Niyum Gandhi, Executive Vice President and Chief Population Health Officer, Mount Sinai Health System
As a population health expert tasked with helping New York’s Mount Sinai Health System transition to value-based arrangements, Executive Vice President and Chief Population Health Officer Niyum Gandhi is well-versed in the many cultural and organizational challenges that occur when a system shifts its focus from filling beds to managing the health of patient populations.
In this episode of Tuning Healthcare, Niyum, who is also an Assistant Professor of Health System Design at the Icahn School of Medicine, shares insights around organizational transformation and effective execution of population health initiatives.
“It all starts at the top. [It] can’t possibly be overstated how important that is. The vision for what we want to do came directly from the board and the CEO. Without that, there’s no chance of the type of transformative change that we want to have. …Without that commitment from the top, I think it’s pretty much impossible.”
– Niyum Gandhi
In this episode, Niyum talks to Lumeris Senior Vice President Nigel Ohrenstein and discusses:
- Why transformative change starts at the top from the board and CEO,
- How to find the right risk-based contracts to start a value-based journey,
- Why organizations will likely find it quicker to scale if they partner with a collaborative payer instead of trying to start their own Medicare Advantage plan,
- What health systems need to do to engage physicians, and
- Why health systems must focus on building a highly effective primary care model that is purposely built for scale to transition to risk models.
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- Read Transcript
Nigel Ohrenstein: In today’s episode of Tuning Healthcare, I’m joined by Niyum Gandhi. Niyum is the Executive Vice President and Chief Population Health officer of the Mount Sinai Health System in New York and an Assistant Professor of Health System Design at the Icahn School of Medicine. In addition to being a close friend and a colleague, Niyum is an expert in population health and spends his days focused on how do you transform an academic medical system that has spent its entire life focused on fee-for-service and filling beds and transition it to a health system that manages populations, whether those patients are in their system or outside.
Nigel Ohrenstein: Join us here in New York City, where not only will you hear some of the flavors of living and breathing in New York, but also learn from Niyum how do you get the right risk-based contracts, what do you need to do to change the culture of physicians, both those that are employed by the system and those that are affiliated with the system, and what do you need to do to start as you look to move from fee-for-service to a value-based system.
Nigel Ohrenstein: Niyum, it’s great to have you here today.
Niyum Gandhi: Thanks for having me, Nigel.
Nigel Ohrenstein: So let me start with Assistant Professor of Health System Design. What is that? Can you explain that part of your role?
Niyum Gandhi: Sure. So about two years ago under the guidance of Prabhjot Singh, who’s now our chair of the department of health system design, Mount Sinai decided to launch an effort to marry the academic mission that we have and all of the great research that goes there with some of the more operational issues going on in healthcare. So we have a great reputation in the School of Medicine for scientific discovery and advancing new therapeutics and then translational research of kind of bench to bedside. This is taking that same idea of bench to bedside around actually healthcare operations.
Niyum Gandhi: So what the department is focused on is identifying kind of opportunities to tease apart what makes health system design work, what makes operations work, getting beyond kind of traditional health services research into true healthcare services and operations research, and then applying that into what we do. The really tangible docking point between my function and the department of health system design is our practice transformation work sits at the intersection of the two, and so the idea of going beyond incremental improvements in primary care to radical redesign of the clinical operating and financial model of what primary care is.
Niyum Gandhi: The type of people who we can get, user experience designers who have a background in that sort of work, industrial engineers, those sorts of folks, we were able to bring them to Mount Sinai because they want to spend some of their time doing research on applying their principles to healthcare, but also develop the pilot opportunities to do this within Mount Sinai, and then the capabilities and intellectual property that allow us to scale it. So that’s the work that we do in the health system design department. I’m fortunate to be a part of it with a bunch of people who are a heck of a lot smarter than I am, who I can learn a lot from, and hopefully, we can get some synergy between the partnership.
Nigel Ohrenstein: And the goal is to take what you’ve done and find out in the School of Medicine and apply it at Mount Sinai, or the goal is bigger and broader, that these principles will get deployed across the country, maybe even across the world?
