Latest / Becker’s Payer Issues Podcast / Dr. Ravi Kavasery, Chief Medical Officer at Blue Shield of California

Transcript

Dr. Ravi Kavasery, Chief Medical Officer at Blue Shield of California · Becker’s Payer Issues Podcast

• 0:00
  Hello, everyone. This is Jacob Emerson with the
• 0:02
  Becker's Payer Issues podcast. Thrilled today to be
• 0:04
  joined by doctor Ravi Kavasari, who's the chief
• 0:07
  medical officer at Blue Shield of California.
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  Doctor Kavasari, thank you so much for taking
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  the time to be with me on the
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  podcast today.
• 0:15
  Good morning, Jacob. Thanks for having me. Yeah.
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  Absolutely. And and before we dive into everything
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  we wanna talk with you about, can you
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  tell us a little bit more about yourself,
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  your background in health care, and what it
• 0:24
  is that you're doing today at Blue Shield?
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  You bet.
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  My background,
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  I am a,
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  internist by training, and I practiced primary care
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  for a number of years before coming to
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  work,
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  for Blue Shield of California.
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  I still practice,
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  on Friday afternoons. I see patients,
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  here in,
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  California.
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  I have worked in value based care models
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  for a number of years, and,
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  you know, my role now today as chief
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  medical officer for Blue Shield of California,
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  folks often ask me, you know, how do
• 0:56
  you still find time to practice? And and
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  I tell them it's precisely because I practice
• 1:01
  that I work at a health plan. I
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  think it helps me
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  to understand we've got 6,000,000 members,
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  here that we serve at Blue Shield of
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  California. We're a non for profit
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  mission driven health plan, that's in every ZIP
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  code in the state of California, and we've
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  got members across the nation too.
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  And, you know, we're really committed
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  to our mission of driving
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  higher quality care and affordability
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  within The US health care system.
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  And so when I think about my role
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  as chief medical officer of a health plan,
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  it's really,
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  how do we, with the levers that a
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  health plan has,
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  really drive across that integrated aim of health
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  care for better member experience, better health outcomes,
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  and,
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  affordability of care?
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  And that's how I show up to work
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  every day, and and that's the work that
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  we're doing together.
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  Fantastic. So you're a practicing physician, but you're
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  also helping lead clinical decisions at one of
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  the largest health plans in the country. And
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  as part of that, Ravi, we're here today
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  to talk with you a little bit about
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  the company committing to shifting 90% of eligible
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  health care spending
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  through pay for value models. So for our
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  listeners who might not be familiar, can you
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  give us a quick overview of exactly what
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  these models entail?
• 2:13
  You bet, Jacob.
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  You know, in a nutshell, I mean, I
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  think your audience is well attuned to the
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  fact, no secret, that The US health care
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  system,
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  part of its brokenness is just fundamentally around
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  misalignment
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  of incentives.
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  We don't pay providers
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  at scale
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  for the outcomes that matter to our patients.
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  And so I'm sure you can think about
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  that from a personal experience that you've had.
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  Many of our listeners can as well.
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  And so our work formatively, right, when we
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  think about how to solve this problem,
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  and in the ecosystem
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  of care delivery,
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  we are the payer. And so the lever
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  that we have that's most foundational is changing
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  how we pay for care, and very much
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  that means aligning incentives around care.
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  I'll share this. You know, Blue Shield of
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  California has a bold mission around shifting 90%
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  of health care spending through these pay for
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  value models, but I wanna also be clear,
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  you know, we're not new to this.
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  This has made sense for us for many
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  years and, you know, just kind of going
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  back in,
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  time here,
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  in California.
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  Blue Shield of California is one of the
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  original authors of the,
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  accountable care organizations
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  back in the late nineties, the early two
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  thousands,
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  launching those here in California.
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  And,
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  in California, we've had delegated and capitated models
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  for many years. And Blue Shield of California,
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  again, has really been committed to,
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  driving not just cost,
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  affordability structures, but driving value
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  and improve quality and health outcomes through those
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  structures. So, you know, that that rich history,
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  I think, is just really important for
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  this group to understand because it's based off
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  of that foundation when we think about this,
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  which is, you know, we look at that
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  and we say, well, where do we need
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  to get to? Because that has not gotten
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  us as a health care system where we
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  need to be. It has not meaningfully moved
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  the cost trends and the cost of health
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  care and the affordability of health care. It
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  has not, moved to the degree needed, the,
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  health outcomes, for,
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  for the state of California. And so,
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  we've gone back and looked at these models
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  and said, look, you know, what what needs
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  to really improve here in this? And we've
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  come to a few key conclusions that really
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  guide us around this work.
