It Takes a Village
Oxeon Associate John Ferry recently traveled to Houston, Texas to visit with the founders of Oxeon's latest portfolio investment, Village Practice Management (VPM). Led by CEO Tim Barry, formerly founder and President of Accretive Health's Quality and Total Cost of Care business, and his co-founders Dr. Clive Fields and Paul Martino, the company is building what they hope will become the largest and most successful primary care physician group in the country. This is how they got there. “We talk a lot about: if this was Mars, and we were designing a new healthcare system… what would it look like?”
I’m sitting across the table from Tim Barry and Dr. Clive Fields at Pappy’s, a comfort food joint in Houston located next door to Clive’s primary care physician group, Village Family Practice (VFP). There’s a reason Tim is here. He spent years interacting with some of the more innovative IPAs and delegated medical groups in the country while at Blue Shield of California. He then went on to grow Universal American’s Medicare Advantage business from $250M to $2.8B in revenue before founding and serving as President of Accretive Health’s Quality and Total Cost of Care business. And when he looked at overall measures of clinical quality and total cost of care, it was Village Family Practice “setting the benchmark by a long shot… the results achieved were truly best-in-class.”
VFP’s outcomes are truly remarkable: patients who go to Village have 55% fewer hospital admissions than the rest of the country. They have 45% fewer readmissions. And perhaps most remarkably, Village is able to achieve these clinical results at a stunning 50% lower cost than the rest of the local market.
Tim has joined with Dr. Clive Fields, the Chief Medical Officer and founder of Village Family Practice, and Paul Martino, the former Senior Vice President of Clinical Strategy and Innovation at WellPoint, to take the model of care first developed at VFP and expand it to primary care practices across the country. Their new business, Village Practice Management (VPM), aims to completely transform and realign the healthcare landscape by empowering the primary care physician.
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The waitresses at Pappy’s all warmly waved, “Hi, Dr. Fields!” when we entered. Clive’s a regular, but he knows much of the Pappy’s crowd because he’s also their primary care physician. “So much about primary care is about being a part of the community,” Clive says as he orders a salad from someone he may have just given a flu shot a week ago.
Immediately following our lunch at Pappy’s, I’m seeing patients with Clive. He’s very much the classic, affable family doctor; he listens to patients’ clinical concerns and seamlessly enters data into the electronic medical record, talks about their progress on care plans, discusses family milestones and upcoming plans, and has a genuine laugh and enjoyable visit with each patient. Patients are scheduled every 10 – 15 minutes, and the types of conditions and ailments presented could easily keep a hospital’s emergency department busy: schizophrenia; debilitating lateral epicondylitis; major depression; a ninety year old battling an acute urinary tract infection. These patients came to VFP, rather than seek a specialist or make a trip to the ER, because Clive and his fellow primary care physicians make themselves the first and most frequent point of contact for their patients. To Village patients, this office is the face and personality of the healthcare system: an efficient practice where physicians address a patient’s needs in a holistic fashion, have the support needed to navigate the paperwork and regulations of a complicated healthcare system and yes, even see them close to the appointed time!
In order to achieve their best-in-class clinical quality and cost of care results, “we have to have a model that’s extraordinarily efficient,” says Tim. “A lot of work is done in advance of a physician seeing the patient, and a lot happens after the engagement. Everything is optimized to maximize the physician’s time with patients.” I saw that efficiency first-hand while making the rounds with Clive. “This is like flight control,” I told him as we bounced from one patient room to the next, passing patients off to referral coordinators and allowing nurses to step in and schedule follow ups.
PCPs at Village see 50% more patients per day than your typical primary care practice, and they see their Medicare patients at a rate of twice the national average.“When you ask Clive how many patients he saw today, he says “as many as needed to be seen.” Across the country Family Physicians average 20-25 patient visits a day. At VFP, a physician can see twice that number if needed. Clive added, “We designed the offices to provide efficient personal and private care. Bathrooms are attached to exam rooms, nurses’ stations are in close proximity to patient care, and patient flow lets doctors focus on patients.” Village’s value-based and at-risk model focuses on caring for the population, one patient at a time; the goal is always to maximize the time physicians spend with their patients.
