Hello, everyone. This is Jacob Emerson with the
Becker's Payer Issues podcast. Thrilled today to be
joined by doctor Ravi Kavasari, who's the chief
medical officer at Blue Shield of California.
Doctor Kavasari, thank you so much for taking
the time to be with me on the
podcast today.
Good morning, Jacob. Thanks for having me. Yeah.
Absolutely. And and before we dive into everything
we wanna talk with you about, can you
tell us a little bit more about yourself,
your background in health care, and what it
is that you're doing today at Blue Shield?
You bet.
My background,
I am a,
internist by training, and I practiced primary care
for a number of years before coming to
work,
for Blue Shield of California.
I still practice,
on Friday afternoons. I see patients,
here in,
California.
I have worked in value based care models
for a number of years, and,
you know, my role now today as chief
medical officer for Blue Shield of California,
folks often ask me, you know, how do
you still find time to practice? And and
I tell them it's precisely because I practice
that I work at a health plan. I
think it helps me
to understand we've got 6,000,000 members,
here that we serve at Blue Shield of
California. We're a non for profit
mission driven health plan, that's in every ZIP
code in the state of California, and we've
got members across the nation too.
And, you know, we're really committed
to our mission of driving
higher quality care and affordability
within The US health care system.
And so when I think about my role
as chief medical officer of a health plan,
it's really,
how do we, with the levers that a
health plan has,
really drive across that integrated aim of health
care for better member experience, better health outcomes,
and,
affordability of care?
And that's how I show up to work
every day, and and that's the work that
we're doing together.
Fantastic. So you're a practicing physician, but you're
also helping lead clinical decisions at one of
the largest health plans in the country. And
as part of that, Ravi, we're here today
to talk with you a little bit about
the company committing to shifting 90% of eligible
health care spending
through pay for value models. So for our
listeners who might not be familiar, can you
give us a quick overview of exactly what
these models entail?
You bet, Jacob.
You know, in a nutshell, I mean, I
think your audience is well attuned to the
fact, no secret, that The US health care
system,
part of its brokenness is just fundamentally around
misalignment
of incentives.
We don't pay providers
at scale
for the outcomes that matter to our patients.
And so I'm sure you can think about
that from a personal experience that you've had.
Many of our listeners can as well.
And so our work formatively, right, when we
think about how to solve this problem,
and in the ecosystem
of care delivery,
we are the payer. And so the lever
that we have that's most foundational is changing
how we pay for care, and very much
that means aligning incentives around care.
I'll share this. You know, Blue Shield of
California has a bold mission around shifting 90%
of health care spending through these pay for
value models, but I wanna also be clear,
you know, we're not new to this.
This has made sense for us for many
years and, you know, just kind of going
back in,
time here,
in California.
Blue Shield of California is one of the
original authors of the,
accountable care organizations
back in the late nineties, the early two
thousands,
launching those here in California.
And,
in California, we've had delegated and capitated models
for many years. And Blue Shield of California,
again, has really been committed to,
driving not just cost,
affordability structures, but driving value
and improve quality and health outcomes through those
structures. So, you know, that that rich history,
I think, is just really important for
this group to understand because it's based off
of that foundation when we think about this,
which is, you know, we look at that
and we say, well, where do we need
to get to? Because that has not gotten
us as a health care system where we
need to be. It has not meaningfully moved
the cost trends and the cost of health
care and the affordability of health care. It
has not, moved to the degree needed, the,
health outcomes, for,
for the state of California. And so,
we've gone back and looked at these models
and said, look, you know, what what needs
to really improve here in this? And we've
come to a few key conclusions that really
guide us around this work.
The first one is,
you know, some of these earlier accountable care
models really were predicated more around cost and
not quality. And so, you know, a big
part of our guiding principles is just that
quality has gotta be baked into everything. It's
core to these models when we pay for
value. We're paying for outcomes. We're paying for
quality.
The second is
that some of the earlier models were,
not as deeply integrated on two sided risk.
So there were incentives
to incentivize the right behaviors,
but,
there was not enough skin in the game
and alignment
around understanding that, yes, it's gotta make sense
to drive health outcomes,
at cost. But if we don't make our
members and our patients healthier and improve their
quality of care and do that affordably, there
have to be consequences around that too. We've
got to make sure, again, it's all about
align aligning these incentives.
And then the third one is really around
the idea that,
again, here in California, much of the work
that had been done to date was around
delegated
capitated models around capitation.
But if we look for example for us
here at Blue Shield of California and it's
the experience for most of the nation too,
most of our patients and members are getting
their care in PPO models. Right? And so
here at Blue Shield of California, for example,
when we serve 6,000,000 members, 800,000 of those
members are served in an HMO arrangement.
