Credit Suisse https://www.credit-suisse.com recently hosted a seasoned physician executive for a virtual meeting to discuss value based care and related topics. As a result of the conversation Credit Suisse published the note “Discussions on Value Based Care with a Seasoned Physician Executive.”
The expert physician presented thoughts on Brick and Mortar vs Physician Partnership Models. The physician emphasized that both brick and mortar (salaried/employed) models and the partnership model have their virtues and drawbacks.
Brick and mortar models have fully integrated enabled practices with multidisciplinary care teams, providing analytics, aggregated data, EMRs, along with health plan data which is used in the process to bring in patients. However, the key challenge with this model is scalability. From a physician perspective, they are drawn to this model because there is a lot of support, multidisciplinary teams, preparation for pre-and post-visits including the next visit etc.
However, there is a loss of autonomy for physicians in this model as they are now employed in a “very methodical cookie cutter type of model”, according to the physician. On the other hand, for physicians who prefer to have more autonomy, an MSO supported practice is a better fit. Under this model, physicians have continuity with the patients they’ve been seeing over the years. However, even there, the physician expert argues that a significant change management within the practice might be required to hit the level of desired performance.
The expert sees the two models ultimately converging-not necessarily as a full integration but rather as a partnership model investing in physical clinics in a community where it’s lacking or the brick and mortar players providing an MSO-type of enablement option.
According to the expert, the risk adjusted revenue seems to be one of primary focus for physician enablement practices. The physician also believes that CMS always pays attention to all the techniques that are used by providers in-home assessment vendors and health plans, to drive risk coding/adjustments, with the high likelihood of risk adjustment getting constrained.
As a result, the expert argues that the plans and providers are by necessity, going to have to take their foot off the accelerator on those kinds of processes and use data to practice medicine to drive better outcomes and reduce medical costs.
The expert is unsure on the future of the Direct Contracting (DC) program. He believes that the number of entities playing in this space will decline due to either the lack of success or from curtailing of the program.
Assuming the program continues as is, the expert doesn’t see nearly as much risk adjusted revenue available (as in MA) because of the lower baseline, shallower ramp up, and no STARs revenue. As a result, the expert views this as “ side gig” for risk bearing providers who want to get as many Medicare eligibles into MA and also leverage DC as an opportunity to capture some value out of serving Medicare eligibles who don’t want to move to MA.
Although Medicare FFS is a highly unmanaged population, the expert notes that there is more opportunity for savings but there is also much lower opportunity for the revenue commensurate with that population.
For further information on the Note: “Discussing Value Based Care with a Seasoned Physician Executive”, ask questions, provide feedback, or news, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.