Tomas Gregorio is the Senior Executive Director of Healthcare Systems Innovation at the New Jersey Innovation Institute (NJII). He is leading the ambitious Medicare effort to help some 11,500 physicians transform their practices as government payers move toward value-based care.

NJII is a corporation of NJIT. Why does the institute want to invest in health care as part of its innovation institute?

Several years ago I approached the university about the wave of technology reform converging to affect health care. I worked with NJIT while I was CIO of a local hospital and applied to the Office of the National Coordinator for Health Information Technology and we were awarded $23 million to help physicians adopt electronic health records. Now that doctors have this health information technology, how are they going to use the advances to change the way health care is delivered? The world is moving away from fee-for-service and it’s our job as an innovation institute to find new ways to solve problems. Doctors are going to be paid for keeping people well and out of the hospital. Our technology infrastructure and reporting know how makes us well positioned to help physicians with this next step.

So last year you were chosen for this important work — helping doctors move toward value-based care — and received a nearly $50 million grant from Medicare. How does your expertise lend itself to this work?

Our ability to collect clinical data from disparate sources, our deep knowledge of electronic health records and our boots-on-the ground experience in physician offices gives us a tremendous head start. We have more than 8,000 physicians as part of our membership of meaningful users of health IT, which also aligns well with the objectives of the grant.

Value-based medicine is about more than changing payment models. Do you also have to change the way physicians and patients think about health care? Do you have to change the culture?

Definitely. Let’s say you’re a doctor with a patient who has a chronic illness. The idea is for patients to have many more touches. There is a care coordinator, maybe a patient navigator, a community health worker. The patient does not just leave the doctor’s office with a piece of paper with discharge instructions or a prescription. Maybe the patient gets a follow-up call. “Did you pick up your prescription?” If the answer repeatedly is no, then what’s the next intervention? Maybe a community health worker shows up at the patient’s door. It’s a holistic approach. It’s no longer that the patient leaves the doctor’s office and it’s over.

Doctors have so many claims on their limited time. How are you going to encourage doctors to join up for this training and coaching?

Right now we are able to show doctors what their performance is and what it will be in the future. We will help them understand that if they don’t get into an alternative payment model over the next couple of years they will lose revenue. We can teach them how to transform their practice and put themselves in the best possible position to receive alternative payments. They really do need to be prepared. Physician practices that follow the measurement sets have seen increases in revenue — some of them hundreds of thousands of dollars in increased revenue. It is critical that doctors understand that if they are not educated, trained and coached, they could see significant deductions in their reimbursements of up to 6%, and vice versa, they will see an increase in their reimbursements if they had been educated, trained and coached. For example, a doctor who elects to be educated, trained, and coached by NJII in 2014 for quality reporting and improvement would have gone through the necessary steps to avoid a 6% penalty, as well as earning up to 32% as an upwards adjustment to the doctor’s reimbursements.

Medicare is expecting this initiative to save $250 million in Medicare costs. Is that really possible?

Yes. It is about finding the sickest patients who are costing the most money because they are not getting the best care. Then you change the paradigm. It takes work, but with our help and the help of the Quality Institute these goals are achievable.