David Carmouche 00:07
This whole value-based thing has a huge market-specific context to it that I don’t think is talked about enough.
Gregg Masters 00:14
PopHealth Week is brought to you by Health Innovation Media. Health Innovation Media brings your brand narrative alive via original or value-added digitally curated content for omnichannel distribution and engagement. Connect with us at www,popupstudio.productions and welcome everyone. I’m Gregg Masters Managing Director of Health Innovation Media the producer and co-host of pop Health Week. Joining me in the virtual studio is my partner collagen lead co-host Fred Goldstein president of Accountable Health LLC. On today’s show, our guests are David Carmouche, MD president of the Ochsner Health Network and executive vice president of value based care and network operations for Ochsner health and Josh M. Berlin JD, Chief Executive Officer of Rule of Three LLC a strategic healthcare advisory firm. A seasoned executive Dr. Carmouche brings more than 25 years of experience in health care, including the delivery of care and leadership of innovative health care organizations across Louisiana’s healthcare landscape, Ochsner, health, Blue Cross Blue Shield of Louisiana and the Baton Rouge clinic. He is a recognized visionary leader in the arena’s of healthcare delivery population, health and payer systems with a keen focus on both patient care and outcome metrics. He currently serves as board president for the Consortium for South Eastern healthcare quality, a regional quality improvement and practice transformation collaborative. Josh brings more than 20 years of experience most of which has been in healthcare advisory and consulting to his clients. Most recently, he has served as principal and co practice leader of Citrin Cooperman his healthcare practice and managing partner for IBM Watson health strategic advisory practice leading a unique group of consultants in each instance to serve clients across the full healthcare ecosystem, including providers, payers, employers, governments and advocacy. So Fred, with that introduction over to you help us catch up with Dr. Carmouche and Josh’s innovations at Ochsner health.
Fred Goldstein 02:37
Thanks so much, Greg and David and Josh. Welcome to PopHealth Week.
David Carmouche 02:40
Fred, it’s great to see you again. It’s been too long. Thanks for having me on today.
Josh Berlin 02:43
Always good to be with you, Fred. And always good to hang out with David for a little while.
Fred Goldstein 02:46
Yeah, it really is a pleasure to get you both back on. And as you said, David, it certainly has been much too long. But great to see you again. And glad you’re doing well. Why don’t we start, David, give us a bit of your background introduction to your work.
David Carmouche 02:56
Sure. So I’m, I’m an internist. By training. I was in practice for 15 years in Baton Rouge in preventive cardiology and went to Blue Cross Blue Shield, right after the Affordable Care Act was passed as their chief medical officer and executive vice president. And then I’ve been at Ochsner health in New Orleans for the last six years as the executive vice president of value-based care and our network operations, as well as our employer work and get to lead the Ochsner Health Network and our ACO and really have gotten to work with Josh through that work at Ochsner. So it’s great to join him on the podcast today.
Fred Goldstein 03:32
And you, Josh.
Josh Berlin 03:34
Thanks, Fred. And thanks, David, for the nice compliments. I have been in healthcare my entire career, I started in law, but quickly realized that was bad for the soul and moved over to management consulting, probably one rung higher on the ladder. But after all of these years of working across government organizations at all levels providers of all types and sizes, plans, employers trying to make a meaningful difference in their employee lives, advocacy organizations and startups decided about a year and a half ago two great friends and business partners that it was time to put my money where my mouth was, and with the support of actioner and a number of other organizations to start to start my own firm Rule of Three. And since we have built an incredibly diverse portfolio of exciting clients that are trying to make a meaningful change and healthcare, and we support them on their strategy and operations work.
Fred Goldstein 04:25
That’s fantastic. And obviously, the work you’re doing and David, you mentioned it, this value-based care, everybody’s talking value-based care. Give us a sense from your perspective of where it is nationally. What’s going on with that. Are we making any progress?
