Decoding Healthcare

Episode 3: Where healthcare meets Moneyball

  | October 25, 2017

Building a clinically integrated network is like building a baseball team: It takes utility players, specialists, and some data-driven magic. Julie Bietsch, RN, vice president of population health at Dignity Health, shares her strategies for building a network and reducing out-of-network migration, or “leakage,” and covers the technological tools that can make the process easier.

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KEVIN BAN: This is “Decoding Healthcare.” I’m Kevin Ban.

JOANNA WEISS: And I’m Joanna Weiss. And today we are going to talk about one of my favorite terms in population health—leakage.

KEVIN: You do like that term.

JOANNA: Leakage. I’m going to say it again because I like it so much.

KEVIN: I’ve got to stop you. Why do you like this term so much?

JOANNA: Okay. It’s evocative. It does not sound like jargon. It contains no acronyms, which is a triumph in healthcare.

KEVIN: Amazing in medicine.

JOANNA: And it’s important.

KEVIN: Well, I’ll tell you, it may be the single most important element that you have to consider if you’re going to get into risk contracting.

JOANNA: So let’s talk about what leakage is. It means when referrals go out of network, which can be a very big cost to both doctors and patients.

KEVIN: Yeah, that’s something that we had to think a lot about, and most of the time you’re not aware of what your patients are doing, and it comes as quite a surprise when you find out that they’re not faithful—they are going across the street …

JOANNA: … to that specialist from that other system. That’s why people who oversee the contracts have been talking and fretting about this concept for years and calling it different names.

JULIE BIETSCH: “Keepage,” on the positive side.

KEVIN: That’s the positive spin. In between there, I think there has been “out migration,” maybe “retention.” So how should we refer to it today?

JULIE BIETSCH: I think “stopping leakage” is fine.

JOANNA: That was Julie Bietsch. She is a registered nurse, and she has managed contracts for United Healthcare, Anthem, Evolent Health, and now …

JULIE: … I’m the vice president of population health management for Dignity Health.

JOANNA: So, before you control who is in a network, you have to build that network in the first place. And when we were recording this podcast way back when, the Red Sox were in the middle of some midseason trades.

KEVIN: I will add, some very interesting and expensive midseason trades.

JOANNA: So, I started realizing that building a network is a little bit like building a team. You need your utility players, you need your specialists, and it takes, what, a little psychology, a little technology, a little moneyball.

KEVIN: You have to actually put this all together, and you have to make sure that everyone is on board and understands the rules of the game.

JOANNA: This is what Julie Bietsch has been working on, so let’s dive in and hear more.

KEVIN: Talking to a lot of other healthcare systems across the country, I think when at times they say, “Wow, I wish I had done something differently” it was, “Wow, we spent too much time thinking about quality or other things other than network” and wish that they could have started there. So, that leads me to where do you start, how do you know what the network looks like, and how do you begin to engage the doctors in that whole discussion?

JULIE: There are two different philosophies on how you build your network. The way that Dignity started building their networks four years ago was: whoever wanted to come in was in. So, we went, number one, to primary care physicians. All your membership in value-based agreements [is] based upon attribution to your primary care physicians, so you want to align your primary care physicians first. Then we started looking at all of our specialists, and we said, “Okay, anybody who wants to join us, come in and we’ll join.”

Some of our networks got really large, and if you have a really large network, splitting the pie among a really large network means you don’t get that big of a piece of pie. If you have a really large network, it’s hard to manage the healthcare of that—[in terms of] both quality and cost-efficiency—because you’re talking to a physician group where they may only have two members. If you have a smaller network of people who are aligned and focused on value-based contracts, you can have more control. Now you represent maybe 20 percent of the physicians’ panel and value-based agreements, and that makes a material difference on how the physician is engaged in performing risk management. So we’re reassessing our networks constantly about who should be in there.

What you also find on the opposite end is, you find some holes in your networks. So, for example, in one of my markets, I had no ophthalmologist, so I had to go out and find someone who would not necessarily join the network but contract with us to participate in these risk deals.

KEVIN: That brings up a great point. There inevitably will be physicians and likely specialists who just are not in-network, whether they’re ophthalmologists, like you just mentioned, cardiac surgeons, neurosurgeons. So how do you approach that?

