Diabetes management moves the dial on value-based care

A medical group in New York is rapidly shifting toward “value-based” care from fee-for-service (FFS)-spurred on by a program to reduce variations in physician practice that began by focusing on patients with diabetes.

Crystal Run Healthcare LLP's pilot program, promoting best-practice clinical guidelines for diabetes, helped to lower the percentage of its patients with hemoglobin A1C levels greater than nine from about 18% down to 8% or 9%. It also reduced outpatient costs of treating diabetes for the physician-run multi-specialty group by almost $850,000 in the full year post-intervention, says Scott Hines, MD, chief quality officer and medical director for Crystal Run's medical specialties division.

Diabetes was chosen for the pilot in 2011 because of its prevalence, and because it is a diagnosis with well-established clinical practice guidelines, Hines explains. Crystal Run calculated total cost per person per year, then segmented costs into professional, laboratory, radiology, and procedure charges, he says. Next it compared care costs among physicians treating diabetes, allowing each physician to compare against colleagues. The final step was to analyze variation and determine its source.

Crystal Run's finding

Physicians' cost variations weren't related to severity of illness or clinical quality: There was no correlation between care costs and the percentage of patients with A1C values under seven. Instead, variation resulted from failure to adhere to established best practice guidelines.

“We said, 'Why not follow ADA [American Diabetes Association] guidelines, get physicians out of their practice ruts and increase awareness of guidelines, and that's what drove the cost savings,” Hines says. “We did not embark on this to save money,” but savings occurred by eliminating unnecessary outpatient visits and labs. High-utilizing doctors (compared to practice guidelines) reduced services more than low-utilizing doctors increased them, and in the end variation between the two was reduced.

Crystal Run continues to monitor physicians' practice variation for diabetes, Hines says, adding that, “You get the most bang for your buck initially, then you stabilize. ...With diabetes, the practice variation has stayed relatively flat. Doctors follow the guidelines well.”

Separately, Crystal Run has quarterly diabetes rounds between endocrinologists and its six patient-centered medical homes, Hines says. PCPs get a list ahead of time of patients with A1Cs greater than nine and talk to specialists; case managers try to get at-risk people in for doctor visits if they're still patients of the practice.

“It allows our endocrinologists to focus on the sickest of the sick,” and primary-care physicians (PCPs) follow other patients, Hines says. About 5,200 patients seeing Crystal Run's PCPs have diabetes, he says.

Next: The broader focus

Crystal Run, a physician-owned medical practice, extends from the Hudson Valley into Manhattan, also covering parts of New Jersey, Pennsylvania and Connecticut. Its 350-plus physicians work in primary care and 40-plus specialties. In 2014 the group saw about 185,000 patients, handling nearly 1.2 million patient visits. 

Improving quality and reducing utilization for diabetes led Crystal Run to focus its effort to reduce practice variations on 15 more conditions, including congestive heart failure and asthma. Virtually all of its adult patients had at least one of these conditions, Hines notes in a July 23 Health Affairs blog.

Variation and costs were reduced for 14 of the 15 diseases for total savings of almost $4.2 million, he says.

Shifting to 'value-based' care

Such results led the medical group, which has grown to more than 35 practice locations since its founding in 1996, to conclude that it had to continue its shift from FFS to “value-based” care. Hines, an endocrinologist in practice nine years, explains that the $850,000 in reduced diabetes costs “is coming directly out of our [i.e., the physicians'] pockets in a fee-for-service world,” which is giving the group incentive to shift to a new practice model. Over the short-term, it has kept its practice stable by attracting new patients.

After passage of the Affordable Care Act, the organization embraced the concept of value-based payments. Crystal Run Healthcare ACO, a single entity comprised solely of the medical practice, has participated since 2012 in the Medicare Shared Savings Program, which publicizes diabetes quality measures, among other indicators.

Hines says Crystal Run has leveraged its experience in the program to undertake multiple risk (shared savings) contracts with five commercial payers, including Aetna, Inc. and Empire BlueCross BlueShield, and a Medicaid managed care plan.

“Crystal Run’s approach of reducing the physician practice variation in the treatment of diabetes has shown positive results within their practice and should lead to the application of this practice with other chronic disease management conditions,” says Barry Brandow, Empire BlueCross and BlueShield's regional vice president for network management.

Donald W. Fisher, PhD, president and chief executive officer of the American Medical Group Association, calls Crystal Run “an innovator in care optimization, which aims to prevent care gaps from occurring by utilizing engaged physicians to standardize pre-visit planning, reduce variations in care, and lead quality improvement initiatives.”

Crystal Run's “efforts have led to substantial improvement in patient outcomes, particularly patients with chronic conditions, such as diabetes and hypertension,” Fisher says. “By creating dashboards to improve process-based measures, they also have enabled physicians to practice at the top of their license and focus on performance-based measures.”

Next: Aligning financial incentives

Moving forward, Crystal Run “expects to take more and more risk,” Hines says. Crystal Run Health Plans launched for 2015 to sell PPO and EPO products to employer groups, and was approved to begin selling its HMO August 1. It will offer individual products on New York State's health insurance exchange for 2016. Also in 2016, Crystal Run wants to move to percentage-of-premium agreements with commercial payers, he says.

Crystal Run is “moving quickly” to align financial incentives with its practice model, Hines explains, “because putting these programs in place requires expensive analytics and a cultural change for physicians ... and because FFS costs us money.”

Improvements in diabetes care and other diseases extend beyond its Medicare Shared Savings Program members, Hines says. “Our philosophy all along has been focused on outcomes, better quality, better patient experience, lower cost-and we're going to apply whatever transformation [occurs] to all patients."