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The Impact of Recent Mergers and Acquisitions in the Healthcare Industry

Healthcare Payment Models

Expert panelists Bruce Feinberg, DO; Dana Macher; and Michael Kolodziej, MD, explore different healthcare payment models.


Bruce Feinberg, DO: We talked a little bit about the fact that we’ve got the OCM [Oncology Care Model]—Mark mentioned it—ACOs [accountable care organizations], and alternative payment models. Dana, maybe you’ll start us off on this. How pervasive are they within the world of IDNs [integrated delivery networks]? Is the assumption that every hospital is involved in some kind of alternative payment model? It started as a pilot program. It was very surprising with OCM. I think many thought it would be a half dozen or dozen practices that would be participating, but then it turned out to be 196, which represents what could be 50% of Medicare beneficiaries with cancer involved in the OCM. But it’s not been necessarily the case within hospitals. How pervasive are these different CMMI [Capability Maturity Model Integration] innovation models across hospitals? Is it really still in that pilot phase? How well are they going to be able to adapt if that becomes the way of the road?

Dana Macher: I think it depends on the model, to be honest, and from the ACO perspective, there are many that are participating. From the OCM perspective, it’s not that many. I think it’s Banner, Cleveland Clinic, and just a handful, not very many at all. That is, on the OCM side, a big “to be determined” with the model in and of itself. There are a lot of kinks to be worked out in the Oncology Care Model, and they’re working hard to do that. The one thing I will tell you that not a lot of these practices will is that it is certainly changing the way that they care for patients, which is a good thing. But from the other perspective, from the financial perspective, there’s a whole heck of a lot to be worked out there. But many of them really tout the services and the well-rounded care of patients at this point.

Michael Kolodziej, MD: I think that’s another thing that we’ve learned, even though I agree with what you said. Some of the IDNs that are participating—and the one that sticks out in my head is Yale and what Carol Nadelson has done—have resources that practices do not. What they did at Yale was develop an oncology urgent care program. It’s owned by the hospital. They made the business case for it. It supported the OCM effort, and it was at least financially acceptable to the hospital system. Community oncology practices do not have access to that kind of capital, or they don’t even make it a money issue. They don’t have access to those kinds of resources, those kinds of opportunities.

Dana Macher: They had to build it, though. They had to build a lot of that, which was really expensive.

Michael Kolodziej, MD: They did, but they could. That’s my point. When I was in practice—this was before the OCM—we had a contract with our largest commercial care payer. I thought it would be really great if we could partner with an urgent care center so that in the evening hours, if I had patients who had nausea and vomiting or who had a fever and needed their blood counts checked, they could go to the urgent care center. It was literally in the same office complex where they were located. I could not find a mechanism to have them execute a contract. They said that my vision didn’t make business sense for them. Why? Urgent care centers are volume businesses. Having somebody there for hydration for 2 hours, they don’t get paid for that. They don’t have access to a lab for 24 hours a day, necessarily. They might, but they don’t necessarily. They couldn’t do a chest x-ray. The issue is that an IDN opens avenues for a practice to start thinking about, How do I optimally manage this cancer patient? It’s just something you can’t do when you’re a freestanding community oncology practice, unless you’re really, really big. Most cancer practices can’t.

Dana Macher: It gets back to a lot of what we’re talking about, whether it’s the mergers and acquisitions and what that brings to the table or the IDNs. It’s the coordination of care component, which really is the driver of that.

Michael Kolodziej, MD: It’s funny because I’ve been working with some practices on their OCM reconciliation data, and we found some interesting things about the reasons for hospitalizations in patients with common malignancies. If you’ve got COPD [chronic obstructive pulmonary disease], you’re in trouble in the OCM. I have said to the practices, “You need to have these patients comanaged by a pulmonologist.” If I know that a third of your hospitalizations are for COPD or pneumonia, there’s a lesson there. The lesson is, you’re not doing a good job for those people with those problems, and there may be a path to resolve that. In an IDN, where you’re all under the same roof, it becomes easier.

Dana Macher: It’s much simpler.

Michael Kolodziej, MD: When I was in practice, trying to find a psychiatrist to see a patient of mine was impossible. But if you’re in an IDN, it’s quite different.

Bruce Feinberg, DO: I think in practice, you often need to have friends. It was a friends’ network. You’d have to find that psychiatrist who would be your buddy, who you knew you could call and ask for a favor. It really is a favor. It was never routine. You can’t have an emergency and look for steroid psychoses where it’s going to be managed in 3 months.

 
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