JULIE: We itemize what you need, so for instance if you’re dealing with a commercial population, you need to make sure you have OB/GYNs; if you’re dealing with a Medicare population, some gerontologists really help. We map our population to see where they live, and you make sure that you have a good ratio of a different mix of specialists based upon needs. You never have all the specialists you want, which is okay as long as you identify who you need to contract with, and you have a contract with those providers to deliver the services.

KEVIN: Let’s talk about physicians. How do you get them to play along? How do you get them to adopt processes that are going to drive in-network referral?

JULIE: It has to be very easy for the physicians to understand the in-network process. So, if you think about when a patient goes to a physician’s office, a physician doesn’t write a referral. He actually tells his referral clerk or puts a task in his electronic medical record that says, “This person needs to be seen by a cardiologist.” Primary care physicians control about $10 million worth of downstream healthcare costs between specialist referrals, hospital utilization, [and] outpatient testing. But all these referrals are actually being made by clerks that are making $15 an hour who probably have a high turnover rate.

We have integrated a solution into the physicians’ electronic medical records so when the primary care physician does a task in his EMR, “Send this person to a cardiologist,” the referral clerk will put Julie Bietsch’s name in, she needs to see a cardiologist, and it will bring back only United Healthcare providers who are in cardiology near my geographic area. So, you have to make it seamless in your workflows.

The second thing is that physicians have to understand the implications to the patients. Patients are highly unlikely to follow the referral patterns. For example, we have done this study with our partner that says if you give a patient a paper referral, chances are about 25 percent of the time they actually do follow through with the referral, and it usually takes on timing. So if you can get the patient scheduled within a day of the primary care physician [visit], you have like an 86 percent likelihood the patient will complete the referral. So all of that is supported now with technology, and it literally is a no-thought process for a person to find the appropriate physician to refer to.

KEVIN: It sounds like it gives you a lot of transparency, too, across what is happening, and must be a really useful tool.

JULIE: You can factor in other things, too. We started off our tool when we launched it as just factoring in the basics. Are [providers] in our network? Do they take United Healthcare insurance or Blue Cross? And are they in the geographic area for the patient? We have expanded our criteria or ranking based upon are they electronically accepting referrals or are they still on faxes? We can also rank based upon how fast they see our patients, are they reaching out to our patients, in what timeframe, how fast are our patients getting into their office? And now, probably in a year from now, we’ll also factor in other information such as cost-efficiency and other specific quality metrics or outcome metrics.

JOANNA: All right, I just need to cut in for a moment here, Kevin, and say “faxes”?

KEVIN: This is healthcare.

JOANNA: This is technology from the 1990s.

KEVIN: This should come as no surprise to anyone who is in healthcare. Faxes are alive and well, unfortunately.

JOANNA: And we’re talking about the need for better control of data and understanding things when we’re operating on paper. I mean, you’re already set back.

KEVIN: Yeah, this is going to take time. The truth is, not only do people not want to give up their workflows and how they do things, but we haven’t figured out yet how to seamlessly incorporate that information into the system without faxes.

JOANNA: Okay, I’m hopeful that we will move into the 21st century soon. Let’s get back to the conversation.

KEVIN: Julie, help me understand how to engage patients in this. People might be used to going to the same doctor for 20 years, and now you’re asking them to do something different. How does that work?

JULIE: Patients are used to choice and convenience. They want to understand the information about the physicians [they’re] being referred to. So if you could say to [a patient], “This is the physician referred to. He has really good outcomes with this condition. He will see you immediately.” Then a patient is more likely to be seeing him because he has been endorsed. A patient is likely to go there because their neighbor goes to that physician. They’re more likely to respond or engage right after an event, so as soon as the patient was diagnosed with diabetes or right after their heart attack, they’re going to be compliant and follow the directions that we want them to go within network.

They also want, though, convenience. A lot of times people can’t take off work to see certain physicians, so we try to find convenient schedule times for our patients so they can see their physicians. They can’t get off during the day, you have evening appointments or weekend appointments. You have to have flexibility.

