James Doulgeris

Negotiating with health plans is not about who you are or what you do. As a healthcare provider, it is about receiving fair compensation for what you deliver. As a health plan, it is about controlling liabilities, and, in the rare occasion when one arises, supporting assets.

Assets represent value. Effective value-based providers can be valuable assets. Yet many doctors refer to being paid for performance as “ghost money,” believing value-based programs to be just another clever scheme by health plans to cheat them when it is rarely the health plan at all. It is the program. That could be a hospital or hospital system not wanting to cannibalize its revenues to share the shortfall with others or “clinically integrated networks,” Accountable Care Organizations, or Independent Practice Associations naively not requiring change as a requirement for participation. 

Large physician practices, including hospital owned practices, make the promises of higher salaries, which they afford through higher fee reimbursement gained by aggressive consolidation and negotiation. While effective in the past, now it moves them from marginally valuable partners to voracious behemoths creating ever increasing liability, which will be controlled – or eliminated.

The refusal to make the cultural, behavioral, and organizational changes needed to transform from a liability to an asset is a liability to everyone – patients, practices, physicians, and payers. Anyone telling you differently is lying. 

If you don’t think that is true, consider the overwhelming rules, conditions, and regulation, from pre-authorization controls to scope of practice limitations imposed by commercial and public payers. Payers are controlling liabilities and mitigating exposure.

Physicians, particularly primary care physicians, in their view, must work long and hard to scratch out mediocre success, underpaid for performing tasks requiring expert skills. That is true, but repetitive tasks, however skilled, are incorrectly confused as providing value.

Treating people episodically for conditions related to treated chronic conditions is often viewed by payers as a failure to properly treat an underlying chronic condition. For anyone paying the tab, that is a liability. For health plans, it is a double liability. Their customer (the premium payer) is damaged, and they must pay for someone to try to fix it. 

Hence, more limitations, restrictions, and controls.

Conversely, cognitive activities, such as managing health and preventing, slowing, stopping, or reversing the progression of chronic disease, which is three of every four dollars of healthcare spending pre-Medicare and 96 of 100 dollars post Medicare, is an asset. Assets are supported. Assets are rewarded. Assets are protected. 

But, learning from experience, payers are cautious.

Value based reimbursement, which mitigates payer risk, generously rewards those who successfully make the transition from task-based service providers to clinical managers – and deliver results.

If you just think about that for a moment, payers mitigating liabilities makes all of the sense in the world. Managing price and some overutilization through regulations and controls are their two most effective tools – pretty much their only tools to reduce premiums.

Why would payers want to reduce premiums? Because it makes them more competitive and allows them to grow, particularly when they are competing for self-insured employers, who represent most of a health plan’s business.

How can providers do better? They can control spending, lower relative risk on a population scale (an advantage because lower risk to lower rates is a year’s lag), and improve patient experience. The combination gives payers a competitive advantage. Competitive advantages are assets as are those who deliver them.

The secret to success is fundamental, and, for many, uncomfortable, because it requires abandoning victimhood, the quiet comfort of managing a fiefdom, and adopting fundamental change in collaboration with others who have had success in transforming liabilities into assets.

The present system is a familiar nest that many are not ready to leave, which is why accountable care organizations, clinically integrated networks and the like don’t require any meaningful change in order to grow and increase care coordination fee income. It is a liability that will be controlled, and, eventually, starved.

Our parents told us all that you can never get something for nothing. The cost of an entitlement mentality is to be forever controlled. The cost of being a lone wolf sticking to the old ways is to be caged until you are no longer of any use at all.

James Doulgeris is the CEO of Osler Health. Osler Health is a statewide clinically collaborative accountable care organization comprised of elite primary care physicians dedicated to setting the high bar for the best care, service, and value in New Jersey.

Articles

Negotiating with health plans is not about who you are or what you do. It is about fair compensation for what you deliver.

The secret to successfully negotiating with health plans

For all the promise of meaningful positive change in the quality, effectiveness, and cost of healthcare that analytics can bring, there is a downside.

