Mastering Bundled Payments with David Terry, Founder & CEO at Archway Health

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: Welcome back once again to the outcomes rocket podcast where we chat with today’s most successful and inspiring health leaders. Today, I have an outstanding guest for you. His name is David Terry. He’s the founder and CEO at Archway health as a CEO of archway health. He’s a thought leader and frequent speaker on bundled payments and other payment reform initiatives with over 20 years experience in healthcare. A trusted strategic adviser for providers and all along the continuum. He has successfully led care and risk management initiatives with primary care physicians, specialists acute care hospitals, pediatric health systems, skilled nursing facilities, home care companies and hospice providers as you can see. His experience spans the entire continuum of health. He holds his MBA from Harvard Business School and he’s got the experience to back up a fantastic discussion today. So what I want to do is welcome our wonderful guest David to the podcast. Welcome.

: Thanks Saul. Thanks so much for reaching out to us. We’re really excited to be here today.

: It’s a pleasure to host you today David. And so I’m curious what is it that got you interested in health care to begin with?

: Yes that’s a great question I think you know I read a little about your background I mean like you have had family members who’ve experienced the health care system and this as everyone has and can be a frustrating experience so drawn to trying to figure out how to improve that. And then also I guess a couple other things. One it’s such a big part of our economy and growing our economy and doesn’t work as well as it could. So it’s a big set of problems. I get our arms around and see if we can you know make a difference on something that’s important to all of us and then as individuals as well as very important to our country. And I guess also this from a professional perspective, it such a dynamic industry with so many different aspects to it you know around obviously critical care and science and ethical issues and economic issues and political and sociological issues and it’s just a dynamic environment to work in with a big important problem that kind of drew me into it in the very beginning and started work in health right at a college in 1990 and I’ve been in the industry.

: That’s awesome. And you definitely have a passion for making things in this system better David, in particular the the payment models which listeners archway is focused on on these payment models how can we make them better. And we’ll be diving into a little bit more about the focus that they have there at Archway. But before we do David, I’d love if you could just share a hot topic that you feel needs to be on every medical leaders agenda and how you guys are archway are addressing it?

: Yeah. So for us the biggest topic is sort of the the core of what we’re talking about on the theme of this discussion of payment reform. You know our mission atarchway is to fix healthcare to kind of reform in the underlying is the basic thesis that fee for service doesn’t work. It doesn’t serve us as patients as lead to you know ballooning health care costs without really understanding what we get for those costs from a value perspective or from an outcomes perspective. And so I’ve been thinking about this and working this here for a long time and over the years we’ve sort of peaks and valleys of interest in moving away from people service whether it was towards capitation or pay for performance or carve outs or those types of things. But this is the best time in my 25 years in healthcare to be thinking about different payment models and value based care. It’s still early frankly even though we knew this for a while you know Medicare is certainly driving the process or seeing more interest from actual providers. So it’s really a transition away from fee for service toward more value based models. Is what we think about over time.

: For sure. And so like five years ago when the topic of fee for service really started gaining some traction I found myself in a room of healthcare executives and there was a panel up front name. They asked the question hey how many people in here are focused on value based care versus fee for service and very few hands came up and fast forward meaning that I was at couple of months ago half the room had their hands up. So to your point progress is being made and I’m just curious what you believe the timeframe before we actually start seeing some of these programs take into effect and be the majority of how we do things.