Niyum Gandhi: So it’s the latter for sure. So we need to figure out how to do it internally first. And so, again, much the same way that we do with our clinical research, you identify something where there’s an opportunity, test it, do kind of a clinical trial, in this case, more of an operational trial, and then publish on it and hopefully help other people scale it. So that’s exactly the intent there.
Nigel Ohrenstein: Sounds great, and tell us a little bit about your role as Chief Population Health Officer of Mount Sinai.
Niyum Gandhi: So I’ve found that the title is… It’s funny because there [are] dozens of us with the same title, and whenever I meet somebody from a different health system who has the same title, there’s almost no overlap in what we do. And I think it’s just because different health systems kind of structure this differently. I remember a conversation I was having last week with somebody where they said, “Oh, so do you do the community needs assessment for Mount Sinai?” And it’s like, no, I don’t. I don’t even know if I’ve ever seen our community needs assessments.
Niyum Gandhi: So my job at Mount Sinai covers a few key areas. One is all of managed care contracting. And we made a really deliberate decision to include the fee-for-service hospital contracting within population health, which I think is really important for our ability to kind of titrate the balance of risk that we take and move forward effectively. And then all of the clinical programs that support value-based payment models, so whether it’s outpatient care management or this practice redesign work that I was referencing, or ambulatory quality monitoring and measurement, utilization management, all of those sorts of programs, the IPA that we use to partner with community physicians who work with us on this, and then all of the kind of IT and analytics that support those other areas as well.
Nigel Ohrenstein: So you mention people with the same title or similar title. Becker’s just named you one of 32 chief population health officers to take note of, so congratulations on that. So when you look at those other 32, they obviously all, as you just said, have had different jobs. Was anybody—and it doesn’t have to be from those 32—does anybody in healthcare you look at and say, “I really admire what he or she is doing. How do we replicate that at Mount Sinai? How do I replicate that in my career?”
Niyum Gandhi: There are…I mean, we could spend the entire podcast talking about this. There are so many inspiring people in healthcare. The two who really stick out to me though, Marc Harrison at Intermountain is just one of my heroes. I think what he’s doing in that health system, the courage he has as a leader to really define the role that he believes Intermountain needs to be playing in that community, and they’re starting from a position of already being ahead of most on all of the things that everybody else is trying to do right now: high value reliable care, population health certainly, he’s taking all that to the next level. You know, massive reorganization…To say, “We’re good, but we’re not good because of how we’re structured. We’re almost good in spite of that. And I really want to take it to where we need to go to meet the community’s needs in the most comprehensive way possible.” So just absolutely inspired by the leadership that he has, where he’s taking the organization already and where he’s continuing to take it.
Niyum Gandhi: And then the other who always comes to mind is Sachin Jain at CareMore. And I think the work that they’re doing at CareMore is fascinating. As we talk more about population health, one of the things that always comes to mind is that we have a healthcare system across the country that’s really designed to be a sick care system. It’s designed to treat illness and prevent death, not to treat the person and prevent illness. And so to get to a model that is successful at population health, it doesn’t require just redesign. It requires kind of a replacement system, something that is radically different. And what they’ve done at CareMore over 30 years is really built that and continue to iterate it.
Niyum Gandhi: What’s fascinating about Sachin’s work there is that under his leadership over the past four years or so, they’ve really started to scale that. Because it’s great if you can deliver this amazing population health-oriented care with 20% lower total cost of care, best quality in the region, almost no patient turnover to 50,000 people, but what about the other 320 million, right? And so under his leadership, they’ve grown dramatically. They figured out how to replicate that model in multiple markets across different populations. He’s also very focused on building the next generation of healthcare leaders, very involved in coaching and mentoring people. And that’s something that I want to try to emulate in my career as I go further.
Nigel Ohrenstein: So if my memory serves me correct, Marc came from outside of the U.S. Do you think there’s something to that, that someone who has had experience outside of this country, wasn’t perhaps tainted by everything that’s historically gone on? One of the things that I experience a lot in health systems is, this is how we’ve always done it. And there’s a lot of people like yourself who want to reform and change and transform and see where healthcare’s going, often come up against a brick wall of people that have lived in fee-for-service for years, made a lot of money in fee-for-service for years, CFOs that know how to build buildings and fill beds. So do you think there’s something in the fact that he came from outside the country and could bring international experience to Intermountain?
