And so I'd like to introduce our first speaker, Dr. Ziad Galad. He's Associate Professor of Medicine at Duke University. He's going to be speaking for making the case for value-based care. Thanks, Mina. Very excited to be here and appreciate working with Mina on this session around value-based care. I appreciate all of you for coming. We wanted to try and encourage you all to move to the front so we could have some discussion. But then we were worried you wouldn't move, so we didn't say anything. But anyway, if you'd like to move, we would be happy to have you come down. So there are my disclosures. And what I'd like to do over the next 15 to 20 minutes is really make the case for value-based care. And to do that, I'll do two things specifically. One is to identify the drivers of health care payment reform. And the second is to understand the lay of the land. What are the current payment models and policies? And then we'll have a discussion about how we as hepatologists can fit into those models. So all of you have seen some sort of permutation of this slide looking at the value in terms of a population perspective. This looks at, on the vertical axis, health care spending per person in US dollars. Along the bottom is the average life expectancy at birth. And you can see when we compare ourselves to our peers in terms of the average, we fall higher in terms of cost and lower in terms of life expectancy at birth. So really, that's the very high-level perspective about how we do as it relates to value. I think what's really driving this drive to value-based care is more specific. And that relates to where our money is going. So health care is consuming more and more of the federal budget. In 2020, we're close to 20% of GDP. And it's estimated that over the next several decades, that will rise to somewhere between 20% to 25%. That's a lot of money. Obviously, going to health care, which ends up crowding out a lot of other priorities. And this is not just an issue at the federal level. At the state level, this is even more pronounced. So you can look at this as data between 2013 and 15, looking at the growth in spending for state budgets. And you can see, whereas there's been some growth in health education, sorry, higher education, transportation, public assistance, all the things that states are doing, Medicaid spending is really pushing the envelope in terms of the percent change year over year. So really starting to stretch state budgets and trying to impact where states can invest their resources. And this is really where I think the real pressure is to improve the value of our health care, is that we just don't have the money to continue growing in the way that we're growing. Now, there's lots of different theories or ideas about why health care costs are so high in this country. I think this one is particularly relevant to us as specialists. And this is a paper that was published just this year by Gerard Anderson and others. And it plays on a paper that Uwe Reinhart published a number of years ago that was called, It's the Price is Stupid. And so their title was, It's Still the Price is Stupid. And the idea here is that prices is really why our health care spending in this country is so high. And a couple pieces of evidence to support that statement. So the first, as we talked about, is that per capita spending in the US is higher than other countries. Here's that information that I showed earlier. If you look at total health care spending, we are close to $10,000 per person in the US versus the average for our peer countries, which is around 4,000. So you can see we're at the higher end of the ring. We're the maximum in terms of that range. Our average annual growth rate for GDP is about 3% annual growth, which is in line with a lot of other countries. But the percent of total health spending in health care, much higher, twice the average numbers for our peer institutions. So the first point here is that we spend a lot more money on health care than other countries. But importantly, we actually devote fewer resources to health care than other countries. So if you look at the average, the number of acute care beds per 1,000 population, hospital occupancy rate, and average length of stay, all of those are lower, significantly lower, than our peer countries around the world. So we're paying more for health care, but we're actually investing less in the resources required to produce health care. And I think, again, particularly relevant is this third point that the US has more specialists than other countries. So when you look at the salary of nurses, actually we do quite well in this country. In terms of practicing nurses per population, again, we do better than average when you look at that. In terms of physicians per 1,000 population, we have fewer physicians in this country per population than the average for our peer countries around the world. So there's fewer of us, but when you look at the generalist physicians as a percent of total MDs, we're the lowest. So there is only about 12% of physicians in this country who are generalists, as opposed to the average around the rest of the world, which is closer to 28%. So many, many more specialists in this country as compared to other countries. And that, I think, is relevant, because then when you think about how this translates into the lay press, it translates in this way. And this is one of my favorite slides. I know it's a couple of years old here. This is from Elizabeth Rosenthal, who wrote an article in New York Times about the $2.7 trillion medical bill. And I'll just highlight for you the subtitle