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‘We’ve Already Transitioned to Value-Based Care’: Atrius Health’s Dr. Steven Strongwater Discusses Accelerating Change in Healthcare—and Cracking the Code on Improved Care at Reduced Cost (Part 1)

Posted By John W. DeWitt, Tuesday, September 25, 2018

What’s on the leadership agenda today for biopharmaceutical alliance executives? How about collaborating to reduce drug costs, suggested Steven Strongwater, MD, to a group of about 20 life sciences alliance executives who participated in an ASAP Leadership Forum meeting and workshop session facilitated by Stuart Kliman, CA-AM, partner at Vantage Partners. The group met in a closed-door session the first afternoon of the September 24-26, 2018 ASAP BioPharma Conference in Boston.

Healthcare spending in the US is “something like $3.3 trillion, or $10,000-plus per person per year. It’s approaching 18%, and heading north of 20%, of GDP [gross domestic product]. A lot of this is driven by drug costs,” said Dr. Strongwater, who is president and CEO of Atrius Health, a non-profit accountable care organization (ACO) that employs 6,800 medical professionals and serves 720,000 patients in eastern Massachusetts. Atrius, with 1,300 clinicians and 825 physicians across 32 clinical sites in over 50 specialties, generates about $2.1 billion in revenue and is the top-ranked ACO for quality of care in both New England and nationally.

“Things are in rapid, accelerated transition right now, with all of these vertical and horizontal mergers like CVS-Aetna, Cigna and Express Scripts, WalMart and Humana. … Digital health is a major transformational force,” he added, flashing a chart showing the explosion, in number and size, of digital health deals since 2011. (Average deal size today approaches $18 million, and 2018 likely will see nearly 700 digital health deals worth a cumulative $8 billion, according to the Rock Health Funding Database.)

“There’s so much money in the healthcare space. Everybody wants in because it’s almost 20% of the economy, and costs are continuing to rise,” said Dr. Strongwater in setting the stage for his discussion of reform strategies and cost-reduction collaborations.

Today, “it’s a terrible disadvantage to be in a fixed model [of reimbursement],” he continued. “I would argue that we’ve already transitioned to value-based care.” He cited a comment by Troy Brennan, CVS’s chief medical officer who will remain on board after the merger. “He says 80% of what is offered at the primary care office will be offered at CVS. Companies like CVS believe they can disrupt the doctor-patient space. They are a serious competitor—with free parking too,” Dr. Strongwater noted to chuckles around the room.

Patients seeking better care at a lower cost are the core change driver—a “consumerism explosion,” said Dr. Strongwater, adding that “patients are looking for more empowerment” and “at the end of the day, consumers will always win.” Today, “patients are booking office appointments like airline seats” using digital solutions. “They want faster quicker access for less money,” he added, citing as an example the emergence of “clearinghouses for cheap MRIs” and rapidly growing demands by Massachusetts and other state governments for pricing transparency.

Of course, reimbursement lies at the center of the healthcare reform challenge.

“How we are paid for healthcare defines the kind of care that is provided,” Dr. Strongwater said. “I will say that again: how we are paid defines how care is provided.”

Stay tuned for more of the ASAP Media team’s coverage of the ASAP Leadership Forum and other sessions at the 2018 ASAP BioPharma Conference. 

Tags:  Atrius Health  Dr. Steven Strongwater  Healthcare  healthcare reform challenge 

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