Engaging Physicians in Reducing the Total Cost of Care

Post Featured Image

Recently, several clients who are working to improve value-based contracts have asked, “How do we better engage specialists in the reduction of total cost of care and improve access and outcomes for our members?” Nationally, the total cost of care increased 4.3 percent in 2016, and, according to CMS, is expected to increase at a rate of 5.5 percent from 2017 to 2026, leading to a steady increase in the percentage of healthcare spending compared to the gross national product.

This spending includes more than 30 percent hospital costs, 20 percent physician and clinical services, and 10 percent pharmaceuticals. Several studies that compare specialists with primary care physicians suggest that revenue generated within the surgical specialties far surpasses all the rest. Clearly, engaging specialists in developing and implementing reduction in total cost of care is imperative.

Specialists can participate in costs savings in several ways:

  1. Making changes in the site of service, including moving from higher-cost, hospital-based settings to lower-cost ambulatory settings.
  2. Developing structures for physicians to agree and participate in defining measurable standards of care.
  3. Participating in value-based contracts that incentivize physicians to reduce variation in care, ultimately leading to lower costs.
  4. Participating in value-based contracts that incentivize specialty physicians to encourage patient compliance in preventive care.

Service Line Planning

Organizations can employ a service line strategy to work with physicians to measure variations in clinical care and develop standards for clinical services. In organizations that have service line structures to develop clinical programs and reduce leakage, they may also use an existing structure to develop value-based incentives, manage bundles, and develop additional “stickiness” among physicians. Organizations that are just beginning to think about including specialists in value-based incentives might consider the service line structure to begin these very important conversations and processes.

Reducing Clinical Variation

In specialty care, reduction in clinical variation is the key to unlocking value-based contracts and incentivizing physicians. Although the Centers for Medicare and Medicaid Services (CMS) has delineated many specialty care guidelines such as colonoscopy, mammography, and retinal eye screenings, as well as prescribing beta blockers and statins, many, if not most, specialists remain on a strictly fee-for-service reimbursement model. To get them in the habit of increasing quality and reducing costs, they must develop standards, measure variation and outliers, and ultimately hold each other accountable to change behavior.

We are working with physician groups in gastroenterology and cardiology to study their practice patterns and identify opportunities to reduce variation in clinical practice. These physicians are in different groups with varying cultures, but they believe they can work together to improve quality and reduce cost. We are also working with payers in their communities to develop incentive structures to reward improvements in the coming years.

Improving Access

We have heard the “site of service” mantra from payers across the country for ambulatory surgery for almost a decade. With changes to regulations, most states now allow many ambulatory surgical patients to remain for up to 23 hours, encouraging more difficult procedures and new groups of physicians who are interested in exploring ambulatory surgical sites. Moreover, payers are now encouraging physicians by offering beneficial rates to include more infusion and invasive cardiac procedures, as well as virtually all urgent care and many more surgical procedures on an outpatient basis. Organizations can also use service line structures to help physicians develop programs that could successfully be deployed in ambulatory settings for the patient population.

Overall, many opportunities exist to engage specialty physicians in participating in the Triple Aim. By including physicians in the development and measurement of clinical standards, adding or improving incentives, and developing ambulatory access points, they will be better participants in an organization’s cost, quality, and leakage goals.

Lynda Mischel

By Lynda Mischel

Lynda specializes in helping clients develop and execute strategies to optimize operational and financial performance in population health, clinical integration, physician organizations, delivery systems, and leadership development.