Kyle L. Monroe
Vice President, Network Development & Provider Relations
Kyle Monroe joined The Alliance in 2017 as vice president of network development and provider relations. His responsibilities include creating and maintaining relationships with health systems, clinicians and other providers to support The Alliance’s strategic goals of improving health care value and organizational growth. He also designs and adopts purchasing and reimbursement mechanisms to accelerate progress toward high value, safe care delivery.
Before moving to Madison, Kyle served on the Board of Directors for the Healthcare Financial Management Association-Kentucky Chapter. He also was on the advisory board for ValidCare, a company dedicated to developing and implementing mobile technology for patients and caregivers.
Kyle received his Masters of Business Administration in accounting and finance from the University Of Louisville College Of Business and his Bachelor of Arts degree from DePauw University in Greencastle, Ind.
In order to better understand Payment Reform strategies and how they can positively influence health care purchasing, let’s begin by explaining how health care is typically delivered. On a basic level, the traditional health care model utilizes a fee-for-service payment methodology where physicians are paid based upon the quantity of patient treatments and referrals, which means there’s a fixed focus on volume – not value – of services provided.
The Fee-for-Service Problem
The problem with fee-for-service payments is they can possibly conflict with the physician’s sense of duty in providing treatment options that are in the best interest of the patient; what’s minimally necessary (and minimally invasive) may not always coincide with producing a profit.
Additionally, fee-for-service makes it nearly impossible to understand the price of a procedure – which can vary wildly between different providers – and the quality of services rendered. There is no correlation between cost and quality, so the adage “you get what you pay for,” isn’t applicable to buying health care.
How Are Alternative Payments Better?
Payment Reform strategies then, can be described as implementing an alternative payment model that aligns financial incentives with that of the patient’s. In other words, these non-traditional payment methods intend to “free” the provider to give the truest, most accurate care for the patient because it benefits both parties.
The “win-win” situation that a performance-based model of payment creates is why Payment Reform is a core driver of The Alliance in delivering High-Value Health Care to employers and their employees, and we’re executing Payment Reform on two fronts: inconsistencies in price and quality measurement.
The Alliance’s Payment Reform Strategies
Reference-Based Contracting by The Alliance
In regards to price, it’s important to set a benchmark for purchasers to compare costs between different providers. In our CEO’s words, “you can’t manage what you can’t measure.”
That’s why The Alliance uses Reference-Based Contracting – which standardizes prices based on a percentage of Medicare – in over 80% of our contracts. This price transparency enhancement not only allows the health care consumer to make smarter decisions, but it also produces a more competitive market in terms of price.
The Alliance contracts with multiple providers who have agreed to bundle common surgeries and tests into a single, manageable price. These services typically require various medical personnel and equipment to treat the patient, and consequently, are billed as separate line items which make it difficult to compare prices between providers. Bundled pricing packages all of those services into one comparable price – which helps defend against surprise billing.
Of course, Payment Reform is more than just about dollars. It’s just as important to measure the quality of the treatment as it is the price, which is the idea behind our QualityPath program – to help patients find high-quality doctors, hospitals, and clinics for select surgeries and tests.
Whether it’s an MRI or CT scan, or a total hip or knee replacement, QualityPath enables consumers to receive higher quality care at a better price with a guarantee; all patients receive a warranty on their care if it results in further treatment due to complications. This program raises the bar on quality, and forces providers to share the burden associated with the cost of these procedures.
Alternative Payments Based on Capitation
The Alliance strives for a future where all health care is bought and paid for through methods that are simple, transparent, and predictable – a fixed price based on the amount and/or risk of enrollees using a per person, per period-of-time fee schedule.
This payment method not only advocates for better price transparency, but because a patient pays their share regardless if they used the care or not, they’re more inclined to seek care when they believe they need it. In doing so, this model controls both cost and health outcomes, because as more patients seek primary-level care sooner, they rely less on expensive (and invasive) surgeries, specialists, and ER visits. Our new Direct Primary Care clinic will use a capitation-like payment method, where employers pay a monthly payment per patient, but only if that patient uses its services.
If you want to learn more about how utilizing Payment Reform strategies, like alternative payment methods, can work in your favor – contact your Account Executive.
In the past few weeks, we’ve been featuring blogs that break down in greater detail the four core drivers on our roadmap to high-value health care unveiled at our annual meeting this year. Today, we take an in-depth look into the third driver, provider network design, and how it fits into the larger picture of high-value health care.
The Alliance is recognized in the markets it serves as an employer coalition with deep expertise in self-funding and a focus on data analytics and cost and quality measurement. More importantly, The Alliance delivers a high-performing provider network that employers can use as a platform for benefit plan design and innovation. The Alliance contracts directly with providers on behalf of employers to ensure high-quality, convenient, and cost-effective access to care for employees and their families. Our provider network has evolved and will continue to evolve to meet the needs of employers.