Niyum Gandhi: Yeah, I think it gives him a better bird’s eye view of what needs to happen. He spent time in the U.S. first, went abroad, came back. I think it puts things in perspective. I imagine that some of the ability to think differently about problems comes from the breadth of experience that he’s had.
Niyum Gandhi: And then part of it I think is also just he’s very unwilling to accept anything that is not good in terms of care. I mean, the passion with which he speaks about what the industry does that doesn’t add value and how that needs to be rooted out, again, I imagine having multiple perspectives both within the U.S. and outside helps clarify that in terms of what needs to be done. But he’s very zealous about that, which is again part of why he’s really inspiring, and hopefully, we can emulate some of what he’s been able to do.
Nigel Ohrenstein: So let’s delve a little bit deeper. It doesn’t necessarily have to be Intermountain. You could pick another system if you like. Are there specific things that, whether Intermountain or another system are doing, that you say, “This is what I want Mount Sinai to be doing,” whether a structure that you mentioned before, or is it the way they do care management? Is it the way they contract with payers? Is there something that you look at Intermountain or another system and say, “These are some of the things that we need to bring to Mount Sinai. We aspire to be like that”?
Niyum Gandhi: Actually, I think Intermountain’s a good example of this from a structure standpoint. When they recently made the switch to the structure where they have basically the community practices and all the risk with the health plans and all the post-acute sitting in one division, and then all of the specialty and acute sitting in another, I think that’s a model that can be replicated in more markets. And I think it’s a more nuanced model than the traditional health system that starts its own plan sort of model. I think it’s also more nuanced than…
Niyum Gandhi: I love Kaiser. The challenge there is it’s a closed system, and we can’t close our system. We deliver primary care or kind of primary care-like services to almost a million people. We touch 3 million unique people every year, with people coming in from all over the world to receive certain care from us, and we can’t turn into a Kaiser. That would actually be abandoning a very important part of our community mission.
Niyum Gandhi: I think what’s interesting about what Intermountain is doing is they’re actually saying, “These are two equally important parts of our mission. We need to maintain the health of the community that we serve, and we need to be there in times of need for people who are not with us for their overall health and wellness journey through life. Maybe they get their primary care elsewhere, maybe they’re coming in from a different geography… And we need to be able to provide the highest value, most effective, most efficient specialty care possible.” So I think there’s something to learn there.
Niyum Gandhi: I do think that, and part of the reason why I took the job at Mount Sinai, is that nobody has quite done what we’re trying to do, and we haven’t done it yet either. But what we aspire to do, because what we need to do is do all of those same things as an Intermountain, in the most competitive market in the country, where we don’t have the luxury of, in certain parts of our business, almost being a monopoly, right? There are three U.S. News & World Report Honor Roll hospitals on the island of Manhattan, along with the top ranked orthopedics program and a specialty hospital and the second ranked cancer program. I mean, this is a really competitive market. And you’re sometimes inhibited in what you can do and how fast you can move in specific areas. We can’t let that be an excuse for lack of progress across the whole, but it’s almost like if we can figure out how to do it here, then nobody else kind of has an excuse.
Nigel Ohrenstein: Sounds like a song, right? If you can do it in New York, right, you can do it anywhere. And quite frankly, that’s one of the reasons, right, that Kaiser and the integrated delivery model is not replicable across the country, right? Today, they probably serve seven, eight percent of the country. Even if you say they’re going to double, right, and get to 15%, that’s 85% of the country, whether it be, as you just described, in an urban setting. It’s not going to work. It’s not going to work in a highly, highly rural setting, right? And so there’s lots of people that need to be served.
Nigel Ohrenstein: And as you said, Mount Sinai is an impressive organization. Even, I don’t know how many years ago, it was five years ago when the billboards were out, “If all our beds are filled, we failed you,” right? So you set out a vision many years ago to transform the health system, and how’d you overcome that? So I imagine many health systems say, “We need to be like Mount Sinai,” right? I’m forcing you to ask about other systems. I’m sure there are hundreds out there say, “I’d love to be like Mount Sinai.” How’d you overcome that wall of resistance that I mentioned before?
