Craig Pederson, Principal at Insight Health Partners, investigated how different health systems are creating physician alignment.
There are numerous ways to align physician groups to maximize managed care performance, each with its own unique benefits and challenges, according to Craig Pederson, Principal at Insight Health Partners. Pederson’s talk was presented at this year's National Association of Managed Care Physicians Spring Managed Care Forum, held in Orlando, Florida, April 21-22.
Each time alignment takes place, “it's always trying to figure out what's the magic elixir or what's the model we have to implement to somehow farm that huge health care spend, improve performance, decrease utilization and improve quality,” said Pederson. “Is there a link, if any, between managed care performance and physician compensation models in at least one of those structures?”
With more venture-backed for-profit purchasing of physician groups and other health care providers, it’s important physicians have a say in these mergers, especially given that the transition from fee-for-service to value based care means some systems are moving services and specialties to provider-based billing, Pederson explained.
“You're telling us to lower the total cost of care, and that we're all in this together and yet, you're increasing the cost of what you're billing for yourselves,” he said, adding as health systems sell off service specific areas it creates more fragmentation, further complicating the process of tracking where care is delivered.
In his talk Pederson offered a case series of alignments, including the mergers of Walgreens and VillageMD, Optum and SSMHealth, and Agilon Health.
For the Walgreens example, Pederson explained the goal of integrating pharmacists into the multidisciplinary care team, with the aim of increasing medication adherence and improving patient outcomes, according to the companies. Combined, they have a goal of opening 1000 joint locations by 2027. However, this effort will hinge on “availability of independent physicians, physician groups for potential purchase or hire,” which can be difficult, Pederson warned.
In the Optum and SSMHealth partnership, Optum will support the system’s administrative functions, in-patient care management, revenue cycle management and other digital needs. “Optum is also a big payer for SSM so they're playing both sides of the fence here,” he said.
Agilon, a California-based company, mostly partners with independent physicians without purchasing, but is experimenting with partnering with independent practice associations. By maintaining primary care physician independence, Agilon differs from the other models. It also bases its partnerships on a 20- year commitment and works with Medicare beneficiaries. “It's always with Medicare because Medicare patients stay with their physicians versus commercially insured patients,” Pederson said.
Comparing evolving physician compensation models allows for assessments of continuum of structures and any differences seen in non-profit or for-profit models.
For Pederson, the main advantage exhibited in the case series is that of Optum playing as both the provider and payer. “Fragmentation in health care is going to continue and it's only going to increase; it's going to make [health care] worse not better,” he said.
“Timing is everything. I mean on these models, if you have the right contract with the payer structured appropriately, it can work but that's a big ‘if,’” he concluded.