David Carmouche 04:39
I think we are making progress. I think it’s led at the federal level today. I think CMS through CMMI clearly have laid down the marker. I think the economics of of the Medicare trust fund, I think the aging demographics of the United States, the baby boomers, baby boomers, kind of mandate some different way of rewarding providers and aligning those rewards with, you know, total cost of care management and health outcomes. So, I think I think that’s, that’s the lead story. And I think that’s the train is has left the station. I think the commercial side is slower for a variety of reasons, probably the most pressing of which are the fact that broad PPO networks are still the predominant structure on which at least the insurance companies face up to the market. And those are not really conducive environments to really transfer risk to providers. I think the place where I’m starting to see more action, and I think I’m kind of heartened by it, is the large employers, I think, have had enough. I think they’re pointing fingers at all the traditional players and say, You guys haven’t done a good job of helping us control our costs. They’re going up 5, 7% every year, and we’re going to take a more active role. And we you know, there’s endless numbers of of examples, we can get into it. So I think with employers being awoken, and with the federal government, I think value is here to stay and will likely continue to accelerate in the future. Oh, Josh, how you see it. But that’s how I see it,
Josh Berlin 06:13
yeah, pretty similarly, I mean, several years ago, maybe 10 years or so ago, if you’d asked me if the if the government was going to lead the way in value, I would have definitely not not predicted that only because we were already seeing a significant move towards value in clinically integrated network success and around the country contemplating different contracting strategies. But then in turn, what’s happened in both in the wake of the Accountable Care Act, and generally, the what CMMI jas done through a couple of leaders, who have been fantastic is, effectively say in the wake of a real routing in volume still, today, we’re going to at least begin to create experimentations and models that that show that this can be done and can be done successfully in the Medicare population provides a great proving ground for that. Now, that said, a number of organizations as David highlighted a minute ago, a number of organizations have begun to demonstrate very successfully with the commercial side of the world. But now the game is changing. Again, I would argue, particularly with the advent of private equity money that continues to get infused into different models of care that really don’t have a rooting in either volume or value, but maybe a blend of both. And the opportunity to keep up with the pace of spend in healthcare alone certainly is continuing to evolve and progressive value landscape. But we’re certainly more more progressed today than we were before.
Fred Goldstein 07:42
Yeah, it’s it’s fascinating. I’m gonna say this is a friend having run a psych Hospital in northern Louisiana and Shreveport years ago, Louisiana is not really thought of as a place where you’re going to see innovation. Yet Ochsner has been able to show some amazing things you sort of mentioned, David, you’ve got this pretty big network, you’ve got a successful ACO as I understand, successful primary care, you do in pop health, and your direct contracting, what’s allowing you to be able to do that what’s different?
David Carmouche 08:08
Yeah, well, I think it starts with a really strong CEO and Board, vision of value-based care being the right way to do it. I think we’re stuck a little bit in fee for service world by virtue of being an academic medical center and having a lot of, you know, tertiary quarternary care capabilities that we really bring to the Gulf south. But I think if they were, you know, if they had their way, you know, I think they think, you know, capitation prepayment for healthcare services is the right way to align the health system with the needs of consumers. So I think there’s a belief that that’s the right thing. The second is Ochsner had a health plan it sold in the early 2000s to Humana but has maintained full capitation and Medicare Advantage, since that time, we’re getting back into the health plan business in 2022, in the MA space, so there’s a there’s a muscle memory, there’s there’s familiarity with risk. And then thirdly, I think, at least for Ochsner, the reality of it