On-demand webinar
VBC 5.0: Mastering the 5 pillars of value-based care success
Explore the 5 pillars of value-based care every health system, health plan and provider needs to succeed.
00:00:01:03 - 00:00:03:27
Claire Wirth
Joanne. Hello and welcome to everyone.
00:00:03:28 - 00:00:35:25
Claire Wirth
We are not ones to punish the punctual, so we are going to get started on our session on Master Ring. The five pillars of value based care success. The greatest challenge in value based care is effective execution. There is not a lack of solutions. There are clinical models that exist, financial models that exist. But actually aligning the resources, the capital and the leadership to deliver value based care is hard.
00:00:35:27 - 00:01:03:29
Claire Wirth
And that's why the focus of our time together today is going to be on the how VBC is continuing to grow, not shrink. The root causes that creating created the momentum for value based care in the first place. They've only intensified. So today's session is all around how to succeed and the insights and strategies that we're going to be sharing today there intended to be replicable.
00:01:04:01 - 00:01:15:00
Claire Wirth
So in the back of your mind, I want you to be thinking about which of these strategies could work for your organization or the organizations that you partner with. Now, Joanne did introduce us, but I'll
00:01:15:02 - 00:01:25:17
Claire Wirth
do this again. By way of introduction, my name is Claire Wirth. I have led advisory boards, value based care research for the last nine years and has been my utmost pleasure.
00:01:25:19 - 00:01:33:22
Claire Wirth
And I am delighted to be joined by someone with such robust expertise with me today. Bhavna would you please introduce yourself?
00:01:33:24 - 00:02:01:13
Bhavana Dhillon
Thank you Claire. Good afternoon everyone. My name is Bhavna Dhillon. I am the senior director for Value-Based Contracting at Optum. I'm a physician by background, have represented our physicians, specialists and primary care for the past decade in the value based care space and pop health space, and negotiating contracts for value based care and executing and performing on those contracts.
00:02:01:14 - 00:02:07:10
Bhavana Dhillon
So super excited to have this conversation with you all. Thank you for joining.
00:02:07:12 - 00:02:09:06
Claire Wirth
Yeah. Agreed.
00:02:09:08 - 00:02:23:27
Claire Wirth
And with that, here are the three main things we're going to cover today. First, we're going to touch base on what's going on in value based care. It seems to be always the same and yet always be evolving. So we're going to talk about the current state.
00:02:23:29 - 00:02:46:02
Claire Wirth
Then we're going to move into that discussion of the five pillars of VBC success, including real world examples of health systems that have moved beyond dabbling in value based care and are truly finding success. The lessons they've learned along the way, the lessons Bhavna and I have learned along the way, and our time working with provider organizations and for Bhavna being one as well.
00:02:46:05 - 00:03:15:12
Claire Wirth
And lastly, we're going to make sure that we leave time for Q&A. So if you want your question answered, I recommend putting it in the Q&A box on the right hand side of your screen as early as possible, that we can actually get to it. So this is where we're headed today. But most importantly, as Bhavna and I were talking about the conversation that we wanted to have today, we wanted to ground it in the most important stakeholder in value based care, who often get overlooked.
00:03:15:15 - 00:03:20:10
Claire Wirth
And that's the patient.
00:03:20:12 - 00:04:05:18
Bhavana Dhillon
Yep. Thank you Claire. Our patient is the most important stakeholder who we want to put the front and center. The why behind and VBC right. So we thought why don't we bring a simple patient journey to life as a backdrop. As we discuss how to execute on value based care. So this is a patient journey Lisa, 55 year old from Denver, has multiple chronic conditions hypertension, asthma, lives in Colorado and one day she ends up with an asthma exacerbation and ends up in the ER, where she is evaluated by a physician and prescribed a nebulizer for her.
00:04:05:25 - 00:04:42:14
Bhavana Dhillon
Asthma exacerbation, she continues on that treatment. But her symptoms do include continuous wheezing and with some high blood pressure symptoms. She is engaged by the physician, the PCP, who, understands her condition. First symptoms that happened a few days back in the E.R. and prescribes her all hypertension medications and asthma maintenance therapy. Now, Lisa continues on that medication prescribed by our physician, by her physician over the phone.
00:04:42:16 - 00:05:15:04
Bhavana Dhillon
And now her centers have settled down. She is on a reduced dose of medication, and she moved from four times per day to only once or twice a week. A very simple example of how PCP interventions and involvement can reduce the risk of an ER visit, as well as support value based care. Now we want to have that as backdrop, because we are going to build layers into this as we discuss the how.
00:05:15:09 - 00:05:19:12
Bhavana Dhillon
So Claire, let's get to the how.
00:05:19:14 - 00:05:24:17
Claire Wirth
Let's get to the how.
00:05:24:20 - 00:05:53:05
Bhavana Dhillon
So I know that you know we hear all these stories about VBC’s success from different stakeholders. Right. National health plans, regional health plans, provider groups who have been really successful. As VBC we also hear some frustrations, some exhaustion coming from the providers. And, you know, many of my providers say, are we there yet? Like how long it's going to take.
