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95 PRACTICE MANAGEMENT THOUGHT LEADERSHIP How to Thrive in a Risk-Based Environment: 5 Questions With BIDCO President and CEO Jeffrey Hulburt By Alia Paavola S ince its incep- tion in 2012, W e s t w o o d , Mass.-based Beth Is- rael Deaconess Care Organization — a value-based physi- cian and hospital network and ACO — has fought to push the healthcare industr y toward popula- tion health and value-based incentives. The organization has worked for nearly five years to equip hospitals and physi- cian groups with a set of centralized ser- vices to aid the transition to risk-based contracting. As President and CEO of BIDCO, Jeffrey Hulburt oversees all aspects of the orga- nization's mission. He works with various physician groups and hospitals to advance the adoption of value-based payment models and to create a high-value, lower cost network in the Massachusetts market. Here, Mr. Hulburt explains how to thrive in a risk-based environment, shares the biggest risk-based contract challenge, dis- cusses the most common mistakes while negotiating contracts and offers his advice for administrators seeking to enter risk- based contracts. Editor's note: This interview has been edit- ed for length and style. Question: How were you able to thrive with risk-based reimburse- ment models? Jeffrey Hulburt: The way we've been successful is having and spreading the philosophy that physicians and hospi- tals need to work together in this new value-based environment. Both parties bring to the table a set of ser vices, which become more essential to success as we transition away from fee-for-ser vice — where both parties could traditionally function independently and get paid — to this new risk-based environment. The new risk-based environment requires parties to coordinate care to be effective and efficient together as an entity. Our real accomplishment has been the rec- ognition of the value that comes from physicians and hospitals working togeth- er. BIDCO itself delivers a set of ser vices to these physicians and hospitals to help them implement the changes necessar y… to navigate this new environment and help them be successful. Q: What are some of the biggest chal- lenges you've faced getting physi- cians engaged with ACOs? JH: One of the biggest challenges we've had, which still exists today, is the movement out of the fee-for-service environment to a popu- lation health, value-based one. Since the tran- sition doesn't happen over night, many of our practices still have a number of contracts or a number of patients for which they get paid via the fee-for-service model. en you have an- other part of the population that has moved into risk-based contracts. So right now, we are struggling with competing incentives. In one situation, providers recognize they can be rewarded by volume, but in another situation they are rewarded for better quality care and the outcome of the patient. Currently, about half of the patients seen by our physician groups and hospitals are in- volved in risk-based contracts. But honestly, I've been telling people we need to be ap- proaching 75 percent to 80 percent of patients seen by providers in value-based contracts before we can let go of the incentives that drive the fee-for-service market. I like to call the 75 percent to 80 percent the tipping point — the transition won't happen overnight, but we have made significant movement. Q: How have you been able to over- come these challenges? JH: One factor was a huge push from the state of Massachusetts. Legislation was passed to push providers into more value-based con- tracts over time in the state. Another factor that encouraged physicians to enter into ACOs, which was in part the found- ing philosophy of BIDCO… was making sure physicians knew the burden of this new, trans- formative environment was not solely falling on their shoulders or their office practice. We wanted to create a centralized set of resources to take the burden of various complexities off of physicians. BIDCO was formed in fall 2012 with recognition it needed to provide support to providers and that providers would not nec- essarily make the move if they didn't feel like they had some level of ability to be successful in this new environment. However, we haven't overcome all the chal- lenges, it's an evolution as we continue to transform the industry or the industry con- tinues to transform us. But thus far we've done pretty well getting over this initial hump. Q: What are some of the common mistakes in risk-based contracting? JH: Contract negotiations used to center around the rate component. Now, if you say 'I'm worried about my rate and what I am go- ing to get paid for each service' you miss the bigger picture. You need to take a step back. Rates are definitely a component; however, you need to understand from the population health management perspective, what the utilization is and what quality opportunities exist. You need to make sure the contract isn't solely focused on the rate itself, but also ways to incentivize the network to achieve these outcome measurements both in utilization and quality. e other big mistake is accurately depicting the illness burden of your population ... to ad- equately risk-adjust your population. ese metrics are not oen considered in a fee-for- service [contract] but they become critical in risk-based contracting. Q: What is your best advice for hos- pital executives entering into these contracts? JH: Hospital executives moving into risk- based agreements have to recognize the way you've always done business isn't necessarily going to lead to success in these new con- tracts. A lot of people think risk-based con- tracting means focusing solely on decreases in utilization, which is somewhat troubling for hospital executives. My advice is to take a broader look at the idea of total population health management. If population health management efforts improve patient satis- faction and drive positive patient outcomes, health plans will begin to reward value-based care appropriately in ways that compensate providers for potential reductions in utiliza- tion… it really involves a shi in traditional mindsets. n