Tag: Accountable Care Organizations

Coordinating Care Coordination

Care coordination is one of the four pillars of Meaningful Use, one of the six NCQA Patient Centered Medical Home (PCMH) standards and one of the main goals of Accountable Care Organizations (ACO). Care coordination, particularly for patients with multiple chronic conditions, is expected to reduce unnecessary repetition of laboratory testing or imaging and the number of avoidable admissions. Other than reducing overall costs, care coordination is also supposed to improve quality of care. According to experts like Joe Flower, “Lack of care coordination is at the core of the mess healthcare is in”, and nobody in their right mind would argue that it is best that medical care remains disorganized and uncoordinated, if it is indeed so. It seems that our fee-for-service, fragmented and fractured (lots of f-words here) health care system is not conducive to care coordination. When patients float around in a sea of hospitals, physicians, nursing homes and other facilities, each care provider gets paid, and is responsible for the piecework performed at their independent entity and nobody is minding the handoff of patients to the next provider of care, and nobody is assembling a comprehensive picture of the entire care process, let alone orchestrating, or coordinating, the progression of patients between stages of care and the overall needs of patients in transit. What would it take then, to see that the bits and pieces of health care we now have, become a safe and affordable continuum of care?

CMS is taking the lead, as it should, in an all-out effort to encourage health care coordination through various carrot-stick initiatives, aligned to ultimately base payment for medical care on value to the patient, as measured on a population level, instead of fee-for-service and no accountability for outcomes. These initiatives fall into three general categories:

  1. Health Information Technology to assist with documentation, information exchange and measurements as required in any coordination effort.
  2. Incentives and penalties for providers based on measures thought to be influenced by care coordination (e.g. preventable hospitalizations, readmission rates, etc.)
  3. Financial and structural encouragement for vertical integration of the delivery system (e.g. ACOs, consolidation, employed physicians, etc.)Continue reading…

The Summer of Sequels

I have seen this film before. Folks get all excited about the potential for vertical integration to save our healthcare system, and then the facts emerge.

The results of the first major ACO demonstration project are in and unless there is some hidden meaning behind all the data, it looks like ACOs may not be the magic bullet that the Obama administration had hoped. The demonstration began under President Bush and the specific payment structure and quality incentive differ somewhat from the ACO rules under the Affordable Care Act, but the main features are the same – give an integrated provider organization a share of the savings if it can hold down Medicare spending while also offering some quality bonuses.

Despite the fact that the participants included ten of the nation’s best known physician-led integrated organizations, less than half were able to lower Medicare costs by the final year of the project and only two demonstrated consistent cost savings. And the methods used to achieve savings – nurse call centers and telephone health checkups – are the sorts of thing that don’t exactly require vertical integration.

There are going to be excuses – the ACOs need to be run by hospitals, they need more time to develop their information technologies, the performance incentives need to be strengthened. But that is the kind of ex post rationalizing one hears any time an experiment fails to support a theory. Maybe the theory (that vertical integration is the panacea for our ailing system) is wrong.Continue reading…

Is the ACO DOA? Reasonable Minds Can Improve the Draft Regulations

In the current all-ACO, all the time, health care policy news cycle, we’ve been inundated with declarations that the ACO is dead, because a handful of big boys say they don’t want to play.

Today, CMS announced that it is tinkering with the proposed ACO rules by offering three variations on the ACO theme (link to press release; see also CMS ACO fact sheet).  From the fact sheet:

  • Pioneer ACO Model: The Innovation Center is now accepting applications for the Pioneer ACO Model, which will provide a faster path for mature ACOs that have already begun coordinating care for patients.  The Pioneer ACO model is estimated to save Medicare as much as $430 million over three years by better managing care for beneficiaries and eliminating duplication.  And it is designed to work in coordination with private payers in order to achieve cost savings and improve quality across the ACO, thus improving health outcomes and reducing costs for employers and patients with private insurance.
  • Advance Payment ACO Initiative: The Innovation Center is seeking public comments on whether it should offer an Advance Payment Initiative that would allow certain ACOs participating in the Medicare Shared Savings Program access to a portion of their shared savings up front, helping providers make the infrastructure and staff investments crucial to successful ACOs.  Comments should be submitted by June 17th, 2011.
  • Accelerated Development Learning Sessions: Providers interested in learning more about the steps necessary to become an ACO can attend an upcoming series of Accelerated Development Learning Sessions.  These convenient and free sessions will help providers learn what steps they can take to improve care delivery and how to develop an action plan for moving toward better-coordinated care.

