PROVIDENCE – In the game of musical chairs that is hospital consolidation today, the music has stopped playing for the moment, and Care New England, the second largest health system in Rhode Island, has signed a letter of intent to pursue a partnership with Southcoast Health, a community-based health care delivery system serving Southeastern Massachusetts, with hospitals in Fall River, New Bedford and Wareham.

A new nonprofit organization would be created, merging both health systems, encompassing eight hospitals, an expansive network of ambulatory sites, two established Accountable Care Organizations, and the alignment of more than 1,700 physicians and providers, according the news release announcing proposed deal on Nov. 16.

The decision speaks loudly to the disruptive manner in which population health management analytics, accountable care entities, and fixed, bundled payments for a continuum of care are remaking the future health care delivery system.

The potential suitors left at the door include Lifespan, the biggest health care system in Rhode Island, Partners Healthcare, the biggest health care system in Massachusetts, and Prospect Medical, the for-profit California-based parent of CharterCARE.

While there were many in Rhode Island who had favored an alliance between Lifespan and Care New England as a potential “Rhode Island solution,” including Gov. Gina Raimondo [and before her, former Gov. Lincoln Chafee], such a forced marriage would have proven difficult, given the different cultures, rivalries and, finally, the “arrogance” of Lifespan, as one seasoned primary care physician, who has spent a lifetime practicing in Rhode Island, described the lack of chemistry in such a merger to ConvergenceRI.

And, the physician added, don’t be surprised, when the music begins playing again, to find Lifespan searching for its own new partner.

Disruptions ahead
In the old business model of health care delivery, doctors and hospitals were paid on the basis of what’s known as fee-for-service – if you delivered a service with a corresponding code, you were reimbursed for providing that service.

In the brave new world of health care delivery in the new age of accountable care, reimbursements will be bundled for providing a continuum of care in an integrated fashion.

Exactly how “accountable” entities are defined is still very much a work in progress, but the new business model is being pushed nationally by Medicare and Medicaid and by the implementation of health care reform under the Affordable Care Act.

Here in Rhode Island, it is also being promoted by commercial health insurers, by the governor’s working group on health care innovation, and by the state’s Executive Office of Health and Human Services.

The goal, according to Dennis Keefe, the president and CEO of Care New England, is to provide “the right care, at the right time, at the right place, at the right cost.”

Three days after the announcement of the letter of intent to explore a partnership with Southcoast, ConvergenceRI sat down with Keefe in his office for a one-on-one, in-depth interview, to talk about the changing landscape in health care.

Keefe called the ongoing disruptions in the delivery of health care a sea change. “When you look at the incentives in population health management, you’re really increasingly moving the walls of the hospital out into the community,” Keefe told ConvergenceRI. “You’re really breaking down the walls of the hospitals, increasing the care that is going to be provided in the community, in ambulatory settings, in the homes.”

With telemedicine and virtual visits, Keefe continued, “We are undergoing a revolution in disruptive innovation in health care,” acknowledging that he was using the term coined by Clayton Christensen, a professor at Harvard Business School. “That’s really where we are headed.”

Here, then, is the ConvergenceRI interview with Dennis Keefe, the president and CEO of Care New England.

ConvergenceRI: As an astute observer of the current landscape in health care delivery, is it accurate to describe what’s going on in hospital consolidation as a serious game of musical chairs: when the music stops, where’s my seat? Or, whom are you going to choose to share a chair with?
KEEFE: If your view of the world is consistent with our view of the world, then I really think the future is all about population health management.

All of the incentives under the Affordable Care Act strongly suggest that this is the direction we need to go in.

The governor’s plan, 80 by 2018 [to have 80 percent of medical costs reimbursed not through fee-for-service, but bundled payments], suggests strongly that this is the direction we need to go in.

Blue Cross [and Blue Shield of Rhode Island] has a similar plan to have 75-80 percent of their payments tied to value, not volume by either 2017 or 2018.

Population health management is where everything is headed; you are developing these new payment systems, and you’re at risk for providing the care within these new payment systems.

Increasingly, and you know this really well, Richard, you have to take on the characteristics of an insurer. And, if you’re going to be successful in this kind of risk-taking environment, you need scale, and you need geographic coverage.

You need to cover enough geography, and then you need the actual members that are served by the entity you’re creating – whether it is an accountable care organization, or the new language around alternative payment models, or alternative entities. There’s a whole new lexicon that’s being developed around these terms.

But it does come back to thinking about the future [of health care delivery], and in thinking about the future, [figuring out] how do you get to that level of scale and geographic coverage, if you really want to be a leader as a population health manager.

