INTERVIEW WITH David carmouche, md

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CarmoucheDavid Carmouche, MD, is Senior Vice President of Ochsner Health System and President of Ochsner Health Network in Louisiana. In his current role, David is responsible for clinical integration, population health strategies, development of a data and analytics infrastructure, care management, network administration and insurance product development. David joined Ochsner with 19 years of progressive healthcare leadership experience in medicine and operations. Before joining Ochsner, Dr. Carmouche served as the Executive Vice President of External Operations and Chief Medical Officer at Blue Cross Blue Shield of Louisiana in Baton Rouge where he successfully led important initiatives designed to organize care, improve quality, and increase affordability.

Key Takeaways

  • Understanding your potential partner’s business models and mindset are important first steps for developing mutually-beneficial collaborative solutions.
  • Opening up a partnership dialogue driven by inquiry as opposed to forced solutions helps quell tensions bred from historic misunderstanding and lack of trust.
  • Innovative, collaborative solutions do not develop overnight – it takes time to identify a shared vision, align stakeholders, and overcome obstacles. Patience, persistence, and grit are key competencies for success.
  • We would all make progress if we had more people who had the skills and capabilities to reach across sectors and put themselves in the other side’s shoes.

TLD Group: In your current role, how do you define your health ecosystem?

Carmouche: Our ecosystem consists of several sectors that come together to create the environment within which our organization operates. The first sector is the provider sector comprised of the Ochsner Health Network (OHN). Second is the payer sector. Ochsner Health System is a high-performing network that is viewed as a value opportunity for purchasers. Third is the health sciences industry, whether its manufacturers, device companies, pharmaceuticals. Lastly, the technology and health IT sector has become an increasingly big part of our organizations’ ecosystem, whether it’s in big data, analytics, consumer engagement, or connectivity.

TLD Group: What role do you believe your organization plays in improving population health?

Carmouche: We believe we lead improvements in population health in the state of Louisiana. I view our role through the following three lenses:

  1. History of risk-taking and population health management
    Ochsner Health System has a history of managing risk. We were the first provider-sponsored health plan in the state of Louisiana. We have been a leader in downside risk contracts in that we bore the risk of health insurance costs for our 20k employees as well as 35,000 Medicare Advantage members. We have been a Medicare ACO longer than any other entity in the state. Our influence is reputational because we have had the most experience leading this kind of work. We believe, therefore, that we not only can but should be the leader in improving population health in the state.
  2. Focus on social responsibility
    Louisiana has the largest burden of illness of any state, so we feel a great sense of social responsibility. For this reason, we are also very active in driving state policy. For example, the decision by the current governor to expand Medicaid in Louisiana was something that Ochsner not only supported heavily, but we also helped craft its implementation.
  3. Clear experience and commitment to collaboration
    Our organization’s growth occurred in two stages. After Hurricane Katrina, we grew through acquisition because many for-profit hospital companies abandoned the New Orleans market, and Ochsner was the only viable entity to come in and take ownership of many of those hospitals. Our growth beyond that has been through partnership and collaboration, because we have a vision to be an aggregator, and not necessarily growing by acquiring greater assets. We have had a significant impact in the New Orleans area, where most of our assets are located. However, we realize that to drive better outcomes for the whole state of Louisiana, we have to develop a collaborative state-wide structure. In this way, we can work with local entities to disseminate Ochsner’s experience to other regions while leveraging local brands and clinical strengths.

TLD Group: What are the most pressing challenges you face in trying to impact the health of New Orleans, and the state of Louisiana at large?

Carmouche: The biggest challenge to impacting population health, in general, is that the programmatic approaches make financial business sense only in a model where healthcare is pre-paid. The reality is that Louisiana is largely fee-for-service. In essence, we are working against ourselves. In population health, the financial rewards are acquired when people are kept out of the hospital. The challenge is trying to help move the payment model at a pace that keeps up with the changes of the value-based operational model we are trying to implement. There is an inherent misalignment in the incentives for those paying for care (health insurance companies) and those providing care (health systems). For example, during my time as an executive at Blue Cross, we would discount the years when there was a big hurricane in Louisiana. In hurricane years, we were more profitable because people were still paying their premiums but unable to access care. In my experience at Ochsner, we also discounted a hurricane year when evaluating historical financial performance, because in these years, our operational performance was completely decimated. These two organizations, representing different sectors of the same health ecosystem, both discounted the impact of a natural disaster because one made an unusually high profit and the other had unusually poor financial performance.

TLD Group: What do you think can be done to ameliorate this misalignment between reimbursement structure and care delivery?

Carmouche: I believe the payers need to come to the realization that the current business model has utterly failed to deliver better health outcomes at a lower price (i.e. broad access networks, leverage gain to control unit prices, and utilization management programs to try to pre-empt unnecessary services). There are limitations to the payer’s historical approach to reimbursement. Unless they want to employ doctors directly or purchase hospitals and run them, they are going to have to work with the providers within their communities to create a win-win financial relationship. To create alignment, we need to bring the major payers at the table with providers to create a different financial relationship that aligns both players.

TLD Group: How did you identify Blue Cross as a potential partner and encourage collaboration?

