[00:00:00] Stacey Richter: Episode 405 what else physicians trying to clinically integrate in the real world really need to know? Today I speak with Eric Gallagher.
[00:00:18] Tom Nash: American healthcare entrepreneurs and executives. You want to know? Talking relentlessly, seeking value.
[00:00:26] Stacey Richter: Let's cut to the chase. You've gotten to the point where you have a gang of physicians, clinicians, physician practices who have expressed a desire to work together. What do you need to know right now? Eric Gallagher, CEO of the Ochsner Health Network, is my guest today, and I largely asked him the same question that I had asked Dr.
Amy Scanlon from the UCHealth Intermountain clinically integrated network in Colorado. And in episode 403 a couple of weeks ago, the question I asked Both Eric and Dr. Scanlon is what are you doing to help align physician practices into an integrated model? How are you going about that? Now, let me remind you, Ochsner Health Network is practically long in the tooth when it comes to clinically integrated networks, and it also exists in an environment that is unique, as are most local markets.
But Ochter's local market is mostly Louisiana, which has an older population and a huge Medicare Advantage penetration. That is quite a different local market from what's going on in Colorado, which is the location of Dr. Scanlon's joint. As we all know, different stages of any journey require different solution sets, and different local markets certainly require different solution sets.
But what was so interesting to me was to notice that despite the market differences and the where are we in the transformation journey differences, how many of the things that you'll hear about today are in the same spirit as the stuff that we talked about in that earlier show with Dr. Scanlon, Eric Gallagher lists three things that he says are essential in the transformation journey and he talks about today.
Number one, making sure that physicians, care teams and those working directly with patients are part of the transformation process, both from a point practice standpoint, but then also from a financial standpoint. This makes so much sense when I state it explicitly here, but so frequently it doesn't happen so frequently.
There's a value based care team that tinkers around in a silo and then an announcement comes over the loudspeaker one day that henceforth we shall add some more clicks. But trust us, it's important. For some reason we aren't going to bother to tell you about. You'd be bored by it or you wouldn't understand it.
Even if this was not the intention, and it probably wasn't, the result is going to be the bad taste in your mouth that I just left you with. Eric Gallagher's number one here that everybody be part of the transformation might be the umbrella really over the first thing that Dr. Scanlon talked about in that earlier episode, which was to make sure to give practices the tools that they need to succeed.
Not what you think they need, but what you've discerned they actually need because you've listened to them. It's a bidirectional exchange share with everybody working together. Every. Eric adds some new ground to that. He says that to make sure that everybody can productively contribute to this transformational process and probably know what tools they may need, it's vital that everybody understands the why behind what the organization needs to do.
Meaning educating physicians and other clinicians in the business of medicine and the financial reasons for the why with the whatever. Insulating docs from the real world here helps no one. And it's not really viable actually in the world that we live in today. Which is a callback to the point that Dr.
Denver Salley made also in episode 403, which in a nutshell was that he thinks that unless docs as a gang start learning a lot more about the business of medicine, that we'll continue to see this value extraction and financial toxicity and moral injury inducing environments that we see right now. Dr. Salley wrote, I needed more education in order to truly help patients. So let me post it that this everybody works together and gets educated together step can help the practice and help patients in a myriad of ways, both at the practice level and at the patient level and also probably at a national level.
The number two thing that Eric talks about here is a recognition that practice transformation requires process transformation and thinking about things very differently. Now all of a sudden we are getting paid to coordinate care. We must work as a team because there are people on staff who can influence social determinants of health.
For example, we have a vested interest to create a community board advocating for food banks and sidewalks and air pollution controls so all the kids who play soccer don't wind up with asthma. Ochsner actually set up a school because they realize educated communities are healthier communities. Dr. Scanlon's clinically integrated network.
They're much earlier in the journey. They're at the point where they're working hard to get participating practices, the tools that they need to succeed and help doctors and other clinicians help patients through what Dr. Scanlon calls the in between spaces, this times between appointments. But all of this really rolls up to the point that Eric Gallagher is making about everybody working together and recognizing that practice transformation requires process Transformation number three essential clinically integrated network thing that Eric talks about today is the culture change that's necessary amongst physicians and other clinicians.