But the vast majority are in a PPO
arrangement. And so, again, as we drive value
based care, it's really about aligning the incentives
and the PPO model structure as well. And
so those became just some of the foundational
pieces of the models that we have today.
So we have today models that stretch across
the entire continuum of care from primary care
settings to specialty care settings
to, acute and hospital care settings.
We've got over 60,000
providers. We've got the largest network,
here in California.
And, again, we're the only statewide health plan
here in California. And so,
as part of that work too, we have
realized, like, you know,
single models are, not gonna be good because
they're not gonna work for everyone, but too
many models are gonna be difficult because then
we're not gonna be able to scale and
implement those.
But we do need the right types of
models across that continuum. And so,
we've got ACO models today that are we
call them ACO two point o models that
are much more predicated around driving quality
and affordability
and two sided risk. They exist within the
HMO and the PPO spaces today. And in
addition to that, we've got specialty care models
to incentivize care,
around specialty care and then models for our
hospitals linking their reimbursement back to quality outcomes.
Certainly. And it seems like needless to say,
Roby, that that this is tough work, transitioning
your members and your provider network into more
value based reimbursement and care models.
So from from your perspective, both as a
practicing physician, but also as CMO,
can you explain for us some of these
key challenges you've encountered in this transition from
fee for service to to VBC? And how
are you addressing these hurdles, to really ensure
that this shift benefits both your members and,
like you mentioned, that very large provider network?
Yeah. That's a good question, Jacob. You know,
as I shared at the top of the
podcast,
you know, the lens that I bring to
this work is as a practicing physician, and
I straddle both worlds across,
what care looks and feels like when providers
are trying to do the right thing for
patients
and,
where payer systems
facilitate and make it easier to do the
right thing and where they make it difficult
to do the right thing. And,
I'd say the following, which is, you know,
one of the key challenges for us as
we do this work is,
if we're gonna be successful around this, we're
gonna have to do this work and scale
it with the providers and in partnership with
our providers,
not at the expense of or done to
the providers. Right? So that's just a key
design principle for us as we've done this
work,
and it's something that I'm very proud of
of our teams and our organization around the
work we've done. We work very closely
with the specialty organizations and providers in designing
our models.
And the reason this matters is this is
really differentiating for us in the quality of
the value based models that we develop.
I'll give you a couple small examples around
this.
You know, when you work with one physician,
you work with one physician when you're developing
something. When you start working with the specialty
associations, you know, the,
the orthopedics associations or you start working with
the California Medical Association or you start working
with the American College of Cardiology,
you're working with the groups that really represent
the specialists across,
that entire organization.
We work with them. We come to them
with the models we're developing and the problems
we're trying to solve. We get their input,
and we incorporate their input, because,
we believe
fundamentally
that all doctors want to deliver value for
their patients.
And,
often the practice settings and the payment structures
that they're in,
can complicate their abilities to do that to
the best of their ability. And so I
would just say that's a really important one
for us,
and, a key challenge
that,
we need to make sure we get really
right as we effectively transition to value based
care. The other one that I would point
out, the second one is,
you know, as we ask our providers to
be held accountable for the patients that they
treat over longer term health outcomes,
it requires a mindset shift in the way
of thinking. You know, it makes a lot
of sense to providers.
But what that also requires too is that,
you know, our providers need the data,
to actually effectively transition and take care of
their members around these outcomes. And that's been
really one of the big wins that I
think around this work is just,
hearing our providers tell us, you know, I'll
just give you some small examples here. When
you've got 60,000 providers, you're ranging from really
large academic tertiary care systems that have a
ton of infrastructure
to, you know,
single solo practices that exist. Right? Independent practices
that exist where, some of them have never
really received the data back on how their
members are doing or how many of their
members are, uncontrolled around health outcomes.
And so being able to pipe that data
back in,
so that the physicians can then take that
data meaningfully and,
take care of, not just the individual patients
that they're seeing during the day, but the
population that they're responsible for.
Again, the data is a challenge, but also
a key opportunity for us. And,
those are two of the key things that
I'd say that we've encountered as we,
do this important work and and how we're
addressing those hurdles.
Absolutely. And let me,
follow-up with you there on something you just
said about the the wide range of diversity
of providers in California and also talk about
some of these specific models.
There's the new hospital value model, which, as
I understand, ties reimbursement to hospital quality outcomes.
So in a state like California, how do
you
resources or health system maturity or independent
facilities.
How do you measure all of this, Ravi?
Yeah. It's a it's a good question, Jacob.
