accountable care

The Accountable Primary Care Model: New Hope for Medicare and Primary Care

Primary care has long been something of an outcast in the medical profession — and despite convincing outcomes and a validated assessment tool, checkered reimbursement has brought the Institute of Medicine’s Primary Care Model to the brink of demise.

But the accountable care movement, and some Medicare Advantage plans in particular, have breathed new life into primary care and offered new hope for the struggling Medicare system. At St. Louis-based Essence Healthcare, a 4.5-star Medicare Advantage plan, network primary care physicians’ deep experience in providing accountable care has spawned innovations that advance primary care and make progress toward the “Triple Aim Plus One” (outlined in C9 below). Their success is the result of five years of active practice transformation and continuous improvement in a risk-bearing environment.

The best practice experience from these front-line physicians can be summarized in the Accountable Delivery System Institute’s Accountable Primary Care Model. This model embraces the four pillars outlined in the Institute of Medicine/Starfield model and expands them for Nine C’s of Accountable Primary Care Delivery. They are:

C1: First contact means that care is initially sought from the Primary Care Physician/Clinician (PCP) when new health or medical needs arise. In a nationally representative sample of more than 20,000 episodes of care, when these events began with PCP visits, as distinguished from some other source of care in the system, costs were 53% lower. This cost differential persisted after controlling for ER visits, health status, socio-demographics, and other relevant variables.

Continue reading “The Nine C’s of Successful Accountable Primary Care Delivery”

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Last week veteran analyst Vince Kuraitis reviewed a report from the consulting firm Oliver Wyman (OW), arguing that the trend toward reconfiguring health systems to deliver more accountable care is more widespread than any of us suspect.

“The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise,” our analysis finds that 25 to 31 million Americans already receive their care through ACOs-and roughly 45 percent of the population live in regions served by at least one ACO.”

OW provides a well-reasoned analysis and conclusions, but I’m skeptical. In discussions with health system executives around the country, I hear some movement toward change, but relatively few organizations are materially turning their operations in a different direction. The specter of policy change is looming, but it is still abstract. As I’ve described before, market forces are intensifying, but they’re mostly still scattered and immature.

Fee-for-service remains the prevailing paradigm, and there is no palpable threat to the health care excess that is business-as-usual. Several health system CFOs have told me: “Why should we take less money until we have to?”

There’s no question that Medicare’s ACO programs have the bulls-eye on reimbursement for health systems, which are a convergence point for a large percentage of appropriate and inappropriate health care costs. But there is a silver lining. American health care is so replete with waste – on the order of half or more of all health care expenditures – that any system that tries could deliver dramatically lower costs and improved outcomes.

Continue reading “ACOs: We’re NOT There Yet”

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From reading recent headlines, one might easily get the impression that hospitals are resistant — or at least ambivalent — in their pursuit and adoption of accountable care initiatives.

Are Hospitals Dragging their Feet on Accountable Care?

Commonwealth Fund: “only 13 percent of hospital respondents reported participating in an ACO or planning to participate within a year”

KPMG Survey: “(only) 27 percent of [health system] respondents said current business models were either not very or not at all sustainable over the next five years”

Health Affairs: “Medicare’s New Hospital Value-Based Purchasing Program Is Likely To Have Only A Small Impact On Hospital Payments”

The Bigger Picture

Do hospitals today perceive their current business model on the metaphorical “burning platform” — when the status quo is no longer an alternative?

The answer from the headlines above might suggest “no”, but I believe the correct answer is “not yet, but it’s inevitable”.  Hospitals are feeling the heat, but it’s just not yet hot enough to jump off the platform and abandon existing business models.

Continue reading “Are Hospital Business Models on a Burning Platform? Not Yet, But It’s Inevitable.”

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Several years ago I had dinner with a woman who had served in the late 1990s as the national Chief Medical Officer of a major health plan. At the time, she said, she had developed a strategic initiative that called for abandoning the plan’s utilization review and medical management efforts, which had produced heartburn and a backlash among both physicians and patients. Instead, the idea was to retrospectively analyze utilization to identify unnecessary care.

