Healthcare spending continues to rise, as many patients know. According to the Institute of Medicine, more than one-third of healthcare spending is wasteful. To rein in costs, more health systems across the U.S. are looking to do away with care that is of little or no value to patients.
That’s where RowdMap, a small healthcare startup based in Louisville, Kentucky, comes in.
Whereas American healthcare has traditionally been ordered along a fee-for-service model, that system has been going through a gradual sea change to value-based care over the last several years. Under fee-for-service, the number of procedures or tests a hospital can order is what matters. But under the risk-bearing model of value-based care, it’s the quality and outcome of care a patient receives that matters. This shift is turning healthcare into a data-driven discipline, which can be a difficult adaptation for payers and providers.
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Using publicly available healthcare data, RowdMap creates a series of risk benchmarks to help physicians, health plans, and hospital systems identify and quantify the no-value and low-value care that physicians deliver. The end result: Payers, on average, are able to reduce their medical expenditures by about 30 percent. In turn, patients receive the right care at the right cost.
“The average American household spends 10 percent of its disposable income on care that doesn’t make them better,” said Joshua Rosenthal, co-founder and chief scientific officer of RowdMap.
Two years ago, the startup was in 10 states with a reach of nearly 10 million patients and health plan members. Today, RowdMap now has a footprint of 49 states and 100 million patients and health-plan members. In May, it added another health system to its portfolio of clients when it signed a multi-year agreement with Geisinger Health Plan, which serves about 586,000 members in Maine, Delaware, and Pennsylvania.
Over the next year, the company plans to further expand its market share, and is currently completing a warehouse renovation in downtown Louisville it plans to use as new office space. Helping payers compensate providers on the basis of high-value care metrics will also be a growing area of focus, Rosenthal said.
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“In a value-based arrangement, instead of doing a ton of volume at low unit cost, you do much less volume at a much higher unit cost,” he said. “A physician can see 20 patients a day instead of 50.”
Take back pain, for example. People with back pain might receive physical therapy, decompression surgery, or even a spinal fusion. But those treatments usually yield the same outcome — and yet a spinal fusion could cost upward of $80,000 compared to several thousands of dollars for physical therapy. By creating population-health profiles for physicians and hospitals across the U.S. — using data that’s been released the last several years by the Centers for Medicare and Medicaid Services (CMS) — RowdMap can identify who’s providing higher-intensity treatment: low-value care that’s riskier and more costly.
The effects can be transformative. As RowdMap explained to Managed Care magazine last summer, one Northern California health plan removed and replaced 101 physicians from its network whose RowdMap profiles showed they “provided an excess of low-value care.” Over one year, the per member per year cost of the average provider in the health plan dropped from $274 to $179.
“You get rid of that low-value care … and patients get the right care instead of the most care,” he said.
For patients, that means less expensive, more efficient care that leads to quicker recoveries, the ultimate purpose of value-based care.
The cynic might wonder why any physician or hospital system would go along with such a scheme. After all, wouldn’t one want to make the most money under a fee-for-service structure?
But Rosenthal argues that the shift to value-based outcomes has made the type of work RowdMap does not only inexorable, but also attractive to payers and providers. Providers can focus on building high-value networks, while payers have been tempted to pay providers higher unit costs in order to drive utilization.
RowdMap even runs its own Institute for the Delivery of High-Value Care for payers and providers to hear from their peers in the healthcare industry about how to shift their focus to value-based outcomes, which Rosenthal said is in line with government goals as well as something that “drives affordability for patients and members.”
“You can have a great clinical outcome on surgery you don’t need. You can even have a low cost and a great patient experience on that surgery,” he said. “But we take a broader view of quality. Whether you need something or not actually trumps whether you have a good outcome.”
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