With Village Family Practice as their flagship founding medical group, Tim, Clive, and Paul are now working to scale this model nationwide to build VPM. This new medical group’s key differentiator will be focused on an unwavering commitment to primary care physicians. “Ultimately, we see so many other companies being built that are trying to reach into the care delivery system to drive change,” says Tim. “Those solutions are not leveraging the most valuable part of the healthcare system: the gray matter in the brains of PCPs.” Clive adds, “Our model really is based on asking physicians what they need help with. It’s all about empowering primary care doctors to be successful taking care of their patients; you do that by giving them the tools they want, instead of the tools somebody else thought they wanted.” What VPM is building ultimately starts with the delivery of care, and that starts with the primary care physician.
VPM is also able to drive remarkable clinical and cost results because their physician payment model is unique. “There is alignment between physician productivity and compensation, and this is ultimately what drives improved quality and, in turn, lower costs,” describes Paul. Physician compensation at Village is determined by how often PCPs see their patients and how much preventative care they provide. Physicians don’t get paid for ordering unnecessary tests and X-rays. Coupled with value based contracting, this model allows VFP physicians to earn far more than the average primary care physician.
There are also long-term financial incentives: each PCP who joins VPM becomes an equity holder in the business. Some of the largest primary care physician groups in the country “have been owned by a very small number of people who did very well on the backs of physicians who did not,” says Clive. At VPM, the physicians seeing patients every day are not a separate entity from the management company; they are the management company. With each practicing physician a co-owner of the company, VPM also allows its PCPs to realize the effects of economic scale in a way that’s appropriately aligned with their ability to influence overall clinical quality and the total cost of care. Unlike a hospital system, which might acquire a PCP practice because it’s looking to boost its referral networks, or a health plan, which might be looking for a vehicle to sell more insurance, VPM is taking a PCP-centric approach to building its network of practices.
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To better grasp the scope of what this team is working to accomplish with VPM, it is critical to understand what each team member has already accomplished in their careers. Tim Barry began his healthcare career at Blue Shield of California, where he quickly noticed that all major discussions in the health insurance space revolved around unit price and the administrative cost of care, rather than its effective utilization. “I came into the health plan world with fresh eyes, and it gave me a chance to go through the inquiry process and really break down what drives the cost and quality of care. Where are the value elements of the business? All the oxygen in the room was around the administrative dollar: everyone was talking about the price we pay per unit, rather than the utilization of services. It seemed to me that the real value is around appropriate utilization. What drives this, and how can we engage primary care physicians to impact it? To improve the quality of care, and by extension the total cost of care, the conversation had to be around physician engagement and utilization.”
He took this focus with him when he left Blue Shield of California to become Chief Operating Officer for Universal American’s Medicare Advantage line of business. While growing the health plan, there was something that caught Tim’s attention: a primary care physician practice they contracted with in west Houston whose overall performance was, frankly, off the charts.
Tim wanted to see first-hand how Village was achieving such impressive clinical outcomes at the point of care, so he visited the practice to meet and shadow Dr. Clive Fields for a day. Clive had followed his father’s footsteps into primary care, eventually joining him at Village Family Practice in 1991. In the early 1990s, Village began taking on Medicare risk contracts and took full advantage of capitation and value-based care as an opportunity for PCPs to realize greater financial reward for their services.
“In 22 years of practice, I had never had an insurance executive or administrator ask if they could follow me around and see patients until Tim,” says Clive. Upon meeting, the two quickly discovered a shared passion for patient-centered and PCP-empowered healthcare.
What Tim saw while making the rounds with Clive, and one of the things that makes Village’s model so unique, is very high patient volume and remarkable administrative efficiency. “There are provider organizations who have shown great success improving quality and lowering costs in a managed care Medicare Advantage environment, but they’ve built their models around seeing a very few number of patients, 15-18 a day. Frankly, it’s impossible to adequately care for an entire population unless you’re seeing far more patients per day.” At Village, high patient volume translates into more frequent follow-ups and increased patient engagement; therefore, seeing more patients per day contributes directly to their high quality measures, rather than coming at the cost of quality of care. Tim and Clive saw 29 patients before coming to Pappy’s for lunch that day. “In other models, when you’re only seeing 15-18 patients a day, there’s a whole host of patients who aren’t having their needs met or are seeking them from somewhere else.”