is, is that the economics and Medicare fee for service don’t work for our system, we don’t make a margin, really in the hospital or in the clinic at Medicare fee for service rates. So frankly, anything we can do to create an effective reimbursement that is north of the Medicare fee for service rates is is is a good thing. And so the way we’ve we’ve kind of tried to simplify that is to say that look, almost any Medicare patient that shows up in one of our hospitals should be a, you know, essentially a cost item, not a revenue-generating item. And that we should be aligned across specialists and primary care doctors and doing what we can to keep people out of our facilities. And we’ve got the ability to load level facilities or repurpose beds. If we ever had a problem. If we were ever concerned that we were going to empty our hospitals. I think we could deal with that. That’s just not ever been the reality. And then the last thing you mentioned, Louisiana is not where you would think of innovation. But if you think of you know, some of the innovation that’s come out of parts of the world like India, where there’s large populations of impoverished people, right? That’s that can be a hotbed of, of innovation by necessity. And so, you know, we’re 49 or 50, depending on the year you look at the state health rankings, and I think Ochsner, by virtue of that, and by virtue of the market with a dominant Blue, with not the most attractive fee for service commercial rates in the country, and with an aging population without commercial growth, really a state that’s really just aging and in the Medicare, the payer mix change, you know, and the health of our state really creates the construct whereby Ochsner has to be innovative, to be successful, and to eke out a two and a half to 3% operating margin despite those headwinds, year after year, I think is testament to our to our ability to invest in and see that as part of our future. So I’m really bullish on doing this in Louisiana, frankly, I’ve had opportunities to leave Louisiana. It’s such a target-rich environment to do pop health. It’s almost a masterclass in it and it’s been really gratifying. It’s been my entire career.
Josh Berlin 11:08
Yeah, I’d add to that. What’s interesting about Ochsner has always been interesting about Ochsner, to me, and I love being able to come back for more all the time. The organization has certainly been great to me over the years that I’ve served it but when you look at Ochsner’s founding and the mid-40s, I don’t remember exactly the year when Alton Ochsner founded the Ochsner clinic, it was one of the first clinic organizations hospitals to focus in on population health in the way that it did with a rooting in the one of the early linkages to from smoking and tobacco to cancer. That’s a population health orientation. So now you look at all of these years later and what success Ochsner has had and has experienced and in particular, the recent doubling down that the Ochsner leadership team has made with the state and with others around health equity, the advancing of the state from where it currently sits a nation is one of the bottom two in the country relative to health outcomes to at least being 40 over the course the next handful of years. It’s a continued journey that I would certainly suggest began with Ochsner’s founding that helps to contribute to success.
Fred Goldstein 12:15
Yeah, I think you raise some really good points regarding how they started the whole service up with the five physicians in the beginning, etc. and then and then grew that out there thinking it’s also interesting, you talk about, you know, Louisiana and its status and I always say in Mississippi or Louisiana or some of these states, if you can do it there, you can do it anywhere. As you said it’s a target-rich environment. And I certainly enjoyed in my past working in Mississippi, some in population health. It sounds to me, David like Ochsner would go quicker if the market would allow them to go quicker into these more value base and you even mentioned full capitation contracts. But to do that you have to effectively be able to manage populations. So what have you put in as infrastructure is systems to do that.
Gregg Masters 12:56
And if you’re just tuning into PopHealth Week our guests are David Carmouche, MD, the president of the Ochsner Health Network and executive vice president of value-based care and network operations for Ochsner Health, and Josh Berlin JD, Chief Executive Officer of Rule of Three LLC, a strategic healthcare advisory firm.
