Value-Based Care Gets a Chance To Be Present at the Creation

Instead of retrofitting for the new world of “value,” what would it be like if a brand-new medical school and health system were built with that mindset from the start? Clay Johnston, MD, and his colleagues in Austin are finding out.

Lola Butcher
Contributing Editor

“We need to be thinking completely differently about the [health] system,” says S. Claiborne “Clay” Johnston, MD, the first dean of Dell Medical School.

Chris Moriates, MD, was a hospitalist at the University of California–San Francisco, where he created a cost-awareness curriculum for residents and helped start a not-for-profit group to encourage physicians to be cost savvy.

Stacey Chang was a managing director for health care at IDEO, the global design and innovation firm.

Elizabeth Tiesberg, a systems engineer, got famous for coauthoring the seminal book Redefining Health Care, which introduced the concept of value-based health care delivery. 

Kevin Bozic, MD, a nationally recognized leader in the use of patient-reported outcomes for orthopedic treatment decision making, had an endowed chairmanship at UCSF.

In the past five years, they—and many others—have made their way to Austin because they believe in the vision of a now 54-year-old physician and stroke researcher.

S. Claiborne “Clay” Johnston, MD, is the first dean of the Dell Medical School and vice president for medical affairs at the University of Texas at Austin. Starting with a clean slate, he and his colleagues are building a medical school and a health system anchored in ideas of value-based care. The stated goals: improve the health of Austin’s residents, reduce health care costs—and disseminate their example across the land.

In contrast to the accretions that characterize so many institutions in American health care, it’s all still new in Austin. The faculty practice, UT Health Austin, and a new teaching hospital, Ascension’s Dell Seton Medical Center, opened in 2017. The first class of medical students will graduate next year.  

There’s all that brio of the fresh start but perhaps the hardest part is coming up: How to make value-based health care a sustainable enterprise. Johnston believes the Dell Med vision will prevail—“ultimately what’s right will win in the marketplace,” he says—but he is not certain exactly how that will happen.

“Right now, I would say Dell Med is an organized collection of related ideas that fit beautifully together, can be beautifully articulated and taught, and can be demonstrated,” he says. “What we have to do now, though, is show that those ideas can scale and have broad impact on the health system. That’s the challenge for the next five years.”

This past June, Johnston gave the first ever “state of the school” address to summarize Dell Med’s progress and path forward. (You can check it out on YouTube.)The event’s planning team wanted him to read from a Teleprompter—standard practice for a formal address—but he told his audience that would not be happening. 

“I was like ‘I just can’t do that,’” he said. “So we compromised. I do have some notes but I’m not going to read them. I’m going to be mostly behind this podium but I’m also not going to respect that completely either. So they better be moving the cameras around and be ready for that in the back.”

Required: a reorientation

Johnston—the son of a pediatric immunologist and the husband of an internist—was born in Germany when his father was in the U.S. Army and moved through Boston, Denver, and other cities as his father’s academic career progressed. He graduated from Amherst College and Harvard Medical School and received a PhD in epidemiology from the University of California–Berkeley. He did his residency at UCSF, where he specialized in vascular neurology. At UCSF, Johnston rose through the academic ranks in both neurology and epidemiology. His last job was associate vice chancellor for research; he also directed the Clinical and Translational Science Institute and founded the UCSF Center for Healthcare Value. But until he arrived in Austin, he had never run a medical school or a health system.

Chris Moriates

Population health and value-based care “are central and clearly integrated” into the curriculum, says Chris Moriates, MD.

Johnston was a young doctor when he saw the emperor unattired. “I came to the realization pretty early on that a lot of the stuff that we did in clinical care, we had absolutely no idea what we were doing,” he told the audience for his state-of-the-school talk.

Because of that, research became a big part of Johnston’s career. He has coauthored more than 300 peer-reviewed articles, many of them on how to prevent and treat strokes and transient ischemic attacks. His most recent article on the topic was published this summer in the journal Circulation; Johnston was the lead author.

His research led to two major findings that inspired the work he’s doing in Austin. First, Johnston proposed his first big study—investigating the use of Plavix (clopidogrel) and aspirin in patients with minor ischemic stroke or high-risk TIA—in 1999. The results—they showed that Plavix with aspirin significantly reduces strokes—weren’t fully out till 2018.

“It was a big trial and all that, but 19 years to answer one little question?” he said. “That suggested to me that maybe it wasn’t just more research that we need, but a difference in our thinking about how we do research.”

The other finding came from work—his and others’—conducted in the ’90s that proved the most effective technique for treating brain aneurysms. (The answer is coiling, a procedure that gets at a brain aneurysm via a catheter inserted into the groin, rather than clipping, which involves brain surgery.) Twenty years later, Johnston told the audience, whether patients get the best technique depends on which hospital they go to.

For Johnston this illustrates limited potency of the research finding for improving health care. “It’s really the health system [that] needs to be reoriented if we really want to accelerate innovations and improve outcomes for patients,” he says. “We actually need to redesign the system. We need to be thinking completely differently about it.” 

50 future value-able MDs

Johnston presided at the “white coat” ceremony for Dell Medical School’s first-year medical students in August.

Dell Medical School’s first-year medical students

Education edifice

Dell Medical School’s Health Learning Building is in downtown Austin, Texas.

Dell Medical School’s Health Learning Building

A year for growth

Dell Med is a hot school. Nearly 5,200 people applied for just 50 slots in this year’s incoming class. The curriculum emphasizes teamwork, population health, leadership, and value-based health care, says Moriates, the only person to hold his job title—assistant dean for health care value—at a medical school. Other medical schools are teaching students about population health and the like, but they are squeezing those subjects into existing curricula, says Moriates. “At Dell Med, these topics are central and clearly integrated throughout. 

