An interview with Craig Samitt M.D., Executive Vice President and Chief Clinical Officer of Anthem.
The Health Care Payment Learning and Action Network has set a goal of having 50% of all health care payments linked to Alternative Payment Models by 2018. To that end, Anthem is pursuing enhanced collaboration in support of its diverse portfolio of alternative payment models. To learn more, we sat down with Dr. Craig Samitt who is speaking at the Wharton Health Care Business Conference on February 10th.
Pulse: In the past, you’ve used the analogy of “the marriage lifecycle in reverse” to describe what you’ve witnessed in terms of collaboration between healthcare companies throughout your career. Can you talk about whether or not you’ve seen that progression continuing, and who is doing this well in the marketplace today?
Dr. Samitt: [That analogy] very much stems from the fact that I spent a good portion of my career fostering payer-provider partnerships, and my concern that payer-provider collaborations were eroding. When I started with Harvard [Pilgrim HealthCare] and Fallon [Clinic], it truly was an aligned and vertically integrated payer and provider framework that delivered exceptional results in terms of better care and lower cost- in essence, a married organization. And I was an executive at Harvard Pilgrim and Fallon through their respective divorces. The partnership as I knew them eroded, to the point that they each separated from one another and felt that exclusive partnership was no longer valid or effective.
Next, I moved to Dean Health System, where I was the CEO, and what I would describe as partnership but not marriage. Two separate and distinct companies that stayed together for the children, which represented co-ownership for the health plan. And it worked exceptionally well. So, while it was not a vertical integration, it was truly a similarly effective partnership, but a step back from the marriage where I started my career.
Then I moved to HealthCare Partners, where it was truly an agnostic environment and felt that there was no commitment to any one payer organization. And, frankly, I think in many ways that describes the world as we know it today: payers that want to have all providers in their network and providers that want to take all payers and be payer-agnostic.
The punchline here is that I think the world has come full circle, to some degree. I believe we will – and we should – move back to my middle experience, which is lasting partnerships with a limited set of preferred partners, along with a recognition that this distinct partnership strategy drives exceptional results. So these re-forging of payer-provider partnerships is very much what Anthem is all about, and frankly where I envision the most successful healthcare organizations will get to and will thrive within. That’s the marriage life cycle history.
Pulse: So you see the progression you’ve seen in the past, reversing and going back to a more established relationship approach between payers and providers?
Dr. Samitt: For a number of reasons, I am a big believer in teamwork and working together to drive results. If you’re just agnostic, then you really have no strong and lasting commitment to anyone, and you cannot get close enough to create a symbiotic relationship – you’ll never get as far as organizations that can enter into a true partnership. Likewise, I’m not sure we’re going to see an evolution all the way to vertically integrated systems. We’re already beginning to see providers that have acquired plans, or have developed their own, and have subsequently recognized it’s more than they bargained for. There are some key provider systems that have said being a health plan is really not what they want. So, I think the true agnostic “let’s date everyone and forge no partnerships” model and the true marriage solution (which is “let’s just put everything under a single umbrella”), are both sub-optimal. The “separate, but aligned partnerships with key distinct participants” will be the way that we’ll see the future go.
Pulse: As Anthem moves into these preferred partnerships with providers, it seems like Anthem has a wide variety of different alternative payment models that it deploys. How do these different opportunities that Anthem is driving tie into this preferred partnership model, and how does this feed into your longer term plans?
Dr. Samitt: We have a comprehensive portfolio of alternative payment programs. Before I talk about the portfolio, I should comment on the success of our program. We’ve seen significant provider interest and receptivity to our ACO programs. We’ve actually seen it accelerate in the past year, with nearly 44% of our payments in value-based arrangements in 2016. This compares to CMS’s current performance of 30%. I think that we’ve seen this success for a number of reasons. One is that we don’t have just one model of payer-provider collaboration, we have many, and it’s a continuum. Coming from the provider sector, the reality is that every provider is in a somewhat different place right now as it relates to value-based payment adoption. To have a one-size-fits-all solution doesn’t really encourage the willingness to think of a different or a better way of doing things. Whether it’s our Enhanced Personal Health Care program, or Comprehensive Primary Care Plus, or our Commercial ACOs, our joint-venture partnerships like Vivity, or our MSO-like partnerships, I would define them all as meeting the provider whether they are. And in many respects, to be a good partner, it requires each party to be a bit more nimble and flexible, and to change the way they’ve worked.
So, given that the level of readiness is different provider by provider, we’ve offered a continuum from gain-share to risk-share to bundled payments to CPC or capitation, and our hope is that each provider advances to the more mature models because that’s where more value is achieved for providers, for payers, and the patients. But to start, we want a highway to value with multiple on-ramps that can help the providers make the transition at their pace, and at their comfort level.
We also have the Cancer Care Quality program and value-based drug pricing. Drug cost inflation is a major area of concern; by many. Similarly, we need a level of creativity, innovative alternatives, as well as partnerships. So, in terms of managing drug cost inflation, we need to assure that we have incentives for providers that reward for appropriate use of drugs, and where appropriate we’d love providers to follow evidence-based and value-based guidelines. And in some instances, we want to be able to know whether there are customized solutions that tailor treatment to unique genomic and genetic profiles. So somewhat similar to the comments I made about meeting the providers where they are, we also need to address drug cost inflation in a similar way. It’s going to require a multi-pronged approach – whether it’s our Cancer Care Quality program, which is very much about pathways, or whether it’s an innovative partnerships and policies with pharma as it relates to value-based, or outcomes-based drug pricing – these are all among the things we need to consider to deliver value.
