Farzad Mostashari, MD, recently sat down with Medical Economics to weigh in on topics ranging from how his former employer can truly make value-based care attainable for solo and small practices as well as the true fate of private medicine.
Independent medical practices may feel powerless in the face of overwhelming government regulations, constant pressures to sell out to larger groups or hospital systems and ever-rising overhead costs amid declining revenue. But physicians must recognize that their very autonomy puts them in a position to succeed.
“Right now, you can retreat or you can advance,” says Farzad Mostashari, MD. “I’d rather play offense.”
Mostashari, the former national coordinator for health IT at the U.S. Department of Health and Human Services and fellow at the Brookings Institution’s Engleberg Center for Healthcare Reform, is a staunch advocate for independent practices. Now he channels his healthcare policy and technology expertise into Aledade, a Bethesda, Maryland-based company founded in 2014 to offer independent primary care physicians access to accountable care organizations (ACO) and the accompanying benefits of partnering with others to improve patient healthcare.
Further reading: Mostashari's biggest Meaningful Use regret and health IT's future
His firm works with more than 110 physician practices in 11 states under the banner of helping independent physicians succeed individually, but also as a team in which no one is successful unless everyone is. Aledade champions ACOs led by physicians over hospital-integrated peers, positioning doctors as the true bedrock of an effective healthcare system.
For proof, Mostashari points to a recent New England Journal of Medicine report that found greater savings among independent primary care groups than those integrated with hospitals.
“ACOs, and in particular physician-led, independent ACOs, are the one kind of ACO that actually works,” says Mostashari.
Armed with that conviction, the man who once enforced Meaningful Use for the federal government now works alongside small practices nationwide to help chart their success amid a sea of ever-changing regulations.
Further reading: MACRA doesn't spell end of independent practices
Mostashari recently sat down with Medical Economics to weigh in on topics ranging from how his former employer can truly make value-based care attainable for solo and small practices as well as the true fate of private medicine.
Medical Economics: How can practices maintain their independence while also participating in an ACO? What are the benefits of teaming up in the face of value-based care?
Farzad Mostashari: Anyone who’s independent right now knows why they’re independent. They have stayed independent because they value the autonomy and they value the ability to do what they believe is best for the patient, not corporate medicine interests.
The reason why so many are still considering or moving in that direction [toward employment], begrudgingly at times, is because of the burdens of dealing with the complexity and the cost and price pressures of remaining independent. So the question is: Is there another way? Is there a third way?
You can retire. The number one thing I hear from docs when they’re considering retiring is: “What happens to my patients?” Which is such an expression of the selflessness of the profession.
Further reading: Why physicians may want to apply for the CPC+ program
You could join up with a big health system, become an employee and let your practice be bought. Or is there a third way?
I think the third way is grouping together, coming together, and joining networks of other independent practices and being able to get professional help on managing the pressures of this new value-based payment model. In a fee-for-service payment model, it is easier to have your own back office staff, and you bill for stuff that comes in and it’s transactional. Right? And in some ways it’s not that different from selling shoes, right?
You come in. You sell someone a shoe. And you say, “OK. That’ll be [the price].” Now you have the third-party payer issue, which is a total pain, but you can manage that. Under population health, there’s a whole new set of technology issues, of new kinds of things that expectations are, accountability for things that you don’t control.
This is hard, but it’s worth doing. And that’s the key thing that I want to convey. At the end of the day, independent practices who take on the challenge of not shrinking into their shell but actually realizing their power-their true power-and reach outside of their walls can say, “No. I can exert influence on the patient’s total care. I’m going to be patient centered, not centered on my little four walls.”
That is incredibly rewarding. It lets you practice medicine the way you wanted to practice medicine. But it also gives you more control. And I think that’s what a lot of practices are yearning for-more of a sense of control and not being at the whims of all these big players; actually being able to be a major participant in the market on behalf of their patients.