: You know it’s really a question I would have said five years ago that we would be there now and we’re not. So you know hopefully within the next five years we see the majority of payment being made in some sort of value base, outcome base structure rather than fee for service. What was encouraging is that Medicare and CMI continue to drive this forward. And you know I think I took a bit of a hiatus transition from the Obama to the Trump administration. But through a few announcements including the announcement of the BPCI advance program bundle payment prepare approve an advanced program and go what’s happening in NexGen and what we’re hearing from the new secretary of Health and Human Services in Burma. It seems like there’s a lot of momentum continuing to come from CMI which is obviously very important. We’re seeing more coming from states as well and state Medicaid programs the commercial market frankly is still behind in what’s happening in commercial health plans. And we’re seeing some activity from commercial plans. I would say we’re seeing more activity and noise and anx from self-insured employers both large and small who are increasingly dissatisfied with the value they’re getting for the dollars they’re laying out for healthcare. So there’s certainly momentum. I think it is a very good time to be working in this area. But again it’s still early. So I would say hopefully in the next three to five years, we reach a tipping point and it’s encouraging to hear that the meetings you are in, there’s a lot of interest and enthusiasm, counsel providers to do is if you have any way to participate in a value based Medicare program they are definitely worth pursuing and at least evaluating because those programs are while they they’re not perfect they share a tremendous amount of data much more freely than what we see in the commercial market. And the rules are clearly defined where it can be complicated but the rules are written down. And so you can look at the data look at the rules and see a clear path to what it will take to be successful.

: Very interesting. Lay on the lamb there David and you know curious to learn a little bit more about Archway. Tell me about the approach you guys use there what makes you guys different than somebody else that would be helping providers or organizations make a transition into a bundled payment or other type of risk based platform?

: Yeah. So I think a couple of things. I mean first of all we are we’re bundled payment company but what we’ve really learned and evolve to become based on our experience and bundle payment is, we’re focused on specialty care management and helping specialist and specialty providers take and manage risk in a very focused way. And you know having worked in accountable care organizations are very close to a primary care physician and have been part of large hospital systems specialists have sort of gotten lost in the shuffle a little bit in this movement but the way we look at the data is about 70 percent of healthcare spending is controlled and initiated by specialists and that makes sense because we use the most resources and then people need the most care when they get sick and that’s when they need to be with specialty providers and really one thing we learned is the biggest variable is whether you’re going to have a good experience and a positive outcome is who is the specialist you’re working with and how good are they at what it is you need them to do. And there’s a lot of variability around. So we’re very focused on specialist specialty care and the reimbursement model that matches that at the bottom. So we kind of match the look to match what the data says and the expertise of specialists with the payment model that rewards them for being really good at what they do and develop and delivering care and official, right.

: Fascinating. Now listeners if if something that David said resonated with you he’s going to share best. Best place to get in touch with them here at the end. But definitely I think it’s a good time to take your programs to the next level, decide and comment on a direction that you’re going to take. And part of the beauty of being here with you with David on the outcomes rocket is that we get to share these isolated pockets of of information and expertise. And just so happens that David is is a bundle payment guru that could help really understand and lead the way light the way in your bundle payment processes even if it’s a basic gut check or pressure test if you did it right. Or maybe you’re on to the next one. So something to consider as we unfold the rest of the interview here with David. David, it hasn’t always been rainbows and sunshine. He take us to a time when you had a setback and what you learned from that?

: Yeah I mean I would say I was very excited about the movement toward global capitation back in the mid to late 90s through them. You know mid 2000s this was when Medicare Plus Choice was developed by ICMS. And you know the first version of Medicare Advantage really and we started to see commercial plans in certain markets like Massachusetts and California and Minnesota move toward global capitated contracting. And you know I worked at Partners HealthCare Boston at the time and we had about 4000 lives and we will cap contracts in Medicare Plus Choice for a couple of commercial plans. And I worked very closely with our primary care physicians to manage patients in that program and all the stuff people are working on today around hospital innovations, E.R. visits radiology tests generic prescribing all those types of things and you’re working with primarily with the primary care physicians to manage that. But the other day we really struggle to make an impact. And I think there were a number of but ultimately failed frankly to see with those programs and partners and a lot of other providers and payers cross country moved away from risk based contracting in the early 2000s Medicare Plus Choice shut down and it took a while for us to get back to where we are today. But yes learnings for that were you know I think primary care is obviously a key part of the delivery system. It’s very hard for primary care physicians to have enough input and leverage really when patients get sick. So we struggled with managing that process. Everyone else while the primary care physicians were kept and there was accountability there. Everyone else could pay a fee for service so the specialist would be the service the hospitals run the orgies. Nursing homes ar e for DM. And the model just wasn’t enough alignment in the model. So you know fast forward to where we are today and I think we’re getting better at the alignment. So I think there’s a long way to go. Most ECOs are familiar with have not adopted reimbursement models or even compensation models for the downstream providers that are value based. But with things like the ECOs in bundled payments and especially carve out and some of the things are happening to better manage post cue care I think we’re getting better at it. But it’s been a long road Saul, I’ve been doing this twenty five years really trying to figure out what the magic bullet is and it’s it’s really hard but I think we’re getting closer. I think what’s getting us closer is much better access to data, so much better information and the ability to fold that into these different types of reimbursement models are getting more traction.

