Unlocking Value-Based Care's Upside

Value-based purchasing has begun to take hold, with federal incentives for lower-cost care and best performance and disincentives for unnecessary care. Many of the VBP metrics will be a tall order for healthcare systems, especially HCAHPS.

Yet healthcare executives also see great upside in VBP. In the HealthLeaders 2013 Industry Survey, VBP rated as the number-two opportunity for organizations, garnering 64% of the vote from the 823 respondents.

Geisinger is ready to help its counterparts realize the opportunity. Last week, Geisinger announced the launch of xG Health Solutions, a spinoff company that will offer the Geisinger approach to value-based care for a price.

xG aims to help clients achieve better care at lower cost. In announcing xG, Geisinger President and CEO Glenn D. Steele Jr., MD, PhD, said, "It is generally accepted in the healthcare industry that somewhere between 30 to 40% of the care that is provided is not only unnecessary, but may actually cause harm to patients."

Danville, PA-based Geisinger, an integrated delivery system that bills itself as the nation's largest rural health provider, is widely recognized for its quality of care, low cost, and innovations such as early EMR adoption. This identity is behind the creation of xG, says its new CEO, Earl P. Steinberg, MD, MPP, Geisinger's executive vice president of innovation and dissemination. "[Steele] is tired of hearing many people say that Geisinger is a one-off, that has a dozen unique circumstances that enable it to provide the caliber care that it provides and that, while it's interesting how it does it, it's irrelevant because it's not generalizable. He doesn't believe that. And so I was hired 18 months ago to figure out how to take what Geisinger has innovated and learned to export that to other healthcare delivery systems."

The xG toolkit was described at the launch as consisting of five pieces: consulting services; population health data analytics, interpretation, and reporting; patient-and population-focused care management; health information technology optimization; and third-party administration services.

But Steinberg focuses on two of these pieces as the absolutely key capabilities. The first is data analytics for the patient population. "By data analytics, I mean data acquisition, integration, cleaning, analytics, interpretation, and reporting—both clinical and actuarial. First and foremost, if you don't have that piece, you're flailing," he says.

Steinberg is in a better position than most to understand the importance of a data analytic underpinning. He was a co-founder of Resolution Health, a patient data company that was purchased by health payer WellPoint, Inc., where Steinberg worked as senior vice president for clinical strategy, quality, and outcomes before joining Geisinger in June 2011.

Many provider organizations have data but no analytics, or IT but no data, he says. For example, "a sophisticated EMR may have never done analytics." Without the analytics in place, health systems cannot gain a deep understanding of their patients, much less accomplish population health management.

The second key ingredient of xG's recipe is hyper-focused care management. "Specially trained, embedded case managers are a powerful weapon," Steinberg told me. "I call them ‘commando RNs.' That connotes a personality that is active and takes initiative. They take charge of the most complicated patients. They're extremely valuable in improving care in a very cost-effective manner."

Population health analytics and focused case management, plus consulting to assess a healthcare system's needs, form the core of xG's offerings. "Out of the box, you can't do everything at once, so we concentrate on those things where Geisinger has something particularly valuable," Steinberg says.

xG's approach has already been pilot-tested at two healthcare systems in West Virginia and Maine. Geisinger brought its health data analytics expertise and systems, parachuted in commando case managers, and took over third-party administration so it could examine claims data. "The early utilization impacts are strikingly similar to what we have observed at Geisinger," Steinberg says. 

But will xG offerings provide a good ROI for healthcare systems? Maybe, says Steinberg. "It depends on where they're starting from." Primary care is a prerequisite to value-based care, and organizations lacking that base would have to make an investment.

Another aspect beyond xG's purview has to do with negotiations between provider and payer. "The key is to be in a financial arrangement where you get a cut, as opposed to giving it all to the payer," Steinberg says. In the value-based world, provider executives must ensure that they're not only delivering good value for patients but also retaining value for their own organizations.