Fighting Back Part 1: How physicians can take charge, protect autonomy and put patients first
ME: How do you maintain independence while still being part of an ACO?
Mostashari: Be very careful about the ACO that you join. One of the most important things is-and this comes under the rubric of “governance.” It means: Are you at the table where decisions are made? Is there transparency?
So if you are going to join an ACO, make sure that you’re joining as one among equals, that there isn’t someone or some organization that dominates the ACO and their agenda is what dominates the ACO. Make sure you ask yourself: “Are the incentives of all of us aligned with each other and with what’s in the patient’s best interest?” I think that is most important.
Once a group of independent practices come together-and we’re seeing it in our ACOs-it’s dynamite. Every practice who joins one of our Aledade ACOs gets a seat on the board. Everyone sees full transparency, all the results that are coming in, and how they’re doing compared to everybody else with names [attached to the data]. And that’s part of the magic, right? It’s when Charlie and Becky can look at each other and say, “Are we mutually accountable to each other?”
We can be independent, but we can’t be autonomous.
ME: How can small, independent practices compete technologically with health systems who have deeper pockets and more resources?
Mostashari: Let me just put this right out there: I would rather go to war with 20 small practices than with the big health system any day of the week. Any day.
Small practices should not feel that they are somehow less capable, less powerful than the big health system. You have to understand your own power. And the reason why I’d rather go with 20 small practices, even though they don’t have those resources of the big health system, is because they can have the will. And they can have no other agenda.
Once you get into the big health system, [there’s] the amount of bureaucracy and the number of committees and how slow everything moves, and you want to put in a change request for the IT system. Well, it’s going to take you six months to be able to get anything done. And then the culture of the place where the head of cardiothoracic surgery is the person who gets paid more than the CEO of the health system.
… And maybe you have a research mission. And maybe you have a donor mission. And you have to build a bunch of marble. And now you have to keep that marble occupied. And we just made a big bet on a proton beam, and we have to keep that proton beam going.
So you don’t have any of that [in small practices]. … Under fee-for-service, those are assets. Under ACOs, those are anchors [to weigh you down]. You don’t have those anchors. But the question is: Can we take the best of both worlds? And technology happens to be one of those things that can actually scale down uniquely.
Bricks and mortar don’t scale down very easily. Technology, particularly with the cloud, scales down beautifully.
ME: How can independent practices survive under CMS’ Quality Payment Program (which, at press date, had yet to be finalized) when the agency’s own data anticipates huge reimbursement cuts to the smallest practices?
Mostashari: Let’s start with what Medicare has to do, because I know that there is policy concern that we-not unwittingly, perhaps-push practices into consolidating with health systems. This is a serious policy problem because when independent practices go away, when there’s no longer any local competition, what happens is costs go up. Because that health system has more market power. And when they go and negotiate with the plans, they drive up costs. So this is a serious policy problem.
The best advice is when you find yourself in a hole is to stop digging. And the rule as currently written [in proposed format] is a big shovel. Which is going to make that hole deeper unless CMS changes a few critical things. … Medicare, I believe, is going to do the right thing and is going change. Because they understand the policy drive.
The first is quality should be judged against your peers. So when the PQRS [Physician Quality Reporting System] program first rolled out, it was among practices that had more than 100 clinicians. Why? Because they recognized that practices with over 100 clinicians have the ability to jump through those hoops better than small practices. So the whole program started off with 100-plus practices being compared to practices with 100 plus. And then the next year they said, OK, now we’re going to lower it down to practices with 10 to 100.
What they should do, and it is such a simple prescription to avoid small practices subsidizing big health systems, is compare me to my peers. If I’m a small practice with fewer than 10 clinicians, then I get graded on a curve compared to other practices who are fewer than 10 physicians. If I’m over 100, I get compared to other over 100 practices. Compare like to like. That would go a long way to guaranteeing equality in those bands. Simple.
