Cost effectiveness of health and the urgent case for value: More insights from HFMA’s 2022 Annual Conference

Erika Grotto: Value and the case for the cost effectiveness of health, today on HFMA’s Voices in Healthcare Finance podcast, sponsored by Conifer Health Solutions. Hello and welcome to the podcast. I’m your host, Erika Grotto. Today, we have the second episode featuring content from our Annual Conference pre-conference. HFMA’s Brad Dennison speaks with Kal Wahab, a director at Nordic Global about the cost effectiveness of health. You’ll also hear my interview with Michael Spencer from our sponsor organization, Conifer, about digital patient engagement and later, hear about a special content offering from HFMA on the cost effectiveness of health. But before all of that, let’s hear what’s happening in healthcare finance news. Here’s HFMA Senior Editor Nick Hut and HFMA Policy Director Shawn Stack.

Nick Hut: Hey, everyone. There are any number of topics that Shawn and I could be discussing in this segment, because July very well may be the busiest month of the year for healthcare policy developments, but the thing we’re focused on today is news that broke just a few days before we recorded this segment, namely Amazon’s announced acquisition of One Medical for a cool $3.9 billion. Shawn, what do you think this could mean for the healthcare landscape in the U.S., particularly the primary care landscape?

Shawn Stack: Yeah, Nick, well, this is something that we’ve been waiting for for awhile to see what Amazon’s going to do in the market, especially with primary care. And One Medical is definitely a pretty aggressive move. They currently are in 19 cities right now and have over 200 locations in those cities, so I think this is definitely, in addition to Amazon expanding their network of services earlier this year to 20 new additional cities, just their virtual and nurse visits to homes program, this is pretty rapid expansion to them, and One Medical is very established in the market or is getting more established in the market, and this is definitely—I see it as a replacement to the Haven debacle that happened last year, year and a half ago. So definitely a feather in Amazon’s cap.

Hut: Yeah, great points about, in the context of Haven. For those who don’t know, One Medical is a membership-based primary care model that emphasizes convenience, for example, through same-day appointments and capitalizes on technology in an effort to try to optimize access. It’s an employee benefit at more than 8,000 companies. I saw that stat and was really taken aback because it shows just how entrenched One Medical has become in the employer market in the 15 or so years since it launched. And last year it made a purchase of its own buying Iora Health to really try to ramp up value-based care delivery to Medicare beneficiaries. And so Shawn, if you’re with a traditional primary care practice and this deal is announced to combine One Medical’s business model with Amazon’s platform, what are you thinking, and what strategies are you considering?

Stack: Yeah, I mean, keep in mind that this platform is still primary care, so collaborating with One Medical and Amazon as far as having them as referral services in your community is always a wise step, and they’re not going to be providing that acute care that hospitals really, really are focusing on. So using that as a conduit for referrals and establish those relationships definitely has never been more critical at this time.

Hut: Yeah, absolutely. Hey, thanks for that, Shawn. Like we said at the top, there are many, many big healthcare policy stories that we could have talked about today. In our next up, we’re planning to discuss major happenings in the world of the 340B drug pricing program, including in the context of the recently released proposed rule for Medicare’s Outpatient Prospective Payment System. So we definitely hope you’ll tune in for that.

Grotto: Improving patient experience is one of my favorite topics, especially when discussing ways to increase efficiency and convenience for both patients and staff. While in Denver, I had the opportunity to sit down with Michael Spencer, senior director of patient access operations at Conifer Health Solutions. We talked about why an investment in digital patient engagement is one healthcare organizations should be making.

Let’s start just by giving a definition of “digital patient engagement.” What does that mean to you?

Michael Spencer: So digital patient engagement in my world and for Conifer means taking this kind of archaic pre-registration or point-of-entry registration process that we have today and digitizing it, delivering it to the patient or providing to the patient different avenues to be able to complete this data gathering exercise that exists as a requirement for hospital services. Beyond how this benefits the patient’s interaction with us today, there’s a benefit case here to help fill voids in our operational needs. So things like lobby management, things that help us maintain wait times and an eye on how long patients are waiting as well as setting appointment reminders, maybe wayfinding assistance within the walls of the organization.

