The key to success in value-based care: Cleveland Clinic's chief managed care officer weighs in

As hospitals and health systems move toward value-based payment models, they face various challenges to ensure such models will help the organization reduce costs while improving the quality of patient care.

That's why Cleveland Clinic will host a Value-Based Innovation Summit Oct. 21-23, at the Global Center for Health Innovation in Cleveland.

During the summit, thought leaders in value-based care redesign and payment reform will discuss topics including best practices in payer-provider partnerships; value-based perspectives from managed care executives and purchasers; the international shift from fee-for-service to value-based care; and successful value-based clinical care and innovative care models, according to a news release.

Doug Chaet, chief managed care officer of Cleveland Clinic, said the event is a great opportunity for organizations to gain insight into those issues.

Here, he talks about the summit and healthcare value-based care efforts in general.

Editor's note: Responses were lightly edited for length and clarity. 

Question: What do you make of healthcare's progress toward value-based care thus far?

Doug Chaet: The progress and the success has really varied quite a bit market to market, so it's hard to say how we're doing on value-based care as an industry. There are some examples of success, and I think the rest of it is a little bit patchy. One of the things we're trying to accomplish with the summit is to try to shine a light on some of those areas that have been successful. One of the reasons why we didn't want to simply have somebody stand up and talk about value-based care 101 is we feel like most of the industry understands what it is and what it's hoping to accomplish. They understand the equation of cost and quality. We wanted to showcase success and provide some examples of payers and partners who have pulled this off in a meaningful way.

Q: How has Cleveland Clinic embraced value-based care? 

DC: It varies a little for us by market because we're in both Ohio and Florida, where we are a separate but related value-based operation. Generally, we feel we have done a good job on improving quality indicators. We think we've done a good job of getting practitioners to pay more attention to coding because we know that's important to the payers and purchasers. We also have done a good job bringing down cost, both in terms of price and in terms of utilization and the impact utilization has on cost. I think we're certainly keeping up with the market. In certain clinical areas, I'd say we're a market leader in terms of the work we've done. At the main campus, we are a destination for payers where they have had challenges with physicians in other markets who have either misdiagnosed or mismanaged illnesses.

In Florida, we've had a great deal of success with transitions of care … out of the hospital to other forms of care. I think we've made our mark, but we're looking to improve on that as time goes on.

Q: What are the greatest challenges hindering progress toward value-based care?

DC: The overall program value for most of the payer-sponsored programs may not be significant enough to promote the kind of change payers 'are looking for. Cleveland Clinic also participate in Medicare programs, and we have two accountable care organizations. In the Medicare Shared Savings Program — which is essentially a large value-based care arrangement — we have substantial upside and we have some downside. We knew going into the program, that if we perform, we'll do very well and if we don't perform, there's a consequence. Most of the commercial programs we participate in don't provide as much potential financial value as the government programs. I would therefore question whether or not these commercial programs provide enough of an incentive for other provider organizations to get behind this and invest in their value-based care capabilities. For us, we're already investing in value-based capabilities because we have significant exposure in the Medicare Shared Savings Program. If the total dollar value of commercial programs is less than 1 percent of all the revenue coming in from all of those payers, it's hard to expect they will completely change the way they've been doing things for years.

Medicare has a different approach in that they need to view us as partners. I think the [commercial] payers understand we're also their partners, but it's a bit of a dilemma because most of the commercial business that we see through those commercial insurers is actually self-insured business. [That's] one of the reasons why we have tried to structure the summit in a way that their focus is not only what payers are doing, but also what large employers are doing as it pertains to value-based care.

Q: What are steps healthcare organizations can take before signing value-based contracts to prevent challenges later?

DC: One of the keys to success is having the physicians lead. When the program and process is payer driven, they can only get so far. And when the program and the process is hospital driven, they can only get so far. It's really the front-line practitioners that have the ability to call the shots and promote positive transformation. You really need them on board, and they want to want to do this, and I think that's key to being successful in these programs.


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