Atrius Health, the largest not-for-profit independent medical group in New England, this year reported a $38.7 million operating surplus. It credits risk-based payments for that success, with about 75% of its revenue coming from full-risk contracts in 2018. The risk has paid off, but in this latest “Bold Moves,” CEO Steve Strongwater recalls how he made the decision, what it’s meant for Atrius and how others can reap the same rewards.
WHAT WAS YOUR RISKIEST DECISION? The decision to remain an independent not-for-profit physician group. That was very much enabled by a seven-year contract arrangement with Blue Cross and Blue Shield of Massachusetts in which we will work together to try and find ways to improve care for our patients, and that the plan agreed to convert their PPO members into a global budget. We do much better managing total cost of care through a global budget process.
WHY WAS THAT MOVE RISKY? Most of what we see is what I’ll call “value-based care light,” when providers take mostly upside risk. But we were talking about taking full downside risk from members who are traditionally thought of as fee-for-service. And in every full-risk agreement, you run the risk of shrinking and losing money.
Our approach to managing care has been pretty consistent. I’d say the three principal elements to mitigate risk were to ensure that we had the right infrastructure to manage people, the right analytic tools to manage data, and then our ability to provide near real-time access. We have the lowest ER use, for example, in Massachusetts. It all presupposes that we can manage total cost of care, which means that you need to have a fully engaged workforce. That’s the people part, and we think we do that pretty well.