[Second], the Congressional intent of MACRA was not to keep people in pay-for-performance and MIPS [the Merit-based Incentive Payment System]. The goal was to encourage adoption of these advanced alternative payment models with more than nominal financial risk. What is more than nominal financial risk to a small practice?
If I got $100,000 from Medicare last year, is a $15,000 loss more than nominal financial risk? Heck yeah. Of course it is.
So Medicare needs to create two-sided qualifying advanced alternative payment models that aren’t going to put small practices out of business, that aren’t going to pose an existential threat to small practices. You need a two-sided risk model where the losses are capped at a percent of practice revenue.
It makes no sense for our primary care practices, for example, to be in a risk model where they could lose their practice if there’s some actuarial swing in the total cost of care. You need to provide downside protection to those small practices. Medicare can do it. Medicare should do it.
Now the second part is: What should practices do?
I do think that you should find people you can work with to work towards the total cost of care management. Not retreat but advance. And you may want to start off with one-sided risk for the first couple of years. There is actually good support if you’re in an ACO that does not qualify as two-sided risk-it’s only a one-sided ACO-there are still advantages to you to being that and in MIPS.
For example, half of the points of your clinical practice improvement are automatically granted. Your quality scores are automatically taken care of by the ACO’s quality report as a group. You don’t have to worry about the efficiency measure, the 10%. That goes away because you’re in an ACO. And you can learn how to do the things you need to do in order to be able to then move on to take two-sided risk, and you can earn shared savings.
ME: Do you think the 2017 data collection date for MIPS/alternative payment models is a realistic goal, especially for small practices?
Mostashari: I think there’s going to be a lot of pressure on them to push it back. Imagine disciplining your kid or rewarding your kid based on what they did two years ago. Where’s the behavioral economics in that? The closer you can make the action to the consequence, the better the impact on behavior change, which is what they’re trying to do, right?
They’re trying to “move the cheese.” So I think there’s a lot of merit to [CMS] figuring out the operational changes that need to be made. This is not in law. There’s nothing in the law that says 2019 has to be based on 2017. It’s what they’ve been doing before because it gives them enough time to run the numbers and set the counters and reprogram the system. Well, compress it.
It’s easier said than done, but I think they should, for example, count AAPM [advanced alternative payment model] participation in 2018 as the basis for your reward in 2019.
I think they can do it if they put their mind to it.
I think that it depends on whether they think outside the box of CMS’s IT systems. And I’m encouraged that there does seem to be more out-of-the-box thinking in Medicare and with things like the Presidential Innovation Fellows and the U.S. digital service [start-up]. Maybe these Silicon Valley geniuses who are coming in to do a stint in government, maybe they can help them figure out a way to have a shorter than two-year time frame to put in place the system changes.
ME: Where is independent practice headed in the next five or 10 years?
Mostashari: We’ve seen this play before, where the pendulum swung towards employment and then it came back again. I actually think that the pendulum is going to swing back [toward independent practice] because of a few factors. One, I do think that changes like site-neutral payments-in other words, why would we pay three times as much for the same thing done in the same building when it switches over to [private practice]?
That’s one of those loopholes that needs to be closed. And I think Congress took a step toward that. And I think that those sort of easy money opportunities for employing physicians and then getting a lot of money is going to be reduced. I think that’s going to staunch the economics of buying these practices.
The second thing I think is going to happen is with practices who joined up with the systems, a lot of times those contracts have a lot of fine print in them.
The revenue is not guaranteed. And there’s a lot of dissatisfaction that I’m hearing already from people who entered into those contracts. And as long as there aren’t, frankly, illegal and unenforceable non-competes in those agreements, those practices should be able to leave that employment arrangement and become independent again.
The third reason, I think, is that those practices who stay independent and band together and enter into total cost of care contracts and do well in them are going be a magnet for pulling more docs out of employment and keeping them independent. So I’m actually optimistic about this.
But it’s not going come without policy changes, network formation, and effective management of total cost of care. Those three things have to happen.