And and what you're pointing to, and I
think this is really important, right, is just,
California is a great
example of, you know, we've got some
very large urban centers, but we've also got,
some very rural areas that have,
real access challenges around care.
And that includes sometimes,
you know, a single hospital system that exists
in that area
that may not have the same level of
resources
or access that other, regions have too. And
so I'd say this in a nutshell. You
know, the the model that we create on
the hospital value model is really, as you
shared, around tying reimbursement to hospital quality outcomes.
Our model rewards hospitals for either improving their
quality score
or maintaining high quality outcomes. And so what
this allows is those that have less resources,
the opportunity to earn incentives based on making
meaningful improvements. And, again, I think just
highlights the types of things that we're doing
today
to really design
in partnership with providers and scale with providers,
that sit in different types of setting with
different kinds of challenges,
as we try to, you know, align the
incentives
across the continuum of care.
Let me ask you about another model, Ravi,
the the primary care reimagined model, which focuses
specifically on preventive care. How are you measuring
the the success of this initiative, and what's
the impact that you've seen so far in
terms of long term health outcomes, short term
health outcomes, and then also, of course, the
cost reductions for both your members and and
the wider ecosystem?
Yeah. The the primary care model for us,
you know, foundationally, primary care needs to be
a a cornerstone of the care delivery system
and the health care system in this country
as a first point of contact.
And the way that we pay our providers
today, it's not set up that way. I
know this from firsthand experience,
working as a primary care physician.
You know, when we develop these models today
for what we can scale,
what we've developed is a hybrid payment model.
And, again, this hybrid payment model has gotten
a lot of attention. I'll just note, you
know, CMS has expressed a lot of interest
in this model too as the model for
us to scale.
And what's really good about this is, you
know, when we say hybrid, it's basically
there is a capitation that exists, and the
capitation is,
it goes to the primary care
providers and the groups so that they have
a reliable,
steady source of revenue
that they can depend on
to make the infrastructure,
the infrastructure investments that they need to make
in order to take care of, you know,
patients and, really take responsibility and accountability for
their health outcomes. Right? Because the idea is
we really want them,
to, practice at the scope of the top
of their scope of their license.
But what it does do is the hybrid
part also is it has a fee for
service component
that incentivizes,
you know, what we would think about today
is probably
the parts of fee for service that are
less broken and less perverse. Right? Which is
where do you wanna actually
encourage utilization? You wanna encourage utilization around immunizations.
You wanna encourage utilization around folks coming in
for preventive screenings,
and, chronic condition monitoring. And so that kind
of
care is incentivized.
And what we're seeing today is, you know,
we've had these models in place. And, again,
you know, it's grabbing national attention.
Members who have high blood pressure, twenty seven
percent more likely to have their blood pressure
controlled than those that are not seeing a
provider in this model today. That's what we're
seeing from our own internal data. Providers that
treat members with diabetes,
thirteen more percent effective at getting their sugar
levels under control.
You know, on the cost piece that you
asked,
keeping chronic condition control, is gonna have longer
term health impacts for the for our patients,
just overall health and cost of health care.
We know that.
We are still evaluating the definitive data on
cost for this.
We're optimistic from what we're seeing around the
work, but it's still a little bit too
early for us to say,
conclusively what that is.
Sure. Makes complete sense, but really fascinating to
hear that CMS has its eyes on this
model. I'm I'm sure it'll be of a
lot of interest to our listeners as well
as this continues to develop, Ravi. And and
in that vein, before we go,
we have a lot of other health plan
leaders listening in right now. So is there
any final thoughts or final bits of advice
you wanna offer them as they continue to
navigate similar challenges?
You know, I think the number one thing
I'd share here for your listeners, right, is
there is, you know, no culture of optionality
around this work. Right? We we are fully
committed to doing this work and to doing
it at scale and scaling it rapidly throughout
the system. We know this needs to be
done,
and we know that, we have a responsibility
in the system to drive this work. And
so,
I'm very proud of the work that Blue
Shield of California does in this space. I'm
very proud of the partnerships that we have
with our providers and the associations and the
groups that we work with around this.
And I'll just share here, you know, no
meaningful change occurs in The US health care
system without multi stakeholder partnership
and, advancing payment innovation and aligning incentives for
payment
for providers to serve our patients the way
that they came into the profession to do
so really requires that multi stakeholder partnership.
Fantastic. Well, I think that's a great place
to leave things. So, Doctor. Cavasseri, thank you
so much for taking the time to sit
down with us and for sharing your insights
with our listeners. We really appreciate it. Jacob,
thank you for the opportunity.
Yeah. Absolutely. And to our listeners, if you'd
like to listen to more podcasts from Becker's
Healthcare, you can visit beckershospitalreview.com.