Analytics programs are only good at transforming data into information. It is up to you to make it actionable. For many users, reports selected by software developers and their authors may not fit your unique needs. Selecting what looks like the right report off a menu is far less important than asking the right question and using system capabilities to get the right 

The key to effectively using analytics is not to ask which, but, to ask why

Here’s an example of asking the right question and getting a totally unexpected answer:

Standard claims analytic reports showed that the top diagnosis-and cost-in our patient population is chronic back pain. It breeds co-morbidity like weeds in an unkempt lawn and costs compound as does misery and debilitation.

In a deeper dive, standard reports provided detailed information on who, what, where, and when.

The most important questions, which the report did not answer, are: 

But it did provide a clue. A substantial number of patients had either undergone physical therapy or had seen a chiropractor, but not both.

The natural question: Was one more effective, or expensive, than the other?

The answer was a complete surprise, going against convention, expectation, and even published evidence-based medicine and health plan protocols.

A customized study of thousands of patients showed that it is less expensive for those chronic back pain sufferers to see a chiropractor than to undergo physical therapy. And, not by a little. By over $2,400 per year. Each.

Another study approach corroborated the result.

Why is a therapy based upon decades of medical convention and science so resoundingly outperformed by one historically on its fringe? Whether science or psychology, results are results.

But this outcome should not have been so unexpected. The chiropractic practice model is warm, welcoming, caring, and sincere, and patients respond by feeling-and doing-better.

Dozens of studies show that staff and physician attitude materially affect everything from procedural outcomes to patient engagement in their treatment.

So fundamentally, good experience equals positive attitude. Positive attitude equals positive results, even in cancer patients.

We are all process-oriented by profession-physicians, clinicians and administrators alike.

We are also curious by nature, our curiosity stifled by burdensome regulations, protocols, conventions, conceptions, culture, bureaucrats, litigators, regulators, and behavioral mores thrust upon us by the nature of healthcare, which wants us to be regimented and in lockstep.

As Thomas Jefferson famously said, “A little rebellion now and then is a good thing.”

Rebel. Be curious. Explore. Make the world a better place.

Inquisitiveness rarely leads to inquisition. It does lead to progress.

James Doulgeris has served in the CEO role in a variety of healthcare industry sectors including hospitals throughout his 45-year healthcare career. He is also a member of the National Physicians’ Council for Healthcare Policy and an award-winning novelist for the bestseller "The Dyodyne Experiment" among other published works.

Affecting real change with clinical or claims analytics isn’t about getting the right report, it’s about asking “How?” and “Why?”

Get the Right Answer from Analytics by Asking the Right Questions

 annual meeting and numerous panel discussions, one ubiquitous theme resounds – many hospitals built, merged and bought their way into huge debt to enhance and diversify fees when they should have been preparing to assume risk.

Assuming risk as a hospital system is no longer a strategic option, it is their future. For many, it is their near future.

CMS has been signaling their shift to risk-based Accountable Care Organizations (ACOs), which strongly outperform shared savings programs. Self-insured employers are flocking to the few ACO type programs which begin to assume their risk. Overall, the evidence is mounting to the inevitable - provider risk delivers better care at a lower cost.

 on federal expenditures for the upcoming ten years by the Congressional Budget Office. At the center, a blockbuster number that Medicare spending will top $1.2 trillion per year by 2028, growing faster than the economy to two-thirds of healthcare spending.

The first question physicians may ask: “Is my hospital in jeopardy?”

With well over half of physicians employed, most by hospitals or hospital systems - a number that continues to grow, that is a good question. But, not the most relevant question.

The real question is “How will it affect me?” The answer is: focus will inexorably shift from maximizing health care spending to reducing it and physicians will be the frontline.


The second largest physician employer, independent medical groups, those who are advanced and perform well in quality and cost, may have the best opportunity of all. They are not saddled with expensive bricks and mortar, infrastructure and regulations hospital systems are. This makes the new money in health care, the delta between premium and cost, larger and far more meaningful because it goes to physicians instead of infrastructure.

In the end, both hospital systems and medical groups on a trajectory to assuming full risk within the next three to five years will be the survivors and purchasers of those who do not.

The odd sector out? Independent physicians, who already have little value because their time has passed as fee-based operations in an increasingly risk based healthcare provider economy.