Grotto: I’m sure there are some people listening who say, “My organization does a great job with digital patient engagement. We’ve got an app that our patients can use. We’ve got a patient portal that is really convenient.” And I know you’ve got some things to say about that.

Spencer: Those platforms are fantastic and obviously we need patient portals. It’s not only a regulatory requirement but it’s the right thing to do to provide a platform where patients can access their medical records and perform certain functions within the patient portal like looking up information on a past visit or maybe even scheduling a future visit. However, here’s one of the issues: Any time you introduce something that requires somebody to download an app or to create a user ID and password, that becomes instantly a barrier of utilization, a barrier of entry. And that honestly is one of the reasons why we suffer as an industry with our patient portal utilization today. Nobody wants to create another user ID and password, and the abandonment rates at that point where they reach that in that experience I think show that. And so when we think digital patient engagement, this should work for everybody seamlessly. So no user ID and password, no app. Simply click on the link, but we have to have security, and so you authenticate by validating sensitive information like date of birth or an address that allows us to validate that you are who you say you are and you’re able to access the application and perform this digital registration.

Grotto: Let’s talk about the provider side a little bit now, because it seems to me if you make things more convenient for your patients, make things easier for your patients, that’s going to be easier for your staff as well.

Spencer: We’re certainly not looking at this type of technology to only benefit and augment a better patient experience, but very keen on understanding and driving a better staff experience with this. And the only way to achieve that is if you have a digital registration tool that deeply integrates with whether it’s on the provider side a patient management system or on the hospital side an EHR, an ADT system. Digital patient engagement without bidirectional integration just becomes another nuisance for staff. It’s another system that I have to log into or I have to take information from one system and manually enter that into, do data entry into another system. And so I believe that this is a win-win opportunity where we can deliver more options for our patients, a better digital patient experience as well as making it work better for our staff and drive efficiencies for our staff.

Grotto: Here’s the hard question. All of these things sound like it’s going to be better for the patient, it’s going to be better for your staff. But adopting any sort of new technology can be a significant spend for an organization. How do you justify prioritizing this and allocating dollars to this when you’ve got so many other competing priorities?

Spencer: Yeah, it’s a good question, and I think for years, patient access technologies specifically have been on the back burner for most healthcare systems because in a fee-for-service environment that we live in, healthcare systems are primarily focused on revenue-generating projects. MRI machines, that robot in surgery, a new patient tower that’s going to provide more beds. And so those are revenue-generating improvements and rightly, there is a place for that. And I will say it’s been maybe difficult for organizations to justify an ROI as big as some of those, but here’s where we’re at as an industry today: Digital patient engagement is now table stakes. Patients are demanding this. That said, I believe that there’s still an ROI, a positive ROI for a CFO or a healthcare organization to consider as we look at digital patient engagement technologies. Studies show that improvements in our patient satisfaction or let’s say, Press Ganey scores, can have positive impact on our financial bottom line of the organization. Also, when we pre-register more patients, we’re educating them on their financial responsibilities, thus preparing them to be able to meet those financial obligations with the organization. So this just becomes good, old-fashioned communication with the patient. From an ROI perspective, I will mention that besides the improvements to patient satisfaction that can yield financial benefits to an organization, we’ve shown that the efficiency gains through this technology implemented in the right setting for our frontline staff is more than enough to pay for itself. In fact, we show somewhere—depending on the organization and their current practices—this should yield anywhere from a 2-5x positive ROI for an organization in efficiency savings alone, not to mention the additional benefits on improvement in patient experience, potentially decreased denials, improvement in point-of-service collections performance, just to name a few.

Grotto: Certainly a lot to think about here. So Michael Spencer, thank you so much.

Spencer: Thank you for having me, Erika.