We also have to take into consideration that there are a lot of social issues impacting a patient, whether they choose to go to our network providers or other network providers. So patients who don’t have transportation, if the physician we’re referencing is not on the bus route, and it’s our Medicaid population, a patient can’t get to them.

KEVIN: When you think back about some of your work in managing networks, what are some of the pitfalls? Where do people just go wrong?

JULIE: Never take physicians for granted. Many times people think, “I’m a leader. I’m a manager. I’m an administrator. I know what is happening in a physician’s office.” And the reality is, if you’ve never been in a physician’s office, you have no idea what is happening in a physician’s office, so you can’t make an assumption. “Well, if the physician would just do this, this will only add one more minute to every patient that he deals with.” Well, you don’t understand that the physicians already have got 26 patients coming in his office, his office staff is already running around, he is still working at nighttime doing his charting and meeting all the requirements for all the regulatory bodies.

So you have to be realistic on what is doable in a physician’s office. And what we have seen is the best way to get physicians engaged—we talked about incentives, [but] it’s not always financial incentives. Sometimes the incentive is that you get to go home at nighttime or you can do one less round, you can do [fewer] rounds, or we can make this easier on your office staff, and you will have less turnover because of the office staff.

KEVIN: So what you’re saying is, it’s not always just about “Hey, we’re going to compensate you if you keep people in network.” You’re actually trying to lighten their load; you’re actually trying to facilitate their work.

JULIE: Right, make it easier, make their patients happier.

KEVIN: Are there times when it actually makes sense to go out of network? Is that something that you actually encourage at times?

JULIE: I think it’s a necessity. For example, in one of my markets I have the hospitals that are taking risk, and those hospitals do not provide all the services we need—for example the pediatric services; we don’t have a pediatric hospital—so they’re going to go out of the network. There are certain types of procedures that don’t happen within our network. For example, if I need a specialized service performed and I don’t have a physician who performs those services, such as a tumor on the spinal cord, my spinal surgeons are too busy to take on another patient and the wait is six months, then we will refer out of network.

The key is you have to understand what your network can deliver, so you’ve got to collect additional data and have it easily accessible for people to use when we’re looking for specialized conditions.

KEVIN: Are there times when simple procedures should happen outside of your network or not?

JULIE: There are times where … we do use people who are not in our network. So, for example, if an outpatient colonoscopy at my hospital costs $750, or that is my reimbursement, but I can buy the same service, the same quality, at a freestanding facility for $350, I’m going to move to that facility, because I’m in a risk pool. Similar with MRIs.

KEVIN: Makes sense. I mean really you’re working just on the value equation, which is if the quality is the same you want to pay less.


KEVIN: Is there a time, though, when you do that—let’s say a patient goes for a colonoscopy outside of the network because it is less expensive and the quality is the same. Does that become a problem for your organization in terms of follow-up?

JULIE: There is always a risk that if you send a patient outside your network that they will be kept outside your network.

KEVIN: Right, exactly.

JULIE: We identify the services that we’re going to want to send outside of our network, we contract with those providers for those services, and included in the contract is the expectation that the patient will be returned to us.

KEVIN: That’s a great point. So if that patient goes out, has a normal colonoscopy—no harm, no foul, you don’t really need the follow up with the GI doctor. But if that patient is found to have a cancer that requires surgery, you want that patient to come back within your system.

JULIE: Right.

KEVIN: I guess it matters who you’re working with. Do you find that hospital execs look at this whole thing very differently than, let’s say, physicians working in the community?

JULIE: Very differently. Hospital executives are very good at running their hospitals on a fee-for-service system, so they’re used to promoting ways to find the patients, such as the commercial patients to come to our hospitals for their beds to be full. … what the fee-for-service value is of having the patients in, having more MRIs done in-house is a value to the hospitals versus having them done in freestanding facilities. So this is a hard conversion, for hospital executives to think about risk pools and risk opportunities and aligning incentives with the physicians.