00:05:53:07 - 00:06:19:28
Bhavana Dhillon
Been talking about VBAC for so many years. Are we there? Yes. And we have CMS, CMMI model comes up with these, you know, rolls out these new models. The ACR reach first it was MSSP. Then there's the team model and it's evolving. And the answer to my provider questions is it's a journey. It's not a sprint.
00:06:20:00 - 00:06:35:16
Bhavana Dhillon
It's a marathon. And what we invest in today we are going to reap the fruits in the near future. And that's what this is about a journey.
00:06:35:19 - 00:06:48:01
Claire Wirth
I know what you just said on the on again off again nature value based care that we've been at this for so long. It leads me to this question so soft and I love to ask folks.
00:06:48:04 - 00:07:17:09
Claire Wirth
Think about the in most advanced form a value based payment capitation population based payment. What percentage of dollars in health care do you think are tied to that most advanced payment? And we have the answer for you on this slide in the bottom right hand side. It's 14%. 14% of dollars in health care are tied to the most advanced form of value based payment, capitation or population based payments.
00:07:17:11 - 00:07:45:02
Claire Wirth
Another thing to look at here is the growth from 7% in 2021 to 9% in 22, and 14% in 23. Who would've thought Bhavna that behind the scenes coming out of the pandemic, that these dollars would have increased so much coming out of that time? So clearly, financial transformation, it is well underway. That said, let's not forget the divide on this slide.
00:07:45:04 - 00:08:12:20
Claire Wirth
We've got roughly 40% of dollars still tied to strictly fee for service, 60% tied to some form of value, although we know much of that is still on a fee for service chassis. But it does say that if this were a country and you're going to visit a country and BBC, we're a different language at this point in time, you're you would want to know how to ask where the bathroom is and how to ask what to order for food.
00:08:12:21 - 00:08:36:22
Claire Wirth
We're at that point when it comes to value based care in the industry. So when my team developed a value based care self-assessment and it helps health systems assess where they are in their VBC journey. So it has are you a producer, a dabbler, a balancer or a demand destroyer on those different phases of VBC journey? Where do you think most health systems find themselves today?
00:08:36:24 - 00:09:01:12
Claire Wirth
Producer and dabbler. They're still in those earlier phases, and there's a reason for that. Bhavna you and I both know that doing this is really hard. When we survey executives, when we talk to executives, the number one barrier that stands out is fear of financial loss. And so much so that in the survey that we conducted, the next highest fear was like, half the number of votes compared to fear of financial loss.
00:09:01:12 - 00:09:23:18
Claire Wirth
It is the stand out, really big barrier on executives minds. So on the right hand side is the most fascinating finding in my opinion. If there is one slide for our attendees today to take a screenshot of, this would be the slide that I tell them to take a screenshot of, because on the right, we have results from a survey that we conducted of about 100 provider executives.
00:09:23:20 - 00:09:44:28
Claire Wirth
And these are folks who are experienced in risk. They they are in value based contracts. And we asked them, are you making money breaking even or losing money in these different contracts? And that's what you're seeing on the right hand side. And upside risk 90% made money. About 10% lost money. It does beg the question of how do you lose money and upside risk.
00:09:45:00 - 00:10:08:23
Claire Wirth
And that just meant that those folks put more investment into it. So they developed disease registries for that upside risk contract. And their bonus didn't cover that full cost and downside risk. About half made money, 40% broke even, and 10% lost money. And you can see a pretty similar breakdown in capitated risk of about half making money, 30% breaking even, and 12% losing money.
00:10:08:25 - 00:10:41:01
Claire Wirth
The thing to take away from this slide is this providers bearing risk were far more likely to make money than lose it, and yet executives remain fearful of losing money in value based care. But I want folks to grapple with this question about the future. Where's the future of health care reimbursement going to come from? Nothing on this slide is new.
00:10:41:04 - 00:11:16:09
Claire Wirth
These are trends that we have been tracking for a long time. But it points to this fact that yesterday's revenue, yesterday's margin is not going to be the same as tomorrow's. We were seeing less commercial reimbursement and greater government funded reimbursement, less inpatient care and more outpatient care, less surgical and more medical volumes. We have an older, sicker patient population, and 10,000 people become Medicare eligible every single day.
00:11:16:11 - 00:11:43:14
Claire Wirth
And they use more care. They need more care. So these are not new trends they've been around. But the fact here that these initiated the momentum for VBC, and yet they've only intensified means the question that Barnett and I need to answer is how how can provider organizations succeed in value based care? How can their partners enable them to be able to do that work?
00:11:43:17 - 00:11:50:27
Claire Wirth
And how are those who are succeeding really pulling it off? Which brings us to this. Our five pillars.
00:11:50:29 - 00:12:15:28
Bhavana Dhillon
Yes. And here we have some as to the how. So we have these five pillars, two subsections, financial transformation and clinical transformation. And we'll deep dig deep into the financial transformation piece first and talk about pair partnership contracting, financial visibility.
