Be a Frog in the New Health Care Ecosystem

Health care is a calling.

That ethos, that view of the world is ingrained in you as a young medical professional. You are taught, and you embed the idea deep in yourself, that you’re going to focus on saving lives. For over a decade, you’re trained to make decisions based on medical evidence. And there’s almost a pride at looking past the crass calculations of dollars and cents. A patient would ask me how much something costs, and as a trainee I’d say “I don’t know.” And I’d almost feel a sense of pride in it.

Then something happens. The system starts to not make sense.

You start to notice little aberrations. You notice sticky notes and EHR alerts asking if your patient with pneumonia or a UTI meets any of the cardinal signs of sepsis. That’s when you notice that the reimbursement for sepsis is more than twice the reimbursement for a UTI. And it’s a bundled payment, which means it pays the same no matter how long the patient is in the hospital.

Skilled Nursing Facility stays are another example. Work with patients admitted to SNFs long enough, and you’ll start to see a trend. The median length of stay in a SNF comes out to a peculiarly specific 21 days. Why is that? Well, it turns out that Medicare will only pay for 20 days.

Then there are these things called “observation stays,” which hospitals suddenly start billing more often. They’re essentially miniature admissions, except for one unique thing - they’re billed as outpatient services, not as a hospital admission. And we start to see more of them just as Medicare announces they’ll penalize hospitals for readmissions within 30 days.

Even when the patient gets home, the home health agency is suddenly adamant that they’ll need to visit at least five times. Is that something we’ve seen in the medical data and the scientific evidence that points to the efficacy of five visits? Or does it have something to do with the fact that Medicare is now paying a bundle of $3,000 for five-visits in a 60 day period?

These aberrations, these signals in the system, they keep happening. Eventually you can’t help but notice them. You begin to feel like Copernicus, looking at the sky with the old Ptolemic model that placed the Earth in the center of the universe, and saying to yourself, “something just doesn’t add up.” Except I suppose that he would have said that in Latin.

Don’t get me wrong, the core of health care is still there. There are still legions of people drawn to health care precisely because it’s a calling. It’s simply that health care is also an industry and that the financial incentives inexorably dictate the behaviors of organizations and institutions within which these idealistic professionals labor.

That’s why this year’s Kellogg Business of Healthcare Conference is so important. The time for a new health care ecosystem has arrived, and it requires us to start by looking honestly at the ecosystem around us today.

We’ve started to see what that new system looks like at Aledade. Today, we’re operating in 27 states, working with payers from Medicare to private plans to Medicaid, covering nearly 800,000 lives, and - most importantly - partnering with thousands of independent, primary care practices across the country.

That last part is key. Primary care practices receive a marginal amount of annual health care spending, but they direct approximately 80 cents of each health care dollar spent in the US. They’re the quarterbacks of our nation’s health care system and, as any good coach would point out, you need to give the quarterback the space and the breathing room to make the right decisions on the field. Unless your quarterback is Mitch Trubisky, and then I’m not sure space is the problem (with condolences to the Bears fans attending the conference).

Our solution at Aledade is to help independent, primary care doctors and their practices create and join accountable care organizations. Whether it’s through Medicare, Medicaid, or private payers, our practices are rewarded for value and outcomes, and they get to do it without selling out to the larger hospital system down the road.

By empowering independent, primary care practices, Aledade ACOs have reduced patient stays in skilled nursing facilities by an average of 27 percent and hospitalizations by an average of 13 percent. Our 2016 cohort of ACOs reduced emergency room visits by 8 percent in 2018.

And we’ve done all of this while helping to improve patient outcomes and save Medicare tens of millions of dollars. Most importantly for the ecosystem of primary care, we’ve brought in new revenue to these practices - helping them meet the bottom line and stay independent.

Let me close with a story about a pond. In this pond, there are two fish, swimming in the water. One fine, cool morning, a frog jumps in. "Morning boys!” the frog declares. “How's the water?”

The fish shrug. Well, if they had shoulders, they'd shrug. The frog swims away.

One fish turns to the other. "Hey Charlie,” he asks. “What's water?" 

The fish are so ingrained in the system that they can’t understand that there’s anything in there. The frog, on the other hand, he sees both worlds. Frogs are weird. Be a frog.

The water we all swim in is the financial incentives of our health care system. Until you see that, none of it makes sense.

The new health care ecosystem is, in fact, amphibious. It’s a blend of the new and the old. It has new regulatory frameworks and programs, which we help our partner practices navigate. It has new tech and data, specifically finding creative ways to navigate the wild west of electronic health records, which our Aledade software does. And it requires on-the-ground, in-person coaching and support, to make sure these practices see the water they’re swimming in and the crazy financial incentives they’ve been anchored to for so long. We help with that, too.

But at the core of it all, the new ecosystem relies on aligning new financial incentives of health care as a business with the age-old tradition of health care as a calling. Because it is, and it should be, both. I believe my colleagues and I have found a way to build that new ecosystem. I believe we’ve found the way to become frogs. And I can’t wait to share what we’ve learned with all of the leaders, entrepreneurs, and scholars joining us at the 20th Annual Kellogg Business of Healthcare Conference.

About the Author

Farzad Mostashari

MD, Co-Founder and CEO, Aledade Inc.

Dr. Farzad Mostashari is the Co-Founder and CEO of Aledade, an organization that partners with independent, primary care physicians to create and run an Accountable Care Organization (ACO) – from business and practice transformation services to upfront capital and a cutting-edge technology platform 

Dr. Mostashari has spent his career at the forefront of health care policy and health information technology. He is the former National Coordinator for Health IT at the Department of Health and Human Services, and served as a distinguished expert at the Brookings Institute’s Engelberg Center for HealthCare Reform. Prior to his work at the Office of the National Coordinator, he founded the NYC Primary Care Information Project, which equipped 1,500 physicians in underserved communities with electronic health records. 

He has spoken and written extensively on issues affecting health IT, ACOs, and health care policy and delivery. He has been published in the New York Times, the Journal of American Medical Association, and Health Affairs, among others. At the Kellogg Business of Healthcare Conference 2020, Dr. Mostashari will deliver his keynote remarks on the topic: Aligning Incentives Across the Healthcare Ecosystem.