30+ provider-driven organizations partner with Evolent. Here's why Evolent's CEO thinks there will be more

Headquartered in Arlington, Va., Evolent Health is trying to change how providers get paid.

At least that's why Frank Williams, CEO and co-founder of the organization, started Evolent: to help hospitals start their own risk-driven health plans or improve their risk-based agreements.

Mr. Williams began Evolent with co-founder Seth Blackley after serving as chairman and CEO of The Advisory Board Co. Launched in 2011, Evolent comes on the heels of his conversations with policymakers, hospital system leaders and physician groups on the current reimbursement system.

Today, Evolent has about 3,000 employees working with more than 30 provider-driven organizations in different U.S. markets. The company helps manage 3.1 million lives. About half of the provider-driven plans are in Medicaid, a quarter in Medicare and a quarter in Medicare Advantage.

Mr. Williams thinks it's working. Evolent's Next Generation cohort has delivered over $100 million in savings. Total expenses for its Medicare Advantage partners have fallen 24 percent. Inpatient admissions for its Medicaid health plan clients have dropped 33 percent.

Here, Mr. Williams discusses what makes provider-driven health plans stand out among commercial competition, and what effect he believes they will have on healthcare costs.

1. What is Evolent's role within the healthcare landscape?

We launched a company essentially to be an operating partner to physician groups and hospital systems that wanted to move toward managing populations. We leverage their clinical strength and provide the risk management infrastructure.

One of the reasons you see so many of our lives in Medicaid and Medicare is because a lot of the cost and quality issues in those populations are with chronic condition patients. In a lot of those populations, 5 percent of the patients make up as much as 50 percent of the total medical costs.

Provider-driven plans can have a significant impact on populations in government programs. Not to say you can't have an impact on commercial populations, but it is a much different population in terms of the potential areas for improvement.

2. Risk is notoriously hard for hospitals. Few provider-based health plans have been successful. How is Evolent addressing this?

If we look at Salt Lake City-based Intermountain Healthcare, Danville, Pa.-based Geisinger Health System, Pittsburgh-based UPMC, Oakland, Calif.-based Kaiser Permanente — we know a provider-driven model can deliver high-quality, low-cost healthcare.

I think you're on to an important issue, which is, risk-based contracting is a new skill set. It is essentially a startup business that a provider needs to launch. Any time you're doing that, it surely is going to have some inherent volatility.

If a provider launches a health plan, and only has 6,000 Medicare Advantage lives, that's not enough revenue to justify the investment the organization is making in infrastructure. In Medicaid, you have much larger numbers of lives that are delegated to providers. Right out of the gate, they can have a successful health plan on a revenue basis, and Evolent fills in the gaps of new competencies: claims processing, population health, risk adjustment and network management.

3. These plans would be alternatives to managed Medicaid plans from commercial payers like Aetna and Blue Cross Blue Shield. What makes them stand out?

If you think about managing medical costs and what's going to be most valuable, it's by having engaged physicians and in-depth, hyper-localized data they can act on in ways that make an impact. That data must comprise both clinical information and social determinants of health like transportation, housing and nutrition. It's also a matter of having relationships with community leaders to bring together disparate data to identify who needs what type of care, which type of outreach will have the most impact, and to unite care coordinators across both clinical and community resources.

National plans tend to not have this in-depth data or the local relationships to develop this type of integrated network. Provider-driven Medicaid plans have the financial and social incentives, and they have the relationships to coordinate the continuum of care for chronic condition patients.

One of our partner Medicaid plans, Passport Health, is aware of all of the substance abuse clinics next to the facilities where its providers serve and can coordinate the hand-off for patients. Passport's new campus is located in an economically disadvantaged part of Louisville, Ky., and will include services like lower-cost food options to help families in a food desert, job training, housing support and other community resources connected to overall health and wellness.

4. Can you talk about the plans you helped start in Florida?

We we were fortunate to win bids to launch plans in five regions in Florida with Fort Myers-based Lee Health, Pensacola-based Baptist Health Care and Miami-based Nicklaus Children's Health System.

These are some of the leading providers in the state of Florida with strong reputations in their local community for providing world-class care to at-need patient populations. It's the connectivity to the clinicians in the local community that gives Lee Health, which has been in Ft. Myers for over 50 years, an opportunity to provide a much more integrated care experience than traditional health plans in that specific community, for example. We believe that their strong brand and relationships with physicians will be attractive to local residents that are looking for the highest quality healthcare for their families.

5. Why do you believe Evolent's approach is the solution?

If you think about solving healthcare's cost problem, we have to make a model, which engages physicians and patients more effectively, work. The friction created in the traditional payer-provider model hasn't worked and has led to higher costs and poorer health outcomes. A model that engages physicians and involves them in the process and that leverages extensive clinical data and an integrated care team has the potential to improve patient engagement and health outcomes.

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