Eddie Qureshi: This is one of the biggest changes in healthcare policy in the last quarter of a century. I think of patient satisfaction as stars, even EHRs in late 2000s. Social determinants of health and how they have impact clinical care. And then this era of outcome based care in its first iteration, let's call it value based 1.0. There were so many learnings over the last decade and a half, but really this is now entering into the next generation of how reimbursement will be divvied out. That's why some of the rebranding that even Medicare is putting around it is outcome based care showing we are in this new era and we can really start using it as a blueprint for this next era of reimbursement care with only two things at the center of it cost and accountability.
Matthew Weinstock: That was Eddie Qureshi talking about a new payment model that the Centers for Medicare and Medicaid Services is rolling out. The Transforming Episode Accountability Model, which is often referred to as team, launches on January 1st. It's a five year mandatory bundled payment model focused on five surgical areas and more than 740 hospitals are involved in this initial phase. Qureshi is the founder and CEO of Rainfall Health, a digital platform designed to help hospitals succeed in team and value based care. The company is working with more than 200 hospitals to gear up for team. In this podcast, Qureshi and Oliver Wyman's Deirdre Bagot discuss ways that hospitals can get ready for the program, especially as leaders face competing priorities. They also delve into the future of value based care. The Oliver Wyman Health Podcast is brought to you by the global management consulting firm Oliver Wyman. For more insights on the business of transforming healthcare, visit our online publication health.oliverwyman.com and now let's pick things up with Qureshi discussing his background and what led him to create Rainfall Health.
Eddie: I'm a synthetic biologist by training, overlap of AI and biotech. Applied that to point of care, diagnostics, therapeutics and now in digital health. For me actually healthcare is a family legacy. My grandmother was one of the first female physicians in the country of Pakistan and my mother is still a practicing physician in a rural little town in Arkansas. So working on healthcare accessibility was the mission with which I founded Rainfall Health about five and a half years ago and we've been on this mission and have had these tailwinds from the value based and outcome based care models. We use cloud based software to help hospitals provide better access to care for all of their patients. Starting off with Medicare as a focus.
Deirdre Baggot: When I had my first introduction to value based care, it was with the ACE program in 2010. So over the last 15 years certainly we have made significant progress. Today we're at 53% of reimbursement in some sort of value arrangement. Certainly nowhere near the aspiration that CMS has for 100% of reimbursement in some sort of accountable arrangement by 2030. But what I remember being on the ground as the clinician was that I didn't feel as though I had very good tools. We were just implementing epic. You know, this was the Affordable Care act era. And in much of what we were doing in early value based arrangements was pretty manual. And so what excites me for what CMS has on the horizon with the team program that we'll talk about today is that today it feels as though we have much better tools to manage populations. Is this an opportunity with this next wave of value based arrangements with CMS where organizations can really begin to rebuild trust through transformation?
Eddie: We actually think this is one of the biggest changes in healthcare policy in the last quarter of a century. I think of patient satisfaction and stars, even EHRs in late 2000s. Social determinants of health and how they have impact clinical care. And then this era of outcome based care in its first iteration, let's call it value based 1.0. There were so many learnings over the last decade and a half, but really this is now entering into this next generation of how reimbursement will be divvied out. That's why some of the rebranding that even Medicare is putting around it is outcome based care showing we are in this new era and we can really start using it as a blueprint for this next era of reimbursement care with only two things at the center of it, cost and accountability. What I like about this model that's coming out of the team model is it starts off very narrow. Five procedures, 742 facilities, 20% of their annual Medicare reimbursement. The center of it, 30 day episodes, 20% incentive payments, 20% penalty payments, five years, that's 4,000 pages summed up in 30 seconds. And only four things really matter at the end of the day, which is satisfaction, outcomes, cost and quality, which I think we can all get behind.