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  The first one is,
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  you know, some of these earlier accountable care
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  models really were predicated more around cost and
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  not quality. And so, you know, a big
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  part of our guiding principles is just that
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  quality has gotta be baked into everything. It's
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  core to these models when we pay for
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  value. We're paying for outcomes. We're paying for
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  quality.
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  The second is
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  that some of the earlier models were,
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  not as deeply integrated on two sided risk.
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  So there were incentives
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  to incentivize the right behaviors,
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  but,
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  there was not enough skin in the game
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  and alignment
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  around understanding that, yes, it's gotta make sense
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  to drive health outcomes,
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  at cost. But if we don't make our
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  members and our patients healthier and improve their
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  quality of care and do that affordably, there
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  have to be consequences around that too. We've
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  got to make sure, again, it's all about
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  align aligning these incentives.
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  And then the third one is really around
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  the idea that,
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  again, here in California, much of the work
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  that had been done to date was around
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  delegated
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  capitated models around capitation.
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  But if we look for example for us
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  here at Blue Shield of California and it's
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  the experience for most of the nation too,
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  most of our patients and members are getting
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  their care in PPO models. Right? And so
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  here at Blue Shield of California, for example,
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  when we serve 6,000,000 members, 800,000 of those
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  members are served in an HMO arrangement.
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  But the vast majority are in a PPO
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  arrangement. And so, again, as we drive value
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  based care, it's really about aligning the incentives
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  and the PPO model structure as well. And
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  so those became just some of the foundational
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  pieces of the models that we have today.
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  So we have today models that stretch across
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  the entire continuum of care from primary care
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  settings to specialty care settings
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  to, acute and hospital care settings.
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  We've got over 60,000
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  providers. We've got the largest network,
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  here in California.
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  And, again, we're the only statewide health plan
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  here in California. And so,
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  as part of that work too, we have
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  realized, like, you know,
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  single models are, not gonna be good because
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  they're not gonna work for everyone, but too
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  many models are gonna be difficult because then
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  we're not gonna be able to scale and
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  implement those.
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  But we do need the right types of
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  models across that continuum. And so,
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  we've got ACO models today that are we
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  call them ACO two point o models that
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  are much more predicated around driving quality
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  and affordability
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  and two sided risk. They exist within the
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  HMO and the PPO spaces today. And in
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  addition to that, we've got specialty care models
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  to incentivize care,
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  around specialty care and then models for our
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  hospitals linking their reimbursement back to quality outcomes.
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  Certainly. And it seems like needless to say,
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  Roby, that that this is tough work, transitioning
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  your members and your provider network into more
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  value based reimbursement and care models.
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  So from from your perspective, both as a
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  practicing physician, but also as CMO,
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  can you explain for us some of these
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  key challenges you've encountered in this transition from
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  fee for service to to VBC? And how
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  are you addressing these hurdles, to really ensure
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  that this shift benefits both your members and,
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  like you mentioned, that very large provider network?
• 7:37
  Yeah. That's a good question, Jacob. You know,
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  as I shared at the top of the
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  podcast,
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  you know, the lens that I bring to
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  this work is as a practicing physician, and
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  I straddle both worlds across,
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  what care looks and feels like when providers
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  are trying to do the right thing for
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  patients
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  and,
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  where payer systems
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  facilitate and make it easier to do the
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  right thing and where they make it difficult
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  to do the right thing. And,
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  I'd say the following, which is, you know,
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  one of the key challenges for us as
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  we do this work is,
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  if we're gonna be successful around this, we're
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  gonna have to do this work and scale
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  it with the providers and in partnership with
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  our providers,
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  not at the expense of or done to
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  the providers. Right? So that's just a key
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  design principle for us as we've done this
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  work,
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  and it's something that I'm very proud of
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  of our teams and our organization around the
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  work we've done. We work very closely
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  with the specialty organizations and providers in designing
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  our models.
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  And the reason this matters is this is
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  really differentiating for us in the quality of
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  the value based models that we develop.
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  I'll give you a couple small examples around
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  this.
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  You know, when you work with one physician,
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  you work with one physician when you're developing
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  something. When you start working with the specialty
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  associations, you know, the,
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  the orthopedics associations or you start working with
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  the California Medical Association or you start working
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  with the American College of Cardiology,
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  you're working with the groups that really represent
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  the specialists across,
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  that entire organization.
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  We work with them. We come to them
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  with the models we're developing and the problems
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  we're trying to solve. We get their input,
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  and we incorporate their input, because,
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  we believe
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  fundamentally
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  that all doctors want to deliver value for
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  their patients.
