How Atrius Health stayed independent by not shying away from risk

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.

WHAT WAS THE RESPONSE FROM THOSE INVOLVED? Before we made the decision, we brought together a cross section of people—physicians, nurses, administrators—and discussed the various options, which were many. This one, as we say, checked off all the boxes.

It allowed us to remain committed to value-based care and population health. It allowed us to remain independent so that we could be agile in the market. It allowed us to innovate, and innovate together with a health plan and get very close to employers. It certainly allowed us to remain a not-for-profit organization and with physician leadership.

So it literally checked off all of the criteria that we established at the outset of looking at whether we could or should remain independent.

ANY ADVICE FOR EXECS IN SIMILAR POSITIONS? Being open to innovative reimbursement models is very important. There’s enormous value that can be created by better managing the total cost of care in handoffs, in the site of service and in medication management.

Chief financial officers try to mitigate risk. That’s their job. So jumping into a full-risk model looks really scary. For us, it was much less scary, because we were already in financial arrangements like that. Massachusetts is a little bit different in that regard.

So early-on experiments where you can be successful and Medicare Advantage products are probably an easy place to start, where the upside is typically very high. Start small and move on to broader experiments.

DESCRIBE YOUR LEADERSHIP STYLE: I am very much a collaborative, engage-the-parties-involved kind of leader. We have an open-door policy to engage our staff. We have a Lean process that values input from across the organization, and we manage through data.

HOW WOULD OTHERS DESCRIBE IT? I hope the same way. Hopefully people feel valued and important in what they do every day.