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In many ways, North Carolina highlights the potential and the challenges facing health care and public health in America. The state is home to leading health systems and health care innovators capable of delivering state-ofthe-art care, and to health care providers and community organizations developing and implementing new population health innovations. At the same time, North Carolinians are also experiencing stagnant or worsening population mortality rates and substantial health disparities. The state ranks 33rd in overall health, 14.7 percent of residents live below the poverty line, and over one million North Carolinians are uninsured. Health care costs are rising, crowding out other state budgetary priorities and limiting wage increases. Despite clear evidence, avoidable medical costs have proven difficult to eliminate. Building on reforms in Medicare, many payment and care reform initiatives have been implemented nationwide to address these challenges. Alternative payment models aiming to support new approaches to delivering better care are estimated to have increased nationally these payments have grown incrementally, supplemented by local programs and initiatives to address the social risk factors that can drive disease progression and health care costs, particularly in low-income, rural, and other populations with relatively poor health outcomes. Thanks to a convergence of public and private-sector health care leadership, though, North Carolina is now on the verge of something different: a set of reforms that would create an unprecedented, accelerated shift in how health care is paid for in the state, and the way social risk factors are incorporated in health care payment and delivery systems. Over the next ve years, the state is poised to make an estimated 70 percent or more of health care payments through alternative payment models. No other state is on track to reform payments so much way to go. The Duke-Margolis Center for Health Policy will continue to work with state public and private leaders to address these challenges, and to share insights from relevant reforms around the country. On February_8, many stakeholders and leaders from the public and private sector in North Carolina will review current progress and identify further steps to address the challenges in state reform ahead. For those unable to attend in person, the event will be webcast live and a recording will be posted following the meeting. This event will build on the Duke-Margolis Center's existing work with the Gary and Mary West Health Institute and West Health Policy Center and many other collaborators to identify effective practices among states implementing value-based care initiatives. and so fast with the goal of improving population health and care delivery while lowering health care spending. Phrase Automated software translation Try it for free Payment reform can make health care more personalized and convenient and support care delivery reforms allowing for better resource allocation, but it cannot achieve significant and meaningful care improvement by itself. New approaches to data use, new models of care expanding roles for nurses and community health workers, new models of engagement, and other innovations are essential. Stakeholders in North Carolina have taken many steps to address these challenges, but much of the hard work of implementing reforms lies ahead. Consequently, North Carolina has the opportunity to show the path forward to overcome the key challenges for state-level leadership in transforming health care. This post summarizes major new initiatives across the public and private sectors in North Carolina that aim to implement "valuebased" health care payment and delivery. It also identifies potential barriers to successful implementation that may lie ahead, and how they can be addressed by building on public-private partnerships and through continued alignment around system-wide reform. Overview Of Payment Reform Efforts In North Carolina Exhibit 1 below summarizes the payment and delivery reforms in place for implementation in North Carolina over the next several years. Together, these reforms represent the unprecedented shift from use of alternative payment models broadly in line with national averages to making the vast majority of payments in alternative payment models -- most in "downside risk" models -- by 2022, and even more thereafter. Exhibit 12 Summary of Key ValueBased Reforms In North Carolina Payer/Purchaser Example Value-Based Reforms - Implementing Medicaid managed care with required shifts to alternative payment models and accountability for health improvements Implementing Advanced Medical Home for enhanced primary care and care coordination Medicaid - Addressing SDOH through Healthy Opportunities Pilots that direct resources toward social and community services to improve outcomes and reduce costs 0 Integrating physical/behavioral health, including increased SUD treatment access \fpayment directly (or with an afliate). To further improve and integrate care management, the waiver introduces tailored rm to serve beneciaries with more intensive conditions (e.g. serious mental illness, intellectual/developmental disabilities) in a way that better combines behavioral health, physical health, and pharmacy services. While many states and their Medicaid managed care plans have begun implementing reforms to address SDOH, the North Carolina Medicaid waiver is the rst approved by the Centers for Medicare and Medicaid Services with explicit payment reforms linked to addressing them. Through Healthy_Opportunities Pilots, funded with $650 million of state and federal money over ve years, Medicaid managed care plans are expected to cover evidence-based interventions targeting four key areas: housing stability, food security, transportation access, and interpersonal safety. The payment structure will offer incentive payments during the rst two years of the waiver, payment withholding for failure to meet dened metrics in the next two years, and shared savings during the nal year based on performance on outcome- and process-related quality measures. Administrator Seema Verma has highlighted the North Carolina model as the type of payment and care reform that CMS hopes states will expand. DHHS is working with stakeholders to link this initiative to create stronger, systematic community-level capacity to address social factors influencing health and health care costs. One of many examples is Mission Health Partners, a large North Carolinabased ACO; Mission Health employs a care coordination strategy that uses data on social risk factors as part of a predictive model to identify high-risk members of their accountable populations, and partners with community organizations (e.g., food banks) to address these risks. The North Carolina mpulation