Value-Based Care: Lessons Learned

Douglas Chaet

As healthcare moves more fully toward value-based models, organizations around the country are learning from the successes and failures of other organizations.

Managed Healthcare Executive (MHE) recently spoke with Douglas Chaet, chief managed care officer at Cleveland Clinic, chairman of the American Association of Integrated Healthcare Delivery Systems, and a member of MHE’s editorial board, about some of the lessons he has learned about value-based care at Cleveland Clinic.

From the emergence of next-generation models to the importance of physician leadership, Chaet describes why he’s excited about the future of value-based care.

MHE: What current value-based programs are you most excited about and why?

Chaet: I’m a big supporter of any value-based program that can legitimately engage physicians and move the needle on both cost and quality. It may seem like an easy task, but historically there have been a number of program deficiencies-meaningful financial incentives, a focus on process vs. outcomes, and a lack of true provider engagement. I’m very encouraged, however, by some of the next generation value-based program designs, fueled largely by employer/purchaser input, which appropriately engages the patients as well as the providers. I firmly believe that all participants need “a reason to care” in order to achieve sustainable value via healthcare delivery transformation.

MHE: Why are value-based programs so important?

Chaet: Patients are our customers, and whether you’re a payer or provider, the collective focus is to provide the very best outcomes. Value-based programs, if structured correctly, can be an incredibly useful vehicle in aligning the interests of disparate, yet codependent stakeholders to achieve a common goal-improved quality and reduced cost. I’m convinced that payers (both traditional and non-traditional) and providers who can excel in this regard will have a tremendous edge in the healthcare marketplace in the years to come.

MHE: What is needed for a successful value-based program (e.g., staff, technology, leadership, etc.)?

Chaet: If you are a payer and you’re designing a program, it’s important that you do so with progressive providers in mind. While it may be easier to develop and deploy a basic model for broad networks, the impact on historical performance will likely be limited. At the end of the day, the focus needs to be on results vs. optics. It’s also critically important that the program be flexible enough to accommodate regional dynamics. What works in Dallas may not be a good fit for Cleveland.

If you’re a provider organization, make sure you have internal alignment on your overall value-based objectives and then commit to the necessary resources. A value-based strategy should be treated as an investment, and like any investment, it’s important that you do your homework in advance, invest appropriately and candidly re-examine your decisions periodically. It is also crucial that the provider organizations allow their physicians to lead such initiatives, as they are the “quarterbacks” of our healthcare system. While this has traditionally been a challenge for some hospital-centric health systems, it is fortunately not an issue for the Cleveland Clinic, a global leader in physician-led care delivery.

In short, value-based success is typically driven by three components-desire, know-how and a genuine commitment to transformation.

MHE: What’s a good place to start and where do you see the future of value-based care?

Chaet: The initial focus has to be on quality and quality improvement. As I suggested previously, physician engagement is the key, and if the physicians are going to lead then the outcome needs to include a tangible benefit for the patients. You can then begin to introduce the cost aspect, coupled with an accelerated education program.

The reality is that every market is at a different stage of development. Ironically, I still get requests to share a capitation risk model that I developed in the late 90s. That alone leads me to believe that the concept of accountability is going to continue to pick up speed.

I’m also thankful that employers and other purchasers of healthcare are now investing substantial resources to determine which providers afford the greatest value. For years, most of the analytics focused solely on comparing insurer aggregate network discounts, which is clearly not an adequate measurement of value.

MHE: What can other health executives learn from legacy value-based programs and how they’ve been implemented?

Chaet: Program incentives should include an appropriate balance of cost and quality. Also, as I mentioned previously, the financial value of the incentives needs to be meaningful to a provider. The reality is that a successful practitioner is not going to dramatically change the way they practice medicine in exchange for nominal bonus, which may or may not be directly linked to their individual performance.

Once you get beyond the design aspect, another big “lesson learned” is the behavioral component. It’s important that you invest significant time in face-to-face discussions with physicians and be specific when you communicate. For example-these are the things that will change, these are the things that will be different, and this is why it’s better for your patients.

MHE: What are some resources for other health executives looking to improve value-based programs at their organizations?

Chaet: There are a number of excellent educational resources available online through a variety of professional associations, and of course national conferences which focus specifically on value-based care. My personal bias, however, is that it’s best to learn from peers who have already lived and experienced the value-based journey. Related, the Cleveland Clinic will be sponsoring its 2019 Value-Based Innovation Summit in Cleveland, October 22-23. What makes this event unique is that will feature “best practice” value-based case studies in from around the nation, which will be co-presented by senior payer executives and their provider partners. Anyone interested in receiving an invitation to this event is encouraged to send an email expressing their interest to Rachelle Brenner at the Cleveland Clinic brenner2@ccf.org.