This was at the height of anti-managed care fervor. A popular movie at the time, As Good As It Gets, cast Helen Hunt as the mother of a sick kid. When someone mentioned an HMO, Ms. Hunt’s character let fly a flurry of expletives. America’s theater audiences exploded in applause.

Apparently, the health plan’s senior management team bought into cutting back on medical management but saw no need for retrospective review. After all, if the health plan abandoned actions against inappropriate services, utilization and cost would explode. Fully insured health plans make a percentage of total expenditures, so more services, appropriate or not, meant the plan’s profits would increase.

And that’s how it played out. Virtually all health plans followed suit, dismantling the aggressive medical management that had been managed care’s core mechanism in driving appropriateness. In the years following 1998, health plan premium inflation grew significantly, for a short period reaching 5.5 times general inflation, but averaging 4 times general inflation through today. Medical management became all but a lost, or at least a scarce, discipline in American health care, which is its status now.
Continue reading “Why Medical Management Will Re-Emerge”

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I’m surprised and intrigued by Medicare’s announcement of 27 new Shared Savings model ACOs.

Surprised

I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care. My expectations had been that we would see either:

Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.

Bust — no one showed up at the party. Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.

Intrigued

What we got is something in the middle:

  • Very small ACOs. Many only meet Medicare’s minimum of 5K patients; most are in the 8 to 25K range; and the largest ACO anticipates 70K patients. Collectively these 27 ACOs plan to serve 375K patients, less than 1% of the entire Medicare population.
  • 13 are smaller, physician led
  • Only 10 hospitals are involved across the 27 ACOs
  • Very few household names

Continue reading “Medicare Announces 27 ACOs. A New Species?”

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Accountable Care Organizations (ACOs) have been likened to:

A unicorn — a fantastic creature that is vested with mythical powers. But no one has actually seen one.

A camel — a horse designed by a committee, one that already has its nose in the tent

With this background, you can begin to appreciate the difficulty of conducting an accurate census of ACO animals in the wilderness.  Yet, this is exactly the task undertaken in the excellent Leavitt Partners report measuring ACO activity in the US.

As I will explain, the Leavitt report has the potential both to overestimate and underestimate ACO and accountable care-like activities. In my judgment, however, it’s far more likely to be understating just how much accountable care activity actually is going on.

Findings in the Leavitt Report

The Leavitt researchers “identified ACOs from news releases, media reports, trade groups, collaborations and interviews through the beginning of September 2011. Also included were entities that either self-identified as being an ACOs or specifically adopted the tenets of accountable care.”

The report counts 164 ACOs — 99 that are primarily sponsored by hospital systems, 38 by physician groups, and 27 by insurers.

Here’s how Leavitt summarized their results:

Continue reading “Leavitt ACO Report: Overstating or Understating Accountable Care Activity?”

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In a high-stakes political, clinical and economic poker game that goes by the name of Accountable Care Organizations (ACOs), the Centers for Medicare & Medicaid Services (CMS) has just issued a call for doctors and hospitals to  grab some chips and ante up.

The set-up goes like this: one of the biggest potential changes in how health care is actually delivered contained in the Accountable Care Act was ACOs. They’re voluntary, but they allow doctor- or hospital-led organizations that take responsibility for coordinating the care of at least 5,000 Medicare beneficiaries to get reimbursed at a higher rate for providing better-quality, lower-cost care. It’s supposed to be a win-win-win for providers, patients and taxpayers and part of a more general move towards “value-based purchasing.”

The problem is that the draft rules proposed by CMS for ACOs back in March looked like a sucker’s bet. Not only were the requirements complex and expensive, the rewards were meager and the odds of winning were unattractive, particularly considering the initial costs to set up an ACO. The big health care systems and physician organizations that had been clamoring for a seat at the table when ACOs were first proposed told CMS they didn’t like the “house rules” and weren’t going to play. Although the concept of ACOs has deep bipartisan roots, a group of Senate Republicans anxious to pounce on any  administration shortcomings jumped in with “serious concerns” about one more possible ObamaCare failure.

Continue reading “CMS Wants Docs to Ante Up to ACO Poker Game”

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