A Conversation with William Johnson, MD

Moda’s Modus Operandi: Meetings and Miles To Go To Succeed

The president of what started as a dental plan describes what it took to successfully launch a Medicaid ACO in the remote regions of Oregon and Alaska.

Interview by Peter Wehrwein

William Johnson, MD

Moda Health has established a successful “coordinated care organization,” which is Oregon’s version of a Medicaid ACO—in the sparsely populated eastern half of the state. The company is better known as a dental insurer company, but William Johnson, MD, Moda’s president, describes how the company got buy-in from communities and providers—and its bumpy ride in the exchange market.

Moda is historically a dental plan that branched into health insurance. How many states are you operating in as a health insurer?

As a health insurer we are in Oregon and Alaska.

How many covered lives in each state, roughly?

We have about 380,000 lives, but I believe only about 5,000 in Alaska. The bulk is really in Oregon.

Let’s talk about Oregon. I believe you are one of the 15 coordinated care organizations in Oregon and these CCOs have been described as Medicaid ACOs.

We are in Eastern Oregon. It’s about 65,000 square miles. Essentially, it’s half of Oregon, and just 6% of the population lives there. This is a lot of high desert country, cattle ranches, wheat fields. Great distances between communities.

How many people?

50,000 Medicaid members.

Could you describe how you put the CCO and Medicaid ACO together in Eastern Oregon?

It took about six to eight months to put it together, and it really involved our senior vice president, Robin Richardson, and Sean Jessup [senior vice president of Medicaid programs] getting in their cars and driving from hospital to hospital, small town to small town, county to county, and really working on developing a partnership and a true understanding of how can we collaborate together to really have an impact and improve the outcomes for the most vulnerable in Eastern Oregon. Originally when you walk in the door and you’re a health plan, hospitals aren’t necessarily eager to take your phone call or invite you into the office.

Robin always tells the story about the first time he walked in, he got five minutes. The next time he came back, he got 20 minutes. But over time they really understood what it was we were trying to do and to accomplish. And we were able to really get incredible buy-in, not only from the hospital systems, but from the providers and the community, and that’s really how we did it. It was boots on the ground, one day at a time, one mile at a time.

You felt you had to have these in-person conversations with providers; this isn’t something you can do by phone and email?

Well, one of the things that we believe in here is face-to-face, sitting down and really getting to know the individual on the other end. That’s one of the things that we do. We believe in face-to-face meetings. Of course, email and telephone when you have to. But for the most part, it’s putting 40-, 50-, 60,000 miles on your car and getting out there.

And in Eastern Oregon, because of the scope and the size of the territory, in each of the 12 counties, we set up an individual community advisory council with people directly from that community that directs the work of the CCO. The chair of each of the local councils serves on the regional council, and the chair of the regional council serves on the Eastern Oregon CCO board of directors.

Sounds like a lot of meetings and governance. Have you struggled to get people to come to the meetings or actively participate?

Not at all. In fact, we even have board meetings here. The meetings rotate, and when the board meeting is here in Portland, it is a full house. So, no, we have not had any struggles of getting anyone to participate.

In what way are the CCOs in Oregon like ACOs?

They are very much like ACOs in that there is certainly risk involved. Upside risk, and then also with the hospitals, with downside risk. And there are also quality metrics that they must hit. You have to meet at least 14 of 17 quality measures in order for you to receive 100% of those funds that have been set aside in that pool. So, from that perspective, it’s very much like an ACO.

So Oregon Health Authority is the state Medicaid payer, as I understand it, and they’ve contracted with you, the CCOs. But in Eastern Oregon, you in turn have contracted with these county-by-county organizations. Are you passing through any upside payments that you get from the Oregon Health Authority to these county organizations?

The Eastern Oregon CCO is a single organization serving 12 counties. It receives a global budget. Any savings generated within that global budget we share as upside payments with providers and community organizations within each county.

This model that you’ve executed out there in Eastern Oregon, what does it really accomplish? It’s impressive salesmanship and community building, but what does it accomplish in terms of either improving care or lowering cost?

Well, first and foremost, what it has accomplished—and this is just sort of, you know, the high-level—is collaboration, where you have at the table a clinical advisory panel, a community advisory panel, and a governing board, trying to really solve the problem of improving outcomes to the most vulnerable population in Oregon. So, I think first and foremost, it did that really well.

