Michael Abrams 00:06
Clearly what the pandemic illuminated is that while most conventional providers have talked about how scary it is to take on the risk that’s associated with being accountable for cost and quality, what they were overlooking was the risk that is associated with working on a fee for service basis I mean fee for services. That’s how they run a restaurant.
Gregg Masters 00:33
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 omni channel distribution and engagement. Connect with us at www.popupstudio.productions. And welcome everyone. I’m Gregg Masters, Managing Director of Health Innovation Media and the producer co host of PopHealth Week. Joining me in the virtual studio is my partner, colleague and lead co host Fred Goldstein, President of Accountable Health LLC. On today’s show, our guest is Michael Abrams, co founder and managing partner of Numerof and Associates a consulting firm that quote “for more than 25 years Numerof’s rigorous structured approach has solved complex strategic and operational problems for clients in industries in transition.” For the last 25 years, Michael has built a portfolio of strategy and business performance successes, as an internal and external consultant to Fortune 500 corporations, leveraging the corporate management experience he acquired prior to founding Numerof, Michael has shaped the development of Numerof’s approach, including the firm’s emphasis on innovative and realistic strategies for changing markets. Michael completed his doctoral work in business policy at St. Louis University and received his master’s degree from George Washington University in Washington, DC he co-authored Bringing Value to Healthcare, Practical Steps for Getting to a Market-Based model. And his articles have appeared in more than a dozen leading business journals. So Fred, with that introduction over to you help us learn more about Michael’s work at Numerof and Associates.
Fred Goldstein 02:33
Thanks so much, Gregg and Michael, welcome to PopHealth Week.
Michael Abrams 02:36
Thanks for the invitation.
Fred Goldstein 02:37
Yeah, it’s a pleasure to get you on. Why don’t we start? First, give us a little bit of a sense of your background and what Numerof and Associates does.
Michael Abrams 02:43
Okay, so for those of you that are not familiar with Numerof, we work with clients across healthcare to develop and implement strategies that enable them to adapt to the dramatic changes that are rippling across the industry. Our clients include major community and academic provider organizations, fortune 500 insurers and manufacturers of pharmaceutical and medical devices.
Fred Goldstein 03:10
Fantastic. And we’ve talked to Rita a few times and obviously seeing you folks at the Population Health Colloquium, which comes up again this fall, I believe, and each year for the past six, you’ve released a report called the State of Population Health, Sixth Annual Numerof Survey report, which I understand you also do with Dr. David Nash, the Founding Dean Emeritus of the College of Population Health. Tell us a little bit about that report.
Michael Abrams 03:32
So back in 2015, Numerof, and Associates partnered with Dr. David Nash, who was at the time the, the Dean of the College of Population Health at Jefferson to study the evolution of Population Health Management in the US. So we developed an online survey that was designed to assess progress, challenges and success factors in healthcare delivery organizations as they transition to population health management, with particular interest in year over year trends. The the survey has targeted physician group executives or vice presidents and individuals working in US provider organizations, including healthcare systems, hospitals and academic medical centers. In the most recent administration, which was our sixth we received nearly 300 responses include which included C suite executives across the entire US in urban, suburban and rural areas, as well as standalone facilities, small systems and IDNs that are for profit, not for profit, government And government institutions, and academic and community facilities were all represented.
Fred Goldstein 05:06
Excellent. And so each year you brought in this data and these data and we’re looking at this and, and every year, I know David’s talked about this a lot and everybody else when is this sucker gonna change. And he’s been sitting here for a long time. But I believe that the this survey once again showed minimal changes, is that correct?
Michael Abrams 05:26
minimal changes as measured by the percentage of revenue for an institution that is coming through contracts that have some upside and downside or some, simply upside? potential. So yes,
Fred Goldstein 05:44
so we’re still seeing most players? On the upside risk only side of that, as is that today?
Michael Abrams 05:51
Yes, um, you know, the percentage of revenue that that comes through prior contracts that have some risk associated with it is pretty nominal for the for the overwhelming majority of our responding organizations.
Fred Goldstein 06:11
And I know you also compare this over time to what the individuals projected they believe would happen, say two years down the road. And how did that compare? what they said was going to happen to what actually did.
Michael Abrams 06:24
So what has happened this year, as well as in recent years past is that projections were far in excess of what the reality turned out to be. In many cases, our respondents are people who have responsibility for population health, generally at the vice president or C suite level, and they do have a serious interest in seeing population health proceed. And I guess I would say that there are estimates of what’s going to happen two years hence, has consistently been more optimistic than what has materialized. We can get into the reasons for that later on.
Fred Goldstein 07:07
So how, obviously last year was a year of COVID, which seems to be extending into potentially the two years of COVID. How How did COVID or did you sense any impact from COVID? In terms of what they were saying or doing?
