Crystal Run Healthcare, a fast-growing, multispecialty physician practice with 350 doctors and 2,200 employees in upstate New York, is winning plaudits for its embrace of value-based care. It recently launched an insurance arm and has partnered with a leading New York City academic medical center to bring its patient-friendly focus into Manhattan. Modern Healthcare editor Merrill Goozner recently explored the group's strategy with its CEO, Dr. Hal Teitelbaum. This is an edited transcript.
Modern Healthcare: You serve a mix of suburban and semirural areas, some with high poverty and some highly affluent. What are the challenges in serving that diverse area?
Dr. Hal Teitelbaum: This is our 20th anniversary year, and the basic premise of Crystal Run Healthcare remains that physicians have a unique role to play in the healthcare system as stewards of patient welfare. That is not an option, but an obligation. It's relatively easy to take care of the affluent population. It's much harder to create a sustainable healthcare system where we are part of the safety net where we take care of everyone.
We focus on creating a single approach to healthcare for everyone. We are agnostic as to whether individuals are better or less well-off financially.
We work with our providers and our staff to make sure that they don't concern themselves with those issues. That's our problem: getting paid. Their problem is simply taking the best care of patients that they can.
MH: How do you make that work financially?
Teitelbaum: We have been very involved with, and are proponents of, healthcare transformation and value-based care, and at the same time, have taken Lean approaches to our operations. This combination works. It allows us to address the needs of everyone in the most high-quality, high-value, cost-effective way possible.
MH: Why are you pursuing growth and more market share in your area?
Teitelbaum: Growth is not sufficient, but growth is necessary to support what is happening in healthcare transformation. When I started this practice, one of the things I knew that we needed to be was unavoidable. If you are disruptive—and we like to think of ourselves as disruptive in a positive way—somebody's ox is being gored.
This is not an environment, sadly, where everyone in healthcare is on the same page. The fragmentation of the healthcare system means that there tends to be a lot of cost shifting between providers of inpatient care, outpatient care, pharmacy and post-acute care. If we are successful in lowering the cost of care and improving the quality, somebody is paying that price. When it's fewer hospitalizations, some hospital administrators may be upset. Or, it may be more appropriate use of medications. So pharma may be upset. We have our own health plan now. So payers may be concerned that disintermediation is occurring. With healthcare transformation, and provider systems doing more of the analytics, they're concerned (about) what value they bring to the system. So this concept of unavoidability (means) we have to be significant enough that we can't be ignored.
MH: How is it going with your new insurance arm?
Teitelbaum: The insurance company is less than a year old. It's been a tremendous and positive learning experience. There's nothing like managing your own panels as a payer to really educate you about process, and about how it is to work with other providers, including hospitals.
Our approach to working with providers as a payer is, let's partner in value. Let's work together. If we can do things together that improve value in terms of health outcomes and lower cost, let's share in that. We've had some hospitals and hospital systems that have said, “That sounds great. We're all in.” And we've had other hospitals that have said, frankly, “Not on your life. We're going to milk fee-for-service until we can't do it anymore.” Overall, it's been a very positive experience for us.
MH: Has your participation in the government's accountable care pilot projects helped you in this evolution?
Teitelbaum: We were chosen to participate in the Next Generation Accountable Care Model that the CMS launched on Jan. 1, but we've decided to defer participation until 2017. We're working on the launch of our commercial plan, our Medicaid managed-care plan, and we are investigating what approach we are going to take to Medicare Advantage, which has had very little penetration in this region of New York state.
But that said, our experience to date (in the ACO program) has been a great learning experience for us. It's helped us to refine our approach to value-based care, to understand what we need to do.
MH: The replacement of the sustainable growth-rate system calls for more pay-for-performance and quality measurement for physicians. Many physicians complain about the costs of keeping up with all these quality measures.
Teitelbaum: We totally support the movement to pay-for-performance in Medicare. We have to stop a model where we get paid for doing more. We have to move to a model where we get paid for doing better. It is very expensive, no doubt. You need to have the analytics. You need to retrain providers to behave differently. Changing the payment system is absolutely necessary to promote healthcare transformation that is focused on outcomes. There are many reasons why we are seeing consolidation in healthcare, but part of it is the realization that small healthcare entities do not have the access to capital, the wherewithal to put these systems in place.
MH: Why did you form a partnership with Mount Sinai, one of the major teaching hospitals in New York City?
Teitelbaum: The large healthcare systems in and around New York City have historically taken a pretty traditional approach to medical practice and to healthcare services. Mount Sinai reached out to us to collaborate with their internal efforts on population-based health and healthcare transformation.
Retail healthcare is particularly poor in and around New York City. It's great to be able to do an amazing heart transplant. But when (patients) have the flu, what's the front door? Is it your emergency room? Access to basic healthcare services is greater in Orange County and Sullivan County, N.Y., than it is in Manhattan. If a patient has the flu in our system and they call up at 7 at night, they'll get a Crystal Run employee answering the phone.
Try that in New York City. After 4:30 p.m., you'll typically get a recording from a doctor's office, whether it's an academic center or a private office. So, we're working with Sinai to help them develop a more retail approach to improve access.