The other is, when we look at outcomes in quality performance in terms of colorectal screening for cancer, depression screening, developmental screening in the first 36 months of life, cost reduction—those are all the things that we’ve focused on. And when you have the actual physicians and providers in the room figuring out ways to do that, you can do it so much faster. That’s really what it definitely has accomplished. And it has driven down the cost.

My reading is that the waiver that allowed the CCO system to set up, that part of the quid pro quo was that it was supposed to slow growth by two percentage points, to 3.4% on the annual basis. Have you hit that mark?

Yes. I think we’re the only CCO that hit that mark and the quality metrics. For 2019 we were at 2.7%.

Is there anything in particular you would point to as the reason you were able to slow the growth rate?

I still believe that it’s everything that we’ve talked about that’s allowed us to do it. If you look at the trends and you look at emergency department utilization, at medication compliance—look at all those things that we measure, all those things are going in the right direction. And also, getting those individuals the right care that they need at the right time. Having an engaged audience—an engaged group of individuals who can actually make that difference—I think matters more than anything else.

And these engaged individuals, are they providers or patients? Or principally the providers out in these rural parts of Oregon?

It’s the providers inside and outside the hospital systems, also public health officials and people from county government, but also the community councils—those are the patients.

I believe this CCO was rolled out several years ago, correct? How many years ago?

EOCCO launched in 2013.

So is there a new five-year cycle that’s about to start or has started?

The new cycle—the Oregon Health Authority calls it CCO 2.0—will start in January 2020.

Do you have the contract for Eastern Oregon again?

The health authority announced its intent to award us a new contract. We’re currently in readiness review.

Do you have any competition in Eastern Oregon?

No. There was some interest from others but ultimately they withdrew their applications.

Are you planning to branch out from Eastern Oregon?

We will be operating with provider partners in the Portland metro area.

How many other regions of the state did you submit proposals for?

We submitted for two additional regions, for which we were not selected.

Can we talk about the ACA exchange? Moda was also in the ACA exchange market in Oregon, and I gather that’s been a far less stable—less of a clear success story for Moda. Can you tell me where things stand in terms of Moda in the non-CCO market in Oregon? Are you still in the exchange market and the off-exchange market?

When we elected to participate, it was something we believed in. We thought it was very important, so that’s why we did it several years ago, and we are today still on and off the exchange [in the individual market]. And our approach has been to work, again, using our collaborative model with various hospital systems to create programs that impact how patients are managed within the health systems, as opposed to just saying, “Here’s the rate, let’s see what happens.” We really work collaboratively with multiple hospital systems in this area, but we are definitely still in the ACA market. And here, the market is sort of stabilizing.

I read that some people said that Moda priced the premiums too low, went for big market share, and that didn’t work out. Did you price your premiums too low, and have you had to increase them?

Well, that’s always the narrative I hear. But we priced based on our risk pool that we had at the time. It was never our desire to corner the market. Based on our risk pool, we set our rates, and that’s what happened.

Now that you have a much more mature market and the populations aren’t moving as much, we based our rates on multiple levers, based on our actuarial analysis, and that’s why you’re seeing the rates begin to sort of level out.

Everyone in the beginning was sort of flying blind. There was no real way to know what was going to happen when things were announced.

You’re in the CCO market. You’re in the individual market. How do those two markets relate to one another? It seems like the CCO thing has been more of a success. Have you taken things you’ve learned with the CCO market and applied them to what you’re doing in the individual market?

The biggest thing we’ve taken from the CCO market and applied to the exchange is that notion of collaboration. We have an advisory council, and that advisory council also has a clinical advisory council, and it’s tied to multiple hospital systems here, as well as our major academic institution. And our approach has been, again, “Let’s work together, let’s focus on quality metrics, focus on making sure that we have network adequacy.” We’re collaborating on how we can actually improve the outcome of those individuals who select our individual product.

It’s no longer Moda, you select us, and you can go to these network partners.

If you select Moda, you’re going to have an engaged health system alongside of you, just like we have in the CCO model.

Do the members experience this as a narrower network than what you first went into the individual market with?

What we’ve been able to do is set up several networks. If you’re connected to a system, you pretty much aren’t going to change doctors based on a small price move. So what we wanted to do is create networks where your doctor was in that network, therefore you didn’t feel that it was narrow because all of your care was done within that health system.

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