Michael Abrams 07:21
You know, we sit we did see some subtle changes. We didn’t see the some of the changes that we had expected we might. But the the more subtle changes that we saw, kind of fall into the idea that the organizations that responded appear to be more receptive to selectively adopting elements of population health. So for example, the standout here is telehealth. As I think everybody knows, prior to the pandemic, utilization utilization of telehealth had been marginal in most provider organizations. COVID dramatically changed that. When asked if they would make more use of telehealth post COVID than they had before, 94% said that they would. So that’s one change that we saw. When asked how likely they would be to implement more joint efforts with payers to apply population health practices. 70% said it was more likely when asked how likely they would be to pursue more direct to employer contracts that include population health components, nearly 70% said that was likely. And And finally, the fourth change that we saw was in home health and other service that demonstrated tremendous value, as providers were forced to stand up new models of care. And so 64% of respondents said that their organizations are likely to expand their use of Home Health Services post COVID. So those are the changes they said they would make. Time will tell if they really make them.
Fred Goldstein 09:19
Absolutely. And I find it fascinating that we can sort of sit here today and say, hey, we’ve had this great success. People are using telehealth, but but in essence, it took a pandemic plus the opportunity to bill for it under fee for service medicine to get them to actually move in that direction. Do you see it similarly?
Michael Abrams 09:37
Absolutely. It literally almost literally was a gun to their head to use telehealth. That’s what it took. And and truthfully, I think that the future of the utilization in telehealth rest very heavily on what the reimbursement is and whether or not that that is made permanent,
Fred Goldstein 09:57
which points back to this whole concept of changing the reimbursement methodology. So that telehealth just becomes a natural part of doing it because you’re going to do better having telehealth, then because you’re going to get paid more for having telehealth.
Michael Abrams 10:11
Absolutely
Fred Goldstein 10:11
And so what you’re trying to get to with this with this study and get people to consider,
Michael Abrams 10:15
right, actually, we did a supplementary study on telehealth and and I had I had executives tell me in one breath that it was a huge hit with their patients. And there’s there’s real demand there. And then the next breath tell me but the the subsequent use of telehealth depends almost entirely on what the reimbursements going to be.
Fred Goldstein 10:39
Right. And we’ve discussed that as well on the show in terms of how high that reimbursement should be, is it more efficient or not than the others. But obviously, if you can peg the price at an office visit, you’re probably in pretty good shape. So the other thing that was interesting, because because this is something else we’ve talked about a bit, you know, there’s there’s been this move into capitation by primary care providers, you’ve got the OneMeds, Iora Health the Chen meds and the others are and Conviva around the country doing this capitation they seem to do better through the pandemic, as you point out those that had revenue flowing in from capitation. Yet it doesn’t seem like that made an impact on other facilities or systems considering capitation going forward.
Michael Abrams 11:22
That’s that is a surprise to us as well. I mean, clearly what the pandemic illuminated is that while most conventional providers have talked about how scary it is to take on the risk that’s associated with being accountable for cost and quality, what they were overlooking was the risk that is associated with working on a fee for service basis I mean fee for services. That’s how they run a restaurant. And when the restaurant when the patrons stop coming, so does the cash flow. That’s what happened here. We thought that would make more of an impression, particularly when it was clear that at least for those few organizations that had a serious component of revenue coming through a contract that they did have up and downside risk, that they continue to get their per member per month checks in the mail. And and everybody else was sitting there wondering what how are they going to pay the bills. So we did expect that we would see more impact from that situation? And we didn’t see it.
Fred Goldstein 12:41
So is this sort of a sense of the healthcare system, just taking a seat and saying, Look where we’re in this fee for service world, we’re going to just sort of stay here?
Michael Abrams 12:55
Well, I think you need to take a step back and see it in context. First of all, to to move into the world of accountability for cost and quality. And and to get away from the fee for service mindset is a tremendous leap. An awful lot of organizations simply cannot seem to make that leap. And and so they they’re clinging very tightly to the model that they know, even though it’s a dying model, even though the margins that are available to them in that model, I think have been shrinking for years and will continue to do so. And yet. This is what they know. And they’re afraid of what they don’t know.
Fred Goldstein 13:40
And that gets the part of the report where you talked about the barriers to to making this move. With the top one being potential threat of financial loss by moving to the new model. I think the second was difficulty in changing the organization’s culture. Third, unsure of when to make the transition from the current model. And the fourth one interesting as well difficulty in modeling the cost of care across the continuum. So given those four areas, do you see any groups actually within a subset of your population saying hey, we can do this, we can do it well, and we’re moving forward.
