GE Healthcare Camden Group Insights Blog

The National Association of ACOs (NAACOS) announced new results to its ACO Tracking Survey. Their report provides updates to the likelihood of ACOs staying in the Medicare Shared Saving Program and the ongoing operational costs of ACOs. The results from the October 2014 survey show that two out of three (66%) MSSP ACOs are highly unlikely or somewhat unlikely to remain in the ACO Program. An additional 26% are undecided. This resulted in only 8% of ACOs being likely to sign a second contract and 92% either unlikely or undecided.

NAACOS President, Clif Gaus, commented "This continues to be the most troubling aspect of the Medicare Shared Savings Program and must be sufficiently addressed in the upcoming CMS proposed rules or the MSSP will no longer exist and the high hopes of DC policy-makers to migrate ACOs to capitation and two-sided risk will be impossible."

Although the ACO may seem similar to a patient-centered medical home with the primary care physician (PCP) as the most important player, ACOs are required to provide care from specialists. There are variations in how this can be achieved. The ACO itself is not mandated to include all specialists, but must manage the cost and quality of providing specialty care.

Although primary care providers have an important role in coordinating care, it is also important for CMS to maximize specialist participation in the management and development of ACOs. Specialist physicians should play a vital role in ensuring the appropriate access to and use of specialty services by patients and their primary care providers.

Specialists may add value in ACOs by:

• Defining appropriate use criteria for referral to specialists
• Specifying appropriate indications for diagnostic and therapeutic interventions
• Establishing performance measures related to specialty care
• Developing innovative solutions to enhance communication between primary care and specialty providers

For integrated delivery systems interested in forming an ACO, there will be fewer changes. If healthcare providers organize into a Level 2 model (a multispecialty group plus a hospital), the specialist may need to join the group to continue providing service to the patients attributed to that ACO. For many specialists, the transition of their patients into an ACO may be invisible. Referral patterns, however, may be markedly affected. Although a specialist could have a relationship with several ACOs, the motivations to minimize cost and maximize quality may lead an ACO to identify “preferred” specialists. Preference could be expected for specialists who provide cost-effective and coordinated care through communication with their referring doctors.

Regardless of the level of integration of an ACO, coordination of care between the specialist, the PCP, and other care providers will be expected. This coordination is expected at multiple levels, from avoiding unnecessary duplication of labs or imaging to ensuring appropriate specialist referrals. Further, communication between specialists and the referring PCPs will increase in importance, both to avoid duplication and to guide the PCPs in conservative treatment of the patient. At each step, there will be an expectation to provide appropriate care in a cost-effective manner.

Successful implementation will require significant cultural changes from the motivations inherent in a fee-for-service model. Spontaneous implementation of change could be difficult, but reimbursement will likely be the driving force to bring coordinated care to fruition.

Join Health Directions Vice President Lucy Zielinski and Ericka Adler, JD, LLM, as they present ACOs: Ready or Not--What Independent Physicians Should Know About Accountable Care Organizations this Thursday, September 26. This complimentary breakfast seminar is presented by the Independent Physician Advisors professional group.

Content to be addressed includes:

• What is an ACO?
• How would an ACO impact your practice?
• What do physicians need to know in order to participate in an ACO?
• What are the benefits or detriments?
• What are the key terms of an ACO agreement?
• What should physicians look for in an ACO and what will be required of them?

Schedule:

Thursday, September 26, 2013

7:30am: Hot Breakfast & Networking

8:00am: Presentation

9:30am: Q&A

Location:

Redstone American Grill

13 Lincoln Center

Oakbrook Terrace, IL 60181

630-268-0313

Registration:

This event is complimentary, however advanced registration is required. To register for this event, please click the button, below:

Time is running out for several undecided Medicare Pioneer accountable care organizations to choose whether to stay or go.

The CMS recently announced that as many as nine provider organizations will make an early exit from the most ambitious federal test of accountable care, an experiment under the 2010 health reform law to overhaul payment to doctors and hospitals. The trial was launched in early 2012 as the Center for Medicare and Medicaid Innovation's Pioneer accountable care program, which sought to try out the payment model with hospitals and medical groups believed to be the most experienced and prepared for its financial risks.