Niyum Gandhi: I always used to say this when I was a consultant, but it didn’t crystallize for me until I came to Mount Sinai. It all starts at the top. [It] can’t possibly be overstated how important that is. The vision for what we [wanted] to do came directly from the board and the CEO. Without that, there’s no chance of the type of transformative change that we want to have. And I remember conversations I had when I was a consultant talking with the CEO of another system that in many ways looks like Mount Sinai, and it, at the time, was certainly further along in their population health journey than even we are now. So they’re still further along. They started many years before.
Niyum Gandhi: But we were having the conversation about really kind of ripping off the band-aid and moving to a model where you move from being a health system with a successful population health arm to being a population health manager that happens to own hospitals. And that…I was having this conversation with this other health system CEO, who I have a lot of respect for and has done amazing things, and he said, “Well, I think the question we have is, who’s done this? Who’s done this full transformation?” I said, “Well, no one. Don’t you want to be the first?” And without missing a beat, he said, “No, I’d rather be the second.” And I get that. I get that. I get why you’d rather be the second. These institutions been around serving their communities for a long time. You need to be somewhat risk averse around certain things. But in declaring that he wanted to be the second, he’s almost declared that he’s never going to get there.
Niyum Gandhi: And then fast forward a month, I was meeting with the Mount Sinai team. And this was before I came here to work full time. I got the kind of consultant’s dream of a pitch meeting with Ken Davis, our CEO, and the rest of the senior leadership team. And Ken asked the same question as we were probably about an hour into the discussion. He said, “Well, this all sounds good, but who’s done it?” I said, “Well, no one, Ken. Don’t you want to be the first,” thinking I’d get a similar sort of response. And without missing a beat, he said, “Yeah, do you want a job?” And I thought he was kidding until he called me the next day, and that’s actually eventually how I ended up here. And we won’t be the first. At least, I hope not. I hope there are others who are right along with us trying to do it faster, more aggressively. But without that commitment from the top, I think it’s pretty much impossible.
Niyum Gandhi: Now, that doesn’t mean there aren’t barriers, and we face them, and we decide which ones we want to take on and which ones we don’t. But I know that my boss will sit there and brainstorm with me. And if I bring him something and he says, “Well, how important is this? Is this absolutely critical to what we need to do,” if I say yes, he will make it happen. And then sometimes, we look at it and say, “Well, we can do X, but let’s not take on that one right now. Let’s do Y instead. Let’s build some more will. Let’s get these other people really excited about the change and then go from there.” And there are thousands of things we need to do. I mean, you know this from all of the other organizations that you work with. We need to prioritize. And so yeah, where we can have the fastest wins comes into the prioritization, but the aspiration is there to do it all. And the backing is there from him and honestly, from our CFO, which is pretty critical.
Nigel Ohrenstein: So have you ever had a situation where you, as the Chief Population Health Officer of Mount Sinai, is saying, “We need to ensure this care happens for this particular patient or this cohort of patients outside of Mount Sinai because it’s better quality of care, and it’s more efficient. And as the manager of the population, that’s the right thing to do for the population”? You’re sitting in the room with the hospital president who’s saying, “There’s no way you’re taking that care out of Mount Sinai. That has to stay in the system.”
Niyum Gandhi: Yeah. So we fortunately haven’t faced much of that, and I’d say it’s less about… When it’s going outside the system, it’s more because there are certain assets we don’t have. So perfect example would be, “Hey, this surgery needs to happen in an ambulatory surgery center,” and we don’t own one in that geography, or “This care should happen in a community hospital rather than coming all the way into the city.” So in those things, fortunately, we haven’t had that much of an issue.
Niyum Gandhi: And I think a lot of it comes down to actually our CFO and his approach to the finances of the institution. And it makes perfect sense to me. I think there are other CFOs who think about it differently, but he’s truly a balance sheet CFO. So he looks at it and says… We’re about an $8 billion organization, and he says, “Well, if we reduce that revenue but reduce the cost as well and keep the same cash position, days cash on hand go up. We’re a healthier financial institution.” He really doesn’t view a bed as a revenue generating asset so much as a capital intensive liability.