: Yeah that’s very very fascinating David and you’re dedicated man I admire your tenacity and your long term approach because you could have a life man. You could have done something different but you’re still in the game. What keep you in it?

: That’s a really good question. There have been moments of doubt, get me wrong.

: I’m sure.

: Yeah you’re right. So I appreciate you sensing the passion. I think this is a this is a bit of a quest for us. We’ve got a great team here at archway, there about 30 people now. Many of us have been in healthcare for a long time and have been committed to your of finding a better model, a better mousetrap. But I’ll say I guess at the beginning it’s a big problem right, and one of the things I guess for a moment. But you know when I started healthcare in 1990, we were spending about 12 and a half percent of our economy of our GDP on health care and it was pretty universally regarded as a mess. And you know that was in the run up to the Clinton election and Clinton’s which was suppose to fix it. That didn’t happen. And we thought maybe 12 and half or 30 percent was as high as Bigo as the economy and after working in this field for 25 years we’re now spending close to 19 percent of GDP on health care. It’s still highly regarded as a mess. And that’s not a good personal story to reflect on from a career perspective because we just haven’t made a dent in improving it. And that’s not the epitaph I want at the end of my career and so, there’s no better time than now to sort of with with what’s happening from Medicare and what what we’re starting to see some folks like Amazon and Wal-Mart and even smaller employers really try to want to find the way to solve the problem. So it’s a great time to be doing it, certainly not easy but there’s nothing I’d rather do. It’s hard but it’s fun it is a good way to spend my time.

: That’s awesome and I love that I appreciate your passion for listeners. If I’m in this game, I would want David in my corner curled up and tackle these issues. I’ll tell you that because if he’s been in it for 25 years the little things that may come up here and there that are a nuisance. I’m sure he’s run into on time and again. So definitely check them out. They’re doing some fascinating things. Go to archwayhealth.com. You’ll see the things that they’re up to. And a little bit more about what we’ve discussed here today. So let’s see the other side of that David. I mean it’s been a grind but you’ve also experienced some highlights. Can you share with the listeners maybe one of the most amazing experiences you’ve had in this space today. One of your proudest moments?

: Yes I think there are a couple. I mean one is just thinking about what we’ve been working on the last 4 1/2 year and a stone archway. We’ve been in all of the Medicare bundle payment programs using the BPCI and the ecology care model, conference which are replacement model. We’re now in the BPCI advance program and BPCI, we’ve seen reductions in cost per episode on average of nine point eight percent per episode with some providers experience savings of almost 20 percent per episode. And that’s where we’ll also see improvement in outcomes in terms of reduced readmission rates, reduced complications, people getting home back home faster. So you know that’s just I’ve never seen improvements in the 10 to 20 percent range. And then the other reimbursement program. And so that’s very funny. The second piece of it I guess is how we got there and this is just because we’re not and we knew this going in. But this is what we’ve learned. When we get there is we get to partner with really good specialists and because we have so much data, we get to see what outcomes and value looks like when patients are with really good specialists who are focused on their core specialty area and passionate about that area and have high volume and good results. And then we go and meet those folks and we talk to the orthopedics surgeons and we talk to the oncologist and the cardiologists who look really good in the data and we learn about what it is that makes them different and there are things that you know we’ve sort of commodoties vision. Not everyone I mean everyone may not agree with us but our view is sort of commodoties physicians in general and particularly specialists. So it’s really hard to know whether you found a good specialist when you get referred to one. And the unfortunate reality is there are not all the same what we can see in the data we can find the ones are really good and we can really learn about what makes a difference and then we can take those what we learn and we can apply it you know across all the programs we’re working in.

