The Business of Health Care

So, You’re a Next Generation ACO …

Screen Shot 2016-01-14 at 5.45.59 PMCMS recently announced the inaugural class of Next Generation ACOs – the latest accountable care models which includes higher levels of financial risk and greater opportunity for reward than have been available within the Pioneer Model and Shared Savings Program. CMSs goal is to test whether these greater financial incentives, coupled with tools to support better patient engagement and care management, will improve health outcomes and lower costs for Medicare fee-for-service (FFS) beneficiaries.
One of the most exciting opportunities for these ACOs is the ability to leverage telehealth above and beyond what is currently permissible in fee-for-service Medicare.

Since section 1834(m) of the Social Security Act was codified well over a decade ago, telehealth has only been able to serve Medicare recipients when they got in their cars and drove to a clinical site, in a rural area of the nation. Simply translated – no homes or cities count. With the lightning speed of telehealth advancement, this structure is archaic, limiting, and frankly at this point, senseless. Now, with this Next Gen designation, these “Next Gens” will be able to offer care through telehealth technologies regardless of the patient’s location.

So, why should each and every one of these ACOs in this premier class leverage telehealth as a part of their model? For them, the answer is engagement and revenue. For the rest of us – it’s proof.
The more patients are engaged in their healthcare, the more successful an ACO will be. Telehealth offers the ability to offer on-demand availability, project care after hours, reduce travel time and expenses, and allows providers to quickly identify and address gaps in care. Combined with the high satisfaction rates telehealth has produced for its end users, Next Generation ACOs have before them a tool that will improve their ability to manage and empower their patients, and improve outcomes through greater touch points.

Then, of course, there’s the dollars. As ACOs make money by keeping the greatest number of patients healthy, telehealth is a key tool in driving revenue. The “anytime, anywhere” nature of telehealth allows ACOs to effectively compete with the rise of retail health clinics and increase covered lives by offering urgent care services 24/7. These technologies can also address increasingly overextended physician supply through load balancing and expand providers’ geographic reach.

The value of telehealth to the freshman class of Next Generation ACOs is undeniable, but these innovators have an ever greater role to play. They can lay the groundwork for the rest of the Medicare ecosystem. For years, telehealth advocates have been championing the cause of expanding telehealth reimbursement within fee-for-service Medicare. And for as many years, the pushback from decision makers has been the unfounded belief that increasing access to telehealth will result in increased costs. Despite concrete proof in the commercial environment that each telehealth encounter saves money, the lack of data from within the Medicare population has resulted in an impasse. These Next Gens have the ability to create the very proof telehealth champions have been waiting for – concrete evidence of the value of telehealth for Medicare enrollees, regardless of who or where they are.

Kofi Jones is a telehealth policy expert for American Well.

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5 replies »

  1. According to the Centers for Medicare and Medicaid Services, healthcare accounts for 17.8% of the U.S. GDP. (CMMS, 2016) Given the rising costs of healthcare, nationwide discourse surrounding this problem remains controversial. Conversations at all levels, whether political, economic, or societal are centered on “fault.” Who is responsible for these soaring prices: Physicians? Insurance companies? Or is it administrative bureaucracy? In short, the lack of coordination between these levels of care is one way to evaluate the issue at hand. As a means to mediate the fragmented healthcare system, there is a push for healthcare to integrate an Accountable Care Organization (ACO) model to streamline the delivery of healthcare with the intent to increase efficiency of care while reducing cost.

    Knowing that healthcare costs will continue to rise, leaders within the healthcare sector are searching for solutions to minimize cost without jeopardizing quality of care. These two factors may seem contradictory; however, Vice President of Government Affairs for American Well, Kofi Jones feels as though these two do not have to be mutually exclusive. Jones published a post on The Health Care Blog encouraging ACOs to integrate telehealth in order to produce revenue and engagement. (Jones, 2016) While Jone’s solution seems practical, there are many uncertainties that make this proposal unlikely to gain traction.

    As outlined by the CMS, ACO’s primary goal is to provide “coordinated care to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical error.” (CMMS, 2016) In other words, ACOs mission is to deliver high-quality care while spending less by offering all levels of care through a one-stop shop approach. However, can telehealth alone bridge the gap between patient care and cost? It is safe to say that telehealth by itself cannot solve the entire healthcare inadequacies. Nonetheless, as outlined by Jones, telehealth can serve as a starting point.

