Tag: Accountable Care Organizations

The Great ACO Debate: 2014 Edition

Jan 19, 2014• 12

By Joseph Damore & Wes Champion

With the beginning of 2014 comes another year of the great accountable care organization (ACO) debate.

Is it a model to deliver high-quality, cost-effective care and improve population health management (PHM)? Or, just a passing fad, similar to the HMOs of decades ago?

Many opinions exist, and they’ll continue to be debated, especially during an election year. One thing most of us can agree on about ACOs is they are a work in progress.

We can say with some certainty that ACOs are taking hold; look no further than their growth, which now exceeds 600 public and private ACOs nationwide with the recent addition of 123 ACOs to the Medicare Shared Savings Program. But they still beg more questions than answers. What types and sizes of hospitals are forming ACOs, and where are they located? What does the pipeline of emerging ACOs look like, and how long will their journey take? And what capabilities, investments and partnerships are essential to ACO participation? What is the longer term performance?

Who better to ask than the decision makers running the organizations that participate in an ACO?

In August of 2013 we surveyed 115 C-suite executives– primarily CEOs (43.5%), chief financial officers (17.4%) and chief operating officers (16.5%) – across 35 states to collect data on their perspectives on ACO and PHM.

Survey results support the increase in ACO popularity. According to respondents, ACO participation has almost quadrupled since spring 2012: More than 18% say their hospitals currently participate in an ACO, up from 4.8% in spring 2012. This growth is projected to accelerate, with about 50% of respondents suggesting their hospitals will participate in an ACO by the end of 2014. Overall, 3 out of 4 senior executives surveyed say their hospitals have ACO participation plans.

Since survey respondents also represent hospitals of different locations, sizes and types, we are able to obtain a broader look at current and future ACO participation and found that:

Non-rural hospitals (82.1%) are most likely to participate in an ACO overall, followed by hospitals in an integrated delivery network (81.1%).
The lowest rates of projected participation are among rural hospitals (70.7%) and standalone hospitals (72.6%).
Large hospitals are moving more quickly, as 30.8% said they’d be part of an ACO by the end of 2013.
And though they’re equally as likely as large hospitals to ultimately participate in an ACO, small hospitals say they require additional time, with 48.6% planning to join in 2014 or 2015.

But some providers have been more deliberate and cautious about when they start their ACO journey. The pace of ACO adoption has been slower than originally anticipated 18 months ago, when more than half of executives predicted their systems would create or join an ACO by the end of 2013. Current survey results show that about 1 out of 4 will meet that projection.

Making Health Addictive

Oct 26, 2013• 3

By Joseph Kvedar, MD

I first posed the question, “Could Mobile Health Become Addictive?” on August 20^th. Since then I’ve done more thinking and I’m warming to the concept.

To start with, addiction is a word laden with negative meaning. When we hear the word, we think of opiates, street drugs, cigarettes, or possibly gambling. In fact, Wikipedia defines addiction as, “the continued repetition of a behavior despite adverse consequences.” So, with that definition as backdrop, is there any way health can really be addictive? Probably not.

What I’m really talking about is the juxtaposition of motivational health messaging with some other addictive behavior, specifically checking your smartphone.

New evidence shows that people are in love with these devices, checking them more than 100 times per day! I’ve heard people are tapping in 110, even 150 times a day. Of course this varies, but let’s face it, we check our smartphones a lot and it’s hard to stop. A somewhat disturbing video makes the case well. It’s easy to build a case that smartphones are addictive.

Recent research shows that checking your phone results in a small release of the neurochemical dopamine. Dopamine release has long been associated with ingestion of addictive substances such as heroin and tobacco. In fact, once the pattern of ingestion and dopamine release is established, even thinking about the ingestion triggers the dopamine release, the biochemical explanation for cravings.

For this post and a series to follow, I choose not to question whether this compulsive relationship with smartphones is good or bad, but simply to acknowledge that it is common, almost universal among smartphone users and to ask if we can exploit it as tool to improve your health.