Deadline Approaching

Pioneers have until the end of July to decide. At least four of the 32 organizations have notified the CMS of tentative plans to switch out of the Pioneer program and join 250 other ACOs in Medicare's alternative test of the payment model, known as the Shared Savings Program. That model allows ACOs to opt for a payment arrangement that does not include the risk of financial losses.

The uncertainty of some Pioneer ACOs—just one year into the test to see if accountable care can deliver the quality gains and spending restraint hoped for by its proponents—raises questions about how successfully the largely untested payment model works in practice. ACOs are one of the key delivery system reforms established by the Patient Protection and Affordable Care Act, and thus are being closely watched. But experts said all along that the ambitious delivery-system changes envisioned in the ACO model would be difficult and take time to achieve.

The potential setback comes even as accountable care contracts between private payers and providers have increased and, the National Academy for State Health Policy reports, several states have endorsed or moved to adopt accountable care under Medicaid. 

The ACO model is intended to reward providers that meet quality and cost-control targets with a share of money they save on patients' medical care. Pioneers also face financial losses if patients' healthcare costs exceed the target. Performance on quality measures directly affects ACOs' financial payouts. Ones that perform well on cost-control targets but poorly on quality measures do not receive a share of the savings. ACOs can see financial penalties reduced even if spending exceeds the target with strong performance on quality measures. 

Pioneers that may exit the program have yet to say much publicly about why they may leave.

The chief executive of Presbyterian Healthcare Services in Albuquerque has previously said his system is negotiating with Medicare over difficulty with the design of the accountable care test. Presbyterian has yet to decide whether to opt out.

Challenges

One challenge with the model is that Presbyterian and other Pioneers cannot limit patients' choice of hospitals or doctors but still must answer for the cost and quality of patients' care whether provided inside or outside the system, Jim Hinton, Presbyterian's president and CEO noted in May. Hinton also said data from the CMS that Pioneers need to monitor their performance has been delayed, a complaint echoed by other Pioneer executives during the program's first year. 

Sharp HealthCare in San Diego is “evaluating our continuation in the Pioneer ACO program in light of the evolving structure of the program,” and will decide by July 15, spokesman Tom Hanscom said in a prepared statement. He said Sharp officials would not make any additional comment before then. The ACO, however, continues to operate.

In Minnesota, Minneapolis-based Allina Health is unsure. Also ambivalent are Arlington-based Texas Health Resources and North Texas Specialty Physicians, which jointly entered into an accountable care Medicare contract for their Plus ACO, based in Fort Worth. Officials with the organizations declined interviews.

More than 200 primary-care physicians who organized another Pioneer ACO in Denver, Physician Health Partners, will review the latest performance data from Medicare and other data sources in coming days, spokeswoman Abby Brookover said in an e-mail. Officials declined to discuss any decision about the program until then, she said.

CMS Weighs In

The CMS emphasized the Pioneers that chose to switch to the Medicare Shared Savings Program rather than abandon ACOs altogether. “We're encouraged that these organizations want to continue in programs that promote better care at lower costs,” said CMS spokesman Alper Ozinal. “We fully anticipated that as these programs get up and running, some organizations would shift between models.”

Tension and leadership turnover have marked the start of the Pioneer program's second year, which began in January. Pioneers face tougher quality performance measures in the second year, which quickly surfaced as a source of tension between the ACOs and Medicare. Federal officials proposed a compromise in April, but have not yet released final details. Meanwhile, the CMS last month announced the unexpected departure of Dr. Richard Gilfillan, the Innovation Center's top official.

Pioneer ACO performance results are not yet publicly available for the first year, which ended last December. Nonetheless, the financial risks for participation grew more aggressive in the second year.

The upheavals and challenges, however, have not discouraged other Pioneer participants. “It's been a tremendous learning experience for us,” said Stuart Lockman, president of the Michigan Pioneer ACO, which was formed by Vanguard Health Systems' Detroit Medical Center and will continue in the initiative. The Detroit ACO constantly fine-tunes efforts as the organization learns from its care management, quality and cost-control efforts under the program, he said.

Michigan Pioneer ACO officials consider periodically whether to continue, based on a number of criteria, including how well the program achieves financial and quality objectives and its working relationship with the CMS, he said.

