By Mishka Glaser, MA, CISA, Manager, and Daniel Juberg, Manager, The Camden Group
The difference between an uphill battle and a steep learning curve is perspective. In the end, both depict a difficult task that ultimately requires lots of effort.
With the recent 2014 Medicare Shared Savings Program (“MSSP”) performance results announcement from The Centers for Medicare and Medicaid Services ("CMS"), is it really surprising that fully “three out of four Medicare accountable care organizations did not slow health spending enough to earn bonuses last year," as Modern Healthcare has pointed out? The U.S. healthcare system is currently disjointed with years of conditioned responses from every part of the delivery system, from patients to providers and everywhere in-between.
The results should not come as a surprise to those who have been monitoring the healthcare environment for any significant period of time. There are two systemic barriers impacting Accountable Care Organizations' ("ACO") ability to drive the cost of care downward to target thresholds:
- Change is an uncomfortable and slow process. The healthcare industry is learning to adopt the necessary structures for successful change to a value-based payment and population health model. This is a paradigm shift for all players in the healthcare delivery space, from the traditional providers such as physicians, care teams, and payers, to less conventional participants such as health information technology companies and patients.
- The complexity of delivery system transformation creates competing priorities which must be coordinated effectively to be successful. For example, challenges include a participating ACO’s ability to:
- Process, utilize, and communicate the copious amounts of data needed to make useful programmatic decisions
- Reach beneficiaries and have meaningful engagement surrounding their health status and the behavioral changes necessary to drive improvement
- Balance the need to provide the right care in the right setting (therefore reducing hospital volumes, shortening length-of-stay and use of emergency room visits). This places further burden on often already struggling hospital margins
- Change provider behavior when payment mechanisms are still rewarding additional visits, tests, and existing, inefficient care models
Barometers of Success
At the heart of the MSSP is a fundamental change in the way healthcare is conducted and measured. Make no mistake - there aren’t any tried and true, proven recipes for success; however there are some key indicators for MSSP success that are emerging. Two predictors of strong program performance are a commitment to care coordination and a detailed analysis of clinical and claims data to properly stratify the entire population while simultaneously drilling down to understand the individual patient and tailor a care plan to their specific needs. Without a committed focus on these barometers of success, the MSSP ACOs in particular, will be hard-pressed to improve performance and surpass their minimum savings threshold in order to ultimately achieve their goal of shared savings.
This is not an exact science - certainly a collection of ACOs may have early wins based upon a variety of factors, whether it’s their previous experience with risk-based programs, market trends, or engaged and active physician practices. However, for the majority of ACOs that find themselves in the unenviable position of having made the initial investment of developing an ACO with nothing to show for it to date, the key to taking the next step to reduce total beneficiary expenditure while improving patient outcomes and overall population health will be a continued and diligent focus on tightly-aligned care coordination and actionable data analytics.
Despite the MSSP Track 1 being seen as a “no-risk” entry into the accountable care environment, organizations were in fact risking their valuable time and effort, provider engagement, and startup capital, with no guarantee that these investments would achieve their desired intent. While it is true that organizations were afforded participation in the MSSP with zero downside risk (meaning they were exempted from having to pay back CMS should they overspend their population benchmark), many organizations struggled in carrying through the well-constructed vision statements detailed in their program applications to CMS.
Building a Bridge to Accountability
The MSSP program was developed to incentivize the behavioral changes that are needed to make the transformative shift toward value-based care and population health and, frankly, as a learning center for provider organizations to build a bridge from traditional fee-for-service care delivery to a new model with emphasis on accountability, outcomes, and ultimately, performance. The first two years of performance data suggest that for a majority of organizations, assistance with prioritizing and operationalizing their tactics may be necessary.
This isn’t to imply that there weren’t positive developments from the latest CMS performance announcement. While the number of organizations achieving shared savings remained constant (approximately 27 percent for 2012/2013 and 2014), the overall number of organizations spending below their prescribed benchmark and successfully earning shared savings increased from 58 last year to 92 this year, saving an additional $101 million dollars. Further, there were 89 ACOs who reduced their expenditures but unfortunately did not reduce them enough to meet their minimum savings threshold.
There was a positive relationship between participating organizations and quality improvement. In fact MSSP ACOs showed improvement from last year’s results in 27 out of the 33 quality measures, including patient survey results and preventative health measures. MSSP ACOs achieved superior performance rates on over 80 percent of the quality measures relative to other Medicare fee-for-service providers who also reported through the Group Practice Reporting Option.
Increased Focus Yields Positive Results
There appears to be a relationship between improved quality and amount of time a participant has been in the MSSP. ACOs that participated in both 2013 and 2014 improved on over 80 percent of the applicable quality measures, while the amount of ACOs successfully achieving shared savings climbed with each additional year in the program (37 percent success rate for 2012 MSSP starters, nearly double the 19 percent rate for 2014 entrants). This indicates that with increased experience, focus, and coordination come positive results. More organizations are continuing on the path and slowly but surely crossing that bridge.
Of equal importance was the news that no Track 2 ACOs (those incurring downside risk) owed CMS losses. This lends credibility to CMS’ belief in the ability of the risk-based programs to shift provider behavior, particularly when there is skin in the game. With innovative new risk-bearing payment models being rolled out this year such as the MSSP Track 3 and Next Generation ACO, this development should be heralded as encouraging news in incentivizing provider organizations to invest in the necessary infrastructure and care management programs. Ultimately the various models are preparing organizations to survive and thrive as the landscape shifts to these alternative payment models.
The healthcare industry is still in the beginning stages of learning to measure success through a different set of lenses. However, these results continue the theme that this has not and will not happen overnight. While financial success is surely near the top of the list on how to measure accomplishments in these initiatives, when dealing with the large-scale, systematic changes necessary, there are many contributing factors that must be measured and utilized to better determine success.
While it remains to be fully determined whether successful participation in the MSSP will ultimately represent an uphill battle for the majority of ACOs or simply one with a steep learning curve, one thing has been confirmed from the 2014 performance reports. Simply signing up for the program without dedicated focus on operationalizing the necessary paradigm shift will likely fail to produce the desired results.
The ACOs on top of the hill didn’t fall there. For the rest, it’s time to start climbing.
Ms. Glaser is a manager with The Camden Group, specializing in clinical integration, accountable care, and many other innovation strategies. She brings over 15 years of experience in various sectors of healthcare including physician practices, insurance, and pharmaceuticals. Ms. Glaser’s in-depth knowledge of value-based care operations provides a context for assisting clients in navigating population health. She may be reached email@example.com;or 312-775-1700.
Mr. Juberg is a manager with The Camden Group and focuses on clinical integration, transactions, and strategic and business planning for healthcare organizations. He has extensive experience with the development of ACOs (financial planning and funds flow modeling), managing Medicare Shared Savings Program applications, and implementing clinically integrated networks. He is also experienced in master facility planning, CMMI Innovation Center grants, medical group valuations, and community needs projections. He may be reached at firstname.lastname@example.org or 310-320-3990.