00:12:15:28 - 00:13:00:02
Bhavana Dhillon
And later on go into the clinical transformation piece where we talk about data and pop health and network management. But let's look at pair partnership right. We are all under pressure pressure to meet ROI. We have pressure to perform on the metrics that are in the contract. If we are provider, we are under pressure to, meet up with the evolving technology, be up to speed with industry demands, and under this pressure, we all, either as providers or health plans, have a natural tendency for some behaviors and some perceptions.
00:13:00:04 - 00:13:28:24
Bhavana Dhillon
So what I did here is that, you know, when Claire and me were talking, we said, you know, let's do this exercise where we wear a health plan hat and then wear a provider hat and look at both perspectives. So as a health plan, the biggest skepticism that I have is that my providers would be able, should be able to make that transformation necessary to deliver on cost and quality outcomes.
00:13:28:24 - 00:13:53:13
Bhavana Dhillon
And that's my number one ask as a health plan. And some of that is, you know, providers kind of have that perception comes from because providers are not ready to take on risk and very likely, right, they might be in the very initial stages of value based care. Just got on the journey. Still figuring it out.
00:13:53:13 - 00:14:23:19
Bhavana Dhillon
They are not comfortable with taking on risk. Providers may be resistant to change because they may not have the tech solutions and the support they need to deliver on value based care at all. They have never negotiated a contract, and that kind of drives the perception. So what can providers do to to not have that perception, not drive that, how providers can mitigate that is to take on some risk.
00:14:23:19 - 00:14:51:13
Bhavana Dhillon
If you're a new provider and you are not able to take on risk, ensure that the health line understands that you can take risk in the second year and have the first year as a learning year, or take a portion of that risk. Maybe not the full risk. Communicate with your health plan the obstacles that sit on your side, whether that's technology, whether it is operational.
00:14:51:15 - 00:15:38:04
Bhavana Dhillon
And I think the transparent conversation between health plan and providers lead to strengthened relationships and trust. And I say this to my providers, Claire, many times, you know, I know your providers. You love caring for your patients. And that's what we want you to do. But sometimes as providers, we have to put that sales hat on and present and pitch to the health plan and our clients, how good we are, how good the clinical workforce is, how great the metrics are met against national benchmarks, how great technology systems are in place at the provider.
00:15:38:11 - 00:16:10:05
Bhavana Dhillon
And maybe it's a practice, maybe it's a network, maybe it's a big group, maybe it's a health system. And put that hat on the sales hat and present to the provider to the health plan that would give you that negotiation leverage, and that would also build relationships. And on the right side, let's put on our provider hat. Right when we put on our provider hat, we feel that the health plan is making it so hard to achieve success.
00:16:10:08 - 00:16:39:17
Bhavana Dhillon
Like they you know, it feels like as a provider, I'm doing all the work because they, you know, the the contract, the way the targets are. It's so hard. And as a provider, you may feel the health plans are not investing at the same level as you as a provider are. And what drives that perception is, you know, there might be a delay in the data that is shared by the health plan.
00:16:39:20 - 00:17:19:14
Bhavana Dhillon
There might be added admin burden on the provider, which drives that perception and sometimes leads to exhaustion and frustration. And so I would encourage both the health plans and the providers to have a transparent conversation about the obstacles that exist on both sides, the tech support, and also some of the operational pieces. Right. You may not have the personnel to do the claims query or pass out that data, or the SFTP may not be set up because of the, you know, the requirements of that environment.
00:17:19:14 - 00:17:24:11
Bhavana Dhillon
So it could be anything. Now, when we are, you know,
00:17:24:14 - 00:17:46:23
Bhavana Dhillon
negotiating with the health plan, we have to remember or negotiating with a provider, we have to remember it's a multi year multi phase partnership. It's a multi cycle. There's so many cycles to it and it's a commitment to go through this process all through all the ups and downs.
00:17:46:26 - 00:18:10:15
Bhavana Dhillon
Right. So you know because there will be everybody's learning. The health plan is learning. The providers are learning the health system. If there's a health system and the as a stakeholder, we are all learning, there will be mistakes done along the way. There might be errors on the contract language. There might be errors on the reconciliation methodology.
00:18:10:15 - 00:18:28:04
Bhavana Dhillon
So if you have great relationship among the stakeholders and there is philosophical alignment, then that would lead to, success. And, you know, everything is solvable when there is there is, philosophical alignment.
00:18:28:06 - 00:18:48:03
Claire Wirth
Bhavna, now I know you've had such experience with this VBC contracting. I'm curious if you have any examples from what you've worked on, where there there was a problem, maybe in the contract, but because they had that philosophical alignment, they were able to, persevere and ultimately maybe in a better spot.
00:18:48:05 - 00:18:50:08
Claire Wirth
Any examples of that?
