Randy Cook, MPH, FACMPE

Ready or not, healthcare reform is underway, and with it brings major changes in marketplace dynamics. With the shift towards Accountable Care Organizations (ACO) and the “medical home” care delivery model, the healthcare system is reorienting towards primary care, and specialists will need to adapt in order to remain competitive.

Randy Cook, founder and CEO of AmpliPHY Physician Services, discusses the changing healthcare market, how to define quality, and steps specialists can take today to prepare for future success.

How would you describe the changing healthcare market in a few sentences?

Historically, market share has been driven by hospitals and health plans. In the future, we’re transitioning to a marketplace that is organized and driven by primary care physicians – and that has ripple effects everywhere in the system.

This means specialists will have to change their fundamental alignment. They have to start thinking where their patients originated from, not where they’re going to be performing surgery. It might seem scary, but there is terrific opportunity here. If specialists can build alliances with PCPs before their competitors, they’re going to seize more market share. Physicians should feel optimistic about this change because it’s putting control of the healthcare system back in their hands.

How will the role of primary care physicians change as healthcare reform moves forward?

Primary care physicians are going to become the stewards of managing patient populations. We talk about the “medical home provider,” which is the physician who is responsible for a given population of patients’ care in all environments. The primary care provider is really going to become the guardian of their patients’ care.

For specialists, that means their job within this new framework is to offer assistance to their primary care colleagues. So if I’m an oncologist, I should go to a primary care practice and say, “Here is my specific expertise. I want to be your partner in helping you manage the care where my expertise comes into play.” That’s where the opportunities lie. The specialists who get out there and initiate those conversations are going find themselves with much stronger relationships.

What is the difference between an accountable care organization (ACO) and a patient centered medical home (PCHM)?

It’s important to understand that ACOs are a payment model, not a healthcare delivery system. A PCMH is a care delivery model that’s adaptable to a variety of payment contracts. That’s an important technical distinction.

An ACO is a contractual model that makes a group of physicians financially accountable for the care of a certain patient population and rewards them for reducing expenditures. If they’re going to reduce expenditures, they need a care delivery system that can accomplish that – and that’s where a PCMH comes in. If I’m responsible for managing a patient’s care, I’m going to send them to specialists with whom I have a clinically integrated relationship. By operating as a PCMH, I should be able to save money and improve quality, which will allow me to succeed under the payer contract in an ACO.

The ACO model is really a symptom of the underlying change that is happening in the marketplace. The marketplace is learning that we don’t have to pay for more units from many different suppliers – we can associate ourselves with some primary care physicians who will act as coordinators of care for a population of patients.

What impact will the PCMH model have on the healthcare system?

If the early research is any indication, it will be quite substantial. Health plans around the country and other regulatory bodies understand this already, as existing PCMHs have succeeded in a meaningful way. We’re talking about a 35 percent reduction in emergency room visits, 40-50 percent reduction in hospital admissions, cutting the hospital readmission rate from 25 down to 8-15 percent, and reducing the rate of complications associated with chronic disease by half.

PCMHs have done exactly what the healthcare system is looking for – better quality at a lower price. Now it’s just a matter of implementing this model on a broader scale. Hundreds of PCMHs have been recognized by the National Committee for Quality Assurance (NCQA), and every health plan in the country has some form of PCMH encouragement strategy.

How will the relationship between primary care physicians and specialists change?

I think this is the part that worries physicians the most. Today there’s a certain hierarchy that exists among physicians, but the changes that are happening in the market are going to alter that. As primary care physicians move into ascendency, it may feel like specialists are declining in importance, but that’s not true. It’s certainly not economically true, as I don’t think we’ll see specialists’ compensation drop precipitously – although I do think we’ll see primary care compensation climb substantially.

But I think many physicians will embrace this change and see it as a great opportunity. Not only is there a market share opportunity for specialists, there’s also an efficiency opportunity. I don’t know a single specialist who wouldn’t love to get better quality referrals than what they’re currently getting. That’s a tremendous opportunity for physicians to improve their quality of practice, their income and their lifestyle. It’s simply about opening the lines of communication between the primary care physicians and the specialists.

What can specialists do to help primary care physicians in caring for patients?

It’s very simple. The main thing I would say to any specialist right now is start talking to the people who refer you patients. Figure out what they need, and then figure out how to give it to them. Ask them, “What do you need from me when you refer a patient? What do you want back? I’ll tell you what I need from you when you’re going to refer a patient. Let’s begin to clinically coordinate.” That conversation will lead to deeper discussion about what the specialist really does, which enables PCPs to send them the most appropriate cases. But it all starts on the basis of communication and dialogue.

Start having these conversations now, because there’s nothing to lose. The worst thing that happens is primary care physicians feel like you’re treating them like a customer. The best thing that happens is you build an ally who’s ultimately going to help you navigate the healthcare marketplace. You can do this formally, or informally, in a very structured fashion or very collegial kind of conversations, but just start talking.

You describe quality as “delivering predictable outcomes.” How do you define predictable outcomes, and what can physicians do to achieve this?

A predictable outcome means that the patient arrives at the end of treatment in the expected condition, at the expected time, having consumed the expected resources, with ever increasing reliability. This applies to all conditions, from the common cold to cancer. Quality is about always striving to increase reliability and how predictable it is.

So how does a practice do that? We believe it’s pretty straightforward. Process improvement is the key. Medicine has been somewhat resistant to process improvement technology, but it’s time for that to change. We have 50 years of evidence in the United States that shows if you take any process – some more complex than medicine – and reduce variation around the steps in that process, then two things will automatically happen – quality will improve and cost will go down. And that’s an absolute prescription for healthcare – reduce cost and improve quality.

It’s an approach of looking at every step in the clinical process and measuring the variation. When I talk with physicians about this, especially with specialists, I tell them not to overcomplicate the problem. Narrow it down. Just look at your typical outcomes and start measuring how much variation exists. Start measuring that and the data will tell you what to look at next. You don’t have to see the whole problem. The data is going to push you back into the process for making ongoing improvements.

Randy Cook is the founder and CEO of AmpliPHY Physicians Services, which helps physician-driven organizations prosper by leading healthcare transformation in their communities. With over 30 years of healthcare experience, he is recognized nationally as a leader in the healthcare “transformation movement.” A Fellow of the American College of Medical Practice Executives, Mr. Cook has directed operations within the health plan arena as well as experienced healthcare from the hospital perspective.