there, which says, colonoscopies explain why the US leads the world in health care expenditures. And I sort of took this one a little personally, because I said, well, why didn't you pick on hip replacement or MRIs or any of the other ones? Somehow she picked colonoscopy. But the point here is that we are in the crosshairs. As specialists, what we do and how much we charge for that is in the crosshair. And there's fairly well-substantiated evidence that the prices that we're paying for health care in this country are much higher than in other countries. So given that, I think it's very important for us to consider, as specialists who are driving many of these costs, how we are going to participate and care in a value-based world. So with that as a background, I want to talk a little bit about current payment models and policies to try and set up some of the conversation that I hope we'll have over the next couple hours about how transplant, sorry, how hepatologists, transplant hepatologists and others, fit into those models. So this is another slide that I'm sure many of you have seen before that defines value as health outcomes achieved per dollar spent. This is from Michael Porter, who published this in the New England Journal almost a decade ago. And obviously, then, value contains components of both quality and cost. And one of the arguments that I've made in other settings is that you can improve value in two ways. You can improve the quality of care, or you can decrease the cost of care. And a lot of what we focused on in certainly the academic marketplace and even professionals among our professional societies is really the one on the left there, is how do we improve quality? Developing guidelines for quality, developing quality measures from that, working with CMS and other payers to try and incorporate those quality measures into various payment models. At the same time, though, the market is focusing almost entirely on the other side of the equation, that is costs. How do we drive costs down? How can we lower costs? And there's been a little bit of a mismatch, I think, in terms of where our professional focus has been and where the marketplace focus has been. I think it's really important for us to kind of realign those two perspectives. So when we think about health care costs and how we can lower them, there's a number of different ways we can do that. The first is to limit utilization. We're all very familiar with this approach. Examples would be step utilization in inflammatory bowel disease, preauthorization for imaging or other services, all the way to limit the utilization of expensive services. The second is to lower the unit cost. This refers to the prices that I was talking about earlier. So we can have seen this in the re-evaluation of CPT codes, especially in the GI and hepatology codes. All of you may know that recently CMS decided to re-evaluate codes for upper endoscopy. And the organization that petitioned CMS to do that was actually Aetna. So it was the insurance company that petitioned CMS to re-evaluate its CPT codes. Reference pricing is another way to limit unit costs. And the other, I think, and the one that I would like to focus more on is how do we redesign the system? The first two in terms of limiting utilization and lowering unit costs really become kind of an antagonistic relationship between physicians and specialists and payers. I think redesign hopefully becomes more of a collaborative relationship where we work with the payers to try and redesign the system to achieve value. And this can be through a number of alternative payment models that I'll mention, and also vertical integration. And we've seen a lot of vertical integration in the marketplace. There's a cartoon on the side there showing the CVS Aetna merger, an example of vertical integration. There's many others in the market there where you begin to have a lot of vertical integration to try and redesign the system and lower costs. So let me just focus on alternative payment models to sort of set up our discussion. So this is a framework for thinking about alternative payment models. Many of you have probably seen this already, looking at categorizing payment models from one to four. One being fee for service payments with no link to quality and value, kind of some might say the good old days in terms of health care. And four is population-based payment, really looking at global payments for population health and everything in between. The goal for CMS and others is really to move us from the left side there in terms of category one fee for service payments to the right side in global payments. And the way to do that, the way that they've encouraged us to do that is through these alternative payment models. In category three, which are really built on fee for service models, so we're not taking fully capitated, we're not taking full risk for a lot of these patients, it's not a capitated model. But there are incentives and other ways to try and encourage us to think about a more value-based or population-based payment model. And the fourth category there, of course, is global models for health care. So let me talk about category three and four. So one example of an alternative payment model is bundled payment. And we'll be hearing a little bit more about the bundled payment shortly. But the idea here is that you pay a discrete amount of money or discrete bundle for a discrete bundle of services. And this can be for a particular procedure, it can be for a particular episode of care, but really a discrete episode of care and a contracted amount that gets