Grotto: Conifer Health is your partner in care.  Providing revenue cycle and value-based care solutions that optimize financial performance, improve business outcomes and elevate the healthcare experience. Learn more at coniferhealth.com. On the last episode of this podcast, you heard from two speakers from HFMA’s Annual Conference pre-conference in Denver. Today, we have another speaker from that event continuing the conversation around the cost effectiveness of health. Kal Wahab is a director at Nordic Global under the performance improvement and advisory services team. Following the event, he talked with Brad Dennison, HFMA’s director of content strategy, about his presentation and the future of value.

Brad Dennison: So, Kal, we were together on Sunday before the conference even started at the cost effectiveness of health pre-conference. Great attendance, great lineup. You were one of the speakers there. If you could just give us a quick flyover of what Nordic presented to the group, that would be great.

Kal Wahab: So Nordic presented on a couple of different topics that we thought would be important based on some of the content you guys have published in the past. We kind of wanted to talk to the audience a little bit about price transparency and how that affects financial leaders that were in the room with us. We also talked about value-based care, readiness assessment planning—a concept that we brought to folks in the audience to kind of help them understand the importance of doing a value-based care assessment. And then we also talked about the data interoperability and the opportunities data integration and interoperability can present to succeed or to help you succeed in value-based care. Those were what we focused on.

Dennison: Yeah, and so you have deep expertise in value-based care, and you and I have spent some time talking about that as well. And if there was any overarching theme with this week’s conference, it was definitely about the industry needing to move now because the time is definitely now. You don’t have five years to punt some things you know you should be doing down the road. And so you work with clients all the time on value-based care, and you probably, since you work at scale, you’ve heard all the objections before. What are some of the most common things you hear? What are some of the biggest obstacles to getting over that hump in terms of mindset?

Wahab: Yeah, so before we get into that, I do want to touch on why it’s important as well. I think VBC really allows you to get paid for traditionally non-reimbursable services. Those are the kind of services that are going to help you with social determinants of health and also allow you to kind of create the patient experience that you wish you could get paid for but you don’t in the current scheme. So it’s definitely imperative and important to be participating in some of these VBC deals. So in the course of my career to VBC conversations, bringing them up with health systems, of course I’ve heard a lot of objections but not really a lot of good ones. So the main one that allows people to object is just local market dynamics that give them the ability to just say no to the VBC portion or just tell me that they don’t really need to do it and you meet them and your network is…so that’s kind of one of the main ones. But if the conversations were more productive, they’re focused on the fear of the unknown, I think leaders not realizing— people are wanting to maybe do it but not realizing that your system capabilities or whether your system has the capability to deliver population health at the level that you need to while in a VBC scheme, even before taking downside risk. So I really feel like just not knowing how you think you’re going to come together or your technology’s going to support your clinical team in your workflows and processes, it can get very complex. So I think that’s the fear that probably a lot of people feel.

Dennison: Right now there’s probably even more fodder for kicking the can down the road, right? You’ve got economy that’s off the rails, you’ve got inflation that’s out of control. We’re not even sure everything that’s ahead of us over the next six months, and I’ve heard more than one person say, I’m just trying to get to 2023 at this point and then I’ll figure it out. But now’s kind of the time to start, right? I mean, you look at folks that have more value contracts, and that really helped them out during the course of the pandemic, and so how would you encourage people to approach that?

Wahab: Sure. For sure. And I think maybe you forgot one of the biggest challenges is staffing shortages, right? So not only is the economy an issue, you’ve got staffing shortages so people are doing more with less, there’s a lot of pressures. But if I were to say it’s times like these that are kind of ripe for transformational change and for reframing issues and what we need to be doing differently. When they’re flush with cash and there’s plenty of money in the system, nobody’s motivated to make the kind of changes they need to do to be successful in a population health model. So I feel like this is a great time to capitalize on. But there is definitely empirical information and data on systems that were in value-based kind of deals and had shared savings agreements, and it definitely had a buffering effect on them financially and they did relatively well or a lot better, way better than those who were completely reliant on fee-for-service revenues for their kind of maintaining their operations. So I feel like a VBC contract, a multi-year relationship with a payer really gives you the ability to mitigate those ups and downs that we’ve seen over the course of many years in healthcare with demands in economy fluctuating, employer picture changing and fluctuating. It has the buffering effect and you definitely are right on that.