Niyum Gandhi: So when I have this conversation with him, and this was also… Before I took the job after Ken inspired me that Mount Sinai was really bought into this, I said, “I’m going to have to spend some time with the CFO. Do we see eye to eye on some of these things?” And I was talking through some of the investments we would need to make, and his office is and our corporate office is right across the street from the main hospital. And we were talking, and I said, and he absolutely believed in the investments that we would need to make to succeed in population health. I said, “Well, Don, just so you know, some of what we invest in is going to take revenue out over there,” and I pointed across the street. And he said, “That’s not your problem.” He said, “Look, either they need to expand their catchment area and become more of a destination for certain things, or they need to take beds out.” And that’s the truth for all of our hospitals.
Niyum Gandhi: And that’s why we’re taking almost a thousand beds out of the system because New York is over bedded. All costs are variable in a long enough time horizon, and we’ve been here serving the community for 170 years. The goal is to make sure we’re here serving it 170 years from now. If that means smaller hospitals, fewer beds, a different sort of ambulatory footprint, the right sorts of partnerships with those who can provide care that we can’t in an efficient and effective manner, then that’s the right answer for what we need to do. And fortunately, both Ken and Don have the long view in mind as they think about this.
Nigel Ohrenstein: So where do you start when you want to transform a system that’s predominantly fee-for-service to managing value-based lives, managing populations? [It] can seem so overwhelming to many systems that they just end up not doing anything or delaying it or saying, “I’ll be number two,” as you said before, but where did you start? Practically, what are the first things you do when you want to move your system forward?
Niyum Gandhi: So the way I think of a lot of what we need to do is there’s so much breadth and depth to the change that needs to happen that across pretty much anything, we try to start with… [And] so I’ll talk about it in terms of contracting and then in terms of kind of primary care model as two key things.
Niyum Gandhi: We try to start with something that is mile wide, inch deep and something that is inch wide, mile deep at the same time. So on the contracting side, get to some level of total cost of care responsibility for everybody, because you can’t go to your physicians and say, “Well, these 20% are risk patients, and these 80% are fee-for-service.” That’s absolutely unfair to a primary care doc to even encourage them to think about things that way. So instead we say, “Let’s take some level of risk across every population, but then let’s go deep somewhere where we know that we can succeed. So let’s take a big block of full risk Medicare Advantage, and let’s take a whole bunch of lower risk across 15 other payers.” So that’s kind of the inch wide, mile deep along with the mile wide, inch deep.
Niyum Gandhi: And then the same thing on primary care, and that’s where I would start from a care delivery standpoint. Well, let’s do the mile wide, inch deep of moving to patient centered medical home, starting to embed some care management, providing the wraparound services, standing up clinical pharmacy, all of the things that you can do incrementally, that you can embed into the practice, that you can change in the incentive design, that kind of base primary care transformation that’s an inch deep but then becomes two and three and four and keep progressing, but also take off some chunk and say, “We’re going to be radically different here, and let’s do the full scale transformation across clinical, operating, financial model.” And that’s some of the work that we’re doing with our colleagues in the health system design department of saying, “Can we take a practice and flip it upside down?” And so that’s, I’d say generally, starting with you got to get the incentives aligned for the system, have to take the risk, and then really engaging primary care, but doing both of them in that kind of hybrid model of both at the same time.
Nigel Ohrenstein: So if you look at Mount Sinai today, what percent of your revenue from sort of your payer contracts is coming from value-based agreements? I guess broadly describe broadly thinking of that definition as opposed to fee-for-service.
Niyum Gandhi: So it’s, the way I normally think about it is, what percentage of our… Well, so there’s probably two numbers. For our primary care practices, what percentage of the patients do we have kind of what level of risk for? We have some level of risk for about 75 to 80%. There’s this long tail of tiny payers who just haven’t gotten through contracting with. Of that 75-ish percent call it, a third are full risk, and then the rest are somewhere along the path. So if that’s kind of one input, so at the primary care level, we’re on the way to all-in.
Niyum Gandhi: And then the other question becomes, if you kind of think about that again, the way kind of Intermountain divides it of primary care community and then specialty and acute, what percentage of our specialty and acute business comes from our primary care patients because we draw from elsewhere? And that’s about half. And that’ll never be necessarily more than that, which is why we’re moving to other types of value-based arrangements on the specialty and acute care side. We’re doing bundles. We’re doing kind of more aggressive quality-based programs there. But the population health enterprise accounts for half of the revenue of the fee-for-service enterprise as we move to more and more risk. So those are the kind of the two numbers we track.
