As employers push patients to lower-cost sites of care and regulators nudge providers toward downside risk, value-based care is moving from theory to reality, and it is coming at “lightning speed,” according to Dan Tasset, founder and chairman of Leawood, Kan.-based ASC company NueHealth.
Editor’s note: This interview was edited lightly for clarity and length.
Question: Your company’s recent deals are in Missouri and New Jersey — pretty different regulatory and competitive environments. What factors made these markets attractive for NueHealth right now?
Dan Tasset: These partnerships are not about growth for growth’s sake. They’re about readiness, particularly readiness for value-based care. What makes those markets attractive is the ecosystem there: The payers and the providers are moving toward the idea that value-based care is no longer theoretical. We have a very specific definition for value-based care, and these markets seem to be embracing where I believe the market is going.
I’m not saying fee-for-service is going to go away anytime soon, but value-based care is coming.
Q: Can you dive a little deeper into how you evaluate that readiness for value-based care?
DT: I’ve spent a lot of time in Washington, D.C. — both with CMS and the CMS Innovation Center, as well as with policymakers. They’re very adamant they want to see competition among providers, and they’re going to push that competition in a number of ways.
Number one is an empowered consumer: high co-pays and deductibles, but generously funded HSA accounts, with price transparency taken to a new level. And pushing provider competition — forcing the states to do away with CON laws and physician noncompetes and all those kinds of things — that competition comes into place, and ASCs are part of that ecosystem.
So what we evaluate is: Do the providers — the surgeons and the ASCs — buy into the fact that value-based care is no longer theoretical? And do the market conditions embrace it — i.e., do payers and self-funded employers want to see providers take risk?
Q: What is your pitch to surgeons who are hesitant to start making that switch?
DT: Every indicator I can see — regulatory, policy, self-insured employers — points to true value-based care. That means providers are going to have to compete on value.
Value, in the simplest sense, is clinical quality plus patient satisfaction divided by cost. I’m convinced it’s coming at lightning speed, and surgeons and surgery centers are going to have to compete on value.
Q: Why are the tides finally turning now? What makes now so urgent?
DT: There are three things, other than the general passage of time.
One, self-insured employers see the benefit of value-based care and how it can change their spend. There have been big employers — like Walmart — who said, “You’re going to have to go to this location to have your total knee replaced,” for example. Consumerism among patients and employees has grown over the last five years, turning them into real shoppers.
Number two is the regulatory environment. A lot of commercial insurance companies follow what CMS does. Right now, the innovation department at CMS is pushing providers to take downside risk. And the narrative is changing: Should we have certificate-of-need laws? Should we have physician noncompetes? Narrative changes the market because early adopters want to get out in front of it.
Three, we’ve been able to quit talking about value-based care in vague terms. Providers are homing in on what it means: clinical quality plus patient satisfaction divided by cost. When you can put an equation to it — and show savings along with a warranty — that gets people’s attention.
A lot of people say, “We’ve got 30% of our business in value-based care.” No, it’s not. Site-of-service shift and a small incentive isn’t value-based care. We’ve got incumbents fighting change. But you can protect your business model all you want; it’s not in the best interest of our country, and it’s not in the best interest of the patients that we espouse to be serving.
