A nationwide surge in the number of physician-led alliances indicates value-based contracting is escalating in 2018, and physicians are seeking more help to go along with the changes.

It’s no coincidence that more physicians are choosing to affiliate with health systems just as Medicare payment changes kick in. Physicians payments under the Medicare Access and CHIP Reauthorization Act won’t change until 2019, but upcoming payments will be based on physician claims data from 2017. The impetus of Medicare payment reform also dovetails with growing value-based contracting in the commercial sector. All payment reforms require buy-in from physicians who aren’t happy about the burdens of a new payment system. Enter the alliance: a strategy for helping physicians manage the technology costs and administrative hassles of payment reform and learn more about the long-term goals of paying for quality instead of volume.

The Medical University of South Carolina in Charleston, South Carolina, used the alliance strategy to mend fences with physicians unhappy about the health system shifting their payment contracts to a relative-value-unit-based system in 2017. MUSC formed the MUSC Health Alliance and launched a Medicare Shared Savings Program accountable care organization to get physicians used to value-based payments. The physician-led alliance also has the goal of supporting physicians and preventing burnout. MUSC reorganized its physician group, MUSC Physicians, to allow it to hire non-academic physicians and set out to boost its numbers and improve its ability to coordinate care for a larger patient population.

Not every alliance creates enough financial incentives to work, however. In Portland, Oregon, the Oregon Health & Science University partnered with Salem Health to create a clinically integrated network and form the OHSU Partners physician group. Physician executives wanted to transform patient care with new clinical guidelines addressing the most troubling medical conditions. The goal was admirable, but the execution lacked authority. As affiliated partners with separate financial systems, the two health systems couldn’t justify the costs, and the partnership ended after two years. OHSU is trying again with a new, similar partnership with Adventist Health Portland in the hopes that shared population health goals will yield better results.

Some alliances find significant success. In Chicago, Illinois, Advocate Health Care and its physician group, Advocate Physician Partners, have prioritized value-based and risk-based contracts. To successfully improve quality, researchers conducted in-house studies on everything from how nutritional supplements impacted inpatient stays to how behavioral health symptoms affected recovery rates. Advocate’s MSSP ACO, one of the longest-running Medicare ACOs, reported the second-highest shared savings among all MSSPs for 2016, $29 million.

Meanwhile, multiple alliances can transform an entire market, leading to widespread data-sharing partnerships and greater savings. In Northern New Jersey, physicians value their independent and small practices, but the realities of payment reform created a marketwide shift in late 2017 and early 2018. Leading health systems such as Atlantic Health System and Hackensack Meridian Health and large physician groups formed physician-led clinically integrated networks to access more patient data for population health strategies. The alliances attracted hundreds of physicians who wanted greater clout in negotiations with insurers and who needed support with electronic medical records and accurate claims billing.

To make the most of physician-led alliances, physician leaders must change physician culture to become more collaborative and less siloed. Any change will be bogged down if the alliances don’t deliver on the promise to make work easier for physicians. Physicians, for example, want electronic medical record technology that saves time, such as the artificial intelligence-enabled software for emergency department physicians being developed by MedStar Health in Washington, D.C. Alliances that successfully change physician culture to embrace payment reform will realize significant savings and quality improvements.


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