: Fascinating. Now listeners what I find is the best in the industry are very knowledgeable and I would say that that’s very true for David and his team and archway. The thing that sets apart the outstanding organizations from the good ones are average is that they’re willing to share that knowledge and David’s doing just that here. Also if you go to their website archwayhealth.com, if you hover over the BPCI advanced link, there’s a link to webinars and they are putting out webinars to educate those that are looking to take their bundle payments knowledge to the next level. Check them out and I’ll put a link to that particular webinar tab in the show notes so that you don’t miss out. That is a true marker of a company that’s fully invested. They want the best for the industry. And David and his team are doing just that. David what would you say an exciting project or focus that you’re working on today?

: Yeah so the biggest thing we’re working on right now is the BPCI advanced program. So you know originally the program was announced way back in the beginning of 2016 and the Obama administration and there was a little bit of a hiatus as I mentioned earlier but in January of this year CMI launched the bundle payment for care improvement advanced program and that’s a follow on to the original BPCI program and there was open enrollment period from January to the middle of March. We signed up over 350 providers across the country to evaluate that program and then decide whether they want to move forward. So we’re just actually having to just literally now starting on Friday and going into the middle this week getting pricing data and baseline claims data for all 350 providers. And we’ll be sharing that with folks over the next 60 days to help them decide whether they want to move forward they have to make that decision at the end of July. So we’re on the road today down here in New Jersey meeting with some providers were in Philadelphia earlier today. So we’re right now, analyzing that information helping providers decide whether they should participate in the program, what their opportunities look like where they can drive improvement in outcomes and reduce cost. And if it’s attractive for them to tack to debate. And so you know 80 percent of what we’re spending our time right now is on that addition or active was very active in the oncology care model which is a similar program but for oncology patients that’s on a different timeline. But that’s been the fund that’s very successful. The last thing we’re doing is the very thing we’re doing is starting to work with some self-insured employers to apply what we’ve learned in bundles and Medicare and take some of that. So same strategies, sell self-insured employers approved through specialty care for their employees.

: David, that’s a really great call out. We’ve been sort of talking to these points. In my mind, I was thinking providers but at the same time there’s that large percentage of employers if you’re an employer listening to this maybe it’s not you maybe maybe you’re not the one to get educated on this piece but maybe it’s somebody within your organization. Don’t miss out the opportunity in leveraging a company like archway to help you get the most value for your healthcare dollar. Because you deserve to get the health care that you pay for, nothing less. And so our great call out there by David on the things that they’re offering, oncology BPCI it’s just terrific effort, David and I want to commend you and your team for the wonderful work being done there.

: Well I really appreciate Saul, it’s a and I appreciate and I think you’re saying about it. Certainly you know knowledgeable about what we do and committed to the cause here and thanks again for reaching out to us.

: Absolutely David. Now before we conclude I love to ask you just for your favorite book for the listeners. And then one closing thought.

: Yes I saw them on your list. I recently finished Moby Dick. I tried to read that about 20 years ago and I failed and I picked it up again. And it’s one of the favorites I read recently. It’s not easy book to get through it took me some time.

: What was your biggest take out from that?.