00:18:50:10 - 00:19:18:25
Bhavana Dhillon
Yeah, sure. So it was a, three year contract, value based contract with a big provider group. And a health plan. And it was the end of the first performance period that when reconciliation was happening, that the both the stakeholders, provider and health has realized that there is an error on the, shared savings calculation methodology in the contract.
00:19:18:27 - 00:19:50:13
Bhavana Dhillon
And when they started reconciling and looking at the attribution of the patients to the providers, the way it was laid out in the contract had an error. And that led to no savings or diminished savings, you know, death. So it lead to financial implications. And, you know, one of the most important things and takeaways from my experience from that episode was because there was philosophical alignment.
00:19:50:16 - 00:20:26:15
Bhavana Dhillon
Both parties agreed to the aim of the partnership, the objective of the contract, the metrics they wanted to reach and the value it brought to the members, to the patients. We put an amendment in place. We corrected that methodology. We had correct calculation of shared savings, and both parties got a portion of the shared savings. And, you know, we went through second year, third year, and we realized, you know, we are on a great we have a great success story here.
00:20:26:17 - 00:20:58:22
Bhavana Dhillon
So everything is solvable if you have a great relationship, you know, so you know, at say for example, here, as you see on the on the slide for a two year VBC arrangement, the first two months are in the proposal phase where you are contacting your point of contact sitting at a table proposing the objectives right, the aim of the partnership, how a provider can provide better care, and quality care to the patients, how they can lower cost of care.
00:20:58:24 - 00:21:43:28
Bhavana Dhillon
And from the health plan side, they are looking at the opportunity how how it's going to impact the patient experience and also on the total cost of care. The longest phase in this cycle is the validation and negotiation phase, which is like a 12 month, sometimes 18 month period where both stakeholders, providers, health plans, health systems are looking at the scope and scale they are looking at what is the provider footprint, how many members are in that market, or for those providers, what are the quality metrics we are going to, impact with this partnership how it's going to benefit the patient?
00:21:44:00 - 00:22:09:20
Bhavana Dhillon
How are we going to engage the patient? What value does it bring both clinically and economically. And then the negotiation piece, how how are we going to reconcile. How are we going to measure value. Who is taking on risk and how much is it. Half and half risk? Is the provider taking half the risk in the health plan, taking half of it, half the risk.
00:22:09:22 - 00:22:44:07
Bhavana Dhillon
So it's a 12 to 18 month process where both parties go through back and forth, sharing their ideas, building on each other's insight and experience, and come to the contract execution before the first performance period begins. And usually it's an annual performance period. The 12 month, which, you know, usually they will set the baseline during the validation period, what the baseline performance of that provider or that program is.
00:22:44:09 - 00:23:12:10
Bhavana Dhillon
And I just want to point up here reconciliation of the of the performance, where the finances take place after 3 to 6 months. And we all know we need a 90 day run out period for the claims to be complete. So a reconciliation can happen 3 to 6 months after the end of the 12 month performance period, and the financial impact happens after that, usually 45 days after the reconciliation is complete.
00:23:12:13 - 00:24:02:21
Bhavana Dhillon
And now when many providers will look at this is like we'll say, so I get financial impact one and a half years after the first day of my measurement period. Yes. But there's there are a lot of frameworks, a lot of ways to support operationally to get operational support from the health plan. So what we can do is or what you can do as a provider is during the performance period, you can have a PMPM model or you can have an upfront cost, cost payment, which supports the providers operationally and which we which can be balanced out or are taken in consideration at the end of the measurement period, at the reconciliation time.
00:24:02:24 - 00:24:28:16
Bhavana Dhillon
And the second year when we are doing performance period, obviously it's going to be concurrent when the reconciliation for the first performance period is happening. Now, as we move forward, there's a lot of tools, right? All the audience, the people in the audience, especially the providers, are saying, okay, negotiate the contract. What do I need to negotiate the contract?
00:24:28:19 - 00:24:52:13
Bhavana Dhillon
Right. Have and there are providers who have been negotiating and they think, are we doing a good job? Like are we doing how we are supposed to do? Are we thinking about the things that we need to think about during a negotiation? And so there's four big buckets that we have to take into consideration when we are doing VBC contract negotiation.
00:24:52:15 - 00:25:22:04
Bhavana Dhillon
Number one, understand your position. Understand your footprint. Right. You want to know how big I as a provider in that market, how, how much of the members of that health plans am I caring for and that market? And if you are a health plan, you also have to consider what percent of my membership is cared for by this provider network.
00:25:22:07 - 00:25:52:02
Bhavana Dhillon
And that gives both parties some understanding of the value this partnership is going to bring, and the members it's going to impact. Also understand the pain points, right. As a provider, we all know what are the pain points of of our patients, of our members, which facility our members go to for ER services, which rehabilitation centers or sniffs our patients go to what are their pain points?
00:25:52:04 - 00:26:22:08
Bhavana Dhillon
What is the side of care number one side of care for my patients? Also understand the line of business. I'm a high risk patients. Medicaid or Medicare Advantage or Medicare or commercial. And it's going to vary from state to state, city to city, whether rural or urban or big city. All these things differ. So as as part of negotiation, you have to understand how big am I in the market?
