ACOs

ACOs

One of the big questions since the inception of the Medicare Shared Savings Program has been whether the model would only work in regions with extremely high baseline costs.  Farzad’s state-level analysis of earlier MSSP results suggested that ACOs in higher-cost areas were more likely to receive shared savings. It’s one of the questions that Bob Kocher and Farzad received in the wake of the op-ed on Rio Grande Valley Health Providers last week.

So we decided to dig into the data.

We’re still waiting for CMS to make baseline costs for ACOs – and the local areas they serve – public. But in the meantime, we linked each ACO to a Hospital Referral Region using the main ACO address provided by CMS – and took a look at the region’s per capita Medicare costs as a predictor of ACO success.

Continue reading “Why ACO Savings Aren’t About Location.”

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Screen Shot 2014-10-04 at 8.22.11 AMLast week, Dr. Bob Kocher and I took to the pages of the New York Times to detail a health care success story in Southern Texas.  In a region once featured for its extreme health care costs and poor health outcomes, a group of physicians motivated by new incentives in the Affordable Care Act has started to change the equation. The Rio Grande Valley ACO Health Providers achieved eye-popping savings in their first year – coming in $20 million below its Medicare baseline and receiving reimbursements totaling over $11 million while also achieving better health outcomes for its patient population.

The savings number made for an impressive headline.

But as is often the case, other information had to be left on the cutting room floor. We dive a little deeper into the RGV ACO below:

The Central Role of Information Technology

Dr. Jose Pena, Chief Medical Director of the Rio Grande Valley ACO, emphasizes that one of the first and most difficult tasks for the newly-formed organization was developing an IT infrastructure that would serve their needs.  “Using what was there wasn’t really an option,” says Dr. Pena, “so we built our own infrastructure.”

Forgoing a single EHR solution, the Rio Grande Valley now operates on a mix of cloud and office-based systems. The ACO developed software to identify metrics from various EHR systems, migrate that information to the cloud, and view real-time performance of providers. “IT accounted for 40% of our costs,” says Dr. Pena, “but the importance of proper reporting – to our leadership team, and to CMS – was at the top of our list.” The ACO identifies its customized IT system as foundational to its success.

Continue reading “A Deeper Dive into the Rio Grande Valley”

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Screen Shot 2014-09-24 at 1.25.29 PMJudging by its nearly invisible public presence, you’d never know that this is prime time for HCA, the nation’s largest hospital chain.    A former HCA regional VP, Marilyn Tavenner, runs the nation’s Medicare and Medicaid programs.  Former CMS Head and Obama White House health policy chief Nancy Ann DeParle, sits on the HCA Board.  Its longtime investor relations chief, Vic Campbell, is immediate past Chair of the highly effective trade group, the Federation of American Hospitals.  And its Chief Medical Officer, Jonathan Perlin, MD, is Chair Elect of the American Hospital Association.

This astonishing industry leadership presence is something most health systems would be trumpeting, perhaps even placing ads in Modern Healthcare.  But not HCA, the bashful giant of American healthcare.  Most hospital systems make a show of “branding” their hospitals with the company logo.  Yet in its corporate home, Nashville, and the surrounding multi-state region, HCA’s 15 hospital network is called TriStar.  Everyone in Nashville’s tight knit healthcare community knows who owns their hospitals, but you have to read TriStar’s home page closely to find the elliptical acknowledgement of HCA’s ownership.

Despite a nationwide merger and acquisition boom, HCA hasn’t done a major deal in twelve years (Health Midwest in Kansas City joined HCA in 2002).  The company has not participated in the post-reform feeding frenzy, continuing a long-standing and admirable tradition of refusing to overpay for assets. For the moment, owning 160 hospitals is plenty.

Continue reading “HCA: The Bashful Giant”

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flying cadeuciiEverywhere we turn these days it seems “Big Data” is being touted as a solution for physicians and physician groups who want to participate in Accountable Care Organizations, (ACOs) and/or accountable care-like contracts with payers.

We disagree, and think the accumulated experience about what works and what doesn’t work for care management suggests that a “Small Data” approach might be good enough for many medical groups, while being more immediately implementable and a lot less costly. We’re not convinced, in other words, that the problem for ACOs is a scarcity of data or second rate analytics. Rather, the problem is that we are not taking advantage of, and using more intelligently, the data and analytics already in place, or nearly in place.

For those of you who are interested in the concept of Big Data, Steve Lohr recently wrote a good overview in his column in the New York Times, in which he said:

“Big Data is a shorthand label that typically means applying the tools of artificial intelligence, like machine learning, to vast new troves of data beyond that captured in standard databases. The new data sources include Web-browsing data trails, social network communications, sensor data and surveillance data.”