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  And,
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  often the practice settings and the payment structures
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  that they're in,
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  can complicate their abilities to do that to
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  the best of their ability. And so I
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  would just say that's a really important one
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  for us,
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  and, a key challenge
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  that,
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  we need to make sure we get really
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  right as we effectively transition to value based
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  care. The other one that I would point
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  out, the second one is,
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  you know, as we ask our providers to
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  be held accountable for the patients that they
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  treat over longer term health outcomes,
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  it requires a mindset shift in the way
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  of thinking. You know, it makes a lot
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  of sense to providers.
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  But what that also requires too is that,
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  you know, our providers need the data,
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  to actually effectively transition and take care of
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  their members around these outcomes. And that's been
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  really one of the big wins that I
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  think around this work is just,
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  hearing our providers tell us, you know, I'll
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  just give you some small examples here. When
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  you've got 60,000 providers, you're ranging from really
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  large academic tertiary care systems that have a
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  ton of infrastructure
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  to, you know,
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  single solo practices that exist. Right? Independent practices
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  that exist where, some of them have never
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  really received the data back on how their
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  members are doing or how many of their
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  members are, uncontrolled around health outcomes.
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  And so being able to pipe that data
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  back in,
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  so that the physicians can then take that
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  data meaningfully and,
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  take care of, not just the individual patients
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  that they're seeing during the day, but the
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  population that they're responsible for.
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  Again, the data is a challenge, but also
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  a key opportunity for us. And,
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  those are two of the key things that
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  I'd say that we've encountered as we,
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  do this important work and and how we're
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  addressing those hurdles.
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  Absolutely. And let me,
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  follow-up with you there on something you just
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  said about the the wide range of diversity
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  of providers in California and also talk about
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  some of these specific models.
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  There's the new hospital value model, which, as
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  I understand, ties reimbursement to hospital quality outcomes.
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  So in a state like California, how do
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  you
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  resources or health system maturity or independent
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  facilities.
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  How do you measure all of this, Ravi?
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  Yeah. It's a it's a good question, Jacob.
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  And and what you're pointing to, and I
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  think this is really important, right, is just,
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  California is a great
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  example of, you know, we've got some
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  very large urban centers, but we've also got,
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  some very rural areas that have,
• 11:55
  real access challenges around care.
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  And that includes sometimes,
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  you know, a single hospital system that exists
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  in that area
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  that may not have the same level of
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  resources
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  or access that other, regions have too. And
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  so I'd say this in a nutshell. You
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  know, the the model that we create on
• 12:12
  the hospital value model is really, as you
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  shared, around tying reimbursement to hospital quality outcomes.
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  Our model rewards hospitals for either improving their
• 12:20
  quality score
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  or maintaining high quality outcomes. And so what
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  this allows is those that have less resources,
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  the opportunity to earn incentives based on making
• 12:29
  meaningful improvements. And, again, I think just
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  highlights the types of things that we're doing
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  today
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  to really design
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  in partnership with providers and scale with providers,
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  that sit in different types of setting with
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  different kinds of challenges,
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  as we try to, you know, align the
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  incentives
• 12:49
  across the continuum of care.
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  Let me ask you about another model, Ravi,
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  the the primary care reimagined model, which focuses
• 12:57
  specifically on preventive care. How are you measuring
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  the the success of this initiative, and what's
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  the impact that you've seen so far in
• 13:05
  terms of long term health outcomes, short term
• 13:08
  health outcomes, and then also, of course, the
• 13:10
  cost reductions for both your members and and
• 13:12
  the wider ecosystem?
• 13:15
  Yeah. The the primary care model for us,
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  you know, foundationally, primary care needs to be
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  a a cornerstone of the care delivery system
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  and the health care system in this country
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  as a first point of contact.
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  And the way that we pay our providers
• 13:27
  today, it's not set up that way. I
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  know this from firsthand experience,
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  working as a primary care physician.
• 13:33
  You know, when we develop these models today
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  for what we can scale,
• 13:39
  what we've developed is a hybrid payment model.
• 13:41
  And, again, this hybrid payment model has gotten
• 13:43
  a lot of attention. I'll just note, you
• 13:44
  know, CMS has expressed a lot of interest
• 13:46
  in this model too as the model for
• 13:47
  us to scale.