Health Collaborative, a collaboration among North Carolina ACOs, has also begun to address such social factors. The state is developing a dashboard of indicators related to social factors inuencing health to provide systematic information for these and other community investments. DHHS is working with local community stakeholders on @partmental priorities including implementing a concise set of screening questions to help providers identify unmet needs, developing a resource database or clearinghouse to link those with unmet needs to community resources, and establishing a Community Health Worker Initiative. Commercial Insurance In January, Blue Cross Blue Shield of North Carolina (BCBS NC) announced that ve health systems will participate in the Blue Premier program, representing a quarter of the insurer's total payments. The ve-year contracts implement ACO payment models starting in 2020; they feature minimal price increases for the contract duration and an increasing shift into populationbased payments linked to outcomes and total costs of care, with "downside risk" implemented by 2022. The insurer is also implementing ACOs with signicant upside and downside risk in independent primary care practices and health centers, with analytics and population health management supports provided through a partnership with Aledade. These contracts are part of BCBS NC's stated goal of covering 50 percent of their customers in the state under such value-based arrangements by early 2020, and having all customers in alternative payment models within ve years. Blue Premier aims to greatly accelerate value- based care transformation efforts among commercial payers. The contract structure has similarities to existing accountable care models, including data sharing requirements to help health systems manage their patient population. Organizations will move from shared savings to shared risk by the third year of the contract. In addition to Blue Premier, commercial payers including United HealthCare, Aetna, and Cigna are expanding accountable care programs, bundled payments, and other value-based models. Aetna has gpanded its Whole Health program, which features population-based reforms and enhanced care coordination and data support, and both Aetna and Humana are implementing bundled payment programs. Medicare (Traditional Arid Medicare Advantage) Currently, there are 30 Medicare ACOs (three in advanced Medicare ACO programs) and six additional commercialonly ACOs operating in North Carolinamost major North Carolina health systems now participate in an accountable care partnership. With the upcoming CMS implementation of Pathways to Success, the new iteration of the MSSP ACO mg starting in 2020, these systems are expected to move into payment models with substantial downside risk and shifts away from FFS. Further, around half of the state's health systems have hospitals or afliates participating in Medicare's bundled payment programs, such as Co_mprehensive Care for Joint Replacement (?) and Bundled Payments for Care Improvement Advanced ,(BPCIA), All of these reforms have common, reinforcing features: a shift to accountability for population health care costs and outcomes, including substantial "downside risk"; data sharing requirements to help health care providers succeed in the reforms; additional resources to support practice transformation for smaller and rural practices and providers; and the systematic development of community resources to address social factors inuencing health, as well as tools to link health care providers to those resources. Employers As part of its \"Vision for 2030," the North Carolina Chamber (NC Chamber), the state's largest business advocacy organization, has developed a "Roadmap to ValueDriven Health." The Roadmap reects the same payment and care reform goals as the Medicaid, commercial, and Medicare initiatives described above. These include enhanced data sharing, increased physician and patient accountability, and the implementation of more meaningful and aligned performance measures. The North Carolina State Health Plan, the state employee health plan, has also proposed reforms aiming to reduce spending, including a reference Mgng to link reimbursement for state employees and retirees to Medicare FFS reimbursement rates. Challenges To Implementation North Carolina is on the threshold of what could be the most rapid and broadbased shift to population-based care and payment models in the country. The reform framework is in place, with considerable support throughout the state; implementation lies ahead. What happens in North Carolina in the next several years will provide important evidence on the feasibility of care transformation. To succeed, these changes in payment will require investments by providers, and public and private organizations working with them, to develop the capabilities needed to achieve real improvements in population health and costs of care. Challenges include: . Sharing and accessing clinical and claims data for care management, making adjustments and enhancements, and evaluating impacts; . Identifying and developing the specific payment strategies and data infrastructure that can effectively support interventions addressing social factors, requiring better u - I u coordination of clinical and community-based services; . Continued efforts to enhance support and access to care in underserved urban and rural areas, by identifying and expanding successful models that may be quite different from those used in more populated and afuent areas (80 percent of North Carolina counties are rural, and many North Carolinians live in low-income communities with limited support resources); . Linking care reform initiatives to other steps to improve access to care and affordable coverage; . Continued outreach and engagement of physicians, nurses, hospital leaders, and other clinicians, leading to further steps that will reduce provider burden through aligning public and private reforms; and . Enhanced purchaser support for advancing payment and care reforms, especially for employers. Most importantly, public and private stakeholders will need to continue to engage North Carolinians for these reforms to succeed. The new care models involve new expectations for patients and consumers as well as providers. While change will not happen overnight, patients will need to see clear improvements in their care that reect the "whole person" goals of the reformsimprovements like more convenient and lower-cost access to effective care, more integration of community-based services that address their most significant health concerns, and fewer chronic disease complications and better health. More Information The nation has been making progress on payment and care reform, but population health outcomes and disparities, and high and rising health care costs, show that there is still a long