00:26:22:10 - 00:27:01:08
Bhavana Dhillon
How big am I to my client? How big is the value proposition I bring to the table, and what are my tools? And also understand under the financial and operational considerations, what is my fee schedule? So Claire, few years ago we had our specialist provider group and they had a very high fee for service schedule. They were like 400% of Medicare and it was so hard for them to get into a VBC contract because they were already being paid a very high fee schedule.
00:27:01:10 - 00:27:24:19
Bhavana Dhillon
So understand that where you're coming from and some of the providers might think, I'm good with my fee schedule and some most of them feel they they have a very low percent for fee schedule. You know, their fee schedule isn't as high as the market. And that's the opportunity we have to understand that, understand what you can impact to.
00:27:24:19 - 00:27:54:04
Bhavana Dhillon
Right. If you are a specialist, you can't impact ER utilization a lot unless you are a cardiologist, right? So if you're a rheumatologist, you can impact pharmacy spend because of the immunologic. If you're a ER Doc, you can impact ER revisit or comebacks to the ER if you're a hospitalist, you can impact length of stay. If you're a primary care, then you can impact total cost of care.
00:27:54:04 - 00:28:26:07
Bhavana Dhillon
Kind of understand that as we, as we negotiate, on the data and capabilities, right. Understanding build or buy, if you are buying, how effective is your tech capabilities? Are you capturing them? Data needed to support this VBC contract are you able to demonstrate your efforts clinically on the data side, do you have data to support your interventions?
00:28:26:07 - 00:29:01:08
Bhavana Dhillon
Your patient engagement? Your gap closures? Do you have the data to support that? And if you can, again, sales hat providers present yourself that you can through data, show how effective you are in closing that care gap. And lastly kind of negotiation strategy, right. All tracks usually start on an annual basis calendar year. So if you're talking to a health plan in May, you will not be able to go live on July 1st of that year.
00:29:01:08 - 00:29:29:17
Bhavana Dhillon
It's going to be January of next year. So keep that in mind that if you, you know, have realistic expectations that the time it takes for the contract to be reviewed, negotiated, legal to redline it and then implement and deploy it, it takes time. So having realistic expectations and I know we talked about pair partnership first pillar contracting second pillar.
00:29:29:19 - 00:29:36:27
Bhavana Dhillon
And now let's talk about the third pillar. Our financial visibility.
00:29:37:00 - 00:30:15:08
Claire Wirth
That contracting pacing being so important. Another really important piece is financial visibility. Because so often we don't see the VBC dollars that Bhavna just talked about how we negotiate for them. But so often as a provider you don't see them. So I want folks to open the Q&A box on your right hand side and finish the sentence that I have for you on the screen for health systems, the biggest barrier to financial visibility in VBC is.
00:30:15:11 - 00:30:21:06
Claire Wirth
Finish that sentence in the Q&A box, and I want to see a bunch of answers come through.
00:30:21:08 - 00:30:46:19
Claire Wirth
For molly time lag between earning the dollars and getting them from the payer? Absolutely. Either. Fear of financial loss? Absolutely. Melanie. Profitability. Dan doing nothing allocating the revenue from Laura. Absolutely right. Capturing all of those into three main challenges here we have them for you. First I can't see VBC on the PNL. Yeah you can't see it.
00:30:46:19 - 00:31:17:07
Claire Wirth
It's often just not there on the PNL. There's that classic expression you can't manage what you can't measure. You also can't measure what you can't see. So that's something to prioritize financially from that standpoint. Second, it's too late. When I finally do see it, that time lag that somebody put in so often it's just too late, right? Because of that reconciliation period, we submitted the data for our contract in April 2024, and we see the dollars in June 2025.
00:31:17:07 - 00:31:39:18
Claire Wirth
Like, that's such a big difference between doing the work and seeing the dollar impact. And then lastly, okay, let's say you can see it. It comes through, you see it. I can't actually explain the dollars. So how do I figure out how these results led to these specific dollar amounts. Can we look back and say where did this number even come from?
00:31:39:20 - 00:32:07:03
Claire Wirth
We can certainly do that in V4 service. We can certainly understand the margin that came from doing that. One more knee replacement in an ambulatory surgery center, for example. We can see that, but it's a lot harder to do that in value based care. Now, I want to tell you all our story, our first story from a high performing health system that is beyond the dabbler stage in value based care.
00:32:07:03 - 00:32:34:12
Claire Wirth
And they're they're truly finding success. And that is UNC health, the University of North Carolina Health and their clinically integrated network, the UNC Health Alliance, which is their VBC and entity they have solved for all three of these barriers and in all the years of our research, and I mean, there's 400 health systems in the country. My team has spoken to a lot of them.
00:32:34:14 - 00:33:02:03
Claire Wirth
This is the most sophisticated example of financial visibility in VBC that we have ever seen. So first off, let me show you what they do. This is a purely representative PNL. So numbers completely made up on this slide. But this is a representative panel. And I want you to look at the dark blue boxes there in the table.