Dennison: Nationally, these are only 11% of contracts. So for as long as the industry’s been talking about value, you know, only 88% to go, Kal. And so you know, if you’re ready to move now and you’re convinced it’s the right thing to do, where do you start?

Wahab: I would say you’re absolutely right. The spectrum of readiness for VBC varies greatly, and there are folks that have not done anything even in June of 2022. But there’s folks that are really doing some amazing work, which we saw a lot of examples in the session yesterday and I’m sure there were many today focused on that. So for me, based on my experience and based on the work we’ve done with clients, really doing a whole holistic assessment of your VBC readiness, just really having a third party—perhaps a neutral party—look at your operational capabilities, your technology, your workforce and processes to understand where you are, what you’re doing well in the current world, current scheme, and what are the things you need to invest in and build out. So once you kind of know where you are, I think that’s a great place to start because it allows you to prioritize your financial investments but also more importantly I think when it comes to VBC and transformational change, political capital. It allows you to prioritize where you want to spend your political capital when you’re dealing with physicians, with clinicians and staff that have been stuck in the old way of providing care. So I think doing an assessment is a great start for anybody regardless of where you are. Everybody can improve, in my opinion.

Dennison: And, you know, you are one of those systems who says fee for services is working for us today. Right? It looks good. There’s a lot of disruption. If you’re not seeing it and feeling it right now, it’s there, and it’s coming in a big way. And you know, if somebody wants to sit on this for the next five years, what’s the risk in that?

Wahab: Obviously like I said earlier, healthcare is like politics. It’s very local. So depending on where you are, the pressures on you may be felt differently. But regardless of where you are, I think in the next 2-4 years, there will be definitely pressures on health systems to either do VBC if they don’t have one or if you already have been in a VBC and you’ve been kind of humming along and maybe sometimes you get incentives, sometimes you don’t, there will be pressure to take downside risk and really put more skin in the game and a little bit more advanced models. So I think that’s inevitable. I think the market pressure and the dynamics are changing, the new entrants that are bringing more focus and energy into these problems that historically we’ve really not solved as healthcare delivery systems. And so I think that competition will definitely drive some folks to want to be in network with payers because I think payers may have different ways of looking at things. They may be re-evaluating how they build their networks given some of the new entrants in the system that can help provide better experience and better outcomes for their patients. So I think 2-4 years is definitely, there will be a lot more of that than 11%, I’m hopeful.

Dennison: That would be great, but what you’re saying is, nonetheless, you’re going to start feeling the pressure and the squeeze from others to begin moving in that direction.

Wahab: Definitely, definitely. And you know, I think even more importantly, whether it comes in two years or four years I think the most important part that I hope people really understand is that when it does come to you and you want to be ready for it, the things that you need to make ready and prepare and put into place whether it’s technology or whether it’s process changes, those things can take 1-2 years. And so when it does come to you and you have to sign these contracts, you are going to be years behind. And so I think that’s an important thing to remember, that the pre-work for this starts a couple years before those pressures come to you and you eventually have to get into it. So I think that’s important.

Dennison: Great point. There’s definitely a cycle to these things you have to go through. So Kal Wahab, thank you for your contribution this week at the pre-conference, and thank you for being such a great contributor, and I appreciate you being on the podcast. Best of luck to you.

Wahab: Brad, thank you very much. It was a very enjoyable experience. I look forward to more of these events in the future, so thank you.

Grotto: Before we close out this episode, I want to remind our listeners of all the great cost effectiveness of health content HFMA produces, including a newsletter, the Cost Effectiveness of Health Report. Here to talk about the newsletter is Senior Editor, Eric Reese.

Eric, we’ve been talking all episode about cost effectiveness of health, and you are the editor of HFMA’s dedicated newsletter to this topic. Tell me a little bit about the newsletter.

