PROVIDENCE – The tide is shifting in the business model for health care delivery, away from fee-for-service and toward what is known as Accountable Care Organizations.

Instead of being reimbursed according to the number of patients seen or by the number of images and tests conducted, the new business model – driven in large part by shifts to a global payment model by Medicare and Medicaid – seeks to reward providers and hospitals through bundled payments across a continuum of care, focused on what the patient needs to be healthier.

Most major health insurers and hospitals in the state have pledged to have 80 percent of care reimbursed through bundled payments by 2019.

The overarching goal is to deliver the right care at the right time and the right place, with quality gates in place so that the money doesn’t get paid until the “quality” of care can be shown.

The change in business models – much like the growth of patient-centered medical homes as part of primary care for more than 300,000 Rhode Islanders – is often hard to discern. It’s much like an ongoing sea change where the ocean waters are in constant motion, and the results may not be visible – except for those swimming in the current.

And, there are once-submerged reefs that are now emerging, creating speed bumps and challenging the status quo.

Here in Rhode Island, Care New England, the state’s second largest hospital system, has moved to transition to its own hospital-wide ACO, known as the Integra Community Care Network.

With it comes a reshaping of the relationships between provider and insurer, hospital and provider, and patient with hospital, provider and insurer.

The transition to an ACO business model promises to reshape the marketplace for how health care is delivered in Rhode Island. It also brings into sharper focus the role that population health care management and analytics will play in the future health care world – and the growing competition [war might be a better word] over who will own, control and analyze the data.

Beyond the goals of achieving the oft-cited Triple Aim – improved quality and satisfaction of the patient’s experience of care, improved outcomes for the health of populations; and reduced costs of health care – the new ACO model also promises larger rewards to the hospital system that can be the most nimble in responding to the patients’ needs in a digital world.

ConvergenceRI sat down for an in-depth conversation with Integra’s two principal leaders, Domenic F. Delmonico, the executive director, and Dr. James Fanale, the chief clinical officer.

ConvergenceRI: Care New England plans to move its entire hospital system and convert it to an ACO. Is that an accurate description?
DELMONICO: That’s probably not quite the right verb. It’s not a conversion. It’s a new structure.

And, it’s not so much a new structure, as much as old structures that have come back around into favor, with the idea that hospitals, doctors, nursing homes and providers, by working together, can better coordinate care.

Our name is the Integra Community Care Network, Integra for short.

I know, everyone uses it, but we are trying to achieve the Triple Aim: by working together, we expect that we can do a better job at managing care, managing cost, and managing population health.

ConvergenceRI: Has there been resistance internally to the change? Where has the pushback come from?
FANALE: [We] have a national health care system, built by I don’t know whom, that doesn’t work, everywhere. Everywhere, it is fragmented, not coordinated, with a very high cost, the highest cost in the world right now. There is not an equal level of quality.

The cost [of the health care delivery system] is 18 percent of GDP and it’s not going anywhere but north.

Remember the [scene] from that old movie, “Network”: [“I’m mad as hell and] I’m not going to take it anymore.”

What the government has done, they’ve said: We have to fix this.

In Massachusetts, everybody’s going to get health insurance; so 99 percent of the residents now have health insurance, right?

But there’s only one thing they didn’t talk about…

ConvergenceRI: The cost?
FANALE: Yes, but that was by design, they said we’ll deal with that later.
Well, the people can’t afford it; the companies can’t afford it, the government can’t afford it.

So, they said: we’re done. You’ve got to figure out exactly what we have to do.

Rather than tell us how to figure out exactly what we have to do, they said: you guys go ahead and form these organizations and figure out how to deliver a better product at a lower cost.

DELMONICO: So, in the Accountable Care Act… I mean the Affordable Care Act, it made provisions for these organizations, called Accountable Care Organizations.

But, if you look backward, it’s really a little bit of “back to the future.”

If you’ve been a long-standing Rhode Islander, [you may remember] RIGHA, [the Rhode Island Group Health Association, created in 1971], was among the earliest ACOs in the country, as was the Harvard Community Health Plan. They were model HMOs, really just early versions of the ACO.

It was actually a tighter version of the ACO, because in those days, the network was very tight. You had as a staff model, that if you belonged to RIGHA, you belonged to Harvard Community Health Plan, and you saw their physicians.