David Carmouche 13:18
So it’s interesting we had, we had Jeff Immelt, address our board a couple years ago at a board retreat, you know, he made a comment in an hour-long presentation that an organization’s ability to participate in and succeed in risk is directly related in proportional to its investment in data and analytics in his mind, and I think I think it really starts there for Ochsner or not. And it starts with Epic, which is our enterprise EMR system that we’ve actually extended into the community and I’d say two-thirds of the providers in our network are on a single instance of Epic that connects all of our urgent care facilities, most of our primary care facilities, all of our hospitals and so just you know that that clinical data environment is really sound in Ochsner. We’ve also configured all the clinical decision support tools and coding prompts and, and registries to support population health that Epic allows. And so I think we’ve taken full advantage of that. We’ve also made investments in claims data analysis and use Milliman Med Insight tool for that and have, like 13 different payer claims files that we’ve aggregated into a multi-payer claims data set that allows us to look across contracts at opportunities and programmatically go after it versus going after, you know, one contract at a time so that we can kind of find the common denominators of opportunity across those contracts. I think the next iteration of that for us is marrying those clinical data sets and those claims data sets with emerging data, publicly available or purchased social determinants data for example, and really creating better predictive models, better patients segmentation models to really focus in our intervention, probably increasingly outside of the office outside the hospital more at the home level care models that will take us to the next level. So I think there’s a, there’s been a pretty significant commitment to make those data investments. The next set of people, frankly, that are just, you know, incredible. These are outpatient case managers, these are clinical care coordinators that are, you know, involved in primary care and doing pre-visit planning and proactive outreach. And in prioritizing patients who haven’t seen us in six months, and you have an A1c that’s out of control and making sure that they get back in to our call center, nurse triage 24/7 call centers that are patients, you know, you have an outlet for clinical information, and don’t just show up in the emergency room, you know, and others, you know, nurse practitioners that go into the home to see a patient who’s been discharged from the hospital and who’s at high risk for readmission. You know, it takes an army of people to surround our clinicians to really drop health and Ochsner’s has been willing to make those investments. I think we’ve done a good job of showing that when we get those investments, we turn it in success. You mentioned, our ACO has generated significant savings year over year in the last several years. And we’re and we’re making, you know, a significant margin at our Medicare Advantage business where its capitated. So it takes a lot and you certainly don’t just wake up one day and decide you want to manage risk, they call it risk for a reason. And I’ll just say it’s interesting, you know, everybody seems to be on on MA and wants to get into Medicare Advantage and willing to maybe think about taking capitation when we had our first $8 million claim for a patient that’s in our capitation pool, you know, doesn’t take too long for a 75-year-old with acquired Haemophilia to have a fall and internal bleeding to create some challenges. So you’re right it is risk. And by virtue of that, you know, we’re anxious to take more risk so that the population is larger to create some actuarial security. And so we have about 100,000 Medicare lives with with substantial risks today. And I think we’d like to grow more of our commercial business that way over time,
Fred Goldstein 17:16
anything Josh, you think you’d like to add to that?
Josh Berlin 17:18
David touched on a couple of things that I think are at least worth emphasizing further, certainly the technology advancements that they’ve made, and continue to think about are critical. The opportunity to continue to understand how to leverage those to enable what its strategic imperatives are, as an organization serve the community more significantly, all those are great, but I wouldn’t want to discount at all the notion that having the having a multi-asset play, whether hard assets and facilities to the ability to deliver the care that’s needed and meet the patient where they are in the home setting or the ambulatory setting, or for that matter, to be able to leverage the tools to be able to understand what their particular situation is with with a patient Ochsner continues to advance and is now sharing that success nationally with the recent news that their digital tools, particularly around remote patient monitoring, they’re taking into health plans are and employers around the country, particularly with an eye towards multi chronic conditions longer term. So not only have they worked inward, and have all of the people process and technology to be able to develop the foundation necessary to care for their communities, but now sharing those experiences beyond in other communities that are either underserved or still regardless need that level of care delivery and excellence, I think continues to be hallmarks of the success of bill that they experience.
Fred Goldstein 18:42
Right. I want to get in a little bit to the primary care piece of this, but first David, years ago, you told me and I thought it was innovative as heck, I want to figure out how to make population health a revenue line item on the on our budgets, and outside of say, CCM codes and that kind of stuff. Have you been able to sort of transform the thinking that way?
