On the Record with Cheryl DeMars, President and CEO, The Alliance

Wisconsin Health News Update – May 1, 2015

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On the Record with Cheryl DeMars, President and CEO, The Alliance

The Alliance is four months into the launch of its QualityPath initiative, which aims to improve healthcare delivery. CEO Cheryl DeMars said they’re already seeing that happen.

By their calculations, more than 800 physicians affiliated with hospitals in the program are using decision support systems to help ensure patients receive appropriate imaging tests.

“That’s an early indicator of the impact of this program on the system overall, which we’re excited about because that changes the way that care is delivered for everybody,” DeMars told Wisconsin Health News.

Already one patient has switched hospitals and physicians to use the program for a knee replacement. The Alliance has partnered with Milwaukee-based Business Health Care Group on the design of the initiative, which currently has 7,000 enrollees, and hopes to bring on more purchasers and payers soon.

DeMars discussed the future of QualityPath and the future of The Alliance as it approaches its 25th anniversary. Edited excerpts are below.

WHN: What is the QualityPath initiative?

CD: The basic idea behind QualityPath is to move business to high-performing physicians and hospitals. Our initial focus is on certain procedures in orthopedics and cardiology, so knee replacements, hip replacements and cardiac bypass surgery. Through this program, we’re setting high standards that physicians and hospitals have to meet in order to be included in the program and then we negotiate lower bundled prices with warranties against defects. We’re identifying good quality care with a negotiated lower cost. And that pricing is only made available to employers who agree to provide significant financial incentives for their employees to use the QualityPath-designated providers. The idea is let’s identify who’s doing a good job and move market share to those physicians and hospitals.

WHN: What is the future of the program?

CD: As of now, we have five hospitals and six physicians that have been designated under the QualityPath program. We are in the early stages of Version 2.0 of QualityPath, which will include not only expanding the number of procedures that are covered under the program but also opening this up to other providers who either didn’t meet the criteria the first time around or didn’t apply. And so we expect the program to grow both in the number of procedures and in the number of physicians in hospitals that are designated. The other area of expansion through QualityPath is we’re working on bringing in more purchasers and payers to work with us on this initiative. We think that quality measurement and the way that we assess the providers should be a public good and so we are reaching out to other plans, other employers, those on the “buy side” of healthcare, to work with us to evolve the QualityPath initiative.

WHN: What procedures are you looking to expand into? 

CD: For this next round, we’ve got a couple on a short list that include colorectal cancer screening, all high-tech imaging procedures and OB care. What we like about those care areas is that they’re much higher volume. Choosing something from that list will resonate with more employers. More people will be able to take advantage of the program.

WHN: Do you have a timeline for the rollout of QualityPath 2.0?

CD: The next procedures that we add will probably be ready Jan. 1 of 2016. But we are envisioning this to be an ongoing, evolving program. So we will be adding other procedures, other care areas along the way, not all with a 1/1 start date.

WHN: How does The Alliance and QualityPath promote transparency for its members and the public? 

CD: It’s a requirement for the QualityPath initiative. The hospitals and physicians that are designated under that program need to participate in public reporting initiatives. Sometimes there’s a choice about whether you make your results public. Wherever there’s a choice, they have to opt yes to make their results publicly available. We are also very involved in advocacy efforts, at a regional and national level, designed to encourage greater disclosure of cost and quality information to patients. And finally, it’s a requirement of our contracts. Physicians and hospitals that are part of our network have agreed through our contracts to allow us to disclose information on cost and quality to our members.

WHN: Since 2004, The Alliance has used performance-based reimbursement policies. What has The Alliance learned along the way and what are its goals?

CD: We use performance-based terms in our provider contracts really as a way to address misaligned financial incentives. And what I mean by that is that current methods to pay for healthcare often penalize providers for doing the right thing. So if they prevent infection or complications or re-admissions, they actually receive less revenue. And we need to change that. We implemented performance-based reimbursement as a way to begin rewarding results rather than just paying for the volume of services. I will say that one of the biggest things we’ve learned is that simply changing the way we pay delivery systems is not enough. Most delivery systems pay their employee physicians based on production. So physicians make more money by doing more things to people with good insurance. It’s critical that we change the way that doctors get paid so that we’re all on the same page.

WHN: The Alliance is approaching its 25th anniversary. What do you see as its future?

CD: I see us really making progress to deliver on the promise of employers working together to control costs, improve quality, engage individuals in their health. That’s our mission. And we’re growing. We’ll continue to grow, not only geographically to other parts of Wisconsin in this next year – that’s our plan – but also within our current service area, as we’re able to demonstrate our effectiveness through initiatives like QualityPath.