That’s kind of a long answer.

ConvergenceRI: When you talk about population health management and the analytics involved driving reimbursements, it makes sense to have a larger geographic base, if those incentives are going to work. That’s why I referred to it as a game of musical chairs, because there are a limited number of seats – or partners – to choose from.
KEEFE: Again, as you know, in Rhode Island, [hospital systems] have been picking their partners. CharterCARE picked Prospect Medical as their strategic partner.

South County did pick Southcoast as a partner, I would guess about a year ago, but that never went forward, but it was the same kind of thinking.

And Westerly picking Lawrence + Memorial, that is now affiliated with Yale New Haven.

ConvergenceRI: My sense is that Lifespan will also be forced to make a move, shortly.
KEEFE: I would think so. It’s always been our thought process. It’s not about us, it’s about everyone, and how they need to position themselves for the future.

So, we absolutely think that this requires them to think about the future and what moves they need to make.

ConvergenceRI: Can you talk about what makes sense moving forward in terms of accountable care organizations? There’s different language being used about these entities – by insurers, by the state, by Medicaid, by Medicare. By my estimation, as a hospital system in Rhode Island, Care New England is probably farther along in defining what an accountable care organization is, with the work with Integra, as a hospital-wide accountable care entity. Tell me how you think this is going to play out here in Rhode Island.
KEEFE: You have to appreciate the fact that I’m in my fifth year here. When I started here, the board had two things they thought were really important and that’s why they recruited me.

One was to really create a system of care throughout Care New England, moving away from what had been an obligated group, a federation model for our organizations, one that really only shared access to capital, quite frankly, as their reason for coming together.

[When I first arrived], there was little or no integration or cooperation, even in some of the support services such as finance, that you would have thought would have been integrated. Human resources was not integrated, and there certainly wasn’t clinical integration.

Beyond that, the board wanted to me to create an accountable care organization for Care New England. Because I had done that up in Massachusetts, soup to nuts; I had developed a Medicaid managed care organization that grew to more than $1 billion in revenue with 200,000 members, as a wholly owned subsidiary.

I came here with all of that experience, and the board wanted an ACO, because they were forward-thinking about what was going on around the country.

At the time, the lexicon around population health management hadn’t even taken root.

Now these entities have evolved, they have evolved beyond ACOs, and more toward population health management.

I like to say: if you’ve seen one ACO, you’ve seen one ACO.

ConvergenceRI: Can you explain what you mean by that?
KEEFE: There are a lot of different forms [and sizes].

There are provider-based ACOs, which is what we are.

There’s the primary care capitated model ACO, which to me, is kind of what Coastal Medical is.

You can have health centers develop ACOs, so there are a lot of different ways you can develop ACOs.

I think, philosophically, the best model, in my opinion, is when you bring hospitals and physicians together in one organization, and we’re all rowing in the same direction, to provide the best care possible, working together, in some kind of risk-sharing arrangement.

Whether it’s shared shavings, whether it’s full risk, it’s the model where we are paid a fixed rate for the care of a population. [Whether it’s] through capitation or a global budget – we’re at risk for providing the care within that fixed payment system.

If everyone knows the rules, and everyone’s working in the same direction, tapping into the clinical knowledge of the physicians in particular, having that be the kind of entity that gets created gives you a much greater chance of success than if you’re a primary care group, whose success depends on pulling money out of the health care system, money out of the hospital organization of the insurance company, without cooperation.

With our model, we are all rowing in the same direction, we are trying to change the delivery system, we are trying to provide care at the right place, at the right time, at the right cost, with the right patient experience.

That’s really the goal, the triple aim.

ConvergenceRI: One of the ongoing conversations that surrounds the effort to develop accountable care entities is how to harmonize the metrics and benchmarks to measure what is quality care and quality outcomes. Do you believe it’s possible to get to develop metrics that work across different institutions, given the differences in primary care practices, nursing homes, hospitals and community health centers?
KEEFE: We are very involved in the State Innovation Model initiative to literally harmonize the metrics, because it’s a huge problem, all over the country. Medicare is very prescriptive, particularly around its Medicare-certified ACOs. Medicaid will be developing their metrics as they go in the direction of Medicaid ACOs and Medicaid alternative payment models.

Blue Cross has their own metrics, and UnitedHealthcare has their own metrics. It’s very unwieldy, and very difficult to track all of these metrics.

Sometimes, they overlap; sometimes, they are duplicative; sometimes, they are similar but not the same.