Together with the Medicare Shared Savings Program, the initiatives announced today give providers a broad range of options and support that reflect the varying needs of providers in embarking on delivery system reforms.

CMS has recently hinted that it will be rejiggering the rules to encourage physician-led ACOs, too (an approach I have previously endorsed).Continue reading…

The Last Best Hope

According to the recently published CMS Accountable Care Organization (ACO) rules, an ACO needs to care for at least 5000 Medicare beneficiaries. Theoretically, two primary care physicians and a nurse, practicing in a garage, or cottage, in Boonville Missouri (yes, there is such a place), seeing nothing but Medicare folks, could become an ACO. Of course, they would have to set up a business entity with a board of directors, hire a couple of lawyers, several accountants and contract with a hospital or two and a score of specialists, and be ready to accept financial risk for their patients in a couple of years; all this on top of seeing twenty to thirty elderly and complex patients every single day. Nope. Not going to happen.

ACOs are for the big boys, hospitals and/or extra-large multi-specialty groups, to set up, manage and perhaps eventually benefit from. Big systems, as we all know, enjoy economies of scale, are better able to manage and coordinate care, and are therefore uniquely equipped to solve our health care crisis by providing better care at lower costs, and ACOs are just the vehicle by which these systems will be rewarded for all that good work. If you care for people in a small primary care practice, you could bite the bullet and sell out to a large system, or you could retire if you are one of those last standing dinosaurs, or you could become a concierge practice, or you could sit still and watch your practice dwindle and die, or you could buy an EHR, which is the last best hope to keep primary care independent.

Science, the type of science that employs mathematical hypotheses, theorems, proofs and equations, is timidly asserting that the emperor is in need of some serious clothing. A 2009 paper published in a non-medical, non-health care venue, “examines the staffing, division of labor, and resulting profitability of primary care physician practices”. The authors who are researchers from the University of Rochester and Vanderbilt University conclude that “many physicians are gaining little financial benefit from delegating work to support staff. This suggests that small practices with few staff may be viable alternatives to traditional practice designs.” Although I did not check the math, which is extensive, I would have expected that such controversial conclusion would make headline news in health care policy forums for at least two or three days. It did not.Continue reading…

What If You Give a Party and No One Comes?

Here is a short update on a post I put up about a month ago about CMS’ proposed regulations for setting up Accountable Care Organizations. The ACO proposal calls for shared savings and other incentives for providers, with a transition after a few years to a real risk contract. But Congress put a “poison pill” into the concept because it was afraid to limit customer choice. At the heart of my argument was this point: “How can you be held accountable, as a provider group, if you cannot control the management of care of your patients?”

The latest news, according to my sources, is that even the most advanced ACO-like organizations like Geisinger and Mayo are not interested in signing on to this proposition. The financial risks can come crashing down quickly and are just too great.

In a recent Boston Globe interview, consultant Marc Bard explains how it would have to work for providers to agree to share risk in an ACO network:

Q. Some consumers fear they won’t be able to go to the doctors or specialists they want in the new system. Is that a legitimate fear?

A. The answer is of course. We can’t be spending 17.5 percent of our gross national product on health care and allow everybody to broker his or her own health care. So ultimately there are going to have to be trade-offs made. The public’s going to have to make them. The delivery systems are going to have to make them. Absolutely there are going to be limitations.

Paul Levy is the former President and CEO of Beth Israel Deconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and
front-line driven process improvement at Not Running a Hospital.