Eric Reese: Well, Erika, not surprisingly, the purpose of the Cost Effectiveness of Health Report is to explore this issue from multiple vantagepoints. So it’s like, for instance, about informing readers about the essential goals for achieving cost effectiveness of health and then providing insight and guidance as to how individual organizations, the industry and even the nation as a whole from a policy standpoint can begin to meet those goals. We regularly have Q&As with industry thought leaders. We have expert-reviewed articles on various topics, and we have columns from regular contributors.

Grotto: Tell me about some recent stories that you’ve had.

Reese: OK, well, Q&As the most recent issue, we had an interview with Bruce Haupt. He’s the president and CEO of ClearBalance. That’s a revenue cycle company. And interestingly enough, he was challenged to say, well, how can you advance the cause of cost effectiveness of health through the revenue cycle? But he actually shared some real good insights into how actually you can align the revenue cycle with the goals of cost effectiveness of health to actually make people be less afraid to come in and get their healthcare, which ultimately is going to keep them healthy. And then another person we talked to was Lance Robertson, a former U.S. Secretary for Aging at HHS, and he shared his insights into what HHS has been doing and its approach to addressing social determinants of health and focusing on real specific issues like how can we help patients and people in their homes avoid falls, which actually can lead to some more severe consequences of declining health. So that was a really interesting interview as well.

Grotto: So if anyone listening is not familiar with the Cost Effectiveness of Health Report, wants to sign up to get it in your inbox, you can do so by signing into your account at hfma.org and going to “My Communication Preferences.” Another way to access all of our past content is to go to hfma.org, click Topics and Cost Effectiveness of Health. You’ll get all the past articles, all the past newsletters on that page. So Eric Reese, thank you so much for joining me today.

Reese: Well, thank you, Erika. It was great talking with you.

Voices in Healthcare Finance is a production of the Healthcare Financial Management Association and written and hosted by me, Erika Grotto. Sound editing is by Linda Chandler. Brad Dennison is our director of content strategy. Our president and CEO is Joe Fifer. If you’ve enjoyed this Annual Conference content and want to discuss it, or anything else, with your fellow members, don’t forget about our thriving Community. We have forums on revenue cycle, payment and reimbursement, denials management, membership resources and a lot more. Just go to hfma.org and click Community. And if you want to chat with our team, you can reach us at [email protected].

On a recent episode of HFMA’s “Voices in Healthcare Finance” podcast, Kal Wahab, a director at Nordic Global, discussed the urgency of moving toward value.

The case for value

Organizations that are committed to addressing cost effectiveness of health issues including health equity should commit to a value-based care strategy, Wahab said.

“[Value-based care] allows you to get paid for traditionally non-reimbursable services,” he said. “Those are the kind of services that are going to help you with social determinants of health and allow you to create the kind of patient experience that you wish you could get paid for but don’t in the current scheme.”

Many healthcare organizations resist moving toward value because of fear of the unknown or confusion over how the organization’s technology, workforce and processes will work together to succeed in such arrangements, Wahab said. The struggles of the pandemic, however, have many ready for change.

“It’s times like these that are ripe for transformational change,” he said.

The first step

Readiness for value-based care strategies varies by organization, Wahab said. Some have embraced value, while some have done nothing. Wahab recommended organizations first do a readiness assessment to learn what changes might be necessary to succeed in value-based care.

“I think that’s a great place to start, because it allows you to prioritize your financial investments, but also — more importantly I think — political capital,” he said. It allows you to prioritize where you want to spend your political capital when you’re dealing with physicians, clinicians and staff that have been stuck in the old way of providing care.”

Impending pressures

Wahab predicted the next 2 to 4 years will be critical in the shift toward value as disruptors come in and change way the industry operates.

“I think the market pressure and the dynamics are changing [because of] the new entrants that are bringing more focus and energy into these problems that historically we’ve really not solved as healthcare delivery systems,” he said.

He also cautioned that the shift for any one organization takes time, as there will likely be necessary changes in technology, process or other areas of the organization. Doing a readiness assessment now will ensure there’s time to make those changes before market pressure comes in.