The caution here? Choose wisely before little value becomes no value and make the best choice for you and your practice. The overriding consideration is the organization you are thinking of aligning with is capable of assuming risk. Robust analytics, experience, and a track record of success are absolute musts.

Then, there are those things that are important to you. The best place to start is with your goals and ambitions.  Prioritize using a 0-5 scale:

1) Rank based upon personal importance to you:
_____ Short-term income
_____ Long-term job security
_____ Near-term retirement
_____ Lifestyle advantage
_____ Leaving a meaningful legacy to an associate or family member

2) Where do you find your greatest satisfaction as a physician? 
_____ Providing care services - seeing patients with acute illness
_____ Managing the overall care needs of your patients
_____ Making health care more affordable to people
_____ Managing your staff
_____ Managing your associates
_____ Being the boss

3) If you were to sell your practice, would you want to continue to provide services in the same location?
__ Yes – full time
__ Yes – part time
__ No

4) How many more years do you expect to practice full time
__ 1-2 years
__ 3-5 years
__ 5+ years

5) Where do you believe you provide greatest value to your practice?  Prioritize using 0-5 scale
_____ As a provider of health care services to my patients
_____ As an administrator in my practice
_____ As a counselor to my patients
_____ As a care manager for my longest term and sickest patients
_____ As a leader for my associates and my staff
_____ As a practice innovator and creative thinker

6) If you were relieved the burden of managing your practice on a day to day basis, is there an area of clinical care or medical management that you have a particular interest, experience or skill set that you would like to continue to develop (Pick 0 – 3)
_____ Cost Management
_____ Utilization Management
_____ Clinical Protocol/Guideline development
_____ Quality Improvement
_____ Contract review
_____ Staff development
_____ Healthcare IT and technology enablement

7) If you were to join a large group practice, how interested would you be in a leadership/management position?
___ Very Interested
___ Moderately interested perhaps
___ Not interested at all

8) What area or areas of clinical management would you see yourself involved in within this new practice? (pick 0 to 3)
_____ Quality Management
_____ UM and cost management
_____ Staff development
_____ Clinical protocols and guideline development
_____ Healthcare IT and technology enablement
_____ Credentialing and provider profiling
_____ Other

9) How important is a role in the continued Governance of the practice to you?
_____ Very Important
_____ Somewhat Important
_____ Not important at all

10) What are your most important concerns regarding joining this new practice?

Many hospitals have built and grown to diversify fee for service. The movement to shift risk to them leaves many in jeopardy.

The Hospital Dilemma and Its Impact on Physicians

If you view assuming risk as a healthcare provider as a gamble, you have no business assuming risk. Ever.

Healthcare insurers manage to be at risk without taking risk by ensuring the math is always in their favor. Despite that, they can only manage the price of care-and to a limited extent.

Physicians are in a much better position because they can manage healthcare spending by avoiding medically unnecessary diagnostics, procedures, hospitalizations, inefficient, ineffective and high-cost consultants, and allied health providers

The bad news is that cobbling together a bunch of providers, from doctors to hospitals, all with crippling conflicts of interest, and adding surface changes like coordinated care and common software (so-called “clinically integrated networks”) is not gambling because losing, sooner rather than later, is virtually assured.

Your best defense from being caught up in ill-conceived schemes starts with understanding the basics.

Let’s start with the terms of the trade:

: All costs paid by insurer including patient responsibility (copay, co-insurance, deductibles), which vary widely depending on the insurance product.

: Receiving a specific amount per patient in a specified diagnostic or demographic group per month in exchange for assuming responsibility for TCC.

Partially or fully paying all TME for a specified population in return for a percentage of insurance premiums and full capture of patient responsibility.

A stop-loss (insurance benefits for all expenses over a set amount) policy limiting exposure, typically $50,000 to $100,000 per patient per year.

: Cost areas, typically those out of the control of the providers, not considered or charged against TCC or TME.

 Specific treatment protocol such as surgery; typically a 180-day cycle of care. For example, 90 days pre-operative, intra-operative, and 90 days post-operative. This may also be a time-specific round of chemotherapy, dialysis, or other definable treatment protocol.

 Treatment of an accident or sudden acute event such as a heart attack.