The Rashomon of Health Care: Why the Government is Promoting and Hindering ACOs at the Same Time


As I have previously blogged, a centerpiece of the Affordable Care Act (ACA) is the promotion of Accountable Care Organizations (ACOs). The Center for Medicare and Medicaid Services is banking on the financial incentives of ACOs (through “shared savings”), combined with over 60 pay for performance quality metrics, to promote efficient, high quality medical care. Providers are certainly taking notice. Hospitals are acquiring physician practices in numbers not seen since the 1990s and many physicians are thinking of starting their own ACOs. For the federal government to so aggressively promote the reorganization of health care delivery is unprecedented. (I am willing to debate those of you who remember the HMO Act of 1973.)

It must have quite a shock to CMS when the Federal Trade Commission announced its antitrust guidelines for ACOs. (These can be found here, especially pp. 21896-21899). I won’t dwell on the details but suffice it to say that the proposed test is likely to have a high false positive rate (challenging many ACOs that are not anticompetitive). And while the FTC lacks the resources to investigate every new ACO, the new rules certainly pose an obstacle to integration. So why is the FTC standing in the way of CMS? The answer may be found in one the masterworks of the great film director Akira Kurosawa.

In the movie Rashomon, four men witness different moments of what might or might not have been a heinous crime. Testifying at trial just three days later, the men attempt to describe the entire terrible episode from their own limited perspectives. The healthcare event whose details are in dispute occurred not three days ago, or even three years ago. And it wasn’t just one event, it was the entire decade of the 1990s. I believe that support or opposition to ACOs depends critically on how one views that lost decade.

Those who adamantly support ACOs – that includes most of my health services research colleagues, especially those still working in Washington to implement the ACA – view the 1990s as a lost opportunity. During the 1990s, hospitals merged with each other and with their medical staffs to create integrated delivery systems. IDSs were the forerunners of ACOs. They were supposed to coordinate care, accept shared financial risk, and give us greater efficiency and quality. Leading health policy analysts at the time could not wax more enthusiastic about how IDSs would change the system. And health providers were eager to jump on the bandwagon; IDS were hailed as “a new wave becoming a tidal wave.” (There were a few naysayers, including this blogger and my friends on the faculty at the Wharton school.) Unfortunately, the IDS wave crashed. Few IDSs saved money or raised quality; many lost their shirts.Continue reading…

ACO Fairy Tale Faces a Rumpelstiltskin Moment

The ACO fairy tale is drawing perilously close to an unhappy ending.

The government’s long-awaited draft regulations on Accountable Care Organizations have brought a dose of ugly reality to a concept that’s always seemed coated with a patina of pixie dust. Unless those regs are substantially changed before the clock strikes Jan. 1, 2012 — the statutory date for ACO implementation — Cinderella’s going to turn back into a scullery maid and the horse-drawn carriage transporting her to the Health System Transformation Ball will be revealed as nothing more than four mice and a pumpkin.

The essence of the ACO concept is using financial incentives to reward doctors and hospitals for redesigning care processes to provide “high quality and efficient service delivery,” in the words of the Patient Protection and Affordable Care Act. As I wrote last fall, ACOs have been the one reform beloved by Republicans and Democrats; doctor groups and insurance companies; policy wonks and profit-seeking capitalists. This unusual unanimity was due in part to a lack of specifics that enabled every stakeholder to gaze upon the ACO and see reflected their very own version of Prince Charming.

Conservatives hail the ACO as marketplace medicine, while liberals focus on organized systems of care replacing fee-for-service chaos. Providers applaud a reform that places them at its center, while health plans know that providers asked to bear financial risk — if an ACO doesn’t measure up, the government won’t pay up — will seek out actuarial experts like them as partners. ACOs also are expected to require the products and services sold by a host of consultants and entrepreneurs.Continue reading…

The Patient-Centered EHR

The term patient-centered has become a serious contender for the most flippantly used term in health care publications and conversations. Of course meaningful use is still #1 on the popularity charts, with ACO quickly moving up, but even meaningful use and ACO are almost always accompanied by patient-centered as a way to add legitimacy and desirability to the constructs.