In their third year, students pause their clinical studies for a “growth year.” They continue clerkships in primary care and in community and family medicine but also spend nine months pursuing something entirely new. Among the first class of students, one helped design a way for primary care providers to refer patients to the YMCA of Austin for nutrition, mental health, and fitness support as part of a treatment plan. Another student pursued a master’s degree in business. A third worked in a lab where researchers are trying to develop new colon cancer treatments.

Dell also has an innovative program for selected residents called the Distinction Track in Care Transformation. For two years, they work with a mentor on a project designed to improve health care delivery and organization.

The health care delivery model envisioned for the faculty practice, UT Health Austin, is most developed at its Musculoskeletal Institute, which functions as an “integrated practice unit.” Members of a multidisciplinary care group that approximates a football team work to help patients achieve their goals. Orthopedic surgeons, rheumatologists, podiatrists, advanced practice nurses, acupuncturists, chiropractors, physical therapists, cognitive and behavioral therapists, nutritionists, social workers—they are all involved, says Bozic. Standard procedures include the use of patient-reported measures of pain and function in shared decision making and the use of phone, email, and video communication to allow clinicians and patients to share information quickly with fewer office visits.

Initial results show that 62% of patients treated for hip and knee conditions said after six months that their treatments were effective, as reported in Dell Med’s REThink magazine. The elective surgery rate for those patients was 25% lower than that of a comparison group (patients treated in a previously existing clinic). Meanwhile, a “perioperative surgical home” created at Dell Seton Medical Center led to 66% fewer readmissions after joint-replacement surgery, and shorter stays—1.2 days, on average, versus 3.1 days—than a comparison group.

So far, those results have attracted less enthusiasm from insurers than might be expected, but Bozic is undaunted. “Now we’re in charge of going out and making the business case to purchasers and payers,” he says. “We think that we as health care professionals should be the ones driving that change, not being followers (to) payers who are lagging behind.”

Tabula, not rasa

Johnston’s colleagues call him “visionary,” but that’s because they share his vision. He isn’t particularly charismatic. He doesn’t present himself as the smartest guy in the room. He’s deferential, invariably citing the work of others in influencing his thinking.

Rather than convincing anybody he was right, he created the space for people who wanted to rebuild America’s health care system and, as soon as they heard about it, like-minded leaders jumped in their cars and headed for Texas. His promise to them is to stay steady.

Reports Bozic: “He says, ‘Yes, this is hard. No one said it was going to be easy. Yes, you’re going to come up against a lot of resistance. But it’s the right thing to do.’”

Actually, the first years have been sort of easy. The new hospital and the gleaming LEED-certified medical school complex sprung up between the UT–Austin campus and the city’s downtown. Travis County citizens voted to tax themselves to support the medical school, providing about $35 million a year, and philanthropists—more than 2,000, including the Cain Foundation, the Livestrong Foundation, and the Michael & Susan Dell Foundation—have given more than $220 million. Johnston added “Austinite of the Year” to his CV in 2016.

Kevin Bozic

“We as health care professionals should be the ones driving change,” says Kevin Bozic, MD, chair of surgery at Dell Medical.

The hard part is facing the fact that there is no clean slate in America’s health care payment system. “I would say that is the most frustrating part of the work that we are doing—and the most consequential barrier to us being able to scale our work,” Johnston says. Sure, most insurers are willing to make modest efforts to incentivize improved quality. “People call those value-based payments, where a small fraction of how you’re paid is related to an outcome—that’s easy to do,” he says. “But something that really liberates you to redesign that care has been much harder. The large traditional [insurers] are not desperate for the products we’re creating.”

The Musculoskeletal Institute has demonstrated that its protocols reduce overall costs by an estimated 10%—and even larger reductions for certain conditions—but only two payers are making bundled payments to Dell Med for its integrated practice unit care. Most continue to pay fee for service for knee replacement surgery and have no mechanism for paying for the therapists, nutritionists, and others who might be able to help patients avoid surgery altogether. 

“For our fee-for-service business, we have taken what could have been the most lucrative business line and made it a money loser,” Johnston says. “Fee for service doesn’t pay for so much of what we do that generates the good outcomes for patients, so we lose money.”

Third-party administrators (TPAs) warm to all the talk about value until they calculate how a different payment model will affect them financially, he says. “Often it gets to the CFO level of [the TPAs] who say, ‘Wait a minute. We get paid a fee based on total spend—why would we take risk on this and have to devote a lot more administration to figuring out how to make the payments when things are going so well the way we do them today?’” he says.

He puts his faith in self-insured employers and a couple of newer insurance companies that are working with Dell Med on new payment ideas. The health system is not yet mature enough to contract directly with employers, but Johnston has his eye on that idea.

“That’s another way that we could build these specialty practices that are high-value and just completely bypass TPAs that are not able to act in the best interests of the self-insured entities,” Johnston says. “Given how much interest we have from the self-insured businesses, one way or the other, value is going to win.”

The payment challenge needs to be sorted out soon. During the start-up phase, annual budget deficits have been expected and planned for; this year’s budget—roughly $200 million in spending—will have another deficit.

Until Dell Med’s founding motto—“Rethink Everything”—is embraced by health care’s public and private payers, Johnston and his colleagues are going to have to figure out how to make enough money to operate without compromising their value-minded ideas.

“We have to close that gap—there we will have challenges,” Johnston told the state-of-the-school audience. “This is part of moving from ‘rethink.’ Thinking does not generate income; making and doing does.”

“I told them I would read this last part, which I almost never do,” he said from the podium. “But they wanted me to.” He then read some soaring language that recapped his previous remarks. And he wrapped up: “The next years are even more important than the last, as we prove that our ideas, people, partnerships, and culture can truly impact the larger, broken health care system,” he said. “I for one, am confident.” 

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