Evolving Value-Based Care Strategies in 2017 and Beyond

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Avalere's Fred Bentley explores how a leading health system adapts to evolving value-based payment models in an interview with Dr. Robert Nesse, senior director for Payment Reform at Mayo Clinic.
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“If you’re responsible for care over time, you need a provider network that transcends any facility for acute-care, post-acute care, primary care, etc., with providers aligned in purpose.” Dr. Robert Nesse, Senior Director, Mayo Clinic


Fred Bentley , Managing Director, Center for Healthcare Transformation

Fred Bentley advises clients on health delivery and payment innovation, providing analytic and strategic insight on issues related to the delivery of care.

Guest Speaker
Robert Nesse, MD , Senior Director for Payment Reform, Mayo Clinic Health System
Robert Nesse is a professor of Family Medicine at Mayo Medical School, Rochester, Minnesota.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.


Fred: Hello, and welcome to an Avalere podcast. Today we are going to be talking about the evolution of MACRA, MIPS, and advanced APMs, and getting the perspective of a leading health system in the U.S. My name is Fred Bentley, and I serve as a vice president for our Center for Payment and Delivery Innovation here at Avalere.

I’m honored to be joined by Dr. Robert Nesse, who currently serves as the senior director for Payment Reform of the Mayo Clinic board of directors and has been at Mayo for many, many years now. And among his many roles, he has served as the CEO of the Mayo Clinic Health System.

Dr. Nesse: Thanks, Fred. From Mayo Clinic’s perspective, we really think that the future of healthcare will be about value, not as a philosophical statement of what’s value, but value-based payment. So we will be paid for outcomes, we will be paid for performance as measured against those outcomes, and we will accept accountability for the patients that come to us for care. We think that is fundamental. The MACRA program, particularly the advanced payment model for the MACRA program, does put in place potentially aligned incentives to allow you to do that, versus—in our opinion—the fee-for-service program, especially as administered by the government, where you get paid lower than your cost, has no long-term future, and is not sustainable.

Fred: Great, and I would love your perspective in particular around the specific challenges and opportunities for high-end academic medical centers and high-end tertiary- and quaternary-care providers like Mayo.

Dr. Nesse: Sure. So Mayo Clinic and other groups like ourselves really have made a reputation out of managing complex patients, complex diagnostic problems, and complex therapeutic problems. Those particular patients require a lot of resources. And just extrapolating a community-based care model to an academic model can lead to significant, unanticipated consequences. The risk adjustment must be more accurate, and really must include social factors and other things. The appropriate attribution of patients—to be sure that if a patient is a primary care patient coming to you and being seen by an advanced practice team—they don’t get somehow misattributed to you when they are there for advanced services. The ability to get access for patients as appropriate, while at the same time recognizing that many patients that are seen in these centers are in a high-cost environment and don’t need the services, that has to be untangled as well. So, right now, when we see the future of value-based purchasing, value-based contracts, value-based care, and all of that, there’s significant potential, but there are a lot of hurdles that we need to address in terms of basic policy design and contract support to make this work.

Fred: As you think about it, for Mayo and for other providers that are getting ready for MIPS and—more to the point—advanced APMs and the more advanced value-based contracting models, what are the prerequisites?

Dr. Nesse: Well, internal to our group, we really talk about some prerequisites for the system and then prerequisites for contract performance. So if you’re responsible for care over time, you need to have a network of providers that really transcends any facility when you think about it, for acute-care, post-acute care, primary care, et cetera. Those providers have to align in purpose. You have to decide purposes of the group, rather than have cross purposes with different contracts. And you have to then come together and coordinate the care. I think where you really need to start looking outside of the internal system in terms of accountability is to understand how to get timely, actual analytics with partners that have access to the databases that transcend your electronic medical record. Because with that, you only compare yourself to yourself, and you must be benchmarked. And I think with those four things in place, then you can think about how to align the payment model.

So that’s the system prerequisites. For the payment model, I think I’ve already mentioned them briefly, it’s appropriate attribution models. Understanding how to effectively adjust risk for complex patients rather than just extrapolating primary care risk measures, and understanding network adequacy, would be three that come to mind. Finally the, the fourth—and maybe the most important—is that the measures we are using to judge performance and therefore pay for value really need to be much more defined and much better understood.

Fred: In terms of getting the frontline providers at Mayo, a very busy system—a lot of specialists and sub-specialists—they may be at varying degrees of knowledge and understanding around MACRA. How do you get them bought into this?

Dr. Nesse: I think there are two ways to do it. One you have to appeal to the big picture, and say “you know we say we’re an excellent provider, we provide high-value care, we need to prove it, and a sustainable health system of the country requires us to do it.” But the next part is, you have to get them actionable information. To go to a provider and say “improve your coding,” they’ll say, “Well, okay, how do I do that?” To say “We are getting paid for incentives with MIPS, so code better and adjust your risk and let’s perform better”—they have no idea. So taking it down to the point of saying there’s these five measures where we see this gap, here’s how the system can best account for it, but if it’s not in the record, we can’t pick it out. So let’s figure it out together, how to improve those five measures”—then you’re finally down to the point where physicians can say, “Yes, I get that. I can see the impact of that. I can see it’s good for the patients, and it’s good for the organization.”” Until you get to that point, you can’t just appeal to do things better and expect anything to happen in a medical group, other than the fact that they believe that they should try to do the best we can for our patients.

Fred: And one last question, just given that as of a few days ago, then–Secretary Price resigned. A lot of turmoil around this—some indication, you might argue, that CMS might be slowing down on APMs, or at least there’s a question around that. How does a health system like Mayo continue to plan and continue to think about the future—what’s stable, what’s not stable?

Dr. Nesse: I think you keep your eye on the ball, because there’s going to be turmoil in many, many different areas. So for Mayo Clinic, if we say this is about the cost of care and access for patients who wish to come to us, the changes that go on in regard to whether this is essentially a regulated model or a states’ right model or whatever it is that’s going on right now is beside the point. This is about better care at lower cost. We think we can provide it, so let’s go prove it.

Fred: Alright, that’s a great point to end on. Thank you for your time.

Dr. Nesse: You’re welcome.

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