 Specific treatment protocol for chronic disease such as getting an uncontrolled condition under control.

 A calculated risk factor for a specified population used to adjust bundled, capitated, or percent of premium payments ( this is the primary means of taking the gamble out of risk).


Bundled payment for specific episodes of care such as surgery or specific, predictable protocols such as infusion therapy




TME or TCC with carve-outs, stop loss, defined narr ow network with patient incentives to staywithin network (reduced co-pays, deductibles, etc.)




Unlimited liability/return in exchange for capitation or percentage of premium

• Who transforms physician office staff to follow site of service protocols?

• Who manages transitions of care and develops treatment/discharge plans?

• Who manages utilization, spending, medically unnecessary care?

using analytics to productively change behavior

That means leaving the high-level reports and colorful graphs to amuse executives and employing patient- or provider-specific actions that will reduce the cost of care on a population basis by a calculated per member per month (PMPM) amount at the operational level.

For example, directing chronic low back-pain sufferers to specific local chiropractors instead of routine physical therapy or spine surgeons can reduce overall PMPM by $10.42 per month for the 

In the simplest terms, the only way to take the risk out of risk is to equip, enable, and empower physicians to work as a team, and to come to terms with the simple fact that acute care providers cannot be in charge of reducing acute episodes of care. No more than tobacco companies can be in charge of smoking cessation.

Here’s how to avoid being a gambler in value-based healthcare.

How Physicians Can Utilize Partnerships to Reduce Risk

So, here we are, stand-alone primary care practices, or, stand-alone any-provider for that matter. This is going to be hard to read for some because it shines a light on three truths that don't fit into the popular narrative on healthcare. It does ring true, however, because if you are being honest with yourself, all the pieces fit.

Truth #1: You are blaming the wrong people.


Hospitals, health plans, regulators, pharma, allied health groups, corporately owned groups, and consolidating physician groups are not out to get you.
What they are is years ahead of you and you are already irrelevant.


Time is running out to join the group best for you. Fail to act, and the best positioned risk-takers will simply absorb your patients when you turn out the lights.

Truth #2: For healthcare, it's all about the economics.

, December 2017 – "In the spring of 1991 President George H.W. Bush looked unstoppable. Following Operation Desert Storm his approval rating hit 89 percent, the highest ever recorded by Gallup. Yet, that wasn't enough. What did Bush in, as Clinton adviser James Carville famously quipped, was "the economy, stupid."


The facts are that there was $3.4 trillion in healthcare spending in 2017 and that number is rising. Over $10,000 per year for every man, woman and child in the U.S., documented or not. Approaching 20 percent of the U.S. gross national product. Twice the cost of the next most expensive of 27 "developed" countries yet languishing at the bottom of most quality and performance metrics.


Continuing on this path is simply unsustainable. Obviously, turning a multi-trillion-dollar industry takes time, but, not so obviously, the turn started a decade ago, and, the new healthcare economy has literally turned the corner.

Truth #3: This has been happening for years.


There is a new world view, one that started with the ACA nearly a decade ago and is accelerating all around you – the transfer of risk from payers such as employers to taxpayers to providers, from hospital systems to physician groups.


A little critical thinking brings the need for this strategy into focus. Payers can only manage price. Providers can manage spending, from utilization to site of service. And, for now, spending is the problem.


Providers can also manage health status where payers can only try to influence it. Improving health status across large populations is the only hope for the future.


Of all specialties, primary care providers who transform from being service providers to clinical managers, managing the total cost of care are in the best position to manage risk. Survivors will take that path.


That is why the vanguards of the new healthcare structure, from health systems to visionary physician's groups independent of health systems, are focusing on primary care.


The key to sustainability is managing chronic disease, which is responsible over three quarters of the cost of pre-Medicare spending and over 95 percent of post-Medicare.


The key to success is practice transformation, sophisticated analytics making statistically significant mountains of data into digestible, task-based actionable information, patient engagement, patient experience and the favorable economics created by top talent, consolidated purchasing and management services and revenues earned by those who provide real value to their customers.


If the foregoing is not convincing enough, it is not only the economy, it is the economics.


