Rob Allen
About 37% of our work today is in a value payment model. In our legacy footprint, that’s actually 50%. As we continue to grow, we see that number going up. We want to intentionally drive that up because we think it’s a better long- term model to have the value-based approach to things.
Narrator
That was Rob Allen talking about Intermountain Health’s commitment to value-based care. Allen took over as CEO of the Salt Lake City-based health system in the winter of 2022. He’s been with Intermountain for nearly three decades, serving in a number of leadership positions, most recently as Chief Operating Officer. And during that career journey, Allen has touched every aspect of Intermountain’s operations.
In this podcast with Oliver Wyman’s Dan Shellenbarger, Allen shares insights on how Intermountain is working to further align incentives across multiple stakeholders, including payers, employers, clinicians, and consumers. They also explore Intermountain’s efforts to rein in costs through efforts like its support of the generic drug manufacturer Civica RX and expanding access to care in rural communities.
The Oliver Wyman Health Podcast is brought to you by the global management consulting firm Oliver Wyman. For more insights on the business of transforming healthcare, visit our online publication, health.oliverwyman.com. We pick things up now with Allen talking about his previous roles at Intermountain and how those prepared him to become CEO.
Rob Allen
The opportunities I’ve had both inside and outside of Intermountain Health have helped me know the system really well, but also helped me see the world from some different vantage points than just inside the one system. And both of those have been remarkably valuable to me in this journey. And as we’ve embarked on facing the challenges of healthcare, I would say that my time in the system, and of course I served as Chief Operating Officer for five years before taking on the CEO job last December, was extremely helpful for me to understand our system. And just in the middle of the merger work with SCL Health, the merger that took place here a year and a half ago, and we’ve been doing all the integration. And so having been a part of that, to see those come together and start to understand the new part of the organization before I took the reins, all have been extremely beneficial as we’ve mapped our course forward.
Dan Shellenbarger
Yeah, that’s great. You referenced coming together with SCL and now that that is certainly at a more mature stage, I’m sure that integrations are always … There’s a long tail to those. What are you most excited about now that maybe the thrust of most of that work is behind you?
Rob
First off, I was excited about the merger because the organizations are so culturally aligned. Mission-driven, both started by religious orders a long time ago with a focus on the community and upon the missions that we serve. And that carried the work very comfortably forward for us. It is a long tail. We projected two years for our core integration work and we’re on time and on budget if you were to look at it as a construction project. That’s good news, but there is a lot of work. And then your work of evolution is ongoing. It never stops. The world continues to change around us.
As we have embarked on that and the systems have come together, it’s given us the opportunity to really look closely at how you take the best of both and how you strengthen the system by looking at the best of both, and that’s been a really good process for us. That approach versus an acquisition where you just say, come, now you do it our way, is much more challenging. The “just come do it our way” is an easier way to do it. But I think we’re going to have better long-term benefit the way that we’ve undertaken it, and we’ve learned a lot together and that’s been really, really good.
From here, the opportunity for us is to carry value-based care forward across the broader footprint. And Intermountain’s legacy component, of course, we’ve had our health plan since 1983 and just celebrated its 40 years, and that’s been a long journey of building it and making it an integral part of everything we do at Intermountain and now we have the opportunity to take that into new markets.
Dan
Yeah, that’s exciting. And reading into that picture that you just painted suggests that the health system model of the future is an interweaving of fee-for-service and value-based payment. We’re at maybe an awkward teenagers stage of development as it relates to value, that might even be a little bit aggressive in some people’s eyes. Five years, 10 years. Give me a little bit of a peek into the future from your vantage point around where you see that going for Intermountain.
Rob
I think we’ll always be in a mixed payer model structure wise, meaning that we’ll have some that’ll be value-based care and some that will be the traditional fee-for-service and people will choose. What is it that you’re looking for? In the value-based world, you’re looking, I believe, for a partner that’s there with you to keep you healthy. Others may just choose to have access through the fee-for-service, the episodic needs that you have from time to time. And we want to be well positioned to serve both.
As a system, we have about 37% of our work today in a value payment model. In our legacy footprint, that’s actually 50% for us. So as we continue to grow, we see that number going up. We want to intentionally drive that up because we think it’s a better long-term model to have the value-based approach to things. And we have the ability today, I think quite well, to manage process around value-based care.
But the opportunity for us is how you continue to deploy resources upstream and continue to find the gains to allow you more resource to move upstream. And as we do that and look at it, I think often we talk about value-based care as a payment mechanism. And the payment mechanism is a facilitator, it’s an enabler for us. But if you stop at that, I don’t think it provides any real additional value, right? It’s all about using the payment structure to be able to deploy resource in a different way and go upstream. And we continue to learn how to do that in a more and more effective way. Our teams are rolling out tools regularly to manage those lives. We have a company called Castell that really helps our physicians know who to see, when to see. I mean, you manage differently in the clinic. In a value-based world, you’re saying, who do I need to see today instead of how do I fill my slots in the clinic? Because the resources have come in, now you’re focused on health and wellness. And so we’re building tools around that.
