Slow Uptake of Value-Based Payment Kills Proven Integrative Model: CHI Health Care to Close

Seven years ago, David Fogel, MD set the goal of proving what he hoped could be a primary care cornerstone of a transformed system of health care. With a generous philanthropic grant, he and his spouse Ilana Bar-Levav, MD created a team-based integrative health patient-centered medical home (PCMH).  To give it power as a national model, the integrative PCMH was fully webbed into the emergent accountable care and value-based system. Early cost and health outcomes at their CHI Health Care significantly outperformed conventional practice metrics. They drew a visit from a US Surgeon General who was in search of innovative, value-based models. Yet now comes news that on July 23, 2019, the Center will shut its doors. An apparent guiding light for health system transformation will be snuffed. What gives?

A December 2018 update on the Center’s thoroughly-documented model reported mounting concerns at the center.  Two goals had been met. It was recognized as a PCMH by the dominant Maryland insurer, Blue Cross Blue Shield’s CareFirst plan, and was a member of the Aledade accountable care organization. But because CHI was small, it had negligible bargaining power with commercial insurers in a fee for service world. The insurers were busy frying larger fish with more market share. To qualify for the programs, the center had to combine its data reporting with a regular primary care clinic that didn’t follow integrative values and practice. The resultant mixing of  CHI’s data gutted its ability to quickly and consistently measure its outcomes against usual care. The data that drew Obama Surgeon General Vivek Murthy to a site visit was muddied beyond use.

An over arching challenge for the Fogel’s success turned out to be the resistance to change in the volume-based industry. Fogel bet on the rapid growth of value-based medicine. One might reasonably have assumed that an industry that produces 30%-50% more services than necessary and 250,000 medical deaths a year in the process might err on the side of exploring promising methods. Such a rapid movement to value-based medicine would have rewarded CHI Health Care and the outcomes from it’s modeling of a high-performing, prevention-oriented team of medical doctors, naturopathic doctors, nurses, acupuncturists, chiropractors, yoga therapists, psychologists and others. The data below were characterized by CHI Health Care “purest data,” from 2016:

  • Hospital Stays Per 1000: Outperforming CMS targets, 5th best PCMH in CHI’s ACO with 19% fewer admissions than PCMH peer practices.
  • 30-Day Readmission Rates: Outperforming CMS targets, 1stin ACO and 19% fewer than PCMH peer practices.
  • Pharmaceutical Costs: CHI patients’ pharmacy costs per member per month (PMPM) are 29% less as compared to PCMH peer practices (CHI $51.13 PMPM and PCMH peers $72.11 PMPM).
  • Emergency Room Visits: CHI patients visit the ER 14% fewer times compared with PCMH peers (CHI 188 and PCMH Peers 217.5).

They got that bet wrong. The movement to values-based medicine has been excruciatingly slow as this examination of action under the so-called “Triple Aim” shows.

Fogel and CHI Health Care found themselves in a very tight squeeze. On one side, they were not getting paid for the value they created. On the other hand, they had no bargaining power in their bottom of the ladder fee for service payment scale from commercial insurers. The squeeze was all the tighter given the necessarily higher care costs of treatment in CHI’s prevention-focused delivery model that produces the documented downstream savings noted above.

For the past 8 months, Fogel pursued the one survival path that he believed was open to the not-for-profit. Could they roll CHI Health Care into a larger organization? In a recent interview, Fogel shared that he had explored multiple avenues locally and internationally to decrease expenses, increase revenue, while staying true to their mission. His team eventually got excited with a potential partnership with Johns Hopkins Health System. The Baltimore-based player had a dovetailing interest in expanding their  Montgomery County presence where CHI Health Care was located. Fogel reports that despite strong philosophical alignment in the two organizations at the leadership level, they could not come to an agreement within the time frame that fit CHI’s “financial runway” and its lease arrangement. CHI’s board of directors chose to pull the plug as what they deemed the most responsible course of action.

Ironically, what made Hopkins or another hospital attractive to CHI  Health Care is exactly what is wrong with the incentive structure in the present medical industry. Transformed health care drives care away from high cost hospitals and tertiary care centers back out into the community toward lower cost and lower overhead primary care that naturally are more closely attuned to the determinants of health.  Yet the industry’s fee for service payment favors hospitals through multiple fees that made joining with a tertiary care dominant delivery organization attractive. There are facility fees. And the larger organization is positioned to bargain for higher FFS payments. In fact, for that part of their book in value-based payment, a large system is again positioned to negotiate for higher disbursements. As part of Hopkins or another system, CHI Health Care – while providing the same care for its people – could start milking the system for new fees and reimbursement levels.

CHI Health Care’s mainly retro gambit to save this integrative health PCMH through reaching back into the FFS world and participate in these still dominant practices has failed. The industry that that is most obviously a “system” in its continuing systematic resistance to become a “value-based” agent for delivering health care killed CHI.

I am an interested party in this story. We have evidence that academic leaders in integrative health see value-based medicine as an opportunity for alignment of economics and principles of care. It’s missing in the perversely incentivized production model. When I learned that Fogel and his wife Ilana Bar-Levav, MD were presented with their opportunity, I was among those who urged them in this direction that they eventually took. I consulted for a brief period, early on. What they did with this philanthropic gift since has been a remarkable, data-generating model. This undoing is all the more saddening. There is nothing else quite like what they created. Primary care needs to learn from it. Policy makers too. Patients deserve more access to it.

Fogel, while caught up in the long closing process, is also exploring what he might do with CHI Health Care’s remarkable story. There is some cash left in the philanthropic grant to support his efforts to educate and potentially lobby. Might the model, the positive outcomes, and the ways that the system failed structurally to admit the the integrative contributions somehow light up an evidence trail to lead policy makers toward new ways for integrative primary health care’s naturally value-based models to flourish?