If something comes out of this SIM [harmonization] initiative, we would strongly support that, because it would add rationality to the system.

And, it would get us all working toward the same population health goals and metrics.

ConvergenceRI: The other part of the equation is how does health equity play within those metrics, if you’re looking at population health over time. How does health equity and health disparities get integrated into these metrics? Health and wellness is not just about when the population enters and engages with the health care delivery system, because some of the concerns are outside the venue of a hospital or a doctor’s office.
KEEFE: When you look at the incentives in population health management, you’re really increasingly moving the walls of the hospital out into the community, breaking down the walls of the hospitals, and increasing the care that is going to be provided in the community, in ambulatory settings, in the home.

With telemedicine and virtual visits, we are undergoing a revolution in disruptive innovation in health care. That’s really where we’re headed.

I don’t know if you remember or not, but I served as commissioner of public health [in Cambridge, Mass.] Public health is in my DNA. When you believe that you are creating a health care organization that starts in the community, that starts with public health, that starts with wellness and prevention, really looking at the factors that lead to disease, you have a very different view of where that responsibility starts.

And, how you deal with it.

To your point, exactly, it does lead you to the equity issues around care, and the disparity issues around care, as a population health manager, because they are part of the questions [you need to address].

ConvergenceRI: I have heard that there is some strong interest in trying to integrate metrics around health equity into the SIM harmonization process, to create a more comprehensive approach, but that there has been strong push back from some folks who say that health equity is not something that fits within the scope of what a doctor’s performance should be measured on.
KEEFE: I’m not hearing that, from our physicians. You probably don’t know this, this could be a story in itself, we’re six months into it, but we now have a public and community health committee of the board.

It is really about engaging with the community and finding out different ways to enlist their support in creating a healthier community.

Part of this goes back to our mission statement, to be a partner in health.

ConvergenceRI: Can you explain further what you mean?
KEEFE: Today, when you’re talking about disease, you’re no longer talking about the back end of the disease – that we’re here to treat you once you have a disease or once you have a condition.

It’s increasingly trying to work and to invest on the front end of the system, and redefining that front end. We have the evidence now about the impact of the social determinants of disease.

ConvergenceRI: Within the dramatic changes occurring in health care, is there a need to change the way that you tell the story about health? There are so many competing narratives, and they are often confusing to the public.
KEEFE: I think this is part of the huge sea change that we’re going through over the next decade. When you really start to talk about the social determinants of disease and healthy lifestyles, really promoting wellness and health, it absolutely changes that conversation.

And, it changes where we make our investments in terms of the health care system as we go forward.

It’s about educating the stakeholders, the political stakeholders; it’s educating the leadership, it’s certainly educating the public and finding ways to do so concretely, so that people understand, that if people make certain choices, it’s going to have a long-term impact on their health.

And, by the way, it’s about physicians, too, learning that they have a major responsibility in that [process].

I think that physicians want to do the right thing – that’s why they went into medicine.

But you [need] to get them off the treadmill of production, where in the fee-for-service system, they have to have so many visits per hour, so many visits per day, so many visits per week, just to have enough income to cover their salary and their office expenses.

To move toward different ways of paying them to care for people, and to have different metrics around which they can earn additional income, that’s where we’re headed.

Once that reality takes hold, people will see the value of those conversations, really engaging patients and families in the best approaches to health.

ConvergenceRI: In talking with one local primary care practitioner, the one metric that she said was the most important tool for her was whether or not the patient felt that he or she had the confidence to deal with their health issues. Does that make sense to you?
KEEFE: We [need to] provide enough education so that people really understand what it takes to stay healthy and prevent disease, to really facilitate that kind of confidence building, to work with patients and family, very proactively, to help them in terms of that confidence.

Directionally, that’s really where we need to go, and part of it is making this transition to [population health management], because there are finite dollars there.

Too many dollars are committed to health care in the United States without [achieving] the value and the outcomes. [We need to] make that transition from the back end, the most expensive parts of the health care delivery system, to the front end, and doing all of these things, but in a way that we have the resources to do it right.

ConvergenceRI: There has been talk about Care New England’s efforts to create a new Medicaid ACO. Can you share what’s been happening?
KEEFE: Blue Cross continues to be a very strong, strategic partner. We’ve done a number of very innovative things with them.

They are our partner in a Medicare Advantage program. We’re doing a behavioral health bundle, HealthPath, with them; we’re also doing a maternity bundle.

And, the thought being: If we’re doing all these things together, shouldn’t we talk about doing something in Medicaid together. So, part [of the thinking involves] Blue Cross and their willingness to make some investments.

