors. He has a unique blend of deep regulatory as well as corporate and finance experience to bring to a transaction as a result of his consummating dozens of health and life science...

Elizabeth Rosen, Health Care Attorney, Foley Lardner Law Firm

Elizabeth J. (Betsy) Rosen is an associate and health care lawyer with Foley & Lardner LLP. She focuses her practice in the health care field where she advises hospitals, hospital systems, physician organizations and other health care entities on regulatory, transactional and corporate matters. Ms. Rosen is a member of the firm's Health Care Industry Team. Ms. Rosen worked as a summer associate with Foley in 2012.