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You Get What You Pay For (07:56)

What is the necessity of moving toward more payer or provider risk in the Medicaid space?

Anya Rader Wallack, former Director for Rhode Island Medicaid, describes how, as an organization becomes more integrated, it assumes more risk and has more responsibility for managing total cost and outcomes of care.

Nationally, there is a lot of discussion about increased risk models such as bundles and primary care medical homes, says Arkansas Medicaid Director William Golden. These can be hard to achieve at the beginning, given the different types and locations of practice environments and the varying relationships between doctors and between doctors and hospitals.

“What we’ve done [at Arkansas Medicaid] with episodes is change the conversation, where people are beginning to think about some of these issues, about how you manage resource and stewardship,” Golden says. Primary care offices are often too small to take on much insurance risk, but bundling them into an ACO or other network can change that, such as with the Comprehensive Primary Care Plus model by the Centers for Medicare and Medicaid Services. “Over time, you’re going to see more surrogate measures for primary care to get them to be doing more preventive work, and probably get them off the hamster wheel of acute care visits but be part of a larger network, which will be at a greater risk for total cost of care and other things,” explains Golden.

“I’m worried that we’re asking provider organizations to live in two different worlds,” says CareMore Health System CEO Sachin Jain. “And the conclusion that may arise from it is that living in a risk-based world is unsuccessful, when the strategy might be right, but the execution is wrong.”

Jain argues for a full-risk world. Optimizing care for fee-for-service or at-risk patients won’t happen with two different operating models, he says. Going full risk is not new, and it can be achieved with different competencies and skill sets incorporated into an organization. “The future of Medicaid, the future of Medicare, is around delegating risk to provider entities that are skilled at managing it,” says Jain. The challenge for Medicaid in operating under that model is risk adjustment.

Changes to risk models often don’t make sense to on-the-ground provider organizations that have to manage within a global budget, Jain explains. To achieve a full-risk world, there needs to be close collaboration between states, providers, and payers. “If there isn’t that collaboration, you end up getting what you paid for, that’s the reality of it,” he says.

Golden cautions against under- and over-provision, particularly when it comes to complex mental illness and disabilities. With so many sub-segments in Medicaid, there is no one-size-fits all model.

Arkansas Medicaid is developing medical homes for different disabled groups in the community to better coordinate their care. “We’re finding, and I think this will be true all over, that as we roll these ideas out, the clinical logic appeals to the clinicians, but when you start disrupting business models, you start to get into all sorts of interesting pushback,” he says.

There is a tendency to think you can manage over- and under-provision with levers or by creating new regulations, adds Jain — an alphabet soup of health care regulation. “One of the real components that we need to magnify, underline, and bold, is the professionalism of our health care provider workforce. Most people who work within American medicine want to do right by their patients. And I think we end up legislating on the margins of bad actors,” he says, noting that there is work to be done to support the professionalism of the health care workforce and re-inspire them as we move toward full risk. “You can have the best clinical models in the world, but what really makes Iora work and what really makes CareMore work is the people who work there.” Good work can ultimately make up for deficiencies in policy and organizational structure.

“We’ve been a big believer that you want to have financial incentives for the provider site so that the innovation happens at the clinical interface, and it’s not just a management of dollar flow,” adds Golden. “That’s part of what you can then fuel the professionalism that becomes a model for others to emulate.”

From the NEJM Catalyst event New Risk, New Business Models held in Boston, October 6, 2016.

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