Applied to health care and ACOs, the proponents of Big Data suggest that some version of IBM’s now-famous Watson, teamed up with arrays of sensors and a very large clinical data repository containing virtually every known fact about all of the patients seen by the medical group, is a needed investment. Of course, many of these data are not currently available in structured, that is computable, format. So one of the costly requirements that Big Data may impose on us results from the need to convert large amounts of unstructured or poorly structured data to structured data. But when that is accomplished, so advocates tell us, Big Data is not only good for quality care, but is “absolutely essential” for attaining the cost efficiency needed by doctors and nurses to have a positive and money-making experience with accountable care shared-savings, gain-share, or risk contracts.

Continue reading “The Power of Small”

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flying cadeuciiWant to achieve effective health care, reduced costs, increased quality, population health, widespread prevention and seamless health information access?

It’s easy, says this article in Population Health Management: mix one part PHO with one part HRB to create a HAPPI.

This correspondent was confused too, but that’s what’s proposed by three smart academics from Johns Hopkins, Arizona State University and UC Berkeley.

As I understand it, Population Health Organizations (PHOs) would be responsible for all medical, public health, community and social services in a defined geographic area and coordinate them with local education, housing and labor. Much of it would be paid for by a pooled risk-adjusted global or capitated payment (budget) from all insurers.

Each organization would be paired with a Health Record Bank (HRB), which would act as a huge data warehouse that not only stores all medical information, but any other publically available information on every individual enrolled in the PHO. The HRBs would be owned and operated by “trusted custodial organizations.” Data access would be ultimately controlled by each patient.

The authors believe that patient payments would be a source of additional revenue for their PHOs. Examples include buying “apps” that are tailored to their individual health needs, or selling their personal health information, especially if it means helping physicians buy an electronic health record or access cutting edge research.

Continue reading “Doubling Down on ACOs and Health Information Networks”

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On June 18, we launched Aledade – a company built on our belief that independent primary care physicians are best positioned to lead the next revolution in health care delivery – boosting quality of care and bringing down costs.  Over the past six weeks, we traveled across the country meeting doctors, discussing the future of independent primary care practice, and recruiting physician partners for our first wave of Accountable Care Organizations.

Meeting these doctors, from areas and backgrounds as diverse as the populations they serve has been a constant reminder of the reasons we founded this company.  One physician, having spent decades serving the same community from the same office, lamented that in the past, he felt more involved – and more informed – about all aspects of his patients’ care.  Today, he told us, fragmentation in care delivery had given him less insight into his patients’ health, and less influence in coordinating their treatment.

When we started Aledade, these were the type of doctors we wanted to empower.

Today, I am elated to announce that we have formally submitted applications to the Center for Medicare & Medicaid Services to form ACOs serving physicians in Delaware, Maryland, New York, and Arkansas for 2015.  We expect this first wave of Aledade ACOs to serve tens of thousands of Medicare patients beginning January 2015.

The choice of four dissimilar states was intentional. We intend to establish a model that can be replicated across the country, and the diversity in our practices matches the diversity of our country. Each state has strengths to build on. Delaware- ‘the First State’ has been a leader in electronic health record implementation. Maryland and New York’s health reforms set the stage for alignment and collaboration with acute-care facilities. Arkansas’ tradition of independent primary care practice is strong. We’ll also be serving very different patient populations in each state – from practices that serve urban neighborhoods to those that treat folks in small towns and rural communities.

Continue reading “Meet the First Aledade ACOs”

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Screen Shot 2014-07-13 at 11.04.35 AM“Drugs don’t work in people who don’t take them.” C. Everett Koop, former US Surgeon General

Cost-based non-adherence, like any lack of medication adherence, leads to further complications and hospitalizations that could have been prevented. CMS appears to have recognized this when they announced that a new ACO measures on whether “providers have educated patients about the cost of medications” in the 2015 fee schedule.  Cost and quality conversations between doctors and patients are becoming a cornerstone to value-based care.

The most expensive drugs are the ones that the patient never takes.  Nearly one third of prescriptions go unfilled. When patients cannot afford a medication, and only discover the price or out-of-pocket cost at the prescription counter, it’s a big risk to long-term outcomes.

“It has been well established that a lack of affordability can drive a lack of adherence to a course of medications.  Patients who do not take their medications cost the U.S. healthcare system an estimated $300 billion in avoidable medical spending annually due to poorer health, more frequent hospitalizations and a higher risk of mortality”, according to The Center for Health Value Innovation and the Network for Health Value in Innovation.

A lack of medication adherence drives further costs for the system and suffering for patients. Estimates are that more than a third of medicine-related hospitalizations happen because people did not take medicine as directed, leading to over 125,000 deaths.

Medication non-adherence, of course, can have many reasons: side effects, difficulty in administering the drug, and others, but there is clear evidence that cost is a factor driving non-adherence. 27% of Americans did not fulfill a prescription due to financial hardship in 2012 according to a Kaiser Family Survey. As copays, deductibles and out-of-pocket expenses go up, so, likely, will non-adherence, and value-based care, and value-based benefits must understand the costs related to non-adherence.

Continue reading “The Cost-Response Curve”

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Screen Shot 2014-06-12 at 5.23.44 AMDoctors (and patients) must own their data or they will lose the most precious asset in healthcare and possibly their future.