For people who wanted one-stop shopping, who wanted highly coordinated care, [it worked.] Because it was all in the same building; you need an x-ray, you go to the third floor; dental, you go to the second floor; you need optometry, you go to the first floor.

There was extremely high patient satisfaction. There was very well coordinated care, at a reasonable cost, but it was a model that people had to buy into.

If you wanted choice, it didn’t work. If you didn’t like the endocrinologist that RIGHA had, you’re stuck, because your coverage wouldn’t pay for another endocrinologist.

In Rhode Island, RIGHA tapped out at about 100,000 members, because the network was so tight, and the network had no opt out; you couldn’t go somewhere else.

But it was an early version of the ACO.

As cost and cost increases started to slow down a little bit, RIGHA fell out of favor. Then they were acquired by Harvard Community Health Plan, and later, they merged with Harvard Pilgrim Health Care.

So, the ACO is not necessarily a new idea. Rather, it’s a circle that has come back around again.

And, one of the challenges is whether it’s here to stay.

ConvergenceRI: Back to my question, are you facing resistance?
DELMONICO: Yes, because remember, the business model for hospitals and doctors is: whatever you did, whatever it is, there’s a code for it, and whatever the code is, there’s a fee for it.

As the management saying goes: you do what you’re paid to do.

So, hospitals and doctors have been building their business models around doing more for patients, not always doing what’s best for patients.

Now, under the newer [bundled] payment models, where you get a budget, you get a fixed amount of money to take care of a group of people, for a set amount of time.

What that does is that it causes you to rethink: what’s best for the patient?

Dr. Fanale is the architect of all our care management work. Our goal is, it’s little trite, but it’s the right place, the right treatment, at the right time.

It’s not necessarily the emergency room; it’s not necessarily the hospital. It’s trying to find where you can take the best care of that patient. If you don’t need to be in a hospital, we don’t want you in the hospital.

If you do need to be in the hospital, we only want you in the hospital for the period of time you need to be in the hospital, and when you’re discharged, if you can go home, we want you to go home; we don’t want you to go to a skilled nursing facility.

What this does is set up a healthy tension between the ACO and the nurse care manager and the hospital.

The best example I can give you is this: if you’re a hospital president, five years ago, and every bed was full, what would you think? It’s going to be a good month.

Now, if you’re under a budgeted arrangement like we are from Medicare, and the floor is full, you’re thinking: do all those people need to be here? Can they be treated at home? Can they be treated in a skilled nursing center? It’s a completely different financing.

ConvergenceRI: Someone should work on changing the messaging on many primary care providers, when you call, they answer: if this is an emergency, hang up and call 911, or go to the emergency room.
FANALE: If you think of hospitals as business units, they are in their business world, and what are they supposed to do? They’re supposed to do business.

[Under the older model of care,] I often jokingly say, that we were incented to keep people sick; we should be handing out cigarettes in the parking lot. You know what happens with cigarettes; people get sick. The old business model says: let’s hand out cigarettes; the new business model says: it’s all about keeping people healthy. And, when they do become ill, treating them in the right way, in the right place, at the right time.

ConvergenceRI: How has the development of ACOs changed the strategic relationship between hospitals and insurers? Care New England has a strategic partnership with Blue Cross & Blue Shield of Rhode Island. Tufts Health Plan has developed a new relationship with Lifespan to market a new, tiered network.
FANALE: We just did a strategic partnership with Medicare, so we became a Medicare ACO. We’re working with Medicare to manage some 13,000 lives.

We have a strategic partnership with Blue Cross to manage their senior population, which is about 14,000 lives.

As we move forward, there are different things we can do with insurers to develop programs and products that deliver better access, better quality and lower costs.

DELMONICO: And, Medicaid is certainly next. We are looking into a Medicaid product as well. While I would agree that the new ACO model is encouraging partnerships, both with providers, with insurers, and with nursing homes, I am not sure I would consider this a natural [process]. Some of this work is hard, to put people in a room together…

But, it’s clearly part of the next round, where partnerships will be formed, and broken, and then reformed. Some of this work will overlap. Tufts has a strategic partnership with Lifespan, a commercial product, but they’re talking to us about Medicaid and Medicare.

We expect, just as providers are learning to work together [in an ACO model], if you’re working with an insurer, hopefully, they will start to recognize changes in the business model, too.

The way that [insurers] require preauthorization, for example, is antiquated, having the doctor call. Because now, if that doctor’s part of a team that’s working under a budget, they shouldn’t have to call to get permission, because they’re working under a budget.