ConvergenceRI: Is the plan for the Care New England Medicaid ACO in Rhode Island a partnership with Blue Cross?
KEEFE: Where this is all going to end up is a little bit unclear. We are working it through.

The organization that has been extremely helpful is the Rhode Island Foundation, with the vision of Neil Steinberg, to provide us with a grant to help us organize and do the planning around the Medicaid ACO, and then its implementation over a three-year period.

We have also applied to be certified as what’s called an alternative care entity by the state, which means that we can contract with the Medicaid health plan, part of a pilot program.

ConvergenceRI: The application was due Nov. 13; the decision on certification for the pilot program is to be announced on Nov. 27.
KEEFE: That’s right. This is very fluid. The idea would be to do something they want, initially done through the health plans. Hopefully, we will be able to do something with Neighborhood Health Plan and UnitedHealthcare. They are the only two Medicaid managed care providers in Rhode Island.

How this all ends up playing out, I think there is still a fair amount of uncertainty. Four organizations have applied.

ConvergenceRI: I know you can’t confirm this, but I’ve heard that it is Care New England, Prospect Medical, Providence Community Health Centers, and Blackstone Valley Community Health Care.
KEEFE: [Not confirming the applicants.] How this all sorts out, we’re not sure. We’ll find out in a week if we’re certified.

We are also involved with this accountable entity for behavioral health, with the expansion of HealthPath. It’s really a pilot for the severely and persistently mentally ill, with about 4,000 patients.

ConvergenceRI: Is Southcoast fully briefed on everything that’s going on? Because, in many ways, what you’re doing is going to require them to change, too.
KEEFE: Part of the attractiveness of Southcoast to us, and us to them, is that a lot of these changes start at the board level, then leadership, then the medical staff.

You have to have a common view of the world; you have cultures that are not identical, but similar, starting at the board level.

They have an accountable care organization, like we do. We share a very common view of the world. I know Keith Hovan [the president and CEO of Southcoast], we worked together when I was in Massachusetts.

They’re in Epic; we’re in Epic. They’ve invested heavily in population health management infrastructure, as have we. They really believe, very strongly, in physician leaders embedded throughout the organization is critically important to success, as we do.

They are high performing in terms quality. There’s a lot of synergy; in some areas, they have strengths, in some areas we have strengths.

ConvergenceRI: Is there anything you would like to add to the conversation or talk about? You have the last word.
KEEFE: I want to make one point, because I think it’s important, too, about regional health care.

There has been some talk from the Governor, and I have great respect for the Governor, about how we need a Rhode Island solution. There has also been some concern voiced by our Congressional delegation, about how we don’t want to have happen to the health care industry what happened to the banking industry in Rhode Island, with all the owners of the banks now out of state.

Health care is very local. And, this concept, that patients and families recognize state boundaries in terms of their decisions about where they want to go for health care is really nonsense, if you think about it.

Health care is local, and it is regional; health care is not confined within state lines.

[In terms of addressing] this idea of a “Rhode Island solution,” both Fall River and New Bedford are part of the Providence metropolitan area statistically. So, there’s a recognition that populations reside in a statistical area, and it is not limited by state boundaries.

Our point of view is that this is absolutely a Rhode Island solution, and that it’s good for the citizens of Rhode Island.

When you look at the out-migration, and I have the numbers, when people leave Rhode Island, where do you think the great majority of them go? Southeastern Massachusetts.

The logic and common sense of us doing something with Southcoast to serve the region is very strong.

I get the concern about Boston. But, you know, when it comes to what we’re doing here, we’re really trying to create a more comprehensive local health care system, focused on the triple aim – the right care, in the right place, at the right time, at the right cost. That’s what we’re doing.

It kind of gets obfuscated when people weigh in with their different agendas.

ConvergenceRI: One last quick question: can you talk about the role of patients and how they can take control of their own lives, and how that changes the conversation moving forward?
KEEFE: It’s where we started the conversation, talking about disruptive innovation and technology. It’s about rethinking consumerism, health care consumerism.

We are moving away from hospital-based care. We are creating different kinds of access, whether we partner with the retail clinics or develop something similar to the retail clinics.

We have a relationship with CVS; Epic interfaces with CVS.

With pubic health and community health, you really have to meet the people where they are, and you can no longer be this paternalistic organization that says: this is what we think you need.

With patients and families, it’s really asking them: what do they think they need, and how can we be helpful to them. It’s a very different direction; it’s the journey that we are on.