What Payers Seek from Orthopedic Destination Centers

May 2, 2015
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Mark Xistris is Vice President, Business Development & Provider Relations for The Alliance, a not-for-profit member cooperative of more than 240 self-funded employers and insurance trusts covering more than 100,000 individuals in Wisconsin, northern Illinois and northeast Iowa.

Mark Xistris is Vice President, Business Development & Provider Relations for The Alliance, a not-for-profit member cooperative of more than 240 self-funded employers and insurance trusts covering more than 100,000 individuals in Wisconsin, northern Illinois and northeast Iowa.  His main responsibilities include oversight of the provider network, pay-for-performance programs, business development of the cooperative and value measurement for its various applications across The Alliance (public reporting, incentive programs, etc.). We interviewed him to get a payer’s perspective on orthopedic destination centers of excellence:

What is The Alliance’s goal in working with providers for orthopedic services like joint replacements?

QualityPath® is a program we launched on January 1st of 2015. We are looking for specific physician-hospital pairings for select services. Identifying the hospital alone was not enough for our employers if they were to put significant financial incentives into their benefit plan design—they wanted to know who the doctor was, too. The goal is to make it a win-win-win for everyone: the consumer gets the best chance for a good outcome with no out-of-pocket costs; providers are rewarded for delivering value by increasing their market share and having no patient collections; and the employer can now understand the complete cost of care by having a bundled price which they can compare, with a warranty that can protect against unforeseen circumstances.

Currently QualityPath contracts are for CABG and hip/knee replacement procedures. Providers first have to meet quality standards, and then are invited to a pricing discussion. Our objective was a bundled price with a warranty. The only way employers can access the bundled price is to put significant financial incentives in their benefit plans for their employees to use QualityPath providers, the minimum being the procedure is 100% employer paid with $0 out of pocket costs for employee. So providers have to step up, warranty their work, offer a single bundled price, coordinate with independent specialists, and accept risk on individual patient basis. Travel expenses and other services are covered by the employer. Consumers have a role too. Sometimes they will have to change delivery systems, possibly leave their community, to access a QualityPath practitioner. Consumers also have to reasonably comply with discharge procedures or the warranty is voided. Patients have to be an active participant in the process.

If we do this right, everybody wins. Costs for the employer stay flat or go down. The employee gets a better chance of a good outcome at a lower out of pocket cost. The provider should increase contribution margin for the service line by growing market share from patients they wouldn’t have seen before.

What do you look for in terms of quality from orthopedic providers?

Outcomes are a must have, and we’re initially focusing on the CMS readmissions and complications measures. But it’s a lot more than just the surgical procedure itself. The QualityPath starts upstream in the primary care setting. We’re looking for health systems to have processes in place to make sure this is the right procedure for the patient in the safest possible manner. We’re looking for some standardized processes like shared-decision making tools being using consistently. The consumer needs to know all of their treatment options and the strengths and weaknesses of each to make an informed choice. We’re also looking for decision support for high-end imaging to avoid unnecessary high doses of radiation. We looked for conflict of interests from industry payments to the surgeon or facility. Additionally, are end of life care conversations part of process of care? We also want to encourage transparency, so to join QualityPath you have to participate in the appropriate registries like AJRR and share data with us. Ultimately, we want to get to longitudinal outcomes, tracking patients over time for 5- and 10-year outcomes.

What do you aim for in terms of cost savings from providers?

We didn’t have a specific savings target, as an organization we were more focused on costs. Our employer advisory group was told what they were paying on average for all services in the bundle, and what the delta between current costs and bundled price needed to be to make it worthwhile for them to implement financial incentives and communication programs. We then did a reverse bid with an upper limit on the bundle price.

What do you look for in terms of convenience and patient experience from providers?

We don’t focus on the amenities too much. The bells and whistles weren’t as important as safe and reliable care at a reasonable cost. We do know this kind of arrangement is a new experience for patients, so it had to be a good one or it would be a failure. We created a position within our organization for a patient experience manager, staffed by a certified nurse case manager, who acts as a concierge for patients who choose QualityPath, helping them with appointments and record transfers and checking in with patients all along the process to ensure that they’re feeling comfortable. We are also using Wellbe’s Guided CarePath in tandem to help make sure patient is prepared and understands what to expect before, during and after their procedure.

How can a provider stand out when seeking to capture your business?

Willingness to be transparent, share data, stand behind your work and outcomes. Be ready to have an open and honest conversation and to share what your needs are, and learn about employers’ needs to find something that works for everyone.

How important is location when choosing providers for your network?

We decided to build locally first, because we think we have good providers already in the community. We don’t need to send patients on a long journey to a high-profile or lowest-cost delivery system. It was important to us to make QualityPath part of larger conversation about what kind of healthcare employers want to buy, and how can we reward providers who step up and provide that kind of care. What we were really trying to accomplish was to improve care for all patients by focusing on a few areas. We will add more procedures to the QualityPath portfolio. Location was very important from the perspective that we wanted to keep care local. We were willing to look outside of our current service area if we needed to, but we were happy that local providers stepped up.

What do you think providers are doing wrong when it comes to marketing themselves to purchasers?

I don’t think they’re doing anything wrong, but I think it’s important to bring data. There are a lot of self-proclaimed “centers of excellence.” When employers purchase everything else for their business – hiring, raw materials, etc. – they have ways to measure what they are buying. QualityPath was meant to replicate that on the healthcare side and align with how employers purchase other items for their business. If there is an area where providers go wrong, it’s focusing on marketing more than data, and data is how employers make decisions. If you want to market directly to employers, speak a language they understand, which is data. Also be sure to collect it in a standardized way and have a benchmark to put the data into context so employers can understand the meaningful differences.

What do you see as the future of how employers and providers will work together?

I think the direct relationship between employers and providers will continue and be strengthened. One thing that was very gratifying to us as we were developing the quality standards and interviewing clinical experts was that when you talk directly to physicians about the kind of care that employers want to purchase — that’s holistic, patient-centric and focuses on keeping people healthy — it’s exactly the kind of care that clinicians want to deliver. I’m very optimistic that we’re communicating more effectively and openly than ever and providers are receptive to having that conversation. I think employers and providers together can get healthcare to where it needs to be. I’m excited. We’re having conversations with providers we’ve never had before. There’s a definite willingness to look at health care and say, “What do we need to make the system financially viable 10 years from now?”

Anything else you think ortho providers should know?

All of our quality standards for our QualityPath program are publicly available in the RFI on our website. We don’t consider it proprietary, and we sought feedback from other purchasers (State Medicaid, Dept of Employee Trust Funds, and Business Coalition in Milwaukee) in developing them. By design a lot of our standardized processes of care were created in alignment to what’s important to other purchasers. We invite other purchasers to use our quality standards and designed them to reduce the measurement burden on providers.

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