Actually entering into a risk pool many times for physicians or hospitals is more of a defensive measure. If they don’t, the physicians go elsewhere. So in California we partner with a lot of independent practice associations, and if we don’t figure this out, they will go to our competitors and take their risk basis there. So you have to figure out a new way of working with the physicians on risk patients. One of the things that I have liked so much about Dignity Health is that they have been open to learning this new way of reimbursement, and so they have been very receptive to thinking about moving some of our colonoscopy patients out of our hospital into a freestanding facility. But it still hurts when it happens.

KEVIN: The fee-for-service model is one where you want heads in the beds and you want the MRI sort of churning, but this is a totally different way to think about it. How do you get hospitals to come onboard?

JULIE: If you have a hospital system that just invested, “Okay, we’re going to do risk contracts,” but didn’t invest in how to manage them, you’re not going to win and they’re not going to stay in risk business for long. You’ve got to give them wins to show the value. And we measure value constantly from a hospital perspective, from a physician perspective, and a patient perspective.

KEVIN: Do you find that you get them onboard more wholeheartedly if you share both upside and downside risk or is there a difference if you just have upside risk?

JULIE: People care less if you have upside risk only. People really pay attention if they could lose money. So we have about 185,000 members in upside-only programs and they get attention, but they definitely don’t get the same attention as the 450,000 where we have up- and downside on.

KEVIN: Right, because they see it as a nice bonus that maybe happens at the end of the year, but if you get into downside risk, now all of a sudden they could actually lose money and make less.

JULIE: If you’re an upside-only it’s a statistical probability, is what people are hoping … that they make it. But you know what, if I don’t invest any administrative cost into it, it doesn’t really hurt, I don’t really lose anything. When you’re in an upside and a downside and you don’t invest in the operations, you will lose money.

KEVIN: The only thing I would say there is how do you recommend or how would you start that? Because a lot of people, Julie, will say, “Hey, if you want to get into this maybe you want to start with an MSSP upside-only type of risk program so that you can build out systems and get people aligned, but then you want to quickly move towards downside risk.” Is that your experience?

JULIE: Oh, 100 percent. So the key for you is the data. When you go into a risk program without any data, you’re walking in blind and your chance of success is limited, so we always recommend that in year one you take a program which has upside opportunity only, and then you learn real quick what you have to put in place. You’ve got to put your nurses in place, you’ve got to get your data put in place, you’ve got to put your physicians in place. Then when you start getting into the opportunity to do downside, we recommend you move pretty fast as soon as you get the data.

JOANNA: So, Julie sets up a pretty useful road map here for an organization that wants to get involved in value-based care. Once that does happen does the patient realize, “Hey, I’m in a value-based contract now”?

KEVIN: I don’t think so. I think largely that is for healthcare wonks and nerds like us that talk about value-based care. I think it is absolutely meaningless to the patient.

JOANNA: Inside baseball.

KEVIN: But what we do see with healthcare systems that get involved in risk sharing is that they begin to rethink how they want to deliver care. So initially they start off and they say, “Well, we’re going to manage all of the attributed lives in this particular contract.” And then they move towards, “You know what, we just want to rethink how we deliver care to our patients.”

JOANNA: Well, you are talking about a new layer of services in a way, either care coordinators, nurse navigators, people who are involved on the ground in patient care, and then also probably a layer of technology.

KEVIN: It used to be that the provider was kind of the end-all and be-all. Now we have the technology, we have the data, we’re able to figure out what do I need to act on, and then we’re able to redesign care in such a way that we can be effective in driving better outcomes.

JOANNA: We’re talking about a pretty big transformation that eventually patients are going to feel whether they’re in risk-based contracts or not.

KEVIN: That’s where we’re headed. You have to get there step by step, but eventually I think the way we deliver care will look completely different.

JOANNA: “Decoding Healthcare” is a production of athenahealth.

KEVIN: Our producer is Nikki Zais. Our engineer and composer and jack of all trades is Mike Moschetto.

JOANNA: You can rate and review us on Apple Podcasts, Stitcher, and Google Play, or wherever you get your podcasts.

KEVIN: And you follow us on Twitter @athenahealth. I’m @KevinBanMD.

JOANNA: And I’m @JoannaWeiss.

KEVIN: And for more stories about healthcare in America today, go to



Episode 3: Where healthcare meets Moneyball