Pretty everybody and Dr. Amy Scanlon leaned into this one too hard. Both brought up the same nemesis, inertia and the requirement to change culture can't be underestimated and the change management that's required here cannot be phoned in. Culture eats strategy for breakfast, lunch and dinner, as they say.
My two macro level takeaways after talking with Eric Gallagher today and Dr. Amy Scanlon earlier are that even though the local market and the nuances of any given particular practice have such a huge impact on what's going to work at an operational and tactical level, if we stay up in the strategic zone, there's some best practices and points to ponder which are likely possible to universalize.
Now emphasis on the stay up in the strategic zone. I was just talking to another person today with yet one more story amounting to it didn't work because it never was going to work. Wherein in this case apparently a very large pair is running around attempting to do a pilot in an attempt to learn exactly and specifically how to operationalize something.
And then their plan is to roll out this one model nationwide. So something works in one local market at one practice and we're just going to assume if it worked there, it's going to work everywhere. And yeah, good luck with that. After you listen to this show, Listen to episode 403 with Dr. Amy Scanlon.
As I have mentioned multiple times, episode 343 and 316 with Dr. David Carmouche would be good to check out. Also episode 393 with David Muhlstein and 394 with Dr. Vikas Sani and Judith Garber. All of these links are in the show notes. My name is Stacey Richter. This podcast is sponsored by Aventrea Health Group.
Eric Gallagher, welcome to Relentless Health Value.
[00:07:30] Eric Gallagher: Hi Stacey, glad to be a part of the conversation today and always a pleasure talking with you.
[00:07:35] Stacey Richter: Just totally diving right in the deep end here if you're a clinically integrated network, an aco, or I'm going to say pretty much any kind of healthcare delivery organization trying to do innovative things. Scale is really important for many reasons in almost any financial model, but especially if you're taking on risk.
We will talk about the reasons why scale is vital in an upcoming show, but today if we're thinking about how do we attain this scale, obviously we need physicians to come together and to to work together, which is a constant source of all Kinds of consternation and a huge can of worms on any day. But one of the things that you have talked about in the past, Eric, are these education gaps that are really important for anyone who is trying to bring physician groups together to understand, to gain, buy in for the integrated network.
Otherwise it's just not going to work. Because as we all know, when you integrate, practice patterns really have to change and you got to get everybody on board for that ride. What would be a really important concept that everybody needs to be on the same page about? Otherwise it's just not going to work. IRL in the real world, there are.
Three things that we need to be talking more about. And one, I think first we can talk about that education gap, but I think as important are two other things. The second is a paradigm shift that we need and then third is really a cultural change that if we don't drive, nothing else matters. So starting with education, we need to demystify really this concept of risk or a value based care.
Eric Gallagher: We almost, and I'm as guilty as the next person. We really haven't done ourselves any favors by portraying value based care or risk as this different thing that requires a siloed solution set. And so while we've been talking about why value based care establishes this kind of economic why that you've talked about to change practice patterns, and we've been saying that for a while, I know you've had Dr. Eric Bricker on talking about this and my friend and predecessor, Dr. David Carmouche talking about kind of the concept of the foot and two canoes and a willingness to just get into the value based canoe. But frankly, I think it's taken a while to figure out how to effectively message that and then connect the dots between really credible experts saying there's a better way, really innovative companies creating tools and platforms to help support that better way, and then actually teaching the economics and fundamentals that bridge between that better way and an economic engine.
So hey, there's this thing that you're doing right now that's making you lots of money and it's saving people's lives. That's what current healthcare is seen as. And we're saying, I promise you that if you do it different, you'll make more money and it will be better for patients. Or on the other side of it, we might be saying if you keep doing it this way, you're eventually going to make less money.
So, okay, maybe we've got a captive audience there. And I think physicians and practice administrators might say, okay, well, what do I needed to do? And then when we tell them what they need to do it, it's like that sounds like that will make my job harder and that's going to cost me more money. So I'll wait and see if your predictions come true.
So I think what we don't probably give physicians or practice administrators, CFOs, COOs enough credit is the importance between having that really strong tie between the financial components of success to be able to operate in this new model. So we need to educate around the economics, like what is risk adjustment and how does that drive premium revenue paid for health plans?
Why to your point earlier, does the size of the patient pool that you're managing, why is that important? How does that help us better withstand variations in costs? How does actuarial risk work? How do we calculate PMPM metrics? Because I think we've sort of said we don't want to bother physicians with that will work on that in the value based care division in the ACO.