    Jones believes that telehealth is a solution in the right direction and ACOs should consider this tool as a viable option. The American Telemedicine Association (ATM) lists four telehealth competencies: improved access to care, improve quality of care, increase cost efficiencies, and meet patient demands. (ATM, 2017) Living in the age of technology, Jones questions why the uptake of telehealth by ACOs has not been ubiquitous. Considering that telehealth is a vehicle through which ACOs can achieve better, faster, and cheaper health, administrators should take action and enable these services.

    ACO critics fear that consolidating treatment and payment methods may lead to a monopolized healthcare system that can in return drive the cost of treatment for individual patients. Political commentator, Avik Roy states, “powerful hospital chains know their insurers have no choice but to accept their jacked-up rates, and the cost of health insurance goes up whenever it suits their needs.” (Roy, 2011) For Roy, merging physicians and hospitals is contrary to what ACOs are actually trying to accomplish. Economics theory of supply and demand would agree with Roy.

    While concerns presented by the opposition are valid, it is important to look at current integrated managed care consortiums like Kaiser Permanente that mirrors the ACO model. Overall, Kaiser offers most of their treatment to patients through unilateral, in-house services. This presents many great benefits because the increased communication between all parties care for patients fosters a teamwork environment. (Kaiser, 2015) For instance, having individuals move back and forth between providers for treatment can result in the loss of patient follow-up through lack of coordination and miscommunication errors. Contrary to this disorienting model, Kaiser facilitates the sharing of patient information so that patients received the best treatment based on in-site, holistic evaluations.

    In order for ACOs to continue improving, there are implementations that can help more providers follow the Kaiser Permanent blueprint. As described earlier, Jones makes it clear that telehealth can spearhead this mission. Furthermore, Chief Policy Officer of the ATA, Gary Capistrant agrees with Jones: “We think all Meducare ACOs should be able to use telehealth to provide the Medicare range of coverage” and this new innovation can “better serve Medicare beneficiaries.” (ATA, 2016)

    So what can telehealth exactly do for ACOs? Chiron Health, a telemedicine company advocates telehealth for individuals with chronic conditions. This is particularly beneficial for those that need ongoing monitoring. (Smith, 2016) This can be particularly beneficial for those with chronic conditions that need ongoing monitoring. For instance, the quick access to a medical provider will play an important role in preventative health. This tool can greatly reduce patients from checking into hospitals when their conditions have reached extreme conditions. Often waiting for extreme conditions lead to immediate treatment that is expensive. Moreover, because one of ACOs major incentives is monetary compensation through bonuses by reducing cost, then telehealth can be become a great resource for efficiency.

    One major challenge of incorporating telehealth lies heavily on getting people to adopt this method of preventative health. For telehealth to functions at its full capacity; physicians, clinics, and the general public need to adopt the technology and integrate it at all levels. The challenge lies on the lack of research to demonstrate the positive effects of telehealth on the healthcare system. As a result, people are skeptical about this transition. Without knowing the benefits of telehealth, Medicare programs are unlikely to incorporate this method to their proposed ACO models. Brining in technology like telehealth is a big investment and providers don’t want to gamble on projects that yield mixed results.

    Moving forward, it is consequential for ACOs to consider which type of technology they are willing to invest in so that they can reduce healthcare costs. The right kind of technology can make all the difference. In her blog, Jones ends her commentary on telehealth with “the good news outweighs the bad.” (Jones, 2016) It can be inferred from Jones’ statement that telehealth alone is not a one-size-fits-all solution. Yet, the benefits of this technology are critical for the success of ACOs. With healthcare costs on the rise, decisions have to be made. To mediate healthcare costs, telehealth can be a steppingstone in the right direction.

  2. I really believe that your article highlights two key points outside of the financial incentive drivers: 1) the more engaged patients are, the more successful the ACO will be–making the connecting two way rather than just pushing information. 2) the Nex Gen of ACO and the fact that there is going to be an evolution from today.

    Good news that nothing is static and the thought that telemedicine will be used in conjunction with what there is today, improvement is underway!

  3. I wonder how much–what percentage–of the total PCP job we can do without touching, percussing and auscultating the patient?

    Is telehealth presently set up so that the doc has an docent/assistant at the patient’s side who can do these things and see that their results are adequatly sent to the doc?


    Is it even possible to transmit some of these data? Eg. feeling the thickness of a suspicious nevus is important. Do you think this can be done through telehealth techniques? Telling a benign lipoma from a more ominous neoplasm might be impossible without actually doing it yourself.