Pioneer ACO’s Disappointing First Year

Aug 16, 2013• 15

By Jeff Goldsmith

On July 16, the CMS Innovation Center reported the first-year results for the Pioneer Accountable Care Organization program: 13 Pioneers, or about 40 percent of the participants, earned bonuses. The program saved Medicare a gross $87.6 million before bonus distributions, cutting the rate of growth in Medicare spending by 0.5 percent, from 0.8 percent to 0.3 percent annually.

However, nine of the 32 members dropped out and press reports hinted at a contentious relationship between the Pioneers and a well meaning but green and overtaxed CMS staff. It was not an auspicious beginning for a program whose advocates believed would eventually replace regular Medicare’s present payment model. There immediately followed a blizzard of spin control from ACO “movement” advocates stressing the need for patience and highlighting first year achievements.

What was irritating about the Pioneer spin is it treated the ACO as if it were a brand new idea with growing pains. This studiously ignores a burned out Conestoga wagon pushed to the side of the trail: the Physician Group Practice demonstration CMS conducted from 2005-2010. The PGP demo tested essentially the same idea — provider bonuses for meeting spending reduction and quality improvement targets for attributed Medicare patients. The pattern of arrow holes and burn marks on the PGP wagon closely resemble those from the Pioneer’s first year, strongly suggesting more troubles ahead for the hardy, surviving Pioneers.

The PGP Precedent. Like the Pioneers, PGP participants were not ordinary community hospitals or freshly formed physician groups or IPA’s. Rather, most were “high functioning” organized clinical enterprises, some with decades of global risk contracting or health plan operating experience. Particularly in light of the degree of clinical integration and care management experience of its participants, the PGP results were extremely disappointing; only two of the ten participants were able to generate bonuses in each of the program’s five years, and one, Marshfield Clinic, earned half the total bonuses. Managed care veterans like Geisinger Clinic and Park Nicollet earned bonuses in only three of their ten program years. Two other high-quality multi-specialty clinics had even rougher sledding, with Everett Clinic getting one year of bonus ($126,000) and Billings Clinic completely shut out.

The pattern in the first Pioneer year is remarkably similar. While thirteen of the Pioneers earned bonuses, it appears from press reports that four of them generated 2/3 of the savings. It is likely not coincidental that three of those four participants (Massachusetts General, Beth Israel Deaconess’ physician organization, and New York’s Montefiore) either run or practice at some of the most expensive hospitals in the country, in two of the country’s highest per capita Medicare spending markets. Orchards full of low hanging fruit (e.g. very high levels of previously unexamined Medicare spending) appear to be an essential precondition of ACO success.

Making Sense of Geographic Variations in Health Care: the New IOM Report

Jul 24, 2013• 24

By Elliot Fisher, MD & Jonathan Skinner

Since 1973, when Jack Wennberg published his first paper describing geographic variations in health care, researchers have argued about both the magnitude and the causes of variation. The argument gained greater policy relevance as U.S. health care spending reached 18 percent of GDP and as evidence mounted, largely from researchers at Dartmouth, that higher spending regions were failing to achieve better outcomes. The possibility of substantial savings not only helped to motivate reform but also raised the stakes in what had been largely an academic argument. Some began to raise questions about the Dartmouth research.

Today, the prestigious Institute of Medicine released a committee report, led by Harvard’s Professor Joseph Newhouse and Provost Alan Garber, that weighs in on these issues.

The report, called for by the Affordable Care Act and entitled “Variation in Health Care Spending: Target Decision Making, Not Geography,” deserves a careful read. The committee of 19 distinguished academics and policy experts spent several years documenting the causes and consequences of regional variations and developing solid policy recommendations on what to do about them. (Disclosure: We helped write a background study for the committee).

But for those trying to make health care better and more affordable, whether in Washington or in communities around the country, there are a few areas where the headlines are likely to gloss over important details in the report.

And we believe that the Committee risks throwing out the baby with the bathwater by appearing, through its choice of title, to turn its back on regional initiatives to improve both health and health care.

What the committee found

The report confirmed three core findings of Dartmouth’s research.

First, geographic variations in spending are substantial, pervasive and persistent over time — the variations are not just random noise. Second, adjusting for individuals’ age, sex, income, race, and health status attenuates these variations, but there’s still plenty that remain. Third, there is little or no correlation between spending and health care quality. The report also effectively identifies the puzzling empirical patterns that don’t fit conveniently into the Dartmouth framework, such as a lack of association between spending in commercial insurance and Medicare populations.