paid for that. And the strength here is that really we're starting to develop efficient and transparent market-based pricing tiered to quality and not necessarily demand. Now, the downside is you can have a bundled payment for a service, but you could still over-prescribe or overuse that service or underuse it. So it doesn't really affect utilization. But certainly a model that I think many have looked to for trying to reframe how we pay. Now, does anyone want to tell us what the first bundled payment was? Does anyone have an idea what the first bundled payment was? End-stage renal disease. Can you just go up to the microphone? I think it was end-stage renal disease. OK, very good. One option. There was something earlier than that. And I have hints that are coming here. So it was developed by professors from Yale. That might not help so much. 1983. Anybody want to take a guess? Dr. Rogal is coming to the microphone. This could be totally wrong, but I'm going to say pregnancy. Pregnancy. Not quite pregnancy, but it does actually fit, actually, when you think about where mothers deliver babies. So that might actually be right. I don't know if Alex Trebek would give you that right. So it was the DRG. So when you think about how a DRG works, it is a bundled payment for a discrete episode of care. And whether it's pregnancy or delivery or whether it's hip replacement, other things, again, it is a discrete payment. And so it might actually be pregnancy. I have to look back and see, because you might actually be right there. So there have been lots of bundled payments that have come through. And recently, there's a program called the BCPI, or Bundled Payment for Care Initiative, from CMS, which has spanned a number of different diseases. And the data here is mixed as to whether this actually improves value or decreases cost. This is data looking at a number of conditions, like acute myocardial infarction, CHF, pneumonia, sepsis, COPD, all of which does not show a great difference in terms of health care costs in organizations that have participated in this program versus organizations that haven't. So the data still needs to become, I think, it's not clear whether this will make a difference. Per member per month is another model of alternative payment models. This is a supplementary per member per month case management fee. There's some great examples in GI, actually, of this kind of models. So one is IBD Medical Home. This has been instituted at a number of institutions. This is particularly from Dr. Ruggiero when he was at University of Pittsburgh with an IBD Medical Home called Total Care IBD. And in this model, the payer, in which case was actually the University of Pittsburgh health care insurance company, funded this program by funding nurse coordinators, nurse practitioners, dieticians, social workers, psychiatrists, and a health coach all to take better care of patients with inflammatory bowel disease. And in fact, the data supported that this is actually a successful way to manage patients in a cost efficient, high quality fashion. So this is looking, this was published in CGH last year, looking at three month in dark and one year outcomes in terms of ED visits and hospitalizations and found a significant decrease in both those outcomes in the patients who are enrolled in the IBD specialty medical home. So at one year, there was a reduced unplanned care, reduced disease burden. They actually found improved quality of life in their patients when they did specific patient reported outcomes and, of course, decreased cost. So really a great model where a small investment or a relatively small investment from the payer has helped the medical team take better care of their patients and has really been a win-win. This is also seen at a national level. So CMS has a program which is a public private partnership between CMS and private payers called the Oncology Care Model. And this is a five year model that's providing these real time monthly payments for enhanced services to patients with cancer to be taken care of. This involves a large, large number of patients, 150 beneficiaries per year, 200,000 episodes of care per year. Like I said, it's a partnership with private payers. And a lot of work is being done to see what the impact of this is on patients with cancer. Now, one of the interesting things about this kind of alternative payment model is that there actually may be a financial benefit to specialists such as ourselves. And I think that's a little bit counterintuitive because people, as they think about alternative payment models, are worried that this will be a decrease in revenue to the practice. But this analysis or this kind of conceptual framework which Kavita Patel from Brookings published in CGH a number of years ago looked at how it might actually be a financial win for specialists. And so if you look at the total cost of care for a particular complex condition, that's illustrated by the whole bar here, most of those payments are non-physician payments. Hospitals, medications, ancillary services. The total physician payments are actually a very small percentage of the total cost of care for a particular patient with advanced chronic disease. So when you have a process by which the specialist is participating in the care of that patient and has a share in the total savings from that patient, you take a small percentage of a large number and tack that on to the individual physician reimbursement, there's actually an upside here for the individual practice. And in fact, this has been borne out. Project Sonar, which is a IBD medical home that came