Value-based Care Will Flop Without Clinical Integration

One of the most fundamental changes in the health care industry today is the transition away from fee for service in favor of value-based payment models. The goal of these value-based models is to promote good outcomes, increased quality, and cost efficiency.

Large payers continue moving toward value-based payment. The Arizona Health Care Cost Containment System, the state’s Medicaid agency, is requiring that a majority of covered lives be under value-based contracts by the end of 2018. Many of the nation’s health insurance leaders predict that by 2020, as much as 75% of the business will be in value-based arrangements.

But, in my view, value-based contracting is just one piece of a puzzle of health care reform.

At Phoenix Children’s Hospital, we are developing one of the nation’s leading pediatric, clinically integrated organizations. Phoenix Children’s Care Network (PCCN), established in 2013, is redefining the approach to pediatric medical management in our marketplace. This new path includes a more integrated approach to patient access, quality improvement, collaboration across care providers, and systemwide data analytics.

Chad Johnson

PCCN offers patients access to more than 1,000 providers, representing 65% of all general pediatricians across metro Phoenix, as well as 85% of pediatric subspecialists including all of Phoenix Children’s Hospital’s sites of service. The strength of PCCN is founded in the strong partnerships with its more than 100 independent community-based physician practices, as well as with Phoenix Children’s Hospital.

Some tips

From a value-based perspective, constructing the architecture of PCCN incorporates several key initiatives, which may provide a blueprint for other health systems developing clinically integrated organizations.

Care model. Provide a centralized care-­management model for defined populations across all aspects of the care continuum.

Data platform. Create a robust data analytics-and-reporting platform that aggregates data from payers, electronic medical records, claim files, labs, pharmacy, and other relevant data sources to enable successful management of segmented populations.

Point-of-care interventions. Deploy point-of-care toolsets to providers that enable proactive management of defined populations, as opposed to reactive medicine.

Adult system partnerships. For pediatric clinically integrated organizations, develop partnerships with adult care systems to provide management of pediatric populations for relevant insurance products.

Payer contracts. Leverage resources for the health system to thrive in any contract environment from fee for service to a full-risk paradigm.

Some trap doors

Clinical integration has great potential, but it’s relatively new. With newness, come some challenges:

• lack of leadership and support from health system executives
• resistance, active and passive, to integration of hospital and employed medical group operations
• immature enterprise IT/data and analytic systems
• payer engagement
• high cost of development and economic sus­tainability
• inexperienced staff required to build new and innovative operational models.

Value-based payment is gaining traction and proving to be a major factor in health care reform. But the success of those value-based models will depend on true clinical integration of providers—not just lip service to coordination.

Chad Johnson is senior vice president of Phoenix Children’s Care Network. Johnson formerly served as CEO of the Children’s Health Network in Minneapolis.