Michael Abrams 14:12
There are isolated standouts among the respondents and some organizations have as much as 40 and 50% of their revenue coming through contracts that involve you know, more of a population health value based approach. But they are relatively few and far between. I think you saw in the report that this fear of financial loss is the leading issue and has been in in all six years of our administration. And it’s a conundrum because what we found is that a lot of organizations have not made the investment in creating infrastructure that would enable them to give some predictability to and have some control over the financial consequences of clinical decision making. So things like building care paths, or providing physicians with feedback on what their average case cost is, relative to their peers. Or having a process for dealing with physicians who are cost or quality outliers. Those are things that I think are very scary for many executive teams, and they don’t do it. And because they don’t do it, they have no line of sight to what are the costs that are being generated by clinical decision making, they have no predictability, or control over it. And so given that situation, the fact that they’re afraid of a financial surprise, if they go at risk, has a reality base, but they’re doing that to themselves, they’re putting themselves in a box.
Gregg Masters 16:23
And if you’re just tuning in to PopHealth Week, our guest is Michael Abrams, co founder and managing partner of Numerof. and Associates, a consulting firm providing the strategy and structure clients required to bring new ideas and innovations to the world. For more information, go to www.NAI-consulting.com.
Fred Goldstein 16:46
We’ve seen, you know, various primary care groups, as I mentioned earlier, actually stepping into global capitation, or, or full risk or partial capitation. Is that going to be the future, the groups that actually do this? And I sort of find it surprising given the fact that you point out your study, that so many of these physicians are actually owned by the organization’s their employees of them, yet they still don’t do what you’ve talked about are able to implement those systems. Is it going to be some of these outsiders like groups like that that make the move? Or is that always going to be a little fringe?
Michael Abrams 17:19
No, I think it’s going to be the outsiders that that don’t bring this traditional mindset, there’s, there’s an issue that has to do with the clinical administration, administrator boundary. You know, historically, in in hospitals, there was an understanding between clinicians and administrators, you play on your side of the line, I’ll play on mine, if it involves clinical decision making, don’t talk to me about it, because you’re not a physician. And even if you are you, you’re not a clinician in this situation, you’re an administrator, it is none of your business. And that is part of what keeps the C suite and management in hospitals from addressing issues like let’s standardize treatment of at least a handful of expensive procedures. That has become a real barrier, but it’s not a barrier when you get outside of traditional healthcare provider organizations. And so, you know, United Healthcare is the second biggest employer of physicians in the country behind the VA. And they don’t, they don’t know about the clinical administrative barrier. Okay, these are people more just more people that work for them. And they’re going to have some control and predictability over the costs that they generate.
Fred Goldstein 18:59
In terms of Michael, the pressure to make this change. Obviously, it doesn’t seem like it’s been enough, but we’ve had companies like Walmart set up these centers of excellence and then limit where they’re sending people and put those into unique contracts that may include quality measures or cost measures and things like that is are the employer is going to drive this is that beginning to resonate in terms of changing behavior.
Michael Abrams 19:23
There’s a great deal of pain out there among employers because that line item that is healthcare insurance is killing them. And there is a real demand for a better way. I think that some of the challengers like Walmart, CVS, will make a difference here and some of the other players the investment from backed hedge fund backed roll ups that are taking a capitated approach are going to prove to the industry that this is doable, that it is superior and that they can make money at it. And that will convince some conventional players that they ought to give it more of a try.
Fred Goldstein 20:16
I know in the in the, towards the end of the study you pointed and you pointed to CMS directly and said, that’s the place that should be driving this that can drive this, do you get a sense they’re gonna move that direction now?
Michael Abrams 20:28
No, you need to try and see between the lines of what they say versus what they’ll do. I don’t feel yet that this administration has committed itself one way or another. They, they took a very limp approach to implementation of transparency rules that had been passed in the prior administration. I don’t know where that stands right now, it seems to have been pushed off the front pages. But that is, you know, in as much as it’s already been tested in the courts. And there’s, there’s really no nothing else to do. But enforce the rule, we’ll have to wait and see how serious they are. And they’ve backed off transparency in pricing, as pertains to payers, giving payers another six months to get used to the idea. So we’ll we’ll just have to wait and see, the problem is that healthcare delivery employs a huge portion of the population. And in many localities, those are all voters. And in most of those localities, the the CEO has the local Congress person on their speed dial. So there’s a lot of room, there’s a lot of resistance to change.
Fred Goldstein 21:51
Yeah, I think, Michael, that’s a great point, it gets back to this a couple years ago, I remember hearing somebody say, coming out of the West Coast, you know, we no longer look at that hospital on the hill as a great job maker or a job creator. It’s not the golden Mecca up there creating this workforce, because the work is so dang expensive. We’re essentially taxing the community. Has that thought process sort of diminished?
