PSW: Navigating the Successful Transition from Volume to Value

The transformation of healthcare is a seemingly insurmountable challenge, yet overcoming any obstacle in the journey begins with the belief that it is possible to win!  It’s not about the magnitude of the task; it is about the collective will to prioritize the wellbeing of every person we serve in our population.  Perhaps when approached with the audacity to imagine a healthier and more equitable future for all, we’ll actually get there.  And that is just what the Physicians of Southwest Washington (PSW) is realizing as they navigate a successful transition from volume to value.

Our guest on the Race to Value this week is Melanie Matthews, the dynamic, creative, and innovative CEO of PSW. She leads a population health company that has been around for three decades. Melanie is not only leading their ACO and managing their progression in the adoption of full-risk Medicare Advantage delegation; she has become a nationally recognized voice for value-based health policy.  In listening to this interview, you will hear from a leader that has a real personal capacity for leadership and a clear focus on excellence. If you want to hear from someone that is at the absolute forefront of risk-based contracting and innovation, who understands the issues at a granular level, this episode with Melanie is a must-listen!

01:30 Introduction to Melanie Matthews and the Physicians of Southwest Washington (PSW)

04:30 PSW has evolved over the last three decades from an IPA to a diverse business that includes a national leading ACO and risk-bearing entity for MA.

06:00 “PSW is a story of independent physicians who, in a time of market consolidation, want to remain independent and focus on the patient relationship.”

06:45 Achieving success in delegated risk and taking accountability for both quality and total cost of care.

07:00 The impact of MACRA on the long-term value-based care strategy of PSW.

08:30 Building an infrastructure and developing capabilities to move a value-based agenda.

09:00 Developing a business model for agility in responding to new rules (“a kayak in a sea of cruise ships”) and engaging all types of physicians in the landscape.

09:30 “The value-based movement is important as the fee-for-service chassis is not realistic, has poor quality and outcomes, and rising costs.”

10:00 Taking risk with physician partners and providing them with MSO services, leveraging a technical infrastructure and population health platform.

10:45 The glacial pace of scaling payment model transformation at CMS and CMMI’s bold goal for 2030.

12:00 The increasing shift to home-based care delivery and the use of generative AI in reshaping care delivery.

13:00 How the flawed economic design of the fee-for-service system creates industry inertia.

14:00 Diverting to the known (i.e. fee-for-service care delivery) in times of stress is an unsustainable path forward.

15:00 Convincing the Board room on the tenets of VBC when it hasn’t historically delivered on its promises.

16:00 Trends in consumer cost-shifting and the challenges of private insurers cross-subsidizing provider losses from public payers.

16:30 Unsustainable economics in employer-based healthcare and the looming insolvency of Medicare.

17:00 What does the CMMI 2030 Goal mean for future of the value movement?

18:30 An overview of the extensive services offered by PSW that empowers success in VBC.

19:30 The explosive growth of strategic transactions of physician groups and how mass consolidation is impacting the landscape.

21:00 Aligned incentives and access to a population health platform as keys to VBC success.

22:00 PE investment impacts on competition in an independent physician ecosystem.

23:00 Generational differences in the approach to the business of practicing medicine.

23:30 “Organizations that are convened with independent physicians are able to show better costs of care.” (vs. employed or vertically integrated systems)

24:45 Capital investment and consolidation as a forcing function for physicians to embrace total cost of care models.

26:00 The explosive growth trajectory of Medicare Advantage and how PSW is capitalizing on innovation in full-risk MA delegation.

28:30 Keys to Success in Full-Risk MA:  1) Incentive Alignment, 2) Empowering Data and Actionable Insights, 3) Standardized Workflows

29:00 Developing a common set of quality and utilization goals across all payer contracts.

30:00 Clinical connectivity, workflow optimization, and a data infrastructure for high- and rising-risk patient segmentation.

30:30 Working with the array of incentive options in MA – from P4P, hybrid capitation, to full capitation options.

31:00 How full capitation allows for an immediate recognition of the high utilizers in need of intervention.

31:30 Prospective payment as a revenue stabilizer for independent practices.

33:00 Using outcomes, quality, and clinical coordination data to align incentives in a physician network.

33:45 PSW has a risk portfolio that covers 350,000 lives, of which 80,000 are Medicare beneficiaries in MSSP and ACO REACH programs.

35:00 MSSP is vehicle for building risk maturity, while CMMI programs (e.g. ACO REACH) present the best opportunity for care delivery innovation.

37:00 Consumer-centric innovation and benefit design flexibility in MA as a source of influencing CMMI payment model design.

38:30 “ACO REACH is the first model that really contemplates the economic considerations of managing populations in underserved areas.”

40:00 Strengths of ACO REACH (e.g. health equity benchmarking, care delivery innovation, incentives for SDOH interventions).

40:30 What can CMMI do to improve the benchmarking methodology used in ACO REACH?

42:00 Testing capitation and assessing health equity opportunities in ACO REACH.

43:30 Executing on a playbook for Population Health improvement.

45:00 Building a culture of team-based care in value transformation.

47:00 Engaging patients through motivational interviewing.

47:45 Ensuring access, capturing quality, and providing preventative screenings as the ABCs of comprehensive primary care.

48:15 Developing shadow bundles within a total cost of care arrangement to align incentives with specialists.

50:30 Melanie’s describes her experience as a leading advocate and health policy expert.

51:30 The need for a unified voice to define what value-based care really is.

52:00 A patient example of how social isolation caused extreme overutilization of the ED.

53:45 “I feel like it’s important to shout from the rooftops on the importance of value-based care…”

55:00 The Value in Healthcare Act as a policy striving to preserve Advanced APMs in the value movement.

57:45 Parting thoughts from Melanie on the future of accountable care.