But I would suggest that once we start to dig a little deeper, we haven't really connected the dots between what we're asking people to do and to buy into on a daily basis. And I think if we do that, we don't just come to the table with the solution and the new model. And here's why this better. We I think the people on the ACO side, the CIN side, the value based care side, who are trying to deliver drive value based care and population health going to learn so much more and be so much more successful because the rest of the care delivery system partners with us on that journey.
[00:12:27] Stacey Richter: You're raising a really important point here. And if I was going to just state one of the biggest failings I think of people trying to do value based care, it's not doing it the way that you're suggesting, which is to work together with physicians, with those who are actually delivering care, to create a model that works for everybody and that everybody understands is the right path forward.
Right. Like you just have so many examples where you've got doctors who are like I am now a widget in a cog, in a big machine and feeling really underappreciated. And I'm not saying without merit here because things are being done to them, not with them, that they don't understand that they haven't bought into or they're being asked to do stuff that just kind of like doesn't work in practice.
Like in a seven minute visit, do all of these things and click over Here and our EHR system sort of doesn't work for that, but I guess just do it anyway. There's a reason why burnout is at the levels that it is. And some of it has to do with exactly I think what you're suggesting not to do, which is just plow forward without giving those who have the patient relationships, those intimate relationships and that are responsible for patient care in the room.
[00:13:39] Eric Gallagher: Yeah, really well said. And I think that's the cultural shift. I mean, I agree for physicians we really have to overcome this threat to physician autonomy and really work to restore, I think the joy of practicing medicine and delivering health care. And really for the entire care team, I think frame value based care as empowering to the care team.
So back to your point on the physicians. You know, there are so many things that we have done that have overburdened docs administrative for several years, the concept of a clinically integrated network or the concept of value based care has been lumped into that category. So that sort of jadedness is really warranted and we have to overcome that.
[00:14:27] Stacey Richter: You kick this off with a list of three things that are really important to ensure happen relative to successfully transitioning into a value based, a successful value based model. And you said education of working with physicians, making sure that everybody's on the same page and has an understanding of like the why here.
That's super important. And then you also said a paradigm shift. And then lastly this cultural change, you said that without cultural change, you're going to wind up with this jadedness. And I'll ask you to dig a little bit more into the culture change that's needed. And then also this paradigm shift that you speak of here, the one thing I'll just interject is like so many things in health care, value based care has become this catch all term and euphemism and just a word that people use that can mean any one of like 40,000 things.
Some of them are amazing and some of them truly suck. And I think one of the things that has really happened here is there's some people who have experienced the truly suck version and now anything that has the value based care label, they assume it's the same. So I almost feel like it's the same thing like with the word hospital.
Right. Which I've ranted about on this show any number of times. Like having one word that encompasses every single hospital in this country is such a misnomer because they are so very different. I think that sort of underpins what you're talking about here and I would love if we could come up with multiple words to describe the very different things that, that comprise a value based care model.
[00:16:14] Eric Gallagher: I couldn't agree more. And I do get concerned that we're, we're doing it even more to ourselves. The really important concept of health equity is in a lot of cases, I think ACOs and CINs feel like that is just lumped in with value based care and sort of their responsibility. And if you think about the effort, the changes needed to really improve something like health equity, it goes far, far beyond the tools and the investments required, which aren't small, to be successful in a value based care agreement.
I mean, health inequity is really just societal inequity. And so you start getting into fundamental environmental education, economic realities and things that need to be changed to improve health equity as a byproduct of that. And I think value based care now sort of having to bear the sole burden of solving for that really, really big challenge is it's dangerous.
And so I think it's just, we play an important part to that. But I think it's so much bigger than the ACO or the cin. I worry for the momentum in value based care organizations that it's just another thing that's being put on the backs of the value based care concept.
[00:17:43] Stacey Richter: I've heard more than once, why are you showing me or making me responsible for something that I have no way of changing like I can do nothing? Is a statement I've heard more than once from obviously physicians who feel very disempowered. Right. They do not have the team to support them to actually affect this larger context.
But somehow or another somebody signed up for an accountable care or a value based contract again in this big, big catch all kind of way. And now suddenly doctors are getting asked to solve for the fact that the town has no sidewalks so nobody can exercise or something.