Michael Abrams 22:14
I don’t think, so there’s an awareness of it. But the AHA and the AMA wield a great deal of power in this situation, much more so perhaps than they should.
Fred Goldstein 22:27
One of the other areas, Michael, that I found interesting, which actually might be some good news, but again, the question is, how much is this driven by fee for service or paying for it was you went into social determinants of health, and looked at the relative changes of the organization’s willingness to use those services or begin to access those services over time, and it’s gone up fairly, considerably?
Michael Abrams 22:49
Oh, as you might expect, one of the real blowout changes that we did see had to do with telehealth and the number of institutions that own their own telehealth operation. But there were other changes that were associated with SDoH. Many more organizations are making referrals or working with community partners in the area of housing and food insecurity and related kinds of issues.
Fred Goldstein 23:20
Yeah, I noticed, for example, in food pantries that went in terms of increasingly partnering with these organizations that went from 28% in 2016, to about 40%. You know, this past year, a nice jump there also a nice jump in terms of accessing transportation, as well as housing community development. So it’s good to see that the question then becomes, I think, is everything we throw at the system is, is there a CPT code for it? Or am I going to do it as part of a bundled payment? So I wonder how far they’re going to go until they say, hey, when are you covering this as more than, say, the chronic care management code or something like that?
Michael Abrams 23:53
Well, Medicare is already covering transportation issues and and you know, the, the traditional providers are more than comfortable utilizing or creating more opportunities for services just as long as somebody will pay.
Fred Goldstein 24:09
So as we think about this, and over time, obviously, people like David started when we talked him almost banging his head against the wall, you know, when is this gonna change? When is this gonna change? Are you do you’ve done this now, six years? Are you feeling like, we’re gonna get somewhere? Some something’s gonna click or is this just going to be an ongoing sort of dragging process?
Michael Abrams 24:34
I think an awful lot depends on what the administration chooses to do. CMS is the only payer, the only stakeholder really on the scene that has the market power to arbitrarily make something happen and what it’s been doing over the last decade, CMMI has been introducing any number of models opportunity from their point of view, to enable traditional providers to put their toe in the water, see if they like it. And if they like it move more into the population health realm. problem is that this, this coaxing hasn’t really worked. And largely because the old model is still available for them to cling to, as long as that remains the situation that strategy’s just not going to work. So it’s up to CMS, CMMI to enforce a change on the industry, they have the market power to do it. The question is, do they have the will?
Fred Goldstein 25:38
Do you think the, as you consider these hospitals and healthcare systems, is there any one area based on your survey you think they should focus on or begin to start to do to make that transition more comfortable? Is it an education process? Is it setting up better analytics and systems? Is it working with your physicians? Where might they go to start?
Michael Abrams 25:59
You know hospitals have made a number of infrastructure changes to improve quality. And so they have started to more consistently, let’s say have follow up phone calls with patients after discharge, to make sure that they understood the discharge instructions right there. There they’ve instituted processes to ensure that a discharged patient has an appointment to see their provider within a reasonable period of time. These are common sense kinds of steps that should have been there all along. And we have seen over the six years, we’ve done the survey, more attention to instance, to building infrastructure to make sure that these kinds of practices happen. I think that’s why hospitals are feeling a bit more confident about their ability to deliver above average quality, but their confidence in the in their own organization to control cost is still not good. And it’s still not good, because as I said earlier, the infrastructure that would enable them to do that has simply not been built. So in terms of what needs to change, I think the key is that administrators and administrations need to realize that they cannot have any predictability or control over the cost of care. If they don’t have some visibility into the clinical decision making of their physician staffs and have some collaboration about what that should look like, what makes the most sense, what’s the most cost effective way to proceed? They can’t afford to leave all physicians to do what it is they think they want to do, each of them Islands to themselves.
Fred Goldstein 27:58
So in essence, just a few short minute we have her so we’ve achieved the double aim. We’re working on improving the health of the population and improving the experience of care, but haven’t been able to impact the cost.
Michael Abrams 28:13
That kind of sums it up.
Fred Goldstein 28:15
Fantastic. Well, thanks so much for joining us, Michael. It’s been a pleasure, a great report, the State of Population Health, Sixth Annual Numerof survey. Thanks again for joining us.
Michael Abrams 28:26
My pleasure and thanks, Fred, for inviting me. Appreciate it.
Fred Goldstein 28:29
And back to you, Gregg.
Gregg Masters 28:31
Thanks, Fred. That is the last word on today’s broadcast. I want to thank Michael, Abram’s co founder and managing partner of Numerof and Associates for his time and generous insights today for more information on Numerof and Associates follow on Twitter by @naiconsulting and @Rita, R I T A numerof N U M E R O F respectively. And to learn more, go to www.nai-consulting.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 you follow us on twitter by @ PopHealthWeek. Bye now