Deirdre: How do you respond to hospital CEOs who say I have many things on my plate? I'm trying to figure out the path forward in our roadmap with genai. I have 50 initiatives going on within my organization. And we add team to our plate. I agree with you that it's very streamlined. But certainly we all know that hospital executives have many, many things on their plate that they're trying to manage.
Eddie: I couldn't agree more. I actually think everything that you're voicing here as their concerns is 100% valid. But I actually do think that we can switch from looking at team and this new initiative as a liability and start thinking about it as an opportunity. And the reason why I say that is is as we're seeing certain lines of revenue go away and outcome based care becoming more centered, we need an infrastructure investment. Right, and that's where you're talking about. We haven't had the tools in the past to make this happen effectively. The promise of AI is early on. But there's a couple things that we know. Healthcare data doubled from 1950 to 2000 and now it doubles every 70 days. Every two and a half months. We have more healthcare data than we've had ever before. Synthesizing it is actually a great way that we can both meet the moment by applying AI strategies in real time and over open up a new line of revenue while improving quality, cost satisfaction and outcomes. That's what's exciting about these new revenue lines. That they're not nominal, they're actually significant. 20% of your Medicare revenue and then 20% incentives on top of that. That is meaningful capital. We've analyzed over 232 of the 742 mandated facilities. On average, their upside on this model is about 4.4 million, scaling up to $11 million a year for five years. Now think about the infrastructure investment that you as a CFO, a CEO, a CIO could make with that sort of capital investment. $55 million over the course of this program.
Deirdre: What is your thought on the role of payers in this phase of team? I have a really strong opinion that that this is an opportunity for payers. Payers should be at the table right next to patients and providers and waiting until sort of the data is in on team to me seems like a bar that's too low. Payers and providers working together most effectively gives payers an opportunity to co create and design the care delivery that comes out of this work. But I'm curious your thoughts on is this an opportunity for payers to collaborate more effectively with providers?
Eddie: This is the point at which payers should be jumping in. We even have an independent committee that spans over eight different health systems and major provider groups that helps guide these decisions and these controls that we Build in. That's an amazing spot for payers to jump in and have their voices heard, not only to architect these big changes at the right time, but also represent their members. And one of the more harsher readings I've heard before in healthcare and healthcare policies, especially when they change drastically, is if you're not at the table, you're on the menu. And in some ways that's why we brought in medical groups into the committee. Not because they're actually not a liable partner in the T model at all. They wouldn't face those downside penalties. But the reality of healthcare is it's so entangled, once you start pulling that string, it affects everyone. So that's why this is the time for payers to jump in. And we do have some forward thinking payers that we're starting to have conversations with.
Deirdre: So when a pressure test an idea that I have and reading the team specs, I believe the way this specs are written, there's tremendous ability to create synergies with initiatives already underway in an organization that it shouldn't be this net new thing that you're doing. Much of the specs in team are really aligned with our clients and what they're already doing as it relates to building the muscle for managing populations and really beginning to think about what does this look like? It's scale. But I want to test that idea with you because certainly from my perspective it shouldn't be the case that this is all new stuff, right? It should really be. What are we doing today? How do we leverage existing initiatives around value based care and population health?
Eddie: I'm going to take a slightly controversial view here, Deidre, to your question because I actually think that even though those metrics that are being implemented to some degree at almost every every single hospital, not just the mandated ones, but every single hospital, the issue is now tying them to realizable value for the system. We can't ignore the real financial overhead that's required from each of these systems and we keep putting more and more on. That's why I always understand whenever there is something new that comes up, the first knee jerk reaction is to say we can't possibly have one more thing come up because it requires so much overhead. Even quality, which has been part of care in some form or fashion over the last two decades, the fact that there's a new composite quality score, cqs being introduced under team, that's new, how is that going to affect reimbursement? How does reporting now work under this? Those are all the question Marks that I hear CXOs talk about. Not that they don't care about quality, not that they're not tracking quality. It's almost like they're being punished for not reporting it in the exact thing that they're required to do. And when it's something new, there's no systems in place. And that is partially what we do. And we're actually standardizing that. We said, look, so much damage has been done in sort of the promises that were made around value based and they fell short. Part of the reason was there was no right way to do something.