00:33:02:06 - 00:33:34:05
Claire Wirth
First off, it's already impressive to have a specific light item for VBC revenue and losses. Now look at the subtitle above that table there for a UNC health hospital or practice. Some health systems may have this level of visibility for the entire health system. UNC health goes way further, and they have it for each individual business unit. Every single business unit.
00:33:34:07 - 00:33:59:23
Claire Wirth
And then on the right hand side you can see we have the proportion of predicted shared savings, the proportion of predicted penalty for missing a benchmark target, their financial picture. It's not retrospective happening way down the line. It is how VBC performance looks today. It is based on the numbers that they are actively tracking, and they have built this financial capability in order to say, here's how we're doing in the contract.
00:33:59:26 - 00:34:25:10
Claire Wirth
As of today, we are trending towards this performance and you can see it on your PNL. So how are they calculating this? UNC health has created a consistent methodology that governs the funds flow in and out of distributing that dollars. So this is how this works. Let's imagine a bonus happens, right? UNC health is going to pay that bonus out?
00:34:25:12 - 00:34:51:01
Claire Wirth
But first 20% of it is retained by the clinically integrated network. And that covers operating costs. They're funding their infrastructure costs. Then the other 80% gets distributed out. So it gets distributed using a proprietary method. So now I'm able to show you the specific breakdown with that within that 80%. But I can show you on the right hand side where that goes.
00:34:51:06 - 00:35:19:05
Claire Wirth
So the first group that you always want to be making sure you pay out to, especially value based care contract, is your PCPs. A big chunk of that 80% goes to the PCPs, next to goes to hospitals. And this is really important to keep in mind. Clinically integrated networks, very few of them are sitting on a stockpile of cash and able to, just like spend is what they need on an annual basis to fund those operations.
00:35:19:07 - 00:35:40:22
Claire Wirth
And so hospitals here in UNC health, for lack of a better term, they're pre funding a lot of this work. And so by having this as a payback they're viewing VBC as an investment. It's an investment for the system. And hospitals are getting part of that reward. And they're seeing it on a monthly basis. This is happening on a monthly basis.
00:35:40:24 - 00:36:01:24
Claire Wirth
And then the last fund, and it's worth keeping in mind because it's similar to a rainy day fund. And that's a PCP reserve fund. It's relatively smaller compared to the other ones. But it's the first line of defense. If there is a penalty. And to think about that for a moment, UNC health, they might be having a penalty for the network.
00:36:01:26 - 00:36:32:22
Claire Wirth
And they're tracking that through their PNL. But they have that reserved amount within that 80% that they can focus on. So if a penalty comes into reality, they have that ready. They have a little bit of safety net. What stands out to me about UNC health and their leadership in VBC is that they're making this sustainable. Part of this by making it sustainable is by having sustainable funding, in case anything should go wrong with those contracts.
00:36:32:25 - 00:37:20:18
Claire Wirth
What's really impressive to me is the predictive nature of how they apply this. So their financial visibility process is predictive down to the business unit level. I want to be clear about how that predictive component takes place, what's happening on a monthly basis within UNC Health Alliance, or CIN is that they are calculating and predicting what each individual business unit, whether that be a hospital in employed practice or an independent practice, whatever that business unit is, they're predicting what that entity's contribution to the contract is going to be, and they're doing that as a result bonus or penalty for that entity, not just the network, but that entity's unique contribution.
00:37:20:20 - 00:37:44:21
Claire Wirth
And then they're reporting it and booking that performance on a monthly basis. So if you're the president of a hospital and you're going to see a bonus from the VBC contract, it's going to automatically show up on your PNL. This is a great moment to keep in mind that not all of their network is employed. Two thirds, I believe, are employed, about a third are independent, and so they're not necessarily part of the UNC health financial ecosystem when you're independent.
00:37:44:27 - 00:38:08:13
Claire Wirth
So for those groups, what they do is they still give them that information and they just have to book it manually, but they still get that information. That's what we describe on the left hand side, that process of predicting and booking it on the right hand side is after the contract ends, what they need to do. So on a monthly basis, they've been looking at performance, that financial information based on how they're doing.
00:38:08:16 - 00:38:28:11
Claire Wirth
And then after the contract after reconciliation period, they have to do their own reconciling of what they've been booking. And I have to say, they've gotten so good at this that what they're actually reconciling doesn't end up being a huge amount of money because they've gotten so good at this practice. But they do have to do that at the end of the at the end of the contract.
00:38:28:13 - 00:38:56:09
Claire Wirth
So this is a really powerful story because UNC health has found a way to overcome those three barriers that we mentioned earlier. It's transparent. They can see VBC on the PNL at UNC health. It's a designated line item. You can see it. It's timely. It isn't happening 16 to 24 months after the work has already been done. They're seeing it on a monthly basis.