And, if collectively, the doctor and the hospital say that this is the right place for that [patient] to be, then they should be there.

[With an ACO,] we’re trying to figure out how to manage the patients ourselves; this was something that the insurers always felt that they needed to do. They needed to prove their value to their employer purchasers, if you will, and that was the way they did it.

But now, what’s going to happen is that the ACOs will increasingly take on the responsibility for care management and disease management, and really take on more of what the insurers used to try and do – and what they weren’t very good at.

ConvergenceRI: I was surprised to learn that Blue Cross is planning to develop its own disease registries. Does this development presage a battle over who is going to control the data and analytics by which you measure population health for ACOs?
FANALE: I would say that whomever has the most of the best data, will win. What that means is that data is becoming a marketable commodity. And, people are trying to figure out, who’s going to have it, and who’s going to own it. Who’s going to control it?

DELMONICO:It’s not just the insurers. You have the Rhode Island Quality Institute wanting to become a big player in this market.

You have the All Payer Claims Database that’s supposed to be about ready to come out.

The positive thing is, many of the providers are moving to Epic [for their health IT system]. So what that means is that the ability to move data to where it’s most needed will be facilitated by that. We’ve moved to Epic; Lifespan has moved to Epic; CVS has moved to Epic.

FANALE: By the end of this year, we may have 100,000 lives in our ACO. We can’t rely on anyone else. We have to have a way of looking at the data. We have to have our own data warehouse, so we can verify and validate what’s in there.

ConvergenceRI: You said 100,000 lives. Can you share where the numbers come from?
FANALE: Medicare is about 27,000 to 30,000; we consider our employees as managed lives, some 14,000. With our commercial partners, there’s another 16,000 lives. And Medicaid, which we want to be involved with, in the next year.

ConvergenceRI: What are the metrics and the standards, that you’re looking at, across a continuum of health care? As you move forward, does it require a new kind of analysis?
DELMONICO: We’ve engaged outside help, Milliman. We’re very fortunate to be working with Milliman because of their extraordinary database. They have three levels of benchmarks you can compare yourself with; they call it low, medium and highly managed plans.

FANALE: We know what we need to look at, and we know when we see something that’s awry, and we’re building the IT capability and analytics function in-house. So, that we can get our data sets and we analyze [the numbers], and something looks wrong, we can dig down and find the answer to it.

ConvergenceRI: How does Integra fit into the new model of care developed in partnership for a continuum of care around mental health, with The Providence Plan and with Blue Cross, in HealthPath?
DELMONICO: That would be probably characterized as a bundle. And the way the program works, as I’m sure you know, is with a fixed charge for a month’s worth of services with a single copay for the patient.

The other aspect of it was that the bundle was creative, covering things that would be have historically not been covered by traditional health insurance plans. They have peer counselors who are an important part of the bundle of packaged services, people who would not have been credentialed by Blue Cross in the past [for reimbursement].

They are using them effectively, hopefully, to keep people with [mental illness] out of the hospital and keep them in their homes.

As a bundled program, care for the person is made up of a number of economic arrangements.

We just finished a maternity bundle.

With Coastal, they talked to us about an orthopedic bundle.

The challenge is, if you do too many of these bundles, you wind up with turf issues.

The longer-term view of what we’re trying to do is the global budget where we a single amount of money for all the care that the patient needs, including mental health.

Some ACOs and some insurance plans, they carve out mental health and give it to somebody else. It doesn’t foster an integrated approach to mental health and medical surgical care. What we’ve found is that those people who are the most sick on the medical surgical side often have mental health problems.

That integration is critical. We’ll keep in tightly integrated. HealthPATH is a very good, important product. In the longer term, we’re going to make sure that all of those programs get integrated within our global budget.

ConvergenceRI: How best can you communicate these changes to patients? What’s the message that will resonate with them?
DELMONICO: The bottom line in all this is public health. That’s the bottom line, our job is to keep the population healthy.

It’s not about going to see your doctor just when you’re sick. Health care has always been at a little bit of distance for most people. When you got into a hospital, how many people feel comfortable challenging a doctor, or challenging a nurse [about care]? They don’t. The hope is that our nurse care managers, our nurse practitioners, our social workers, are going to be right alongside the patient to help in that process. That’s what excites me; that’s how I think we want to convey it, in a way that says: this is why it’s going to be better for you. Hopefully, we can do this, and the costs come down.