The Exec: How to Succeed in Value-Based Care Payment Arrangements

In value-based care, it is helpful to have clinician compensation tied to quality measures and outcomes.

To succeed in value-based care payment arrangements, healthcare organizations and their payer partners must have a clear understanding of what they are trying to achieve, the chief medical officer (CMO) of Yuma Regional Medical Center says.

Bharat Magu, MD, MHA, has been CMO of Yuma Regional Medical Center since September 2015. He was recently named as the medical center's senior vice president of medical affairs.

HealthLeaders recently talked with Magu about a range of topics, including his challenges as CMO, the key to success in service line development, and value-based care payment arrangements. The following transcript of that conversation has been lightly edited for brevity and clarity.

HealthLeaders: What are the primary challenges of serving as CMO of Yuma Regional Medical Center?

Bharat Magu: The No. 1 challenge coming out of the pandemic is to maintain access of services for the local community. Yuma and the surrounding communities are an underserved healthcare area that has seen attrition of providers during the pandemic. One of my challenges is to recruit and retain providers to maintain access to primary care and specialty services.

My second challenge is to minimize transfers of patients out of our primary service area. We transfer about 15% of our patients to Phoenix, Tucson, and other areas for specialty needs. We are trying to limit our transfers, particularly for pediatric subspecialties.

The third challenge is minimizing subsidy to the medical group and maintaining market-level productivity to match our providers' compensation.

HL: How are you rising to these challenges?

Magu: I created a team for provider support and recruitment. Since 2016, we have added 16 services and 150 additional providers. We offer a competitive compensation package. We have a culture where providers feel valued—they have leadership roles. We have a medical leadership structure under executive medical directors in three divisions—surgery, medical specialty, and primary care. Those three executive medical directors report to me. This structure has not only helped recruit candidates but also keep providers here. We have physician-led projects, which is also helpful in recruitment and retention.

To reduce patient transfers, we added services. We have partnered with a tele-stroke program. We have also established a children's rehab services program, with specialty providers from Phoenix and Tucson—they come once a month to provide services in our community. We don't do transplants. We don't have extracorporeal membrane oxygenation. We don't have neurosurgery. So, we do have transfers that we cannot avoid.

Aligning provider productivity and compensation is challenging because fair-market benchmarks are dependent on the Medicare fee schedule. We want to make sure that our providers have incentives to come and work in a rural area like Yuma versus Phoenix, San Diego, and other markets. But at the same time, we have to align compensation with fair-market benchmarks.

In addition, we are trying to give our providers operational support to minimize their bottlenecks in the clinics. We have hired additional medical assistants if they need them. We have centralized the scheduling of patients to optimize all of the empty slots in providers' schedules. Finally, we have a program with five physicians who are certified as champions for our electronic medical record. They help providers in the clinics to be more efficient and spend less time in the EMR, which improves their throughput.

Bharat Magu, MD, MHA, is chief medical officer and senior vice president of medical affairs of Yuma Regional Medical Center. Photo courtesy of Yuma Regional Medical Center.

HL: What is the key to success in service line development?

Magu: The No. 1 key in service line development is alignment of goals between providers, operations, and the administration. It goes beyond sharing the financial benefits of an optimized service line. The service line medical director and operations director should be in a dyad partnership to meet the needs of the community and the patients. If the clinical leader and the operational leader are not aligned, a service line will fail.

HL: What is the key to success in quality improvement initiatives?

Magu: You need to have providers involved. You will not get the desired outcomes, or an initiative will fail if you do not have the providers fully engaged. Quality improvement initiatives should be led at least in part by a provider. We have shifted our focus significantly from nursing-led initiatives and operational-led initiatives to having dyad-led initiatives, which can include our executive medical directors.

HL: What are the keys to success in value-based care payment arrangements?

Magu: The payment arrangement is what matters the most. You must be very clear with your payer partner about how you define the incentives for quality activities as well as shared savings. Initially, we did a lot of work on value-based care and improved quality, but we did not generate shared savings because the cost of care was not significantly lower. So, having a clear understanding of what you are trying to achieve with the payer is No. 1.

No. 2 is designing a good compensation plan for providers. Often, a productivity-based model is not compatible with a value-based care arrangement. So, we have some physicians who are providing value-based care and their compensation is not tightly tied to productivity—their compensation is tied to quality and outcomes.

HL: How are physicians involved in administrative leadership at your medical center?

Magu: Physicians are heavily involved in administrative roles. We have the executive medical directors overseeing surgery, medical specialty, and primary care. Under them, there are medical directors in areas such as trauma, stroke, and intensive care. We send our medical directors through a leadership development program, with roughly six leadership sessions per year. Our chief medical information officer is also a physician. Our physicians present their initiatives periodically to the governing board.

HL: You have a clinical background in internal medicine. How has this clinical background helped prepare you to serve in leadership positions such as CMO?

Magu: I see patients once a week—I have my own panel of patients. I hear directly from patients. I am the only active clinician in the senior executive team. I was a hospitalist before I became the CMO. So, having these patient insights has greatly facilitated my journey in the CMO role.

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