out of Illinois Gastro in partnership with Blue Cross, has actually seen their revenue for inflammatory bowel disease patients go up in these partnerships with insurance companies because the insurance companies wins by decreasing the total cost of care, the practice wins by enhancing their revenue in providing better care to the patients. And so this has really been a win-win. And it's really an easy calculation when there's not a hospital involved, I think it gets more complicated when you have a hospital involved. Finally, shared savings, I'll just say a couple words here about the opportunity to participate in this population level health management. This is where there's a capitated or a population level payment for a particular population. And examples of this, of course, would be accountable care organizations. The footprint for ACOs is growing significantly. This is just data between 2011 and 2016 showing that the number of ACOs and the number of people enrolled in those ACOs is growing consistently. And that trend has continued over the last several years. I think there's some tension about where the marketplace is going in terms of paying for alternative payment models. Is it gonna be more of the bundles and episode-based services, or is it gonna be more of the patient and population-based services? I think it's really important for us as specialists to understand how we fit into these two models. And we'll be talking a little bit about that today, is how specialists can fit into both the bundled or episode payment models, and then patient or population-based models. I think the role of specialists in value-based care is still uncertain. There are not many specific payment models that recognize the contributions that we make to high-value care. A lot of our quality measures and payment models, we're sort of based on checkbox measures, and we need to have better ways to assess those contributions to patient care and outcomes. And I think that specialty medical homes will be the way in which we can do that, but I think that still remains to be seen. So in summary, hopefully what I've tried to illustrate is that the move to value-based care is driven by unsustainable healthcare costs that are crowding out a lot of the other priorities we have as a society. Medical specialists, such as hepatologists, I think are a particular risk in value-based world. Alternative payment models have been proposed as a way to control rising healthcare costs and align payment with value. And I think it's really important for us to think about how we fit in those models, and that we do have an opportunity to contribute meaningfully to high-value care through the alternative payment models. And there may, in fact, be a financial upside through the sharing and the savings, which can be quite substantial. So thanks very much. I'm happy, I think we'll take a few questions if there are some, or we can save them for the end. And please come to the microphone if you're interested. Thank you. Thank you. I'm just wondering if the horse is already out of the barn in the sense that how do you address the issue we're talking about total cost, but when you were addressing physician reimbursement, one, we have a physician shortage, whether you be a specialist, theoretically, or less than the rest of the world, and the number of physicians we have driving the knowledge-based informative medicine. We've sort of delegated to nurse practitioners, and then we oversight them. The other question is, when 80% plus of all physicians now, even subspecialists, are owned by the hospital, really, when we're talking about total reimbursement, that money, whether or not we improve our proportion of it, essentially goes to the system first to then be distributed and contain costs. Right. Yeah, no, thank you for those points. I think they're both well taken. So in terms of your first point about, is the horse already out of the barn, I think it is. I mean, I think it's still in sight. You know, I think there's still an opportunity to catch it. But what you do see, at least in gastroenterology, is a lot of the innovation and work in this area is actually happening in community practice, because that's where there is sort of a more immediate benefit and an opportunity for partnership. I think the market's going to drive those sort of partnerships in the large systems. It just might take a little bit longer to see those. And in terms of your second question, remind me again, give me two words. The money goes to the system. Right. How we work. So if we work harder and do better quality measures and value-based, we are not necessarily going to directly benefit by a better income. We're just going to be moving forward a lot. Right. Right. Yeah, no, I mean, I think the challenge of how we as specialists fit within the system is really a difficult one. You know, at Duke, where I am, we struggle because the only measure that matters to the ACO in terms of gastroenterologists or hepatologists is whether we do colon cancer screening. So all the other work we do around quality measurement, patient satisfaction, patient experience, that doesn't impact the ACO measures and the star rating. So I think that it's really a concern. And that's why I think we have to challenge ourselves to think about ways that we can impact the measures that the ACO or the institution is measured at or form separate partnerships with payers. I think you've identified two of the biggest challenges we have in that space.

Dr. Ziad Galad

Associate Professor

Value-based care

Healthcare costs

Alternative payment models

Specialists