Our telehealth work, which is a very broad network of services available that we’re using to deploy and reach far places. So the rural areas particularly are areas we can serve well and meet the needs of people in ways we couldn’t have years ago. And we’re excited about that and how we keep more people at home, which we think is also a value-add. And then how do you work with all the players along the journey to be aligned, to really assure that that work is one section, or one piece is feeding the next piece? So how do you connect the work to the patient? We always talk about that, right? And you go to the clinician, the doctors, the nurses, the APPs. That’s an important connection. But then how does that connect with the health system that’s supporting that work and creating structures? How does that then connect with the payer who’s managing this whole process that the buyers, be it the government or the employer or an individual, are purchasing and they’re looking for someone to manage that? And that’s a really important part of that journey as well. And that ultimately comes back to the individual that’s being insured or provided the benefit coverage for.
That alignment through that process is a powerfully important part of the work we do and need to do. And we’re spending a lot of energy today looking at how we assure there’s alignment. Some of that along the stream we own as an integrated delivery network, but we’ll never own it all in that process, and it’s important we have good alignment with our partners so that the patient, the community, ultimately benefits from the work that we’re doing.
Dan
Obviously, Intermountain does serve, as you’ve referenced already, vast rural communities as well. Talk to us a little bit about how you see value extending out to that part of the population.
Rob
The journeys of going upstream really are similar in urban as rural, right? How you go about it in a community network and what resources in the community are available might be very different, but the concept is the same. And as we bring the system to bear in a community to support it with the telehealth services, with our social determinants of health work, with the health plan, we can impact the rurals we believe just like we can the urbans in that process.
One of the key moves for us is keeping people at home. And with telehealth and the system support, we can keep people at home more than they otherwise were able to because you can get specialists through telehealth that you couldn’t recruit and maintain in a community, is one example. But rural is a big part of our focus and our 630,000 square miles that we serve in here in the Interior West has a lot of rural area. Our networks, we believe, are adding value there and we’ll continue to use the same tools we’re developing in the urbans to support this work as we reach to the rurals.
Dan
It’s a complicated environment in which we’re trying to move to value, the interests of payers, employers, governments, consumers, ultimately, or providers. Within that mix of various stakeholders, how do you see that coming together? Do you see that we’re making more progress there or any kind of top-of-mind needs, primary needs of things that need to change?
Rob
Yeah, we feel that we’re making a lot of progress on this front, Dan. It’s been a slow road historically to try and create that alignment. And I think a lot of that is learning what each other needs in a way that we can align it so that it meets the needs for all. And when that happens, people come to the table much more quickly.
I think of it in the context of my journey in healthcare. Most of my years I spent as a hospital administrator and I learned early in my career, there’s a natural friction between physicians and administrators. That baffled me at first, and fortunately I had a doctor who helped point out some things for me, but I think 95% of what we’re trying to do is actually aligned. We spend way too much time in the 5% that isn’t, and that creates the friction, and we spend our time with the friction and if we agree on the front end that we’re trying to be aligned, that we’re trying to accomplish similar things, we can find our way to those spaces that are common. I think that’s the case in this alignment as well.
Dan
Talk to me a little bit about where you see your providers being today on that journey, right? Because as you said, there’s a lot of common alignment. There’s a lot of, frankly, doing the right thing, but there’s also a lot of inertia in the legacy model, and you guys have been at it for a long time. I’m curious how you describe the mindset of your clinical community.
Rob
First, I would say our mission at Intermountain is helping people live the healthiest lives possible. I have never heard anyone in our 64,000 caregivers disagree with that as the right cause and the right thing for us to be focused on. When you start there, then you’ve got the minds connected. Now it’s how do you connect the processes and align the work inside your organization and build the tools that facilitated?
I mentioned Castell. It is one of the critical tools for us. Our telehealth with 40-plus services that we provide to support clinician-to-clinician work and specialty ends, to support patients direct to caregivers or to clinicians, a lot of different ways. We’ve got platforms that are there. The pieces we’re still building and working on now are how do you create the work measurement in a way that aligns with value?
Our traditional accounting systems, you celebrate when you have more patients in beds in a hospital because it’s going to help you cover your cost to operate it. And yet, if 50% of those patients are value-based patients, that isn’t the finance equation anymore. And yet we look at it that way. We talk about things still in the traditional models and measure success that way. So it’s focusing on how do we give the tools and information to our physicians so that they can manage effectively? And the follow-up reports, support them, actually show them the things that are working well and the things that are not working well so that they can continue to evolve their work in the value-based model and recognize their teams for the great things they’re doing. And that’s an evolution for us.
