Patrick Conway and Mark McClellan on Moving to Value-based Care

The former Centers for Medicare and Medicaid Services officials, both of whom are currently leaders in North Carolina, discuss the three big changes they’re working toward in the state’s transition to value-based care.

Key Takeaways: Conway and McClellan explain the top priorities – value-based payments, affordability and consumer experience – that can “shift the whole system” in North Carolina.

By Michaela Katz

Mark McClellan, MD, and Patrick Conway, MD, sat down at the last Health Evolution Summit to discuss a public-private partnership in North Carolina that aims to transform the state’s health care system in the movement to value-based care.

To get there, they’re making big changes across 3 key areas.

First, big insurers are pushing transitions to value-based payments. “Eighty seven percent of our payments today are tied to value but we actually want to move to the next level of advanced alternative payment models,” said Conway, who is President and CEO of Blue Cross and Blue Shield of North Carolina. “We think we can get over half of our payments in those models, including two-sided risk, within the next nine months.”

BCBS isn’t the only organization moving toward fee for value (FFV) and alternative payment models.

“We’ve estimated that the 20% or so of payments in these alternative arrangements today will go to over 80% in the next 3 or 4 years,” said McClellan, who serves as Director, Duke-Margolis Center for Health Policy & Robert J. Margolis, MD, Professor of Business, Medicine and Policy. “People have signed on the dotted line for this.”

[See also: NC HHS Secretary Mandy Cohen discusses ‘buying health’ for its citizens.]

Second, moving toward FFV payment models is only part of the effort so BCBS is also working to address affordability in health care. “We want premiums to be flat or negative. In the individual market, we were down almost 5% last year and in Medicare Advantage we reduced premiums by 30% last year,” said Conway.

Lastly, there is an emphasis on making the consumer experience better. “Our Net Promoter Score is almost 25, which is actually best in class for a health plan,” said Conway. But good for a health plan is not good enough for Conway. “Could you be like a consumer company where you have a net promoter score of 50+ because you have that seamless health care experience that individuals and families want?”

The impact these players are having simply wouldn’t happen if they were working on their own.

“We’re partnering with the state,” Conway said. “We insure the majority of people in the state and when we partner with the state, who also has a majority role in health care, you literally shift the whole system.”

With efforts focused on transitioning to value, affordability, the consumer experience and new types of partnerships, it is no surprise that as a byproduct competition is also changing.

“Competition should be about outcomes for people at the lowest cost and it should be about shifting from an emphasis on treating health problems after they happened to really getting at the root causes of why people are in poor health,” said McClellan. “The changes in payment and the kind of commitments to focus on competition and innovation around outcomes, improvement and reducing total costs of care is an absolutely critical foundation.”

Watch more episodes of the Health Evolution Interview Series. The next Health Evolution Summit is scheduled for April 1-3, 2020 in Laguna Niguel, California.  


Patrick Conway, MD

President & CEO, Blue Cross and Blue Shield of North Carolina
Former Director, CMMI

Patrick Conway, MD, MSc, joined Blue Cross and Blue Shield of North Carolina as President and CEO on Oct. 1, 2017. Conway most recently served as Deputy Administrator for Innovation and Quality at the federal Centers for Medicare and Medicaid Services (CMS). In this role he also held the position of Director of the Center for Medicare and Medicaid Innovation (CMMI). As the most senior non-political leader at CMS, he worked Full bio ›

Mark McClellan, MD, PhD

Director, Duke-Margolis Center for Health Policy & Robert J. Margolis, M.D., Professor of Business, Medicine and Policy

Mark McClellan, MD, PhD, is the Robert J. Margolis Professor of Business, Medicine, and Health Policy, and Director of the Duke-Margolis Center for Health Policy at Duke University with offices at Duke and in Washington DC. The new Center will support and conduct research, evaluation, implementation, and educational activities to improve health policy and health, through collaboration across Duke University and Health System, Full bio ›

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