: You know I think one is it’s just an amazing study of sort of the undershot you know what we understood back in that time about the science of whales and the ecology of the ocean and those separate things that very very detailed around that. So that was very interesting and then I think the other piece is this is the esoteric I guess but it’s really a study of good and evil and what prevails. And it’s a book about faith, faith versus will versus freewill versus versus preordained things. It was just you know obviously it’s a great book and I really enjoyed reading it even though it did take me a minute to get through it.

: It’s really interesting David. I’ve not read it before but you know interestingly I took my son. He’s 15 months old to come to the to the aquarium and we were sitting there and they showed us a picture of a dolphin’s fin and if you ever see that and this is true for any sea mammals dolphin or the whale or even like just any sea see mammal. If you look at their fin, they actually have the structure of a human arm and the metacarpal is in phalanges.

: Right, right.

: It’s believable, did you know that?

: I did know that, I’ve been to the whaling museum in New Bedford before it was not far from Boston and they have a skeleton of a whale there and I have seen that I think the folks who study this believe that they don’t there’s no purpose for that it’s just an evolutionary happenstance.

: It’s fascinating, Isn’t it?

: I don’t know if you’ve heard that. Yes.

: Yeah. You mentioned and I just think folks if you have a chance I mean if you’re driving if you’re driving for later but I think you’ll find this interesting, Google a whale skeleton or on a dolphin skeleton and you’re going to see that that the skeletal structures like ours but the radius and the Almah is much shortened. But yet they still have the same structure super fastinating. Anyway a side note, right I was fascinated by that. Great recommendation by David, a book of the things that we’ve discussed here today. Ladies and gentlemen is available just go to outcomesrocket.health/archway and you’re going to be able to find all that there including the transcript, links to the webinars that I was telling you about as well as Archway Health’s website so you can learn some more. David, I’d love if you could just close us with a parting thought and then the best place for the listeners could get in touch with or follow you.

: Sure yes. So I would say just that the theme of this, for providers on the on we’re listening or are they are listening. It’s a great time to be pursuing these initiatives and particularly I’m obviously biased here but yeah the bundle payment programs for especially organisations. The risk is relatively limited the opportunity can be can be meaningful the learning is significant just to be a look at the data. Compare your performance to others, understand where there are opportunities for improvement work with or health to work with a specialist you a specialist organisation work with you or your hospitals and your post providers. There’s just so much opportunity for improvement and it’s so accessible in these programs that it’s time to get started and then for employers, I would say there is a big difference from one provider to the next and the ability to kind of look at this information and help your employees find the best specialist, they can improve the outcomes of who the patients experiencing the help get your employees back to work faster when they had some sort of sickness or injury and it can help you you know reduce the costs. It’s really everyone wins in that scenario so it’s a great time to be thinking about this it is still early but it’s too early to get started because we think it’s very important.

: A great message and what would you save the best place where the listeners could follow you or reach out to you?

: Yes. So as you said Saul, our website is archwayhealth.com. I’ll give you my email address, dterry@archwayha.com. We have a general email email inbox info@archwayha.com and we love, as you can probably tell,we have the fact folks about this but your provider organization or a pay or a player looking to drive improvement, you have to focus..

: David, thanks so much for your help and your contributions here today. It’s been a really fun conversation and I know that it’s going to make a big impact for the listeners in their approach to bundled payments. I just want to send a big thank you your way.

: Well thank you all. Thanks for including us this has been a I really enjoyed the conversation. You’re obviously you’re also very passionate knowledge about this area and the type folks with us to talk to you. Thanks so much.

Thanks tuning in to the outcomes rocket podcast. If you want the show notes, inspiration, transcripts, and everything that we talked about on this episode just go to outcomesrocket.health. And again don’t forget to check out the amazing healthcare thinkathon where we could get together to form the blueprint for the future of healthcare. You can find more information on that and how to get involved in our theme which is implementation is innovation. Just go to outcomesrocket.health/conference that’s outcomesrocket.health/conference and be one of the 200 that will participate. Looking forward to seeing you there.

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