Deirdre: Yeah. One of the things for many of our clients, they still feel as though while the tools are better, some of the challenges as it relates to interoperability make it particularly difficult to scale some of these value arrangements. And making significant investments that maybe aren't sustainable also sort of causes unnecessary whiplash for health system executives. Do you have thoughts there?
Eddie: Yeah. The big shift to me for team is actually not the requirements and those quality metrics. It's actually this move entirely. It's saying who's responsible and it's saying, we're going to start off with the hospitals who do have most sophisticated infrastructure right now, but you have to now start bringing in everybody else into the fold. That's where I definitely see where the panic comes in and I see why the American Hospital association, the aha, put out a public letter to Medicare earlier this year saying, I don't know if this is going to be feasible for our hospital systems because this requires too much infrastructure. It's true. Because you are asking them to now bridge a gap that has never been bridged before. And if you're the most sophisticated, and I think this is the example that I use with my CXOs is spinal fusion, which is one of the INSCO procedures, one of the five. And you're the most sophisticated hospital system in the country. You have an amazing analytics group. You have the state of the art EHR implemented across your sites. You have now full line of sight to only 33% of the cost of care. That 67%. You don't know what's happening there. And that's the main challenge of this model. But like you actually started this off that I think we have the technology and the infrastructure and rainfall is providing some of those tools along with our partners to actually say, let's rise to that challenge and get the rest of the tools in. Because ultimately that's the true way that healthcare is being received. From the patient perspective, what do patients get out of this one word simplicity. They have only one entity in their care journey that's responsible for their care. They only have to pick up and call the hospital. Not the PCP that they were handed off to, not the physical therapy clinic, not skilled nursing facilities. They just have the hospital who's responsible for now coordination, case management and tracking that entire care journey.
Deirdre: Do you think that the proliferation of app enabled medicine makes this more difficult? Many of our patients are engaging with healthcare in a multitude of ways.
Eddie: Yes, because your healthcare, your journey, your data is being stored in now a myriad of ways and all of them are appealed to a myriad of different regulations and requirements. So that is a big challenge. But you don't have to get all the data across those different apps, all those different elements of care. You just have to worry about five procedures and this 30 day episode as a hospital making it just very simple and in that narrow scope I think is a great first step to say how do we then start expanding that scope from there and bringing the information from, as you said, like this app based care.
Deirdre: So let me try to summarize what I think I heard. Certainly teams is an opportunity for an organization to pressure test their readiness for scaled value based care. It sounds like we're aligned on the importance of playing to your strengths as an organization. It's actually a relatively low entry point given the way that the program has been designed and find synergies with other value based activities that your organization is currently undertaking. Is that fair to say?
Eddie: I think trust is going to be one of the most important elements of this entire model. Trust with the hospital and trust in your network.
Deirdre: January 1st is coming up quickly. Eddie, for organizations who are planning for and are subject to the team mandate, what are three no regret moves that you recommend?
Eddie: Number one, get your CFO, your COO and your Chief Quality Officer in one room together, your decision makers. Number two, actually look at your historical look back period data and your referral network and see where the gaps are. Number three, actually see where and how you can train up your medical groups and your referral networks to respond to those four components of your reimbursement. And this last one unfortunately is going to require some investment in infrastructure because that's a lot of data to collect in a streamlined and straightforward way that's ready for reporting.
Deirdre: Eddie, it's been a pleasure. Thank you.
Eddie: Thanks Dierdre so much for having me and having this amazing conversation.
Matthew Weinstock: Thank you for listening to the Oliver Wyman Health Podcast. This podcast is brought to you by the global management consulting firm Oliver Wyman. For more insights on the business of transforming healthcare, visit our online publication, health.oliverwyman.com.
