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Lessons from the frontier of physician practice transformation, p1

October 4, 2016
MACRA - a compelling impetus for physician practice transformation.
Chief Executive Officer, Retired

At Geneia, we partner with organizations as they confront the seismic changes happening in healthcare. We help them change the way they work to achieve meaningful population health and succeed in a value-based environment.

PracticeTransformationForContentOur work with a physician-owned multi-specialty, multi-location practice, which I will refer to as Commonwealth Physicians*, is particularly gratifying to me. Commonwealth Physicians is a growing practice that serves more than 500,000 patients and is comprised of 25 practices and nearly 100 primary care providers. As a result of our partnership, the physicians have been able to remain independent and thrive in the years since the Affordance Care Act (ACA) was enacted while simultaneously improving the health of their patient population.

For Commonwealth Physicians, the ACA created the impetus for practice transformation. For other physician practices, MACRA (the Medicare Access and CHIP Reauthorization Act of 2015) provides the carrot and stick to embrace the change from fee-for-service payments to a system that measures and rewards quality and cost improvement.

Within months of passage of the ACA, Commonwealth jumped at the opportunity to enter its first accountable care arrangement. Many have asked why Commonwealth become an early adopter of value-based reimbursement. For starters, the overall health statistics of their population were declining. Adult obesity rates in their state, for example, had climbed from 13.7 percent in 1990 to 28.5 percent in 2010. Not surprisingly, obesity-related health issues such as diabetes and hypertension also were rising.

Equally important, the first health plan that offered Commonwealth an accountable care contract shared surprising data. The numbers illustrated Commonwealth’s cost and utilization performance compared with peer physician groups on metrics such as primary care visits, specialist appointments, and generic prescription use. In general, Commonwealth was performing similar to its peers with one glaring exception: the data showed that although Commonwealth had fewer hospital admissions and shorter lengths of stay, hospital costs were 20 percent higher.

Armed with the data, Commonwealth became invested in identifying the root causes of this disparity between utilization and costs and finding ways to address them. Nearly five years into this journey, the Commonwealth experience offers valuable lessons for other physician practices committed to transforming from volume to value.

Physician Leadership

Commonwealth is a physician-owned organization, and with physicians as chairs of all practice committees, is largely managed by physicians. As such, physicians are talking directly to their peers about outliers and changes that can be made to improve the quality and cost of care. As a general rule, physicians do not want to be outside the standard deviation of their peers. So data coupled with peer comparison and input greatly advanced Commonwealth’s practice transformation initiatives.

Identify ‘Low-Hanging Fruit’

With new data available on more than three dozen metrics, Commonwealth was tempted to tackle all the outliers simultaneously. Instead, Commonwealth leadership, in consultation with Geneia, determined they needed some significant wins in the first year – and that conclusion helped narrow their focus to lab work and imagery.

Commonwealth operates an in-house laboratory, yet the data showed many patients were using a hospital laboratory, which cost more for the same work. As a patient-focused practice, their physicians tended to ask patients which lab was most convenient for them. Upon learning lab choice had a significant impact on overall costs without any difference in quality, Commonwealth physicians began to encourage greater use of the in-house laboratory and saw a corresponding reduction in costs related to lab work.

In the first year, Commonwealth determined the average number of MRIs per 1,000 patients for each physician was 14 and the range was three to 21. Upon further review, they learned the younger physicians tended to order more MRIs. So they used evidence-based medicine to develop clinical guidelines for MRI-appropriateness and worked to consistently apply them. Younger physicians also were paired with more seasoned ones for mentoring. Within six months, the average MRI rate fell to six per 1,000 patients.

The early wins helped build momentum among Commonwealth’s physicians, which enabled the organization to tackle more complex issues such as care coordination for polypharmacy patients and effective pre-patient-visit planning.

To read part two of my blog, visit: Lessons Learned on the Frontier of Physician Practice Transformation, Part 2.

*The experience of Commonwealth Physicians is an illustrative example based upon the actual experience of a Geneia client. This information is provided for illustrative purposes only. Commonwealth Physicians is fictional and not intended to represent any specific organization. Any direct similarities to a real organization are purely coincidental and unintentional.