David Carmouche 19:01
Yeah, I think I think we have I think my role today on the executive team is a testament to to our CEO, recognizing that this is a business that is potentially equally as important in the future to Ochsner, our historical kind of care delivery business. And so we’ve we’ve actually organized our our business into really three verticals. One is kind of traditional care delivery, it’s really our hospitals and clinics. The business I lead is our risk and insurance business, and it has a P&L to it. We’ll come back to that in a second, which I think is really important. And then the third is our digital kind of virtual business that Josh alluded to that we’re both using internally as a care management tool and externally as a revenue generator and diversification play. I think for many organizations and for Ochsner. The challenge to asking for all those resources, whether those were data resources or people resources were being able to answer and what do I get for it right. I think the failure of many pop health programs has been to define what an expected return on those investments could look like and create an expectation that you’re willing to hold yourself accountable to. So we’ve created a P&L for our value business that in the revenue line puts all of our care management fees, our insurance, product performance, we have some JVs with some of the carriers. And so to the degree that those are making or losing money, those counts are shared savings are capitation performance, and a variety of other things are in the top line. And then under it are all the expenses, my team, the analytics, and you know, and then you can, you can see a margin and you can see that and set, you know, kind of parameters and expectations for growth in that business over time. I think being willing to do that, and having the finance team see that you’re willing to take that sort of accountability has really empowered the organization and enabled it to make the investments that I mentioned. And so I think it’s an it’s not really spoken about a lot. And I’m glad you you know, you remembered it. It was a vexing problem for me in the early days at Ochsner, I think, you know, we’ve mostly fixed that. And certainly, I think it’s, it’s it’s freed up our team, to, frankly, to be held at the at the same level of regard as the is the traditional healthcare delivery system, because, you know, we have an operating review every every month that we’re no different than the care delivery assets in terms of how we’re held accountable. I think that has raised the kind of importance level of the pop health team within Ochsner.
Fred Goldstein 21:32
Yeah, you’re being measured for your outcomes, both operationally and financially, I assume, based on what you said,
David Carmouche 21:37
yeah. And I think you know, and then I think the next and Josh has been part of this work, I think, you know, our efforts in pop health have largely been focused on the Ochsner Clinic, yes, we have a network, but really Ochsner’s clinic has 1600 employed physicians, and 250 primary care physicians. And so we had a lot of work to just build the team to support that organization. I think now that we’ve done that, we’ve tried to extend that those capabilities out to support more of the community physicians that are in the network. And again, there has to be a financially viable reason for Ochsner to front those investments and bring them to community physicians. And so, you know, the way we work at Ochsner is that 50% of the revenue generated by the network gets retained by Ochsner to defray its its expenses. Well, for me and my team. Now, the challenge is, can you create enough revenue so that 50% of it is more than the investment we’ve had to put into it? So can you create a positive margin? And I think it makes our teams constantly look at efficiency and effectiveness? And are we building programs that actually work. And if we’re not, let’s retool them. And without that financial kind of transparency and accountability, you just don’t manage it with the discipline that’s required it. So I think we on the value side need to embrace that if that’s the new business of healthcare, then we’re going to have the same accountability as the older legacy business.
Fred Goldstein 22:58
And, Josh, from your perspective, having worked in this, what did you see is as keys to sort of allow for people to recognize the transformation and the need to do this? Obviously, you’ve got a big network of physicians that David has, etc. How do you do that?