• 13:48
  And what's really good about this is, you
• 13:50
  know, when we say hybrid, it's basically
• 13:53
  there is a capitation that exists, and the
• 13:55
  capitation is,
• 13:56
  it goes to the primary care
• 13:59
  providers and the groups so that they have
• 14:01
  a reliable,
• 14:03
  steady source of revenue
• 14:05
  that they can depend on
• 14:06
  to make the infrastructure,
• 14:08
  the infrastructure investments that they need to make
• 14:10
  in order to take care of, you know,
• 14:13
  patients and, really take responsibility and accountability for
• 14:16
  their health outcomes. Right? Because the idea is
• 14:18
  we really want them,
• 14:20
  to, practice at the scope of the top
• 14:22
  of their scope of their license.
• 14:24
  But what it does do is the hybrid
• 14:26
  part also is it has a fee for
• 14:27
  service component
• 14:28
  that incentivizes,
• 14:29
  you know, what we would think about today
• 14:31
  is probably
• 14:32
  the parts of fee for service that are
• 14:34
  less broken and less perverse. Right? Which is
• 14:36
  where do you wanna actually
• 14:38
  encourage utilization? You wanna encourage utilization around immunizations.
• 14:41
  You wanna encourage utilization around folks coming in
• 14:44
  for preventive screenings,
• 14:46
  and, chronic condition monitoring. And so that kind
• 14:49
  of
• 14:50
  care is incentivized.
• 14:52
  And what we're seeing today is, you know,
• 14:55
  we've had these models in place. And, again,
• 14:57
  you know, it's grabbing national attention.
• 15:00
  Members who have high blood pressure, twenty seven
• 15:02
  percent more likely to have their blood pressure
• 15:04
  controlled than those that are not seeing a
• 15:06
  provider in this model today. That's what we're
• 15:07
  seeing from our own internal data. Providers that
• 15:09
  treat members with diabetes,
• 15:10
  thirteen more percent effective at getting their sugar
• 15:13
  levels under control.
• 15:15
  You know, on the cost piece that you
• 15:16
  asked,
• 15:18
  keeping chronic condition control, is gonna have longer
• 15:20
  term health impacts for the for our patients,
• 15:22
  just overall health and cost of health care.
• 15:24
  We know that.
• 15:25
  We are still evaluating the definitive data on
• 15:27
  cost for this.
• 15:29
  We're optimistic from what we're seeing around the
• 15:31
  work, but it's still a little bit too
• 15:33
  early for us to say,
• 15:35
  conclusively what that is.
• 15:37
  Sure. Makes complete sense, but really fascinating to
• 15:39
  hear that CMS has its eyes on this
• 15:41
  model. I'm I'm sure it'll be of a
• 15:43
  lot of interest to our listeners as well
• 15:45
  as this continues to develop, Ravi. And and
• 15:47
  in that vein, before we go,
• 15:49
  we have a lot of other health plan
• 15:51
  leaders listening in right now. So is there
• 15:53
  any final thoughts or final bits of advice
• 15:56
  you wanna offer them as they continue to
• 15:58
  navigate similar challenges?
• 16:00
  You know, I think the number one thing
• 16:01
  I'd share here for your listeners, right, is
• 16:04
  there is, you know, no culture of optionality
• 16:07
  around this work. Right? We we are fully
• 16:09
  committed to doing this work and to doing
• 16:11
  it at scale and scaling it rapidly throughout
• 16:13
  the system. We know this needs to be
• 16:15
  done,
• 16:16
  and we know that, we have a responsibility
• 16:18
  in the system to drive this work. And
• 16:19
  so,
• 16:21
  I'm very proud of the work that Blue
• 16:22
  Shield of California does in this space. I'm
• 16:24
  very proud of the partnerships that we have
• 16:26
  with our providers and the associations and the
• 16:29
  groups that we work with around this.
• 16:31
  And I'll just share here, you know, no
• 16:33
  meaningful change occurs in The US health care
• 16:35
  system without multi stakeholder partnership
• 16:38
  and, advancing payment innovation and aligning incentives for
• 16:41
  payment
• 16:42
  for providers to serve our patients the way
• 16:44
  that they came into the profession to do
• 16:46
  so really requires that multi stakeholder partnership.
• 16:50
  Fantastic. Well, I think that's a great place
• 16:52
  to leave things. So, Doctor. Cavasseri, thank you
• 16:54
  so much for taking the time to sit
• 16:56
  down with us and for sharing your insights
• 16:58
  with our listeners. We really appreciate it. Jacob,
• 17:01
  thank you for the opportunity.
• 17:02
  Yeah. Absolutely. And to our listeners, if you'd
• 17:05
  like to listen to more podcasts from Becker's
• 17:07
  Healthcare, you can visit beckershospitalreview.com.