Pushing Boundaries and Options
In an era where provider networks are getting smaller, our provider network is continually expanding to give employees and their families more options for care. In the past five years alone, we have grown to serve about 30 more counties than we did in 2014, reaching further North and East into Michigan, west into Minnesota and South into Illinois. We are continually monitoring where patients are seeking care and adjusting our network accordingly to help our members avoid expensive out-of-network care.
We have also partnered with Trilogy Health Networks to provide our members with services at hospitals and doctor offices that are not part of our primary network. Plus, we are growing strategically to add doctors and hospitals in new markets where our members have worksites and where we might serve additional prospective employers. Our growth helps our members’ expanding businesses but also allows us to increase our leverage in the markets we serve by serving more employers.
These initiatives go hand in hand with our efforts to change how we pay providers (core driver two, payment reform, featured in our last blog) and our focus on advanced primary care, often delivered through shared-site clinics. Employers have utilized these tools to reduce their overall health care spend while employees are better served by primary care clinicians that can spend more time with them.
In other words, we don’t believe that employers must give up on reducing costs to offer enrollees a broader choice of high-quality, high-value providers. Our solutions allow employers to drive down the total cost of care by aligning incentives and customizing networks regionally to maximize employers’ investments in health benefits. That’s how we work to control costs and add value even while we are expanding our network and our offerings.
What Can Employers Do?
If you are interested in advanced primary care, our provider network expansions, or our four core drivers of health care, please reach out to the Member Service Team. To learn more about how The Alliance works with employers to make health care more affordable, contact our Business Development team.
At The Alliance 2019 Annual meeting earlier this year, we talked about the four core drivers on our roadmap to high-value health care. This blog takes a more in-depth look into the second driver, payment reform, and why it is a central piece of the work and mission of The Alliance.
Many businesses have financial incentives built into their contracts that allow them to reward good business partners when they exceed expectations and pay less for services that aren’t meeting expectations. Aligning financial incentives to reward providers for high-quality care isn’t as straightforward.
Health care providers aren’t viewed as service providers, which is understandable. Health care is more than a business transaction. The culture of health care delivery has been opaque and unpredictable. And traditionally, 100% of the risk has been on purchasers. That means employers, as purchasers, have paid for waste and mistakes, even when the health care provider is at fault. This long-established history makes payment reform complicated but necessary.
The Alliance Contracting Philosophy
Achieving payment reform by creating the right incentives for care delivery is the platform upon which The Alliance was built. We’ve used our strength in numbers to pursue unique contract provisions that protected our members and their employees from unexpected charges. And we are building on that foundation to include a focus on cost and quality transparency (our first core driver) to continue the payment evolution.
Over five years ago, The Alliance launched QualityPath® as a high-value health care option for our members and offered bundled payments for a select set of services. We continue to grow these two programs, which reassure our members that they understand the prices of the care they are receiving and that it is comprehensive and coordinated.
Now, we are starting to implement contracts that use Medicare-based pricing. Medicare, the largest purchaser of health care in the US, has done the work to establish the base rates for various services and then adjust them by provider to factor in geography, patient mix, and quality metrics. Medicare-based pricing gives us the benchmark needed to pay a fair price for services, rather than focusing on a savings of total charges. Paying providers a certain percentage of Medicare not only gives us an appropriate benchmark by which we can measure relative value, it also enables employers to use plan design (another one of our four core drivers that will be featured in an upcoming blog) to incentivize employees to use lower-cost, higher-quality providers.
These efforts are moving us away from the fee-for-service model toward what is called “Total Cost of Care” contracting. In a Total Cost of Care (TCOC) model, 100% of the care provided to a patient, or a group of patients, is considered when analyzing reimbursements. That includes hospital plus non-hospital, initial versus follow-up care – quite literally all the care delivered. We are moving this direction because it will help us identify patterns of overuse and inefficiencies in the health care system that remain hidden in a fee-for-service model. It also moves the risk traditionally born by employers for inefficient care or medical errors to health systems. Its promise is to identify cost saving opportunities by system so we can reward provider partners that deliver the most cost-effective care to our employees and their families.
What Can Employers Do?
Employers that join together, like those that are members of The Alliance, can use their collective bargaining power to influence the change in health care that employers want. The Alliance’s solutions, like bundled payments, QualityPath©, and Medicare-based pricing, are customizable to each of our member-employers’ circumstances and their appetite for achieving cost savings. Members and their advisors are encouraged to contact their Member Service Team to learn more about our efforts toward cost transparency, predictability, and control.
In this second part of a two-part blog post, I’ll answer key questions about what’s ahead for The Alliance network and share my insights into how we are strategically seeking better ways to purchase high-value, safe health care for our members.
Read the first of a two-part Q&A with vice president of network development and provider relations Kyle Monroe about what's ahead for provider contracting at The Alliance.