Pioneers learn from each other as well, and fewer participants would be “unfortunate,” said Lockman, adding however that “I don't think it's a very significant impediment.”

The joint effort between five-hospital ThedaCare, in Appleton, Wis., and Bellin Health Systems in Green Bay, Wis., also will stay in the program. Dr. Dave Krueger, executive director for the Bellin-ThedaCare Healthcare Partners Pioneer ACO and its medical director, lamented the departures. “We are losing some intellectual horsepower,” he said.

The Wisconsin Pioneer benefited during the program's first year from prior investments in quality and efficiency improvement, he said. The ACO performed well during the first year and was also able to make new investments that officials hope will pay off in later years. “We're still ramping up,” he said. “We're still putting our changes in place.”

Without such advance investments, other Pioneers may have struggled to deliver results during the first 12 months, he said. Even so, Bellin and ThedaCare found the return on investment took longer than imagined. “It's always more work than we expect and never as quick as we expect either,” he said.

Courtesy of CNBC.com

According to the United Nations, the overall median age in developed countries rose from 29.0 in 1950 to 37.3 in 2000, and is forecast to rise to 45.5 by 2050.

The aging population comes with many challenges — across social, financial, economic, and political dimensions. Managing healthcare quality and costs for this demographic is one of the key focus areas in the U.S.

Healthcare spending has grown from 5% of U.S. GDP in 1960 to about 17%, or $2.4 trillion, in 2008. The Centers for Medicare and Medicaid Services (CMS) expect healthcare spending to nearly double to $4.4 trillion by 2018 (20 percent of GDP).

While the cost of healthcare continues to increase with age, there is significant evidence that a collaborative approach between consumers, providers and payers has a very meaningful impact on reducing long-term healthcare costs. 

The effective use of healthcare information technology is one of the primary levers for achieving this objective. Healthcare IT offers a tremendous opportunity to support many high impact areas in health care delivery.

Here's some ways it can help:

• Enhanced consumer awareness and tracking of healthcare conditions: patient portals allow easy access of healthcare information to patients, while consumer health technologies allow effective use of consumer health devices and self-management software for consumers.
• Increased focus on chronic condition management: complete patient records would enable physicians to access patient information integrated across healthcare providers. Business intelligence and analytics could be used to identify high risk patients and proactively manage care.
• Reduced cost of hospitalization and re-admissions: cost tracking tools would enable organizations to clearly track true input costs and efficiencies, optimize resource utilization and reduce costs.
• New cost effective healthcare delivery models created: The use of home monitoring and tracking applications could  reduce the need for hospitalization, while the use of new Internet video/audio capabilities could enable consumers and patients to increase access to physicians and nursing staff without need for visits or hospitalization.

The federal government is recognizing the positive impact of health care IT on managing and the reducing the cost of health care. 

The American Recovery and Reinvestment Act of 2009 (ARRA) provides $19 billion to promote the adoption and use of technology in healthcare. The law provides financial incentives for hospitals and doctors to adopt and use electronic health records, and financial penalties for physicians and hospitals who do not use them meaningfully by 2015.

There are many new healthcare technology organizations emerging in the market — resulting in a high level of venture capital and private-equity funding.

In addition to technology focus, providers, payers, and government need to work closely to create the right financial incentives for all stakeholders to collaborate effectively in a win-win environment. 

Traditional volume-based fee-for-service models need to transition towards outcome-driven models for patient care. Many new initiatives — pay for performance, bundled payments, accountable care organizations and patient-centric medical homes — are aligned in this direction.

Healthcare IT can be leveraged to integrate clinical information with financial and operational data, provide evidence-based insights and actionable intelligence, and reduce the risk involved with the new performance-based payment models.

In summary, the aging population is one of the most key issues facing the U.S. and most other Western countries. Given the high level of inefficiency in the healthcare ecosystem today, there is significant potential to reduce costs while still protecting the financial interest of all the stakeholders.

Our experience with healthcare technology over the years has consistently demonstrated that there is tremendous opportunity in using technology to enhance healthcare delivery for the aging population and reduce costs. From the healthcare IT perspective, the journey has just begun!

Another oustanding inforgraphic from Greenway Medical. This one on Accountable Care Organizations (click for full size):