I hate to be the voice that repeats what others are saying, however it was recently stated in the Wall Street Journal and has been retweeted in the digital health echo-chamber:  ”Data is the currency of healthcare”…and it is liquid.  Liquid gold.  It can be packaged, repurposed and traded for big money.

It hit me right between the eyes last year at the HIMSS conference – : who were all these people, and what were they peddling?  What are they making and what were they selling?  Data-Gold.   As a doctor on the front lines, I had a sinking feeling and the cold realization that while all the razzle-dazzle on the exhibition floor (complete with models, give-aways and million dollar booths), the data that was being traded was collected by doctors and provided by patients.  Simply put, patients are data and the doctors role is to collate, codify and create meta-data.  That is, doctors synthesize thedata presented and generate more data (diagnosis, treatment) which we then enter into a machine (electronic medical record).  That little machine is connected to some tubes and wires and the data defies gravity and heads straight up to the cloud.

The image that continues to torture my imagination is an army doctors, running from room to room on the proverbial hamster wheel of medicine entering data up to the cloud where nymphs with gold cups of champagne and data/analytics CEO’s were bathing in hundred dollar bills chortling merrily at their successes (on the backs of the data collectors).

While the Sugar Data’s mint cash, doctors are told they can expect decreasing reimbursement for the next decade.

Encyclopedia Britannica is a cautionary tale for doctors (and patients).  They had all the data but did not understand it’s value when digitized.  Wikipedia ate their lunch.  I had lunch the other day with a physician employed by a foundation and was flummoxed to hear that her $5,000 performance bonus check was going to the foundation, not her.  She had no idea, nor any access to the performace data and had it not been for an accidental letter sent to her about the check, she would have never known.  Ah, the dark art of data control.  If we as a society don’t get this digital health data ownership correct, actors will be creating the health version of credit default swaps.  oy.

Continue reading “Who Is Your Sugar Data?”

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Craig GarthwaiteOn Wednesday June 4, the Kellogg School of Management hosted its annual MacEachern Symposium. A packed auditorium listened to an impassioned discussion about The Future of the Physician. Presidential adviser Ezekiel Emanuel and AMA President Ardis Hoven were among the speakers. While Emanuel was optimistic about the impact of the Affordable Care Act on hospital-physician integration and the resulting potential for cost savings and quality improvements, Hoven was concerned about the impact of the business of healthcare on the medical profession. In this blog, we offer our perspective on the evolving role of the physician.

The hit television series Marcus Welby, MD last aired in 1976. Dr. Welby was the physician of every baby boomer’s dreams, whose patients always felt cared for and always got better. By the end of the century, Dr. Welby had been replaced by Dr. House, an MD cum Sherlock Holmes with Narcissistic Personality Disorder and an opiate addiction. While his bedside manner is decidedly not Welbyesque, Dr. House still embodied the basic premise of the all-knowing and dedicated provider that solves problems with little concerns for costs or standard practice.

But in the real world, physicians are evolving along a different—and we argue—better path. The 20th century physician was self-employed, championed the interests of patients, and had complete control over the medical system. But this system had at least two primary problems: (1) ever escalating costs and (2) dramatic variations in physician practice patterns with little connection to outcomes. We shudder to think how much Dr. House spent on his patients. This system is no longer sustainable.

Enter the 21st century physician, who is increasingly an employee of a large provider organization that scrutinizes every medical decision based on both cost and quality. We may all be better off for this transformation – the question is will we accept it? If past is prologue, we fear that American public is still not ready.

Continue reading “The Future of the Physician”

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Farzad MostashariLike many participants in the Medicare Shared Savings ACO Program (MSSP), Family Health ACO is sailing in uncharted waters.

All ACOs are facing significant challenges in better understanding patient utilization patterns, identifying high-risk patients, and implementing care coordination strategies.

Even more unique is that Family Health ACO (“Family Health”) is composed entirely of federally qualified health centers (FQHCs).  FQHCs are community based organizations that provide critical primary and preventive care for millions of underserved and uninsured Americans, regardless of their ability to pay.

Nationwide, there are over 1200 FQHCs serving the health care needs of the working poor, the unemployed, the undocumented, and anyone else in need of primary medical care. Family Health provides care to over 200,000 patients and spans nine counties in New York State; from the bustling streets of New York City to the rural landscapes of the Hudson Valley.

Partners in the Family Health ACO include Open Door Family Medical Centers (“Open Door”), The Institute for Family Health (“The Institute”), and Hudson River Health Care (HRHCare).

Collectively the ACO includes 120 physicians, 60 advanced practice nurses and physician assistants, and nearly 100 dental providers.

These organizations have a strong history of collaboration, including their first venture in 2008 to form the Hudson Information Technology for Community Health (HITCH). HITCH enabled the organizations to pool resources and work collaboratively on cancer screening and diabetes management outreach programs.

The ACO partnership is helping to further strengthen the ties between these three community-based health care organizations and their communities.

Continue reading “How Community Health Centers are Taking on Accountable Care for the Most Vulnerable”

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