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A featured contribution from Leadership Perspectives: a curated forum reserved for leaders nominated by our subscribers and vetted by the Healthcare Business Review Advisory Board.

Associate Chief Medical Information Officer at ChenMed

Daniel Guerra

How Full-Risk Capitation Facilitates Innovative Primary Care

If there was any silver lining to the darkest days of the COVID-19 pandemic, it was the way it pushed the entire American health care system toward wider adoption of advanced technologies. As an industry, we’ve learned how technology can positively impact the patient journey faster than any other set of circumstances could. The learning curve wasn’t always a smooth one for many practices – but ChenMed was an exception. Our nearly 100 centers in 12 states were able to quickly transition to technology-assisted methods of delivery almost immediately. More than 18 months later, we’re still providing high-touch, high-quality telehealth care that our patients in many cases prefer to the “old way” of having to travel to and from a center once per month for preventive care visits. In this article, I’ll share insights about how we started – and sustained – a successful approach to virtual care.


Before we get too far into the discussion, let me quickly describe the funding model ChenMed operates on, because it’s an important factor in what we’ve been able to achieve with technology. ChenMed operates on a full-risk, value-based care model, also known as full-risk capitation. This involves a payment structure in which a private insurance company or Medicare enters a partnership with a health care provider. At that point, the health care provider – not the insurance company or Medicare – is responsible for paying for the patient’s health care. This is where the “risk” comes in – the provider is responsible for paying for any preventive, specialty, or emergency are the patient may require. However, if the provider is able to help the patient prevent or successfully manage chronic medical conditions – therefore avoiding costly emergency department visits or hospital procedures – the provider keeps the savings. Therefore, the incentive for full-risk capitation providers like ChenMed is to do whatever they can to help patients stay as healthy as possible.


ChenMed’s full-risk capitation funding model is pertinent to this discussion for two reasons:


- Because ChenMed operates on a full-risk capitation basis, our centers were able to transition immediately to telehealth and other delivery methods because we knew we would be compensated in the same manner for virtual visits as we would for in-person visits. Many fee-for-service providers, on the other hand, had to temporarily cease all operations because they had to wait until insurance companies and Medicare – which historically have not reimbursed virtual care at the same level as in-person care – decided whether to approve payment parity.


- Second, the health care provider’s financial incentives in full-risk capitation align with the patient’s health incentives: Keep the patient healthy, and the financial benefit will follow. Therefore, companies like ChenMed have an interest in developing and using tools, including technology, that will help care teams more effectively prevent or manage health conditions.


At ChenMed, the financial incentive to keep patients happy, healthy, and out of the hospital has fostered a culture of innovation. Beginning in 2017, the company has invested in the development of a strategic roadmap for virtual care delivery. A multidisciplinary team of internal user experience, IT development, and informatics experts work alongside ChenMed’s clinical and operational staff to develop tools for primary care physicians and their care teams.


One such tool is a specially designed electronic health record (EHR) system with an integrated telehealth platform. That critical tool meant that, although nearly all ChenMed appointments happened in person prior to March 2020, our centers were able to pivot to almost completely virtual care within two weeks of the national shutdown.


A head start certainly helped speed ChenMed’s telehealth adoption in 2020 – but so too did an important procedural decision. Although the modality of patient visits changed, ChenMed centers adhered to the same workflow patients had experienced when attending their appointments in person. This was an important way for centers and providers to reinforce trust. ChenMed’s patient population largely consists of older patients with Medicare Advantage plans. Seniors typically do not have the same technological fluency as younger patients do. According to a 2020 research letter published in Health Care Policy and Law, an estimated 72 percent of patients over age 85 did not meet the criteria for telehealth readiness and 41 percent of Medicare patients lacked access to a computer or mobile device with high-speed internet connections when the pandemic began. That unfamiliarity can breed distrust.


Because trust is at the core of any successful doctor-patient relationship, it was important not only for the ChenMed telehealth platform to be simple to use but also that the process surrounding the telehealth encounter remained similar to an in-person visit. Patients received a check-in call from their ChenMed center’s front-desk staff shortly before their appointment, letting them know their doctor would see them soon. That staff member would also remind patients of virtual visit-specific pointers, such as ensuring they were in a quiet, private space and havingvital signs-recording devices nearby. A few minutes later, a nurse – called a care promoter in ChenMed parlance – would send patients a link to a private, secure, and HIPAA compliant virtual exam room where their doctor would meet them. In essence, patients received the same level of high-touch care they had come to expect from ChenMed, just in a different location – the comfort and safety of their home.


Although in-person visits have resumed, medical providers across the country are anxious to determine what the path forward looks like for technology-assisted health care. As an industry, we’ve swung from having nearly 100% in-person visits to a hybrid 50/50 split between virtual and in-person visits. Moving forward, no one is quite sure where the pendulum will rest between the two options. What we can be sure of, however, is that convenience has been elevated as a critical health care value.


Judging by the feedback from ChenMed’s patients, we know that many do not want to go back to the old model of a 10-minute or less encounter sandwiched between round-trip travel that can take four or five times that long. Our guiding principle at ChenMed for the foreseeable future will be to keep in mind our patients’ preferences and needs, and to meet them at the appropriate level of care. The experiences of the past two years, coupled with our organization’s commitment to investing in technology, will ensure we keep to that course.


The articles from these contributors are based on their personal expertise and viewpoints, and do not necessarily reflect the opinions of their employers or affiliated organizations.

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The Leadership Perspectives forum brings together voices shaping the healthcare ecosystem. Participation is by invitation only. It features leaders who are not merely observing changes in care delivery, but actively contributing to them through clinical, operational, and patient-focused insights.

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