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Panel IV Summary

Panel I: When Providers Become Payers and Vice Versa (and more): Cross-Sector Blurring

Nathan Nash, November 13, 2015

Moderator: Howard P. Forman – Professor of Diagnostic Radiology, Economics, and Public Health, Yale School of Management and Yale School of Medicine

  • Troyen A. Brennan – Executive Vice President and Chief Medical Officer, CVS Health
  • Benjamin Chu – Executive Vice President, Kaiser Foundation Hospitals and Health Plan, Inc., and Group President, Kaiser Southern California and Georgia Region
  • Michael J. Dowling – President and CEO, Northwell Health
  • Lewis G. Sandy – Executive Vice President, Clinical Advancement, UnitedHealth Group

Commentator: Barak Richman – Robert Braucher Visiting Professor of Law, Harvard Law School, and Edgar P. & Elizabeth C. Bartlett Professor of Law and Business Administration, Duke University School of Law

Panel I of the New Health Care Industry Conference pushed back on the opening speakers’ belief that collaboration among competitors should automatically raise concerns about consumer harm. Instead, Panel I argued, the accelerating integration and consolidation in health care can provide a valuable opportunity to increase the value of care that consumers receive. This panel brought together speakers from traditional payers and providers, as well as new market entrants, all of whom were pursuing innovative approaches to integrating payment for and delivery of health services.

All of the panelists, similar to Secretary Kathleen Sebelius, emphasized the importance of moving away from siloed, episodic medical care to a system build around holistic care promoting patient wellness and engagement. The panelists considered payer-provider integration to be an important step in creating the space for innovation and collaboration that will make this transition possible. In discussing the benefits of payer-provider integration, the panelists highlighted the importance of (1) aligning incentives and creating synergies between providers and payers; (2) promoting effective use of data to improve care and empower patients; and (3) fostering innovation across the health care system. The panelists concluded that payer-provider integrated systems may provide the best platform for meaningful collaboration, disruptive innovation, and interdisciplinary, evidence-based, and patient-centered care.

I. Aligning Incentives Among Providers and Payers To Create New Synergies

As moderator Howard Forman remarked in his introduction of the panel, blurring of lines among providers and payers is nothing new. Rather than creating collaboration and integration, the Affordable Care Act (ACA) accelerated trends already showing promise and gaining steam before 2010. Benjamin Chu noted that Kaiser Health Plan has successfully integrated care and payment for decades. The panelists’ pursuit of collaboration and integration predated the ACA, and has already yielded success for their organizations as well as consumers. This collaboration can come in many forms. For example, Lewis Sandy described Optum, UnitedHealth Group’s cooperative, cross-sector partnership that provides a platform for payers and providers to work toward a higher-performing system without top-down command-and-control. Rather, collaboration at its best is about aligning incentives and creating synergies.

According to Benjamin Chu, Kaiser’s capitated system only works to provide better care at lower cost because providers and payers together bear capitation’s risks—and benefits. In the exam room, as well as in the front office, and even among the support staff, Kaiser is committed to ensuring that patients follow their treatment plans and stay healthy. Troy Brennan followed this idea in discussing CVS Health’s vertical and horizontal integration, as a Pharmacy Benefit Manager (PBM) and retail pharmacy that provides services across the continuum of care. As a PBM, pharmacy and primary care provider, CVS Health has a strong interest in encouraging patients take their medication. Through the new Minute Clinics, CVS Health can bring basic primary care services to where patients are, providing counseling services to ensure that patients understand why compliance with their treatment regimen is important. This integration improves patient access and outcomes while encouraging them to fill their prescriptions.
Michael Dowling described how Northwell’s integration combined not only providers and payment, but also education of new health professionals. By training the next generation of health professionals in an environment that emphasizes collaboration, Northwell is challenging the traditional conception of medical professionals as autonomous, self-sufficient providers of episodic care. As Benjamin Chu responded to a question about the need for primary care physicians, the new reality is that today’s primary care teams must be interdisciplinary and team-based to coordinate patient care and address patients’ needs effectively. The panelists agreed that greater consolidation can promise interdisciplinarity, coordination, and synergies that better support health professionals and their patients.     

II. Promoting Effective Use of Data To Improve Care and Empower Patients

Many of the audience’s questions focused on the capability of data to directly engage patients in their health and lead to better care. Michael Dowling explained how giving patients access to data can affect their lifestyle behaviors—key determinants of health—but Troy Brennan cautioned that simply making data available does not alone improve patient care. Instead, as Benjamin Chu described, patient engagement requires tools that allow patients to understand, engage with, and take ownership of their personal health data. All of the panelists described ways in which they are using technology to reach patients more regularly and effectively.

Better data, and integration of claims and clinical data, can help providers as well. Barak Richman noted that more integrated health systems have better access to large swaths of data, which can improve care but also expand these large systems’ market power. Lewis Sandy responded to this argument by describing how large payers like UnitedHealth Group have made their data and analytic capacity available to policymakers, researchers, and providers. By encouraging data sharing, detailed analysis of claims and clinical care, and patient and provider engagement, technology can make large-scale collaboration not only possible, but effective.

III. Fostering Innovation Across the Health Care System

All of the panelists were innovators, and all believed in the importance of fostering innovation. Michael Dowling explained that, just as it is important for regulators to strike a careful balance between fostering competition and collaboration, so too should regulators protect efficiency and safety of care while promoting disruptive, beneficial innovation. He explained Northwell’s venture group initiative, which encourages staff to propose ideas for how Northwell can provide better care more efficiently. According to Barak Richman, ensuring regulatory clarity, along with data accessibility, is essential to supporting productive innovation. Although all of the panelists represented large organizations, they recognized the essential role innovation can play and argued that large, integrated organizations can support, and even incubate, disruptive innovators.

As Barak Richman remarked, this panel provided an optimistic view of how consolidation of the health system can help move us in the right direction. He noted that the panel’s positive view contrasts with economists’ more negative treatment of consolidation’s effects on the health care market, which future panels would explore. All of the panelists demonstrated careful, consistent consideration of how their new collaborative efforts would benefit consumers while strengthening our health care system. Even across their diverse backgrounds and experiences, the panelists came to similar conclusions about the promise of the accelerating cross-sector integration in health care.