00:38:56:11 - 00:39:20:28
Claire Wirth
And lastly, it's trustworthy. UNC has a good methodology for predicting and reconciling for these entities. They have these numbers and of course they reconcile them as needed. But these are numbers that their leaders feel like they can trust. This approach to financial visibility goes to a level that most, most health systems simply do not get visibility at the business unit level.
00:39:20:28 - 00:39:51:14
Claire Wirth
It's as close to real time as you're going to get. Yeah, you can trust those numbers as a leader, and that makes VBC not just financially visible but also sustainable for the organization. And that wraps our conversation on financial transformation. So when we think about VBC we've got these two big categories financial transformation a change in how we get paid and a clinical transformation, which is a change in health care is delivered.
00:39:51:16 - 00:39:56:19
Claire Wirth
And now we're going to get to that clinical transformation piece. Right? Bhavna.
00:39:56:21 - 00:40:32:18
Bhavana Dhillon
Yes. Thank you Claire. So on the clinical transformation piece, two big items are data driven path health and network management on the data and tech solutions. Right. I always Claire, I always find my providers having the question build or buy. Should I just hire analysts to do the queries and to run the reports and, admin to do that for me as a provider, if I'm a provider group or if it's a big hospital system, do I build my own platform?
00:40:32:20 - 00:41:00:12
Bhavana Dhillon
And then there's a question, do I buy it right? There's a lot of questions around it. So I think the easy way to think about this is we want the providers to do what they do best, care for their patients. And the technology piece. There are organizations out there who figured it out, who have solutions, who have products, who have AI that runs in the in the back end.
00:41:00:15 - 00:41:27:27
Bhavana Dhillon
And so we want the value based care models to be, to have a seamless integration of tools and information that can help our providers deliver high quality, cost effective care during moments that matter right. It can be overwhelming for providers with all these tech solutions. That's it out there. I know this this slide is, has a lot going on.
00:41:27:27 - 00:42:02:28
Bhavana Dhillon
But to simplify, I want to ensure that our providers and health systems and payers understand that the technology can run in the background to cater to needs in the pre-visit space. The day of the appointment, during the patient encounter, and also for follow ups. Right. We want the visits to be scheduled. We want the patient history and the labs to be captured before a patient encounter.
00:42:03:00 - 00:42:39:09
Bhavana Dhillon
We want our providers to be prompted with recommendations for med management or for closure of care gaps. We want the prior auth to arrive by itself. We want the eligibility confirmation to be by itself. We want the prescriptions to be refilled or filled by itself, and AI can do that. There are organizations that have figured it out and do make the clinical workflow seamless and very, simple.
00:42:39:11 - 00:43:02:09
Bhavana Dhillon
And the best part of this is they do create tracking. They do create outcome reporting. So you automatically know as you're in the value based contract on this journey, how am I doing today? How did I do in the past three months? What does it look like for the rest of the year? How I'm going to do that.
00:43:02:11 - 00:43:15:00
Bhavana Dhillon
And so I would encourage everybody to think about, you know, the question buy or build. I kind of assess all the solutions that are out there. And I know, Claire, you have a great
00:43:15:02 - 00:43:23:10
Bhavana Dhillon
story for us. How on, advocate health help. Would you, would you kindly share?
00:43:23:12 - 00:43:29:28
Claire Wirth
Yes. Yeah. So this is advocate health. Advocate health is at the cutting edge of what Bhavna was just talking about.
00:43:30:00 - 00:43:52:25
Claire Wirth
They are already using automation with their care management team to help them reach more folks and get to focus on the patients who most need their support. So for those of you who are less familiar with Advocate Health, it is the third largest nonprofit health system in the country. So they're covering Wisconsin, Illinois, North Carolina, South Carolina, Alabama and Georgia.
00:43:52:25 - 00:44:20:24
Claire Wirth
I hope I got everything, but those are the states that they're primarily operating in. They've got roughly 120 VBC contracts with 2.4 million attributed lives in risk. And so for them, being able to reach scale and enable their care management teams is of great, great importance and big dollar potential savings. So what they did is they turned to this AI tool and we have here how it works.
00:44:21:00 - 00:44:47:23
Claire Wirth
What the tool essentially does is take out a lot of the first beginning steps of care management. It reviews the patient chart to determine the complexity of that patient. And it says, okay, how complex is this patient? If they're really complex, immediately passing on to the care management nurse, giving some recommendations, if more medium complexity suggesting some interventions, probably a couple different things for the nurse then to look at and approve.
00:44:47:29 - 00:45:06:00
Claire Wirth
And for a low complexity patient essentially asking the care manager, hey, can you approve? This is a low complexity patient. They don't need a robust suite of resources or support from a nurse. Just making sure we're going to reach out and do x, y, z thing. So think about what that's doing for these nurses from the get go.
00:45:06:02 - 00:45:37:02
Claire Wirth
They've just got to check the math that these are the right interventions and the right call. But they've already got to save a ton of time and effort. And then here's the other really scalable part. Not only did that AI tool review the chart, give the nurse care manager the most essential information and the recommendations. It also automates the outreach for low and some medium risk patients just extending the reach of the care team.