[00:18:20] Eric Gallagher: And by the way, I'm really fortunate to work for an organization that both recognizes the importance of health equity, but also recognizes how big of a feat it is. And so ochsner announced in 2020 an effort to take Louisiana, which has always been 49th or 50th in the rankings in terms of any, by any health measure, to be ranked 40th by the year 2030, and has made significant investments in that effort.
But it's also brought together stakeholders both within the health system, outside government, health plans, universities, higher education, other health systems, competing health systems, environmental groups, private organizations, and you know, recognizes that it's a Much bigger feat. So it's being, I think it is in some places and we're just lucky to have the sort of leadership that has had the foresight for that.
But in other places it's being thrown onto the backs of ACOs. And so you know that that challenge is, is real.
[00:19:24] Stacey Richter: It's fascinating to me sometimes this principal agent problem, which is just sort of a weird other party who winds up getting to be responsible for things that you wouldn't necessarily think that they should be responsible for or would be responsible for. Like for example, how did hospital systems in an area somehow or another get to be responsible for putting a sidew or housing or regulating industry to control the particulates in the air so all the kids playing soccer don't wind up with asthma?
On a number of levels, it's an understandable progression, but nonetheless odd what's happening here.
[00:20:00] Eric Gallagher: It's tough. There are things health systems can do that are probably outside of their traditional field of responsibility. Our health system has started a couple of schools, K through 12 schools, because we know how important education is and literacy and high school graduation rates as a determinant of long term health.
But that's a major challenge to try to solve for. And we're not going to open up enough schools to change education from health systems statewide, region, wide, nationally. But I think even some of the smaller concepts around really accountable care. So if the care team has the mindset that their responsibility is the health and well being of their patient, that can be empowering.
I can't tell you how many frontline staff or people working in call centers feel so much more empowered when they are able to send someone to a patient's home or connect them with a social worker to help them through an insurance issue, or get them transportation, or help them understand the medications that they were prescribed upon being discharged of the hospital.
I think the care team wants to be empowered to do that. I think right now they, in an FFS model, they aren't paid to be able to do that. And that's frustrating. And so in a value based care model and an accountable care model, those things can be done and you can have that merging of empowering the care team, doing what's best for the patient. And it's also in the interest of the economic model for the organization.
[00:21:54] Stacey Richter: And so this is the paradigm shift that you're talking about that the organization has to change. And I've heard this and we've had guests including Dr. David Carmouche on the show talk about the importance of Transforming into a team based model where not everything is just chucked on the backs of the doctors in clinic.
If somebody does need additional help or education, that there's a care team that surrounds them, that can take charge of some of the staff, social workers, et cetera. But even in your case, there's probably even a larger concentric circle here of other things that you're doing. For example, starting a school or having this community board, which is actually something that Vikas Sani mentioned in a show about how to fix the whole charitable contribution situation that we have in this country within hospital chains.
He suggested actually this as a best practice, that there's a community board that is also involved in helping to figure out how to best distribute charitable money. Right. So we've got improving patient health in the center of that bullseye. Then we've got the physicians and the care teams that surround that patient.
And even wrapped around them are the things that, for example, your organization has started to do or that organizations can do at the organizational level that are outside the four walls of the hospital and get into the community and then the contracts that you can gain from that, which ultimately all are synergistic in the pursuit of patient help. It sounds like.
[00:23:23] Eric Gallagher: Yeah, absolutely. And I think in the DNA of our organization, resiliency runs strong in every healthcare organization. In dealing with the pandemic over the past couple of years, certainly in our region, and having had to deal with severe weather and hurricanes and displacement in both recent and past years as well, we have had to find a different way of supporting our patients and our communities, empowering and enabling everyone on the care team to do what is right for the patient.
I think we're in an inflection point, maybe in the industry, but I think you could maybe even say in another crisis in terms of labor shortage and costs, if you're on the health system side, that requires the same collaboration, the same team based model that has gotten us through these other challenges in the past.
[00:24:24] Stacey Richter: Someone said on LinkedIn the other day, we shouldn't necessarily call the. That hospitals deliver healthcare, we should call it hospital care. Because in an FFS model, that's what they tend to be focused on. And I think a paradigm shift, which is the second thing that you had mentioned in our list, potentially what you're talking about is the after of a paradigm shift.
