Leading Change in Healthcare: Creating Opportunities Out of Network Vulnerabilities

Health system vulnerabilities have become disruptor opportunities. They’ve opened the door for disruptors to enter markets and shape how healthcare dollars are spent, which providers people choose, and what care delivery looks like.

That’s why it’s so important that healthcare organizations lead change rather than react to changes in their market. And the time to do so is now, while they can still drive network optimization and make a more mission-focused impact in their communities.

During Guidehouse’s 2021 Clinical Integration Summit, experts shared insights on the state of disruption in healthcare, how the disrupted can become disruptors, and ways to build momentum for innovation.

The COVID-19 pandemic is a catalyst for change.

While the pandemic exposed vulnerabilities in healthcare—from disparities in access, to lack of virtual care capabilities, poorly aligned payer/provider partnerships, and network leakage—it also accelerated existing trends, such as the growing fragility of fee-for-service payment models and the push for more consumer-centric care delivery.

“I really see the pandemic as a magnifier,” Zeev Neuwirth, MD, Chief Clinical Executive for Care Transformation and Strategic Services, Atrium Health, and the author of Reframing Healthcare: A Roadmap for Creating Disruptive Change, told Clinical Integration Summit attendees. “It hasn't caused any of the fundamental systemic problems in healthcare delivery. Instead, it’s stressed the system and magnified the vulnerabilities and unsustainabilities in our healthcare system. And, it’s also serving as a catalyst for the transformations that were already underway.”

Now, consumers not only want digital access to care, but they also have higher expectations for the experience of care, the ease with which they can connect with health professionals, and the value they get for the services they receive. Meanwhile, healthcare purchasers—from health plans to employers—are demanding higher levels of quality, access, and value from health systems, clinically integrated networks, and physician groups.

Healthcare leaders must redefine value from the consumer perspective.

Drawing on hundreds of in-depth interviews and research, Dr. Neuwirth pointed out that consumers of healthcare services (a.k.a. patients) have an increasing array of choices and options, and they are beginning to act more like consumers.

“We are well into the era of reframing care,” said Dr. Neuwirth. “This is not the beginning of that era; but we’re just beginning to realize it. Every other industry has been reframing for years and healthcare has also shifted into the era of reframing.”

As with every other facet of their lives, people expect convenience, service, transparency, ease of use, and choice. This means reframing chronic disease management and developing entirely new systems and processes for helping people with complex conditions improve their health. It also requires that leaders reengineer care to make it easy, engaging, and relevant. For example, the industry simply does not have the resources to sustain chronic disease management through incremental improvements and legacy processes.

3 Ways to Make the Move from ‘Disrupted’ to Disruptor

So, how can healthcare leaders more effectively position their organization for success? During the Summit, leaders shared three keys to doing so.

1. Break through the status quo.

“Sometimes what appears to be disruptive is actually the result of a whole bunch of smaller innovative steps which are orchestrated to achieve a remarkable impact,” said Bruce Muma, MD, CEO, Henry Ford Physician Network (HFPN).

Your network could be the chassis for driving optimization in a disruptive environment, but only if you recognize the need for change and rethink old approaches to driving value in your market.

Winning strategies for value are market specific. They focus on opportunities to increase covered lives across populations, invest in the infrastructure needed to elevate performance, more effectively align incentives, and strengthen contracting acumen. They also identify avenues for monetizing care-model improvements, an approach that ensures organizations can continue to invest in the tools needed to enhance population health and value.

It’s clear that health systems need better incentives to achieve value, whether between health systems and payers or with their physicians.

Reimagining incentives could lead to a more sustainable economic model as providers gain increased access to the premium dollar in exchange for assuming more performance risk for population. Thoughtful changes have the potential to supercharge alignment, but they could also spark innovations that lead to demonstrable change.

Further, reframing chronic care management could result in new ideas for supporting family caregivers and including them in care discussions—critical given the rise in seniors who rely on family members for care assistance and the shortage of caregivers nationwide. And with 60% of insured lives tied to value-based arrangements, the time is right for new forms of risk-based collaboration between payers and providers. In this scenario, first movers in markets with high value-based growth potential will hold an advantage.

2. Build momentum through disciplined innovation.

Since 2019, Henry Ford Health System has developed a number of successful risk/reward value-based contracts through HFPN, including a direct-to-employer contract with General Motors, an accountable care organization (the Henry Ford Accountable Care Organization), and Henry Ford Preferred, an offering for Henry Ford employees that incentivizes care from HFPN providers.

Initially, HFPN’s efforts to enter into value-based contracts resulted in just 25,000 covered lives, which Dr. Muma says, “Really didn't amount to more than 5% of any particular provider’s practice,” despite aggressive efforts to land large contracts and increased national interest in value-based care. In 2014, HFPN launched an investigation to uncover the barriers to value-based contracting, interviewing key stakeholders, from independent physician practice leaders to heads of corporations. “We learned that nearly every stakeholder perceived the Henry Ford Physician Network as a direct or indirect threat,” Dr. Muma says.

“That was a real eye-opener for us,” he says. “To use a medical metaphor, the Henry Ford Physician Network had evoked a systemic antibody response, and we were being neutralized.”

HFPN knew it needed to dramatically change its approach if it was to have any chance of survival. First, the network revised its governance structure to allow independent physicians to sit on the HFPN board. “This created equity between the employed docs and the independent docs,” Dr. Muma said. “We essentially gave a veto vote to both sides.” Next, HFPN agreed that it would not pursue disruptive contracts with existing payers that would force physicians to choose between the HFPN and their existing provider.

With independent physicians onboard, HFPN took its first big step toward shared savings with the launch of a Next Generation ACO, the Henry Ford ACO, on January 1, 2016. Leaders identified five areas where the rapid launch of value-based care initiatives could make a significant impact on reducing waste, from efforts to revamp disease management to support more timely access to care to enhanced discharge planning that could reduce readmission rates, ease transfer to skilled nursing facilities, and more.

“We were able to launch these initiatives without formal authority over any of the operational units that implemented these programs,” Dr. Muma says. “I have attributed that success to our approach to using leadership influence to support deployment and having a robust analytics capability that helped us deeply understand the problems we were trying to solve.”

Today, Henry Ford uses lean thinking to design, develop, and deploy value-based initiatives. In its first year as an ACO, Henry Ford ACO achieved more than $3.9 million in shared savings, with more than $20 million in savings through 2019.

3. Define a leadership system for value—and make decisions based on data.

As Henry Ford transitioned its approach to value from a semi-aligned set of initiatives across the system to a formal component of operations—a move made even more necessary by the direct-to-employer contract with General Motors—leaders knew they needed a more systematic approach to decision-making and governance.

Henry Ford established a network oversight committee for value-based initiatives.

“It creates accountability for value-based care performance within the clinical operational leaders, and that really happens at the network oversight committee at the top,” Dr. Muma said.

“We have all of the representatives of all of the markets and all the key operating units there, and so they get to see the performance; they get to give advice; they get to be held accountable in terms of how they’re performing, as well. They also participate in and formally approve new programs and new capital expenditures that might be necessary for those programs and launch rapid-cycle improvement teams [to support value initiatives].”

Developing a Future-Proof Approach

Peter Drucker once said, “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.” By recognizing the need for disruption and choosing a path for transformative innovation—whether by doubling down on consumer engagement, differentiating from competitors, or exploring ways to drive premium dollars and membership growth—healthcare leaders can more effectively chart a course for financial sustainability and relevance in an evolving market.