00:45:37:04 - 00:46:04:02
Claire Wirth
So they've reduced that administrative burden and then look at what they've been able to achieve. They increased the number of patients that they were able to reach out to by 126% in a single given year, and they saw a 39% reduction in readmissions. So for advocate health here, they've got care management. They treat it like a team sport.
00:46:04:02 - 00:46:29:14
Claire Wirth
So when I say nurse care manager you know that it's not just a nurse care manager. They've got a bunch of care management staff here, but they also understand that we don't need to just throw more people at the challenge. We're never going to have enough resources to do the care management that we really need. So how can we use automation as an additional member of the care team to help them be able to prioritize and focus on what they really should be doing?
00:46:29:17 - 00:46:58:12
Claire Wirth
So advocate health. They're using the more traditional care management approach, but they're doing it grounded in data. So we've now covered four of our five pillars. But now we've done payer partnership contracting financial visibility. And now we've done data driven population health. And our fifth and final pillar is network management. And as you and I were talking about this, we were talking about this balance of growth and quality.
00:46:58:12 - 00:47:00:19
Claire Wirth
Can you can you talk more about that?
00:47:00:22 - 00:47:25:12
Bhavana Dhillon
Sure, sure. Claire, it feels like a crash course. Right? As a company obviously in an hour. But yes. So our fifth pillar of our value based care success is network management. And we have to make sure we keep a balance between growth and quality. Right. When we talk about network, I think the first thing that comes to mind is growing the network.
00:47:25:12 - 00:47:57:22
Bhavana Dhillon
Yes, strength is in numbers. More providers mean more attribution and greater negotiation power for the providers as well as the health plans. Right. Building dominance in the region is so important to control the cost of care. But there's another piece that most of us forget the network quality. We want engaged providers who are committed to perform on the value based care outcomes will be champions and role models for other providers.
00:47:57:24 - 00:48:23:22
Bhavana Dhillon
And also we want providers who will engage on a regular basis, right? We don't want only 20% of the providers engaged and 80% silent. It has to be the other way around. So making sure our network has both growth and quality, to support the five pillars. Claire, great story about UNC do you want to touch upon that real quick.
00:48:23:25 - 00:48:44:17
Claire Wirth
Yes, I'm going to give the short version because I do want us to get to Q&A. Folks. You've got some great questions coming in UNC Health Alliance back at them again when they are thinking about really calling their network while also growing it. They look at both qualitative and quantitative, and what they found over their years of managing the network is how important the qualitative is.
00:48:44:19 - 00:49:06:06
Claire Wirth
They want clinics that are going to bet with them, that are going to understand VBC and are wanting to learn and grow and improve in those specific ways. And so there is a balance here of the growth, but also making sure it's a high performing network. And UNC Health Alliance has realized the importance of the qualitative in being able to do that.
00:49:06:08 - 00:49:29:04
Claire Wirth
So with that, as we draw our time to a close, I want to hit on the main messages that we've hit on so far. First VBC is here to stay VBC is growing, not shrinking. There's a lot happening in healthcare right now, but for anyone questioning the future of risk based models, there's a lot of momentum that has been here for VBC in the first place that have just been exacerbated.
00:49:29:07 - 00:49:56:01
Claire Wirth
Remember, VBC is both a financial transformation and clinical transformation. You need both to be able to be successful and VBC fails without alignment. You need alignment internally in your organization and with your partners. That's why payer, partnership and contracting are so important, and making sure that you're tracking it on, your PNL, making sure you're seeing the dollars in your PNL statements.
00:49:56:03 - 00:49:57:26
Claire Wirth
But that can you hit the last few
00:49:57:28 - 00:50:25:20
Bhavana Dhillon
Yes and technology is the engine. So technology, and analytics act as a catalyst, right? They act as a catalyst. They make your journey seamless and smooth. There has to be balance between network growth and network quality, right? Keep in mind, efficient, effective providers committed to the value based care journey and success in VBC yes, possible.
00:50:25:22 - 00:50:54:05
Bhavana Dhillon
Not everyone will win, and who doesn't get on this VBC bandwagon will be left behind, unfortunately. And so I tell my providers and my health plans today, you can be part of the framework and building out and developing that framework. If you don't participate, you will not have a choice later on, and we'll have to follow the framework structured for you.
00:50:54:07 - 00:50:55:15
Bhavana Dhillon
So in this building
00:50:55:19 - 00:50:58:23
Bhavana Dhillon
phase, you know, we have to participate and build it out.
00:50:59:14 - 00:51:05:01
Bhavana Dhillon
Joanne, I’m gonna hand it to you
I think we are coming up to a close for the session
00:51:05:08 - 00:51:16:27
Joanne
Speakers, thank you for the great
presentation and thank you for sharing your thoughts today. Thank you to
the audience for participating in the webinar this concludes today’s presentation.
Thank you again and enjoy the rest of your day.