Bringing Big Changes to the Smallest Patients

Dr. Sandy Melzer and Seattle Children's Hospital are dedicated to bringing value-based models to pediatric care in the Northwest

Just as the healthcare marketplace moves slowly but inevitably from fee-for-service toward value-based care and payment structures, providers and payers have been acquiring data and developing models to make population health work, both financially and in terms of quality of care. At least, that is the case for adult healthcare. Pediatrics, however, is a different animal. Dr. Sandy Melzer, executive vice president for networks, population health at Seattle Children’s Hospital, is working hard to bring attention to the importance of pediatric population health as the healthcare environment continues to evolve.

“The total spend on children’s health is relatively small in proportion to adult health spending. It has not been prioritized,” he says. “With the ACA, there was a big focus on putting money and effort into finding new clinical and business models, especially for adults in Medicare. There really has been no parallel effort for children.”

Working on behalf of children’s health has been Melzer’s lifelong career, beginning as a pediatrician and later moving into management. Originally from New York City, Melzer graduated from the University of California, Berkeley, and Icahn School of Medicine at Mount Sinai. After a few years of clinical practice, he became intrigued by the business side of medicine. “As the healthcare environment changed, I got interested in how regional specialized hospitals respond and thrive in this very dynamic environment,” he says.

Sandy Melzer, Seattle Children’s Hospital

In 1994, Melzer joined Seattle Children’s, the pediatric and adolescent academic medical center for
Washington, Alaska, Montana, and Idaho—the largest region of any children’s hospital in the country, now comprising forty-one network sites in those four states. His first major task, which took up much of the first decade or more of his tenure, was building that network.

“I really enjoyed that external role,” he says. “I spent a lot of time in Alaska and western Montana, flying around in small airplanes, having breakfast with doctors in local diners, and trying to build that network to bring Seattle Children’s specialized care to distant communities.” He discovered that his clinical background was a major benefit. “I find it critical to understand the clinical side and to be able to have clinical conversations with our providers and partners,” he says. “My unique role is kind of the ‘doctor-
business guy.’” Melzer augmented his business credentials by earning an MBA from the University of Washington in the early 2000s. “That solidified my skill set and gave me the vocabulary and knowledge of the nuanced financial aspects of healthcare delivery,” he says. “A physician/executive with an MBA and a well-developed clinical perspective has a tremendous advantage.”

The philosophy behind all of this network building, as with other large regional medical centers, was to create the hub-and-spoke system of tertiary care connected to community-based hospitals. “The goal is to provide pediatric care closer to home, in places where care is very limited,” Melzer says. A secondary goal is to collect and analyze care data to push best practices in the new world of population health as it relates to children.

Fasten Your Seat Belts

Building a network across widespread, remote parts of the American Northwest provided Sandy Melzer with some interesting, and sometimes harrowing, experiences. For example, he once was asked by Senator Patty Murray to testify at a hearing in Central Washington. “I expected a state patrol car to pick me up,” Melzer says. “Instead, a man from Fish and Game met me with a well-worn two seater airplane and took me on a fantastic tour over the Cascade Mountains. He wanted to give me a personal tour of where he worked. It was a bumpy, windy, thrilling ride. And it was not what I had expected when I got up to go to work that morning.”

The main difference between adults and kids, he says, is that many adult health problems are age and lifestyle related, such as diabetes, hypertension, and substance abuse. Children, on the other hand, are generally healthy, except when afflicted by acute conditions, congenital diseases, or complex conditions such as cancer. “In pediatrics, we are challenged in managing complex, rare, and expensive conditions,” he says. “We don’t have the same standardized evidence that exists for many common adult diseases. There are hundreds of outcome measures for adults, but few standard measures for children. We would greatly improve quality of care by developing consistent metrics and standardizing care.”

Melzer also emphasizes the importance of keeping children front and center in health policy conversations and developing solutions specific to their needs. In health policy development, kids are often left behind and may be an afterthought in planning, Melzer says. “When it comes to clinical care, children are not little adults, and our population health interventions, policies, financial arrangements, and approach to families must reflect that fact. We are working hard to raise awareness of the differences between adult and children’s population health and hoping to improve care in that way,” he says.

To that end, Melzer has been spearheading the health system’s new clinically integrated network, called the Seattle Children’s Care Network, a quality improvement and contracting initiative that he says is relatively new to pediatrics. Made up of about two hundred independent, community-based primary care physicians and about seven hundred pediatric specialists employed by the network through faculty arrangements, its goal is to standardize care, reduce utilization through better data analysis, and collaborate with those community-based doctors in new payment products. “It is largely focused on employer-based and commercial value-based arrangements, and we have learned some very valuable lessons in the process, especially around quality improvement and data collection,” Melzer says.

Another major project on his to-do list is leading a fifteen-hospital collaborative effort on accountable care for the Children’s Hospital Association, a national trade association. Each hospital is looking for different solutions for accountable care and value-based contracting, Melzer says. “There is no single model, no well-defined path, and it is fascinating to see the different approaches hospitals are taking,” he says. Several organizations are “placing big bets” on full capitation for Medicaid populations, Melzer says. Others are looking to develop legal entities between community physicians and hospitals to improve quality and share data. “A third area is children’s hospitals attracting kids with special needs,” Melzer says. “Some are positioning themselves as population health managers for kids in foster care or disabled kids. They are looking at ways to work with a wide range of payers to treat some of these complex and expensive cases.” One of the most challenging aspects of his job, though, isn’t the work involved.

“It’s getting people’s attention in the market,” he says. Breaking down the silos and shifting the focus from transactional healthcare to a more longitudinal perspective takes up much of his time as he coaches, mentors, and energizes people to move in the direction of change. “We know the world is going this way and that the old fee-for-service world will be less of our business,” he says. “Here in Seattle, I don’t see us being 100 percent value-based, but enough of our business will move that way that we have to be effective in making that transaction.”

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