Atrius Health reaching back to its managed roots

There’s a back to the future feel to some of the changes taking place in US health care, and Atrius Health, which provides care to some 740,000 patients, is a leading player in that effort in Massachusetts.

After years of soaring health care costs, there is growing interest in moving away from the fee-for-service model that has long dominated care, where providers are paid for each patient interaction or procedure. The trend now is toward giving health providers a set budget to care for patients over the course of a year. The idea is that it creates an incentive for providers to do all they can to maintain patient health, even if it means more spending on preventive services to prevent costlier outcomes down the road.

It harkens to the early days of managed care, when such a system was touted as a way to achieve the double-win of better health outcomes at lower cost. By the 1990s, however, HMOs were in retreat, faced with a public pounding as many big for-profit companies seemed more interested in managing costs by denying various services than promoting good health outcomes. The idea behind managed care, however, is enjoying a revival as the US health care system struggles to find ways to better coordinate care and control cost growth.

At Atrius, one of the state’s largest health networks, with more than 700 physicians and 400 non-physician providers, more than 80 percent of all revenue now comes from some sort of global payment structure that moves away from the traditional fee-for-service model.

“Which means we are directly aligned with our patients’ interests,” said Dr. Steven Strongwater, the CEO of Atrius, on this week’s episode of The Codcast. “We want to keep patients healthy and well and out of ERs and hospitals to lower their out-of-pocket costs, and to improve their outcomes, their patient experience, and safety.”  

It is, in many ways, a fitting role for the huge provider group, whose corporate roots date back to the 1970s and Harvard Community Health Plan, one of the country’s earliest and most well-regarded nonprofit health maintenance organizations.

Among other moves, Atrius signed a seven-year agreement earlier this year with Blue Cross Blue Shield of Massachusetts to care for 65,000 patients covered by the insurer under a global payment budget. It is also one of 17 providers taking part in a huge state effort to care for Medicaid patients as a global payment recipient known as an accountable care organization.

“Eventually, we believe this is the right model of care for everyone,” said Strongwater. “In the long run, we’re seeking to create better outcomes which cost less money.”

But he conceded that getting there may not prove easy.

“The biggest problem for us in Eastern Massachusetts is that the prices are just too high in the hospitals in particular,” said Strongwater.  “One of the problems that we have, and blessings at the same time, is we have these world-class, quaternary academic medical centers. And they are very, very attractive to patients, but they’re much more expensive than community hospitals.”

“They drive up the price, and that puts just extraordinary pressure on value-based care providers like Atrius Health, where we’re trying to find ways to economize,” said Strongwater, who has suggested the possible need for stronger state regulation of hospital prices. 

John McDonough of the Harvard Chan School of Public Health, who co-hosts the “Health or Consequences” episodes of the Codcast with Paul Hattis of Tufts School of Medicine, said promise of global payment structures is colliding with the underwhelming early evidence from accountable organizations nationally.  

The savings so far have been “nothing to write home about,” said McDonough.

Strongwater maintained that the approach remains “the holy grail,” that there is evidence it does pay off, and that it is ultimately the only way to tackle the cost of US health care, which far outpaces that of any other country.

He offered fulsome praise for Gov. Charlie Baker’s recent proposal to require increases in spending on primary care as the sort of thing that’s needed to push the system in the right direction.

“If we are sincere about trying to control the total cost of care as it relates to the consumers in the Commonwealth, we all have to lean in a little bit,” he said. “We know that it’s possible,” he added, citing a truism offered by Winston Churchill that “the Americans will eventually do the right thing — after they’ve tried everything else.”



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