During his six years at the CMS, Dr. Patrick Conway oversaw the agency's big push into value-based reimbursement. He was deputy administrator for quality and innovation and headed the Center for Medicare and Medicaid Innovation. Late last year, Conway left the CMS Innovation Center to become CEO of Blue Cross and Blue Shield of North Carolina. While he's now removed from rulemaking, Conway remains passionate about the idea of linking payment to outcomes. He recently spoke with Modern Healthcare Editor Emeritus Merrill Goozner. The following is an edited transcript.
Modern Healthcare: What's it like leaving government and going into the private sector?
Dr. Patrick Conway: It was difficult deciding to leave The CMS, just because I think we made a lot of progress and I was connected and tied to the people there. I think we did work to improve Medicare and Medicaid, serving over 100 million people.
That being said, I was incredibly excited about the opportunity to be CEO at Blue Cross North Carolina. We insure the majority of people in the commercial market in North Carolina and many of them for the majority of their lives. That gives us an opportunity to drive better care, better outcomes and lower costs. That's been the core of my mission for a long time. It's part of me as a practicing physician. So the opportunity here to drive change at a state level and influence the Blues system was too great to pass up.
MH: To what extent did the Trump administration taking over and the future of the Innovation Center drive the decision?
Conway: I worked on value-based care in Republican and Democratic administrations. I believe the Innovation Center and the work on value-based care will continue. It's driven in both the public and private sectors. Private insurers are driving value-based care models like accountable care organizations and bundled payments.
MH: We've seen the administration scale back the mandatory bundled payments. They're pushing for more voluntary programs. What impact do you think it'll have?
Conway: The geographic bundles from Medicare have had and would have had a larger positive impact on a larger scale. I think the geographic bundles made sense. The orthopedic hip-and-knee bundle continues in half of the markets—the higher-cost markets—which are the markets that are most important for that work to continue. I'd also say voluntary bundles, both in Medicare and in private payers, are a much larger portion of the change. In the Medicare program, you literally have thousands of providers, tens to hundreds of thousands of Medicare beneficiaries and billions of dollars in the voluntary bundles program.
I think it's more important that the next iteration of voluntary bundles for Medicare comes out and continues. And then, in places like North Carolina, we have hip and knee bundles that are saving about 20% and it is improving quality. So I think you're going to see payers continue to push forward on episode-based payment.
MH: Let's turn to another one of the major programs that you had at the Innovation Center—ACOs and the Medicare Shared Savings Program. How do you see its future?
Conway: Overall, the Medicare ACO program improved quality and improved patient experience and had modest savings. On the savings, it's important to note the ACOs that were in the program longer saved more money. Physician-led ACOs, on average, saved more money. And those ACOs at two-sided risk—at partially capitated or capitated-type payments like Next Generation ACO—did the best.
I think those programs will continue in Medicare, but they may be modified in some ways. In the private market, including in North Carolina, private payers are putting ACO contracts in place with independent physicians and large health systems.
We have an ACO that just reported $20 million in savings, but more importantly, the patients in that system are getting coordinated care. They have nurses calling them to make sure they get the care they need.
My mother is in a Medicare ACO. After a hospitalization, she had a care coordinator who called her and made sure she had her medicines, made sure she knew that she had a doctor's appointment and that she had transportation to get there. That's what the system should look like for patients, and that's why I think the care model will continue
MH: To what extent do you see the private sector becoming the driver of these? Do you think that the momentum is there for them to keep going and expand it even without a push from government?
Conway: I do. In North Carolina, we're going to work to move the majority of our payments to providers into a partnership model like ACOs and bundled payments where the provider is accountable for quality and total cost of care and quality goes up and costs go down.
I've interacted with a lot of CEOs of systems in North Carolina; they're ready. There's variability, but we want to partner with health systems, with physician groups and with hospitals on a model built on quality and value. We've got over 80% of payments tied to quality and value in some way in Blue Cross North Carolina and now it's taking it to the next step of really scaling these ACO models and bundled payments across the state.
MH: There are so many strands of reporting requirements—quality indicators, process indicators, outcomes indicators. What can be done to lessen the regulatory burden on physician offices and on hospitals?
Conway: At one point in my career, I led quality reporting for a large health system, Cincinnati Children's Hospital Medical Center, and we had over 700 measures we were reporting to various entities. You cannot improve on 700 things.
As a general rule of thumb, you want to try to get 30 or fewer quality measures and 10 or fewer is even better, for providers to improve on.
At Medicare, for example, the number of hospital measures went down significantly during my tenure. We led work on core measures for physician specialties so there was more standardization. There's still more work to do there, and I think it will continue to push on what are the right measures.
Then, to take it to where I am here at North Carolina, I do think there's a state opportunity that I hope North Carolina capitalizes on. How do we as, a private payer, and the state governmental programs here and other payers, partner to determine the right set of measures for North Carolina? Let's measure those key, hopefully outcome-oriented measures, and drive better health outcomes for the people in North Carolina.
MH: In the context of transparency, how do you translate that information into something that's useful to patients and to consumers in making their decisions?
Conway: There's strong evidence that when you put out information on quality and cost, providers compete to improve, whether it's hospitals, nursing homes or physicians. There's also good evidence that, when it's presented to consumers, they make choices based on that information.
MH: One of the critiques of the measures is that there's too much emphasis on process and not enough on outcomes. You're a physician. Do you think that the measures could use a good revamping?
Conway: I do believe we need more outcome-oriented measures. In the hospital measure set on Hospital Compare, during my time in Medicare we had over 75% process measures. Now, the majority of measures are outcome measures. That's a fairly big shift.
At Blue Cross, we will focus on outcome measures whenever we can. As a practicing physician, I take care of children hospitalized mainly with multiple chronic conditions off and on Medicaid, and I will tell you what their parents care about—they care about getting out of the hospital as soon as possible, not having a safety event like an infection and having the best well-coordinated care possible.
Those are outcome-oriented metrics. If you tell them, "We're going to measure the process of this minute evidence-based detail," they don't care. They care about the outcomes for their child. That is the type of quality measures we need.
MH: You recently came out opposed to the UNC Health Care and Carolinas HealthCare proposed merger. Why?
Conway: I would go back to the data and evidence, but I am not aware of any combining of large hospitals and health systems in the U.S. that has led to lower costs for consumers. The question we have asked and I think should be asked generally, to take it away from any specific instance, is how are these changes going to drive higher quality and lower costs?
At Blue Cross North Carolina, the majority of our costs are medical costs. As medical costs go down, we pass on those savings to consumers in lower premiums. Globally, the question I'd ask is, "How is any arrangement going to drive lower costs for consumers that we can then pass on in lower premiums?" We're a not-for-profit health plan and our mission is about higher quality of care and lower costs.
We have strong relationships with both UNC Health and Carolinas. As I wrote in a letter to the CEOs of both systems, after a thorough review of independent research which shows that when healthcare systems combine, costs for consumers go up, Blue Cross NC can not support their proposed combination. We are open to continued dialogue if they can demonstrate how this combination will lower costs and improve quality over the long term.
