Highmark Partners with Aledade’s Accountable Care Organizations

January 24, 2017 - In December 2016, Aledade Inc., a leader of accountable care organizations (ACOs), and Highmark Blue Cross Blue Shield announced in a company press release a new partnership to provide quality medical treatment through accountable care organizations. The ACOs would operate in Delaware and West Virginia to benefit about 40,000 Highmark health plan members.

Tom Fitzpatrick, Senior Vice President of Provider Contracting & Relations at Highmark Blue Cross Blue Shield in Delaware, spoke with HealthPayerIntelligence.com about Highmark’s vision to advance value-based care payment models by partnering with accountable care organizations.

“On the journey to transform the way that healthcare is delivered and financed, my charge is to work with providers to form partnerships around value-based care and try to get us down a path of creating the healthcare system of future that values outcomes as opposed to volume,” Fitzpatrick said. “I’ve got a team of folks that come to work everyday focused on how to we reduce the cost in the system and, at the same time, increase the quality for our members.”

“Our physician programs have morphed from the patient-centered medical homes to the new program that we put out in January called True Performance,” continued Fitzpatrick. “We continue to seek out provider partners and health systems that are also interested in this journey to value. We’re piloting and doing different reimbursement designs with them that run the continuum of episodic payment, bundled payment, gain shares, and risk shares. Ultimately, we’re trying to get people down the path of looking at total cost per member per month on a global budget.”

The Highmark emphasis on transitioning to value-based care payment models led the payer to partner with Aledade to invest in accountable care organizations. Fitzpatrick explained that Aledade’s vision for value-based care reimbursement aligned well with Highmark’s expectations.

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“We’ve been meeting with Aledade for the better part of a year. They shared with us a vision and approach to value-based care that aligned very closely with our vision for value-based care,” explained Fitzpatrick. “They were able to demonstrate to us that they have a vast experience and an innovative approach. We were certainly interested in pursuing that. We share the notion of physician-led transformation. That was of the utmost importance to us. Aledade has said on numerous occasions that Aledade only succeeds when practices succeed in delivering better care at lower cost.”

In their approach to transition toward value-based care payment models, Highmark Blue Cross Blue Shield recognized that fee-for-service payment arrangements led to a broken system. Instead of rewarding the volume of services, the health insurer was more interested in paying for value and quality care received by their members.

“We’re operating in a system that’s been broken,” said Fitzpatrick. “We were very interested in rewarding outcomes and very interested in learning and growing in the value-based space with providers and other partners interested in delivering the right care in the right setting at the right time. We’ve had 75 years of history being a very large network with any willing provider with rich benefit plans. That bred uncoordinated care.”

In their move to value-based care, Highmark Blue Cross Blue Shield had some difficulty in finding the right balance between financial incentives and not causing a financial strain among clinics and physician offices. Additionally, getting the right data and analytics platforms to support clinicians proved to be a challenge for Highmark, said Fitzpatrick.

“Finding and aligning on the right incentives to ensure that what we want to accomplish isn’t, at the end of the day, going to hurt either independent physician practices or independent community hospitals,” added Fitzpatrick. “Finding that right balance was a challenge, but an opportunity that we took on.”

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“Lastly, creating and finding the right data, informatics, and analytics to be able to support the programs we’ve created in order to then help providers has been difficult,” he said. “It’s been well-documented that one of the absolute keys to success for the ACOs is that data-sharing and that exchange of actionable data. At the outset, those were the challenges but the combination of Highmark and finding the right partners like Aledade have enabled us to overcome those challenges.”

An important benefit of accountable care organizations and Highmark’s decision to partner with Aledade involves putting patient needs at the forefront. ACOs are often patient-centered and engage the members in their care more directly, said Fitzpatrick.

“The biggest benefits from our perspective is that we believe in putting the customer in the center of everything we do,” continued Fitzpatrick. “When you look at the key component of what ACOs promise and what they stand for, you learn ACOs stand for engaging patients in their healthcare decision-making, driving better experiences and outcomes, and, ultimately, reducing cost. At the end of the day, the members win. That’s what we’re here for - our members. To us, it creates a very symbiotic relationship on what we’re trying to accomplish on behalf of our members and what these ACOs can potentially bring to the market.”

Fitzpatrick offered some key advice for other healthcare payers looking to invest in value-based care payment models. It will be imperative for payers to find the right provider partners when transitioning to alternative payments.

“I would say that it is extremely critical and important to find the right set of providers. You need to find the right folks that are aligned on the vision and the mission and to have a general understanding of the work that will take to achieve success,” Fitzpatrick explained.

“Creating and aligning on the right incentives is absolutely critical for success,” he concluded. “Governance and making sure that you take the time to create a solid governance structure with representation from both sides (payer and provider) to really focus on the support and the collaboration is key. Payers will also need to ensure that you have the right IP structures, data, informatics and analytics to support the program and help providers succeed.”