Niyum Gandhi: We do need to get to greater levels of risk across some of our risk contracts. And some of that is just, we started the contract in 2017. We weren’t going to jump into the deep end of the pool in 2017 without learning with that payer first. And we found there really is value to learning with the payer. We do very differently in our Medicare Advantage risk contract that we’ve had for a decade versus the one that we’ve had for two years. And we know what we need to do to succeed, but we need to hardwire that in more. So as we do more of that, I think we’ll be able to get to more of a model of, in primary care, basically everybody is full risk or something like it, and then we become the biggest payer for the acute and specialty enterprise.
Nigel Ohrenstein: So you mention Medicare Advantage. How critical is Medicare Advantage to the population health strategy?
Niyum Gandhi: Absolutely critical. It’s the only population that meets probably all of the right criteria for success in population health. I mean, one of the things I love about population health as a business model is you have incentive to focus resources on the most needy patients, which is totally not true in fee-for-service, right? In fee-for-service, you have incentive to see patients as quickly as possible so that you can see the next patient. In population health, my total cost of care as a patient for last year was, I don’t know, probably $150. You take risk on me. What are you supposed to do? You don’t want to decrease that. I had one PCP visit. You probably wanted me to have that. Patient that costs $50,000 a year in Medicare Advantage, well, two hospitalizations, a couple of ED visits, maybe they’re on an inexpensive Part B therapeutic that you could move to a more effective and less expensive one, big opportunity there. Focus on the needy, which is great. So the senior population has a lot more of that, just demographically. It makes sense.
Niyum Gandhi: And then Medicare Advantage, unlike Medicare fee-for-service and the models released by CMS, is not a beat yourself model, if you’re performing. So on our most effective Medicare Advantage contract, we perform in the high 70s medical loss ratio. If we perform at that level and we keep doing the same, we keep making money on it, which we can use to fund infrastructure.
Niyum Gandhi: One of the things I don’t like about the turn the industry has taken over the past three to five years around population health is these are referred to as value-based incentives. It’s not an incentive. You don’t need an incentive to provide good care. You need funding to invest in things that the fee-for-service model doesn’t fund. So in a model where it’s all about beat your prior performance, and we’ll share some of the savings, and then we rebase it and then beat your prior performance again, you don’t have predictable streams of revenue from a population health source to fund the infrastructure. And in Medicare Advantage, you do. In the new CMMI programs, in the new Medicare Shared Savings Program, they put a little bit of that in. It goes to half and half, half the county benchmark, half your own. But Medicare Advantage is still kind of the gold standard of the right type of model.
Nigel Ohrenstein: And I couldn’t agree with you more. I’ve spent 10 years studying different models around how do you move a system to value-based care, and it seems that what’s critical, right, is a sustainable business model, right? You can have a year or two of success, right, but how do you sustain it? Seems to me that there isn’t a model out there that I’ve seen that has sustainable success without MA. I think it’s partly what you said around the financial element of it. It’s the fact that the risk adjustment model, as you said, is working, but it’s also the fact that you can engage your primary care physicians at a much lower panel size. There’s some great elements to it that help drive that. What advice would you give to a system then that said, “I don’t have a large MA population yet. I need to build that over time. How do I start? Where do I go? It’s going to take me a few years to build that MA population”?
Niyum Gandhi: I mean, we were fortunate that our largest Medicare Advantage payer in our market-
Nigel Ohrenstein: You own.
Niyum Gandhi: We own a piece of. But they operate only in a full risk model. They’re globally capitated. I mean, they pay the claims, so it’s not true kind of prepaid global cap. But they’re globally capitated for 85% of their lives. And everybody who receives their primary care from us, we have full risk for across Medicare and Medicaid there. So that’s great. It gives you a good starting point. If you don’t have that already, I would say find whoever is the largest MA payer in your market, try to strike something collaborative, and then yeah, try to grow MA right? And if you don’t have collaborative payers in your market, bring a payer in from out of market.