Even Paul Ryan’s new recipe for fiscal Nirvana is touting patient-centered health care as one of a litany of fictional achievements made possible based on an array of wishful thinking assumptions. But perhaps the most common usage of patient-centered terminology is the Patient Centered Medical Home (PCMH), which is touted as the ultimate patient friendly solution to our health care difficulties. Since PCMH is heavily reliant on Health Information Technology (HIT) to achieve patient-centeredness, and since Meaningful Use of Electronic Health Records (EHR) is being increasingly aligned with this goal, it may behoove us to explore the features and functionality that would qualify an EHR to support a patient-centered approach to health care delivery.

But first, what exactly is patient-centered health care? From reading the NCQA medical home specifications, the Meaningful Use definitions, the HIT suggestions from PCAST and the brand new ACO regulations, all of which assert a patient-centered approach, one would conclude that patient-centered care is made possible by providing all patients with timely electronic access to the entirety of their medical records including lots of patient education, electronically coordinating a multitude of transfers of care, empowering non-physicians to provide most medical care, measuring a bewildering array of health care processes and constantly evaluating and reporting on population metrics, while somehow allowing patients and families to express their wishes regarding the nature of care within the boundaries specified by each proposal. I am excluding the Ryan budget proposal here, since other than having “patient-centered” typed in various spots, there is no reference to actual health care delivery, or what is left of it after most seniors, sick and disabled folks are reduced to begging for medical care. Computers and EHRs can, and to some extent already do, support many of the above activities, but is this truly patient-centered (singular) care, or should we add an “s” and refer to a plurality of patients-centered, or population-centered, care?Continue reading…

HIT Trends Summary for March 2011

This is a summary of the HIT Trends Report for March 2011.  You can get the current issue or subscribe here.

Government drivers. Federal communications dominated this month’s news.  ONC defended its core EHR strategy through a report published in Health Affairs analyzing the most recent studies to prove the benefits.  It found that 92% of studies reported positive or mixed but predominately positive results.  The study updates prior research by Chaudhry (2006) and Goldzweig (2009).

It also released its 5 year HIT strategy that is more of a comprehensive tactical plan of the work over the next years.  The plan seems generally aligned with most industry expectations.  (Adopt EMRs.  Exchange patient info.  Make it secure and private.  Get patients empowered.  Measure everything.)  ONC is asking for public feedback.  Early comments wish the plan contained more on fraud prevention and innovative solutions and architectures.

There’s also some pushback on its Stage Two and Three requirements.  A CCHIT industry survey indicates some potential overreach in areas such as agency reporting, formulary checking, medication reconciliation, patient info access and other areas.  Yet CMS put out its first rules on ACOs for comments, and the HIT requirements are ginormous.  Writing in the NEJM, CMS head, Don Berwick says, “Information management — making sure patients and all health care providers have the right information at the point of care — will be a core competency of ACOs.”Continue reading…

Why ACOs Won’t Work

First, I think Accountable Care Organizations (ACOs) are a great idea. Just like I thought HMOs were a good idea in 1988 and I thought IPAs were a good idea in 1994.

The whole notion of making providers accountable for balancing cost, medical necessity, appropriateness of care, and quality just has to be the answer.

But here’s the problem with ACOs: They are a tool in a big tool box of care and cost management tools but, like all of the other tools over the years like HMOs and IPAs, they won’t be used as they were intended because everybody—providers and insurers—can make more money in the existing so far limitless fee-for-service system.

I see the $2.5 trillion American health care system as a giant health care industrial complex. It just grows on itself and sucks in more and more money. Why not? The bigger it gets the more money we give it.

How do you make it efficient? You change the game. You can’t let it any longer make money just getting bigger. The new game has to be one that only pays out a profit for results—better care for a budget the country can live with. There are lots of tools available to do that. ACOs, capitated HMOs, IPAs, disease management, enormous data mines, Electronic Patient Data Systems, and so on.

But, here’s the rub. There isn’t a lot of incentive for payers and providers to do more than talk about these things and actually make these tools work. Right now they can just make lots more money off the fee-for-service system. They demand more money and employers and government and consumers are willing to just dump more money into the system. Sure they complain about it but they just keep doing it.Continue reading…


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