Dr. Parodi on trust, innovation, and the shift to value-based care

Trust is a crucial factor in the shift from fee-for-service to value-based care models, Stephen Parodi, MD, said on a recent panel during Modern Healthcare’s recent Value-Based Care Virtual Briefing.

The panel, “Innovation in Action: How Value-based Care is Transforming Delivery Models,” explored the current state of value-based care and how organizations are innovating in their transition away from fee-for-service models. Unlike fee-for-service systems which emphasize volume of services to generate revenue, value-based care rewards improved patient outcomes and greater affordability.

“If I have one key message, it is the importance of building trust between all the different teams that have to make this happen,” said Dr. Parodi, executive vice president, External Affairs, Communications and Brand for The Permanente Federation. “You have to have trust between the payer and the provider. You have to have trust between the physicians and the patients. And you have to have trust with the system itself.”

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As value-based care adoption continues to grow, transforming care delivery models and spurring innovation, Dr. Parodi noted there’s more work to do. He said that even within government programs — which have led the shift to value-based care — there remains diversity in the mix of models.

“Only about 59% of Medicare Advantage plans are actually what we term HMOs,” Dr. Parodi said. Health maintenance organizations operate under a value-based care model, providing comprehensive, preventive, coordinated care services for a fixed per-member fee to improve patient outcomes and control costs.

He said the remaining Medicare Advantage plans are preferred provider organizations, or PPOs. These network-based plans work with fee-for-service models, contracting with physician organizations for reduced fees, while allowing patients to go out of network at a higher cost.

Of Medicaid recipients, he added, “about half of the beneficiaries in terms of spend are getting their care through a managed care-type organizational structure.”

How innovation aligns with value-based incentives

Health care organizations are innovating to better align with value-based care incentives. Panelists agreed that forming integrated, aligned, and incentivized teams — an approach already used by Permanente Medical Groups — lays the foundation for effective preventive care.

Dr. Parodi explained that at Kaiser Permanente, teams of clinicians and IT specialists work together to integrate protocols and algorithms and embed them in electronic health records, “that are then prompting those very teams to do preventive services screening, depression screening, cancer screening.”

Dr. Parodi also highlighted Kaiser Permanente’s innovative Cancer Expert Review Program — a virtual consultation system that gives every Permanente oncologist access to expert advice from cancer subspecialists nationwide. This approach improves patient outcomes while reducing the need to travel for second opinions.

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Another innovation that has advanced value-based care is ambient AI, which transcribes patient-clinician conversations during office visits to create notes that the clinician then edits. The technology has reduced time spent typing up notes during and after clinic visits, Dr. Parodi said, “and increased face-to-face time with patients, which improves (treatment) adherence.” He said it has also standardized “a bunch of documentation, which from a data perspective, is going to be important in the future.”

Human involvement remains crucial

Dr. Parodi said artificial intelligence and data are essential tools in value-based care, but human involvement remains crucial for designing workflows, interpreting data, and decision-making across both clinical care and back-office operations.

For example, frontline clinicians helped design Advance Alert Monitor, an AI-driven predictive analytics tool used in all 21 Kaiser Permanente hospitals in Northern California. This program identifies patients at risk of clinical deterioration, enabling early intervention and preventing over 500 deaths annually.

Kaiser Permanente care teams also helped design a similar alert system that considers medical, behavioral health, and social determinants to identify patients at high risk of emergency department visits or hospitalization.

“If [the alert system] notices a social need, it alerts an assigned social worker so they can initiate an intervention,” Dr. Parodi said. Case managers are able to take care of 1,500 patients, instead of just 200, because they’re able to focus on the ones requiring intervention.

Register to watch a recording of the full virtual event here.