Niyum Gandhi: I hesitate to say start your own plan. If it’s on mission for your organization, it makes sense. So again, for somebody like an Intermountain or a Geisinger in a more rural geography, I get it, actually, because the way they define their mission aligns with having a health plan across a broader geography than their delivery system. In a more competitive market, we look at it and say it’s actually an off-mission use of our balance sheet to set up insurance reserves. That’s not what we’re here to do. So let somebody else hold the reserves, contract for risk in an appropriate way, take performance risk rather than insurance risk.
Niyum Gandhi: But running an insurance company is a hard business. Running a health system is a hard business. You’re already in one. Do you want to get into another? But partnerships are possible, and there are more and more smaller Medicare Advantage payers that are willing to enter a new market in partnership with a delivery system to really take things to the next level. It’s a slow slog though. If you can find the 40% share MA payer in your market and they’re willing to be really collaborative, probably a quicker way to get to scale.
Nigel Ohrenstein: So you mentioned before that the performance you have in an MA contract that’s 10 years old is different to one you have in two years. So imagine then if you owned that plan and 10 years down the line, you’re now getting that much more of the premium dollar that’s coming back to Mount Sinai as opposed to giving that up to the payer.
Niyum Gandhi: It’s a good question. And it gets down to the payer mission as well, right? So with our contract with Healthfirst, they run a zero profit business, and if they ran any profits, it would come back to us and the other shareholders on the back end. And so it works pretty well with a for-profit health plan. Perhaps they want to make sure that they have some level of earnings.
Niyum Gandhi: If you think though about a health plan margin on an MA book, it’s small. It’s single digit percentage, especially with the MLR floors. So if we can take full risk at 88% of premium, do I care if they run their admin costs at nine and keep three? Well, if I’m performing at 75, I’ll take my 13 and not worry about their three. And I guess that’s the approach we’re taking, that most of the potential earnings to invest in better care are in the MLR, not in the administrative cost ratio. So I don’t really want a claims shop. I don’t want to do billing eligibility and enrollment, all of those things. We’ll focus on delivering care.
Nigel Ohrenstein: That’s great. I’d like to end as I normally do with few quick fire questions. Best piece of business advice you’ve ever been given?
Niyum Gandhi: All you have is your people.
Nigel Ohrenstein: Favorite thing from your time at Harvard?
Niyum Gandhi: I’m glad this is at the end so that you can’t put me on the spot. The time that I spent with my singing group at Harvard, and no, I’m not going to sing.
Nigel Ohrenstein: Favorite thing you do when you’re not working?
Niyum Gandhi: So we’re really boring. So for me, favorite thing is cooking dinner, sitting down on the couch with my wife and our dog, and watching some TV while eating.
Nigel Ohrenstein: If you had $100 million to invest in healthcare, and obviously you can’t say Lumeris, where would you put it? You don’t have to say an actual company. What part of the healthcare system would you put it in?
Niyum Gandhi: I would focus on building a highly effective primary care model, and that doesn’t necessarily mean primary care centers but a primary care model, a primary health model that is actually purpose-built for scale. I think a lot of the tremendous models that we have for primary care are seeing challenges in scaling and are trying to. And then we have scale and are seeing challenges in getting to that level of performance. That’s where I would put my bet.
Nigel Ohrenstein: And finally, biggest change from being a consultant to actually being an operator and responsible for a line of business?
Niyum Gandhi: Having to be humble about what doesn’t succeed. Not that all consultants aren’t, but it was very easy as a consultant to… You give them a strategy, you leave, you come back two years later, they’re successful: you pat yourself on the back. [If] they aren’t successful, you say, “Oh, they don’t know how to implement.” We’ve had failures, absolutely, and I have to own the failures along with the successes. And that’s taught me a lot of humility.
Nigel Ohrenstein: Great, Niyum, thank you for joining me.
Niyum Gandhi: Thank you.
- Text Message Alert 1 Sound. Available at http://soundbible.com/2154-Text-Message-Alert-1.html.
- ECG Sound. Available at http://soundbible.com/1730-ECG.html.
- AM Radio Tuning Sound. Available at http://soundbible.com/2099-AM-Radio-Tuning.html.
- Intro music. Gordon Household. August 2019. WAV File.