Josh Berlin 23:12
Yeah, David and I talk a lot about the notion of how to drive value success. And at a minimum, you need to have as requisite components of that a primary care engine with their surrounding services that allow those primary care physicians and the patients that they represent and serve, to be able to be successful to be able to understand how to address the needs of a very complex population without those sort. Without those pieces all together, it becomes really challenging to be successful in an environment and the way that David was describing a minute ago, but clearly the holy grail today has to be rooted in primary care. I mean, there’s there’s not even a question I don’t think anymore in healthcare, the value that a primary care physician brings to healthcare if there was certainly I’d like to think that the National Academy study that came out last month, or maybe a month before describing that every patient every every person in the country needs a primary care physician. There’s no better way to describe the importance that a primary care physician serves because it becomes the connector for so much. Now. Does that primary care physician need to interact person to person eyeball to eyeball with the patient in particular? No, not necessarily that can come through an APP or a nurse practitioner, there are ways to create an ecosystem surrounding the primary care capability that you need in order to be successful, but the reasons why you see as I referenced earlier on private equities infusion into primary care, the reason why you see systems like Ochsner, numbering more and more that are thinking about primary care success as the anchor to value and the surrounding population health services because of how underpinning it is to our ability to be healthier country for sure. And,
David Carmouche 24:57
Josh, Fred, let me just add one thing that Josh prompted that is really, really important. There’s been a lot of debate, especially in the ACO world around whether hospital-affiliated ACOs are at a disadvantage or can be successful versus independent primary care led ACO and certainly the early successes favored the primary care group. I will say that there was a point in time at Ochsner in the last three or four years where I, I did call the question which was what is the job of primary care at Ochsner? There, there were a couple schools of thought, right, I think we, you know, three-quarters of the employed physicians at Ochsner are subspecialists, there were some sub specials at some primary care physicians and maybe even some leaders in primary care who believed that their historical importance to the health system was an access point, the front door, the political front door to the organization that fed specialists, you know, that they were that that was their job was to, you know, to kind of create patient relationships and steer him downstream. And then in the world that I come from, you know, what I needed primary care to do is take on more of the management of these patients be more discerning around downstream referrals, raise the profile of primary care and change the compensation model to reward them for being population health managers, more than transactional fee for service, you know, access points. And and I think, you know, it became very clear that, that you can’t send both messages to primary care doctors and ask them to perform well. And I think in organizations where they have it really put that stake in the ground and define the role of primary care, you see the challenges of value-based care performance, I think it Ochsner we’ve been very clear, and that we’ve told our primary care doctors, your job is to develop tight, trusting relationships and to manage the total cost of care, that is job 1,2,3,4 and 5, there is no requirement that you send X number of patients downstream to a cardiologist, orthopedist, or orthopedic, and we’ve changed their the way we pay him to support that I think organizations do need to make it very clear to primary care what their job is. And if that job is value, I think that we’re an example to show that even a hospital-owned group of primary care physicians can be incredibly successful at value-based care.
Josh Berlin 27:11
Yeah, and by the way, the organizations that don’t think like that run the risk of being disintermediated. I mean, there’s not a doubt question in my mind, if you’re not going to think about that you’re not going to embrace that type of thinking. And I don’t think there’s any better example of what what just happened in South Florida with, Cano, health now investing a billion dollars in the last 30 days to build what is now probably the strongest independent primary care practice in the country.
Fred Goldstein 27:37
Yeah, I think, you know, as you mentioned earlier, David, it gets back to that leadership saying, we’re going to do this we’re going to support this. And if the hospital the healthcare system itself, leads from the top with that, then that primary care model will work within it, unlike what we may have seen very early on in the ACOs, where just it appeared that many more of the primary care driven models were working versus the health care system models. So I’d like to thank both of you for joining us. It’s really been a pleasure, David and Josh, and back to you, Greg,
Gregg Masters 28:06
and thank you, Fred. That is the last word for today’s broadcast. I want to thank Dr. David Carmouche, President of the Ochsner Health Network and executive vice president of value-based care and network operations for Ochsner health and Josh M. Berlin, JD Chief Executive Officer of Rule of Three LLC, a strategic healthcare advisory firm for their time and insights. today for more information on Ochsner health go to WWW.Ochsner. That’s O C H S N E Rs .org or follow on Twitter via @CarmoucheMD that C A R M O U C H E MD and @OchsnerHealth respectively. To contact Josh at Rule of Three LLC go to www.RO3llc.com. And finally, if you’re enjoying our work here at PopHealth Week, please subscribe to our channel on the podcast platform of your choice and do follow us on twitter via @PopHealth Week. Bye now.