Following that first trip down to Village, Tim worked with Clive to bring this model of efficiency and visit frequency to other Universal American markets, with incredible results: he successfully grew Universal American’s Medicare Advantage business from $250M to $2.8B in revenue by implementing a laser-sharp focus on primary care and rolling out Universal American’s Village-inspired, PCP-focused Healthy Collaboration model.
In 2009, Tim joined Accretive Health to start their Quality and Total Cost of Care business, seeking to leverage the managed care environment he led at Universal American and bring that to IDNs looking to successfully make the transition to value-based models of care. One of his first acts of business was visiting Clive, and over beers at Pappy’s, Tim recruited him to become Chief Medical Officer for his new Accretive Health unit. “Accretive Health was a huge opportunity for me to see other parts of the country, different populations, staff models, university models,” says Clive. “It gave me the opportunity to work with a different type of executive than you’d traditionally work with in clinical practice.”
While living in Chicago and building this business at Accretive Health, Tim was introduced to Paul Martino, then the head of all clinical innovation and strategy at WellPoint, where he was instrumental in architecting the national health plan’s patient-centered primary care initiatives. Tim and Mary Tolan, the former CEO of Accretive Health, met Paul for a lunch that ended up lasting almost five hours. “We realized there was a lot of commonality in our belief systems around the necessary changes in the health system,” says Tim. Paul traveled to Minnesota to see Accretive’s Quality and Total Cost of Care business in action. This is where he first met Clive, and “that’s how the band started to come together.”
“Paul is a connector,” describes Clive. “He is so well-networked, and he brings to a physician group a point of view that a physician group has never had before - what a customer, or an insurance company, is actually looking for. He’s able to look at several disparate things and think, if they were re-engineered just a little differently, we could leverage that into our primary care setting.”
Furthermore, adds Tim, in Paul’s position at WellPoint, he was the one who “anyone trying to sell anything as it relates to the intersection of payment and care delivery had to go through. So he’s seen it all. As we think about changing our commercial contracts to 100% value-based and we’re working with a population where 30% has BMI greater than 30, and thinking about tele-health and obesity counseling and patient experience and workflow within a physician group, Paul’s the kind of guy that can see the different things that are out there and can weave together a solution that can then be brought together here.”
“If you really want to change healthcare, and you have thirty years of training,” says Paul, “then you’ve got to get up and do something. Village Practice Management is what I want to do. I owe it to my kids, to myself, to Tim and Clive. This is the model, and this is the team to build it."
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The team’s first order of business is to acquire additional primary care practices, then help them adapt to the care model and technology developed at VFP, and ultimately optimize their health plan contracts by moving them all to full, global risk.
Building the nation’s largest primary care group does not happen immediately. “At the end of the day,” Tim notes, “you have to go in and do it one-by-one, doctor by doctor. You don’t get these kinds of changes by sprinkling in a technology solution and magically changing the lives of 5,000 physicians. This is one primary care physician at a time.”
He continues, “This is not a simple, elegant technology system that just gets widespread adoption. This is changing decades of experience and behavior within an industry that today is made up of one and two physician practices. The change has to happen on the ground. Change management is a process that requires people interacting with people, and data and information to help someone in the movement towards that change. You can’t consolidate and grow in a meaningful way unless you’re willing to step into that very difficult spot of, one by one we’re going to do this.”
As I left for the airport, Tim and Clive were leaving to meet with a doctor interested in joining VPM. The company is well ahead of their early physician growth and risk-based contracting targets, but their ultimate goal goes far beyond an immediate time frame. For this founding team, with their collective experience and relentless drive to reinvent the industry, each new physician who joins VPM is another step toward the patient-centered, primary care-focused transformation they are working to ignite.