[00:24:44] Eric Gallagher: Yeah, I think that paradigm shift is truly in healthcare understanding what the consumer wants and what's important to that consumer, as opposed to the tail sort of wagging the dog right now. I think like Any industry, what's best for the consumer and what do they want? So they want a great product, they want value and they want a good experience which can be defined in a lot of different ways.
Access, convenience, customer service, et cetera. And so I think when will the consumer voice in healthcare be loud enough, be maybe sophisticated enough and maybe most importantly, maybe in unison enough to begin to influence demand in a way that changes supply of healthcare? So this is why I think Walmart and Amazon think that they can be successful in healthcare.
Because they've built their model around an obsession about their consumer and that's a differentiator to their success. And they don't see that in healthcare. So I think they are trying to bring that consumer focus and obsession that's driven success for them in their traditional operating model into healthcare.
Now I don't think they've solved that quite yet. And I think health systems and physician practices have an edge because building an effective operating model is easier really than building the patient trust that many physician groups and health systems have built within their communities over decades and decades.
[00:26:15] Stacey Richter: So if you were going to give advice to clinicians, practice leaders, physicians who are out there contemplating how they can push their organizations forward, because we do have a lot of listeners who may be starting on their journey, they're in an upside only arrangement, trying to figure out how to integrate in a more holistic way. What is your advice for them?
[00:26:42] Eric Gallagher: I think it goes back to bringing the right stakeholders to the table early on and not trying to build a solution that solves for the issue without bringing the care team, the operators to the table early on. So if we could do it all over again, this concept of going after low hanging fruit, building solutions and capabilities to do the things that we didn't want to ask the practices or the hospitals to do, we probably wouldn't build it that way.
The concept of incubation and innovation is important, but you have to bring your stakeholders along from day one. You have to bring them to the table from day one.
[00:27:33] Stacey Richter: Yeah. It is very alluring to decide that in our omnipotent wisdom other people need X and then go out and buy build the X without having all the people who are going to need to embrace or to use or be a part of X at the table. So apropos, because I was at an event recently and I said something to this effect and someone who was super smart kind of looked down their nose at me and said that doctors a lot of times don't understand what is possible to build.
So the Solutions they may envision don't take advantage of the latest and greatest whatever, which would make the thing so much better. Better. And I think your point is not anti innovation as you just said. It's just that you gotta get the right people on the team and at the table and in the conversation so that nobody leaps unknowingly so far ahead of the current clinical workflow or the technical know how and creates something so foreign that when they peer over their shoulder, no one is following or using the thing.
I mean, sometimes creating something that is less than what is technologically possible is actually optimal. I think sometimes also people underestimate the number of variables. But that's a whole separate conversation. But what's the impetus for these stakeholders to even want to get brought along for this transformational ride?
I mean, do you have any tips or what have you maybe said, like what's a winning message to get everyone even interested in aligning behind something like we've been talking about?
[00:29:10] Eric Gallagher: It might be easier now because you're not trying to compete against another model that is still proving to be really profitable. So I think the challenge we had accountable care organizations had for the last decade is that you were on a campaign that was counter to what your care delivery stakeholders understood, drove success for the organization and drove the economic engine a lot of that.
And we used to talk about this tipping point as being when the percent of your revenues from value based care got to a certain level to sort of offset fee for service. But I think we're now, at least in our part of the country, but in most, we're now at a point where every patient is a value based care patient, whether they're in a contract that is structured as such or not.
Because the economic incentives that were there in fee for service have been pretty much evaporated with such a significant cost increase over the past couple of years. So again, I really think it goes back to that education around what are those economics, why is this model different? It's better for patients, it's better for providers, it's better for the organization.
You really have to make that case with an economic and a financial conversation.
[00:30:37] Stacey Richter: So if someone is interested in learning more about Ochsner Health Network, where would you direct them?
[00:30:43] Eric Gallagher: You can absolutely Google Ochsner Health Network. We have an impact report that we publish each year that highlights and celebrates our successes and really tries to publicize the value proposition that being a part of an accountable care organization via being a part of a clinically integrated network can bring to not only physicians and patients but employer groups, health plans, and any other purchaser of health care.
[00:31:12] Stacey Richter: Eric Gallagher, thank you so much for being on Relentless Health Value today.
[00:31:16] Eric Gallagher: It was my pleasure. Thanks so much Stacey for the conversation.
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