CODE speaking with Dr. James T. Caillouette, MD at the 4th Interdisciplinary Conference on Orthopedic Value Based Care 2020

Session Topics: 

  • Contracting outpatient joint surgery panel 
  • VBC: Multidisciplinary Stakeholders Panel

Interviewee:
Dr. James T. Caillouette, MD
Chief Strategy Officer
Hoag Orthopedic Institute
Joan & Andy Fimiano Endowed Chair in Orthopedic Surgery
Hoag Memorial Hospital Presbyterian

Dr. Brian Cunningham:
We’re here at the 2020 Value-Based Care Conference and I’m lucky enough to be joined by Dr. Caillouette. He’s the Chief Strategy Officer and a Senior Partner at Hoag Institute, one of the really successful large groups here in Southern California.

First of all, thank you for joining us, taking a few minutes out.

Dr. James T. Caillouette:
Thank you.

Dr. Brian Cunningham:
You know, they have one of the most unique practice designs, collaborations in the country and I wanted to just ask a couple of questions. First, how did this come about?

Dr. James T. Caillouette:
Well, we are in a unique part of the country where Kaiser has an organization that consists of an insurance company, a facilities company and a physician company essentially. So they have all three parts of the equation and because they have all three parts, they’re very closely aligned in how they deliver care.

Dr. Brian Cunningham:
Sure, sure.

Dr. James T. Caillouette:
We looked at that model and we recognized that there were a lot of advantages as the market started to reduce overall reimbursement. And so we felt that if you could reduce the friction that traditionally exists between physicians and hospitals.

Dr. Brian Cunningham:
Right, right.

Dr. James T. Caillouette:
And drive to alignment, you would actually do better in a value-based world.

Dr. Brian Cunningham:
Right.

Dr. James T. Caillouette:
And so we convinced our community-based hospital board to take that leap with us and to design a true joint venture that’s a partnership, 50/50 partnership initially both in equity and governance. And so that we would be true partners and truly vested in the outcome of this experiment. And so it was an experiment at the beginning and now we’re 10 years in, and fortunately we’re growing and it’s going well.

Dr. Brian Cunningham:
That’s fantastic. So let’s talk a little bit more, what were the biggest challenges to starting this venture? You know, if I’m a group and I say, “You know what, wow, this guy’s really onto something. Let’s reach out. Let’s start to connect with our system and start to think about how we might be able to compete against some of these places that provide both insurance and care delivery products.” What were some of the initial big challenges that you had?

Dr. James T. Caillouette:
I think that human elements are the biggest challenge.

Dr. Brian Cunningham:
Sure people problems.

Dr. James T. Caillouette:
And so I think that the element of fear of change is a critical element that you have to overcome, and fear of loss is really driving that. You know, if you look at all the work that’s been done on behavioral economics, people fear loss at four to five times gain.

Dr. Brian Cunningham:
That’s right.

Dr. James T. Caillouette:
And so from a hospital’s perspective, there’s a fear of loss of revenue right off the bat, and a fear of loss of control over the direction of the physicians.

Dr. Brian Cunningham:
Right.

Dr. James T. Caillouette:
From the physician’s point of view, they had a fear of loss of real dollars because they had to put up skin in the game to do this. So there was, I would say equivalent fear on both sides, which is actually a constructive driver.

Dr. Brian Cunningham:
Interesting, okay, okay. So tell me a little bit more about how this really plays into value. How does this collaboration help to drive value-based care?

Dr. James T. Caillouette:
I think that with every element of our organization invested in both the economic outcome and the governance of change, it really is critical that everyone is marching to the same credo. And that credo for us from the day we started was to drive to value, better outcomes and lower costs. We record all of our data. We’re transparent about all of our outcomes and we publish it all. We committed to publishing our outcomes good or bad from day one.

Dr. Brian Cunningham:
Wow. Do you publish that internally to physicians or?

Dr. James T. Caillouette:
We publish it both internally on a quarterly basis. Everybody has a report card that measures cost and quality. And then we actually do an annual publication as well that we distribute to, I think, 10,000 or more people.

Dr. Brian Cunningham:
Yeah, wow, fantastic. Fantastic. We talked a little bit about the race for cost containment and the challenges that present, and a few people brought up the fact that there may need to be something else to differentiate a group or a physician or practice. Do you think that’s based around patient reported outcomes or patient experience, or where do you see that potential kind of disruption as everyone’s trying to cost contain? Where are those places that you can shine?

Dr. James T. Caillouette:
I think as a physician, we always hope that the ultimate differentiator will be quality and outcomes. And so I think that that’s really been our mantra is that we believe that if we drive to quality, everything else will follow, that the economics will follow. We obviously have to be cost conscious and aware, and we also have to be conscious of where the market is going in terms of contracting.

But we believe that if we can create better outcomes overall and a better patient experience, that that will be our differentiator long-term.

Dr. Brian Cunningham:
Fantastic. Well, you heard it here. Patient outcomes is a key differentiator in the marketplace, and we thank you for your time.

Dr. James T. Caillouette:
Thank you.

Dr. Brian Cunningham:
Have a great conference.

Dr. James T. Caillouette:
Thank you Zeev, for inviting me.

About the Author

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