Independent practices simply have less value to payers than those with the size, infrastructure, analytics and management expertise to assume and manage risk within the next three to four years. That is why groups on a risk-trajectory receive multiples of Medicare to support their progression and independent providers receive a fraction.


The signs and validations of all of this surround every one of us in this industry.


Those preparing for risk today will be there for your fire sale tomorrow.

The economics of healthcare are inexorably shifting risk from payers to providers. Independent providers who fail to join risk facing groups are doomed.

Why Standalone Primary Care Practices are Doomed

New Jersey is the only state in the country that fails to protect its residents against predatory out-of-network billing.

Not only are protections missing, under New Jersey law, out of network providers don't even have to tell their patients that they are out of network.

Here's an example, if an out-of-network surgeon bills $85,000 for a procedure that insurers normally pay $2,000 with a $200 co-pay for, and the insurer provides an out of network benefit of 60 percent, the insurer pays $51,000 and the patient is on the hook for $34,000.

, out-of-network charges cost New Jersey residents about a billion dollars per year.

William Castner, the senior vice president of corporate and regulatory affairs at Horizon Blue Cross Blue Shield, speaking at a healthcare IT summit on November 1, urged people to use social media to try to influence state legislators to pass A1952.

Castner characterized out-of-network providers as "a microscopic number of largely specialists and super-specialists…who are driving up the cost of healthcare astronomically in the state."

Out-of-network experience at Osler Health, Horizon's second largest accountable care organization (ACO) next to Hackensack Meridian, the dominant hospital system in New Jersey, is anything but "microscopic." Of the 8,115 doctors who have seen Horizon insured patients through the Osler system in the past two years, 24.1 percent are completely out-of-network and an additional 16.6 percent were out-of-network at one time or another.

Which brings us to Assembly bill A1952, in part, requiring out-of-network providers to warn patients beforehand. And requiring binding arbitration when they don't.

Disclosure mandates only apply to those commercial plans that are state regulated.  The requirements do not apply to plans that are self-funded, which represent over two thirds of the commercial plans in New Jersey. Patients do get some protection in emergency situations.

Arbitration over excessive billing practices does protect patients from the process, reportedly favoring health plans sufficiently for Horizon BCBS to, at one point, agree to a $300 million state raid on its reserve fund if the bill became law.

Other states are not quite so equivocal. As in ALL other states, which protect patients against predatory healthcare billing practices to one degree or another for the same reasons they outlaw fraud and theft.

As it stands, if half the specialists left, New Jersey would still handily top the national average of fewest patients per capita per specialist.

Out of Network Billing is the Tip of the Iceberg

Protecting consumers requires understanding the fundamental causes of a problem. In this case, that means understanding cost. At the heart – it isn't what physicians reasonably charge, it is what they spend, which drives the cost of care far more than price. Systemic abuse is far less sexy than scandalous overcharging, and far more damaging.

A fundamental cost driver is physicians that treat a similar patient at a vastly higher cost because they run up the bill with added diagnostics and services in a process called churning.

Here is a brief example of responsible care and churned care.

Jim had a lesion about the diameter of a pencil eraser on his head that needed to be removed. A doctor removed it in his office in five minutes start to finish including numbing the area with an injection. The cost to insurance was a few hundred dollars.

Because the pencil eraser sized wound was on his scalp, Jim was sent to a plastic surgeon to close the wound that afternoon to minimize scarring. This process also took less than five minutes from injecting a local anesthetic to the last suture snip - in a full operating room with full sterile drapes in ambulatory surgery center with an anesthesiologist and two nurses. The cost to insurance, thousands. The cost to in deductible and co-insurance, over one thousand. The excuse, "the light was better."

Even when doctors are in-network with an insurer, they can have their way with you, your insurer and your pocketbook. And, insurers pay while regulators look away. Uncovered medical expenses, insured or not, are the 

 in the U.S. at 40 percent and as high as 62 percent in New Jersey.

 is the CEO of Osler Health. Osler Health is a statewide clinically collaborative accountable care organization comprised of elite primary care physicians dedicated to setting the high bar for the best care, service and value in New Jersey. 

New Jersey is the only state in the country that fails to protect its residents against predatory out-of-network billing. 