Pulse: Going back to the theme of our conference, which is crossing boundaries in healthcare, it is exciting to see that Anthem is developing new partnerships with the pharmaceutical sector. Can you talk more about this strategy?
Dr. Samitt: I’m very much an advocate for partnership as a means of driving transformation of our industry. So, whether it’s payers partnering with providers, payers partnering with pharma, hospitals partnering with providers, we live in a very siloed environment that frankly compromises the quality, cost and accessibility of US healthcare.
Pulse: To that end, Dr. Samitt, as providers take some, or even all of the risk, how does that change how Anthem expresses its value proposition to its partners?
Dr. Samitt: We’ve taken a somewhat different approach as we think about supporting providers that wish to assume risk. In general, the industry has historically viewed ACOs and APMs purely as payment vehicles, and I think that is flawed. I know from experience that if all you do is change the payment arrangement, and you don’t enable or support the providers with tools and capabilities so they’re knowledgeable transitioning to successful risk, it’s no different than the managed care era from the 80s or 90s when payers would leave money at the providers’ door and walk away. Strategic partnerships to drive transition to risk will require us to think of ACOs and APMs beyond the notion of payment methodology alone.
When we look at Anthem’s ACO and value-based payment programs, we find that they are not so much different than the CMS [Medicare Share Saving Program] (MSSP) ACO programs. And yet, even though our payment methodology isn’t different, we’re seeing different results. The MSSP programs have delivered modest improvements, but Anthem’s programs have delivered significant and simultaneous improvements in cost of care, quality outcomes, and even patient satisfaction. The differentiator obviously can’t be the payment model. The differentiator is everything else. For our providers in our ACOs, we deliver an enablement package, which includes data analytics, practice redesign consultants, and care model redesign support. Given Anthem’s geographic reach and density we know the primary interventions that a provider on the West Coast is doing that’s delivering exceptional results on our patients. We can then share insights about that strategy with providers on the East Coast resulting in national spread of Anthem provider partner best practice.
I have to believe that enablement or practice assistance coupled with the ACO contracts is really the key to helping providers transition from fee-for-service to value.
Pulse: As payers implement these sorts of enablement tools, I know many are concerned about “raising all boats” — where all of these tools will just help their competitors in the same offices. Or, said differently, if there isn’t a sufficient population attributed to these providers, it may not be worth it to provide these tools. Has that been a concern as you have implemented these partnerships?
Dr. Samitt: Well, it certainly is a concern, but I’d say more importantly, an opportunity.
So, we all recognize that the universal need for change is very large, and there’s a lot of value transformation that needs to occur. Therefore if our efforts can raise multiple boats in the transition to value, we have helped accelerate the pace of necessary change in our industry. We’re also offering best-of-breed solutions, so if those solutions can help providers, not just for Anthem, but for other payers, then it only further strengthens the partnership that exists between Anthem and our provider partners.
Pulse: Are these enablement services offered in conjunction or through the Commercial ACO financing structure, or are these separate consulting services? How are these being deployed?
Dr. Samitt: It’s a bit of both. There’s a baseline level of support infrastructure, especially for those that are in gain-share relationships. As providers move to more advanced payment models and risk-share arrangements, we offer a different level of capability – inclusive of new systems, and a set of functions that are more complex and more comprehensive. So, it falls into both categories, and it all depends on where the provider is, and we meet them where they are.
Pulse: On the regulatory front, MACRA (the Medicare Access and CHIP Reauthorization Act of 2015) had large incentives for the adoption of these alternative payment models, have you noticed through your provider partnerships that that is accelerating, or that providers are taking notice?
Dr. Samitt: As I’ve already mentioned, we’ve seen provider interest in our ACO programs accelerate, and it’s probably a combination of a strong and sound program, as well as the likelihood that providers are experiencing less of the “foot in two canoes” phenomenon. The more MACRA advances value payment, and the more commercial payers also pay for value, the more providers are reimbursed under a common framework for cost and quality and the less schizophrenic providers feel.
So, to some degree, MACRA creates alignment. We also have to remember that MACRA replaced the SGR that came with a very unpopular looming uncertainty every year of what would happen to provider payment. While MACRA has elements that are not perfect (e.g. less familiar methodology but certainty of payment levels), it is likely viewed as more favorable thanSGR (e.g. known methodology but risk of inadequate payment levels) I still think the net result is better, especially since we want the world to shift to value, and the interest and the receptivity and the growth of ACO-like arrangements speaks to the willingness of providers to really consider this alternative.
Pulse: We discussed earlier many of the cross-stakeholder partnerships and programs that you find to be exciting, and are gaining traction. If you flip that around, are there any risks, challenges or things that are keeping you up at night as you think about implementing these programs?
Dr. Samitt: I believe that the greatest risk to transformation of our industry is resistance to change, legacy thinking and inertia, and the lack of awareness that disruptive innovators will seek to change our industry if we do not
I was recently invited to give a talk that was labeled “The Battle Between of the Incumbents vs. the Disruptors.” Of course, I thought I was being invited as the “disruptor”, because that’s what I’ve been known for throughout my career. But no, I was being invited as the “incumbent” with the view that hospitals, physicians and payers are all incumbents…and that the folks that will really disrupt change in the industry will be tech, retail, consumer goods, consultants. This made me realize that our industry’s incumbents, mostly payers and providers, jeopardize our own survival by resisting transformative change.. That’s why I’ve been such a strong advocate for our own reinvention, as it would be a shame to see disruptors lead our industry because of our change-resistant and non-contemporary approaches to transformation.