Dan
Rob, you spoke a couple of times to other capabilities that you’ve built, Civica being one of them. I’m curious about your outlook on how the health system model continues to shift away from obviously being hospital-centric into much more diversified types of businesses and services. Where are you guys headed on that and what’s your outlook?
Rob
Well, we continue to look for ways to create simpler access and opportunity for people to get care in the right setting at the right time, and we’re launching new things. Tellica Imaging is an outpatient low-cost model for CAT scans and MRIs that’s very successful, high satisfaction, easy in and out for patients. We’ve had significant savings both for patients and for the health plan. It’s saved our health plan so far, these models we’ve launched this last year, $5.1 million for the health plan savings. On the patient side, it saved patients 4.4 million out-of-pocket expenses, and we’re going to continue to focus in those areas. We’re also going to look heavily at simplification.
Dan, I’m going to shift slightly here to some thoughts around this that tie in, so bear with me. These do tie back very much, we think, to the value. But one of the areas we’re focusing on is this need to address the reality that we don’t have enough workers to fill the model that healthcare is built on today. If we were able to recruit and secure every doctor trained in our seven states in the next 10 years, we wouldn’t have half enough doctors to support the work we need. And we’re not going to get them all. We know that. There are other people who will be recruiting them, and we’ll appropriately get some of them. Nurses, we know the numbers on those as well. So how do you change the models? How do you start thinking differently about the care? And we look at the burden on our caregivers, how do we make it doable for them?
Then you look at the economics of healthcare and let me share some perspectives around the economics and why we think this is really important for us. Last year we spent $4.4 trillion in healthcare in this country – 25% of that was spent on things that are considered waste. They don’t produce value, many of them administrative process. Nurses spend 30% of their time at the patient bedside. How do we actually shift it, so caregivers do what they do and what they got into healthcare to do, and we get the burdens off of them that are not necessary?
AI has promise in this arena for us. We think there’s a lot more things we can do to streamline just the work. We’re working aggressively to do that. We’re piloting some things AI related and nurses are reporting more time with their patients, which they love, of course. And we think there’s opportunity out there to keep driving that.
There’s also another 27% of that $4.4 trillion that was spent on caring for things that are preventable. So you think of value-based care going upstream. That’s why it’s so important. And I think of trillion, how big is a trillion? And when we talk about the opportunity here, I think it’s important to recognize what that really means. And I grew up on a farm in Wyoming, right? We didn’t deal in trillions there, so it’s hard for me to wrap my head around. This was helpful for me, and I’ll share it with the listeners. If you were given a dollar every second, just continually given a dollar, in 12 days, you would have a million dollars. Just keep that going. How long does it take to get to a trillion? It’s 32,000 years to get to a trillion. 32,000 years ago, we were in an Ice Age. That’s the size of a trillion.
And we have opportunities to cut $2 trillion out of that $4 trillion in spend based on if we could eliminate the waste and if we could actually prevent things that are preventable. So there’s real opportunity there. And the reworking of things, I think we can manage around the staff we can get if we redesign work, and we can certainly make it more simple for them.
Then there’s the side for the patient or the consumers we think about partnering. 62% of Americans believe the health system was designed to be confusing. If that doesn’t catch our attention as healthcare leaders, I don’t know what will. 62% of our communities thinks we sit around and try and figure out how to make it harder for them to get their health services. And we all know that’s just the opposite. We’re working constantly to improve that. We have got to streamline it for them as well. Simplification is a major initiative at Intermountain, simplifying for our caregivers and for our patients. And we think the economics can follow in a positive way and it increases our opportunity and value, and value is half of those economics we can gain.
Dan
So having select health and the integration between the payer and the provider side would seem like it offers an even greater opportunity for that simplification?
Rob
We are looking at how we align those so that we are doing things as easy, as simple, as streamlined as possible, and we have opportunity there quite a bit, as we do in every area in healthcare with it. But it allows us to trial some things in a more simple way. When we talk about how do you manage risk, how do you do those things? We’re already managing risk. How do we move risk into the delivery side? And it gives us the opportunity to do that in a less risky way, if I can say that, just because it’s already under the umbrella. And so we can test things, see what works, keep moving and evolving it.
Dan
Rob, thank you. This has been terrific.
Rob
It’s been a pleasure.
Narrator
The Oliver Wyman Health Podcast is brought to you by the global management consulting firm Oliver Wyman. For more insights on the business of transforming healthcare, visit our online publication, health.oliverwyman.com.
This transcript has been edited for clarity.