Carmouche: Several payers want to work with Ochsner in a variety of ways, but we honed in on Blue Cross partly because of a willingness to collaborate in a meaningful way, and partly because of their influence in our markets. And, since they are not-for-profit they have the ability to be more nimble because they aren’t beholden to some corporate entity or board that is responsible to shareholders. More importantly, though, it’s because Blue Cross believes that engaging in a unit price battle with providers is not the path to keeping healthcare premiums affordable; rather, it’s through incentivizing providers to move to value.

Once we identified Blue Cross as a potential partner, we then engaged their new CEO. Both Ochsner’s and Blue Cross’ CEOs saw their respective organizations as “shapers” of the healthcare ecosystem in Louisiana, and rapidly discovered a shared vision of what the two could do together. We needed their help in terms of moving the payment model, allowing us to have access to some data and information that would make us more effective, and they needed our help transforming our care model to reduce utilization and lower our total cost of care. In the case of Ochsner, it was through aligning us in a business model that allows us to share in the profitability of the insurance products that are built on our network. Once we identified the mission, the main challenges were taking that vision and overcoming barriers to implementation.

TLD Group: Can you give an example of some barriers and how you’ve tried to overcome them?

Carmouche: For OHN to be successful, we need to be able to sell narrow-network products. Narrow-network plans offer cheaper premiums which appeal to price-sensitive consumers. If we are going to be taking utilization down and if the per-capita reimbursement to Ochsner is going to decrease, then we need more capita. The way to grow more capita is to either capture more of the healthcare services within our system or to bring new people into our system who don’t historically get their care here. That requires a narrow-network vehicle that has benefits designed to keep people within our system. The challenge is that most of the business that we’re going to go after is controlled by brokers. Blue Cross has mastered the distribution of their products through great relationships with brokers, but brokers don’t like narrow networks because a) they don’t understand them, b) they have to deal with a lot of post-sale complaints by employees who are no longer able to go to the physician or facility of their choice, and c) their brokerage fees are the same for selling these products even though they require more work. For us to collaborate successfully with Blue Cross, we needed to consider how to change incentives for brokers. It’s been very difficult for Blue Cross to think through how to do that because they’re very afraid of disrupting their relationship with their brokers. To overcome this, we pulled together a meeting between some of their most influential brokers, Blue Cross’ sales and marketing team, and my team at Ochsner, to explain that our imperative is to lower the cost of health insurance, and that the way for Ochsner to do that and remain viable and successful is through narrow network products. It was really important to open that dialogue with the brokers because it could have potentially been a disruptive move in the marketplace. Much of the feedback we received from the brokers was that, had we not brought us all together and explained that vision, they probably would have fought us tooth-and-nail. We had to align all the players because everyone comes in with their different priorities for their own organization. By opening up the dialogue and laying everything out on the table in a very transparent way, we were able to come up with a collaborative solution.

TLD Group: What was your role in facilitating the collaboration?

Carmouche: I am the only member of Ochsner’s senior management team that comes from a payer background, giving me a unique perspective to anticipate potential obstacles and suggest methods to overcome the roadblocks in a win-win manner. For example, if someone on my team starts speaking from a position that is historical or from a provider-focused angle that I know is in conflict with how the payer views the world, I’ll call it out and help them understand the other side’s position. Getting both parties to understand the other’s side is very difficult, though. If you can paint your position in a very clear-cut, understandable, and factually-based manner, that tends to move people. If you can also figure out what the “middle ground” looks like, and what each side has to do to get there, that tends to be an effective way to move people who are hesitant. Even the most recalcitrant people tend to take a step forward when they see that the other party is willing to meet halfway. That’s the tactic that’s been helpful for me.

TLD Group: How would you recommend leaders, who only operate in a single sector, develop the capacity to foster these types of conversations?

Carmouche: The thing that stymies progress the most in healthcare is a lack of understanding of each other’s business objectives, priorities, and challenges. It is amazing the misperceptions that have been generated over decades that have persisted today that are just factually incorrect. If you’re an organization envisioning a future that involves cross-sector collaboration, but your leaders only have experience within one sector, the best thing to do is to gain an understanding of your cross-sector partners’ business model and way of thinking. This could be done just by asking the right types of questions, and getting the partner to open up and share how they view the world. Leaders could also ask to spend time within their partner’s organization, which creates opportunities for learning in their environment. We need many more people with the ability to foster cross-sector collaboration. This is a skillset that can be developed. The reason these leadership skills are important is because once you create an understanding and accurate perceptions, a lot of the resistance barriers dissipate quickly. I would say that we would all make progress if we had more people who had the skills and capabilities to reach across sectors and put themselves in the other side’s shoes.

TLD Group: What would you say has been your “key learning” from your experiences trying to impact change within your organization?

Carmouche: I have had to learn to take a longer-term view. I am not a patient person – I see an opportunity and have a vision for our organization that is so powerful to me that I want to get to it immediately. For me, the leadership lessons haves been: a) you’re not going to hit a home run on every complex initiative, and b) there is value to just having the discussion itself. Not reaching the desired solution immediately doesn’t equate to failure. Just opening up the dialogue and having the conversation makes the organization better and is part of their growth. For me, it’s having to learn to view it as a learning process that takes time and persistence.


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