The Affordable Care Act Will Fail Without Patient Engagement

Jul 22, 2013• 24

By Adrian Gropper, MD

What’s behind the recent EHR public relations blitz and our passionate debate in The Health Care Blog? It’s fear for the Affordable Care Act’s future. Oh, the ACA can weather political challenge in the short term, but in the long run, only health cost containment will matter. EHRs are the ship that institutions are counting on to navigate payment reform and, from the institutional perspective, physicians and patients are just along for the ride. From the citizen perspective however, cost containment will be seen as rationing unless patients and physicians are appropriately engaged in the most costly decisions.

The impact of yet more regulations, such as Stage 3 Meaningful Use, could be too late to save the ACA. For now, the administration and those of us that hope the ACA succeeds must work to shift EHR vendors and their institutional customers toward patient engagement using the tools of policy guidance, public relations and federal procurement.

First, a crash course in health economics. If you have a few minutes, read Accountable Care Organizations: Can We Have Our Cake and Eat It Too? by Jessica L. Mantel. Otherwise, just struggle through the next two paragraphs summarizing why EHRs are the lynchpin of health reform via the ACA.

Cost containment requires either cost controls or a shift away from fee-for-service payment. The ACA is based on accountable care as an alternative to fee-for-service. Accountable Care Organization (ACO) is shorthand for the new health care payments regime. By paying ACO institutions instead of individual service providers, health insurance companies and Medicare provide direct economic incentives to reduce waste, lower costs and, if we’re not careful, withhold needed care. An ACO is by definition an organization or institutional construct.

The EHR is is not the Jedi knight’s lightsaber, it is an institutional tool designed to bind the individual service providers into the Federation’s collective. Not surprisingly, patient engagement is an afterthought.

How to Fail at the Next Health Care

Jun 11, 2013• 13

By Joe Flower

The Next Health Care calls for very different strategies and tool sets. Many systems are acting as if they read a manual on how to do it wrong. How many of these critical strategic and tactical mistakes is your system making?

So I was beta testing FutureSearch, this cool new Google add-on app I’m writing with a coder, and I found an article that I wrote in 2025. My first thought was, “Cool! It works!” My second thought was, “I’m still working at the age of 75?” It was only then that I focused on the title of the article: “Fail: The 16 Steps by Which Hospitals Failed in the Post-ACA Risk Environment — An Analysis.”

The article detailed a dispiriting history from 2013 to 2020. More important, it listed the 16 most common mistakes that hospitals and health systems made while trying to navigate the new risk environment of the Next Health Care.

I found this interesting because of course right at this moment much of the health care industry, in many different ways, is trying to move away from the traditional fee-for-service payment system, which has given the whole industry adverse incentives, leading to much higher costs, poorer quality and restricted access. The rubric of the day is “volume to value.” And I see many different institutions and systems across the country making exactly these mistakes already in 2013.

Step-by-Step Instructions

As you read this list, ask yourself in what way you and your institution might be making the wrong decisions, and ask yourself what they will look like looking back from 2025.

Stick with fee-for-service. Though they included various incentives and kickbacks, most accountable care organizations and ACO-like structures built in the 2012–2014 period were based on a payment system that remained stubbornly fee-for-service. Systems continued to make more money if they checked off more items on the list (and more complex items), rather than solving their customers’ problems as well and as efficiently as possible.

Knocking the Palooza Out of the Data

Jun 7, 2013• 16

By Jonathan Bush

Just back from the Health Datapalooza confab that took place last week – an event now in its 4^th year hosted by the federal government. I had a few lingering thoughts to share. First, on the event name: I’m guessing it came out of my old business partner and current national CTO Todd Park’s experience in Washington, where trying to get any single distinct thought through “the interests” could knock the “palooza” out of a grown stallion.

You’d think the federal government would be the last ones to host a Datapalooza, but the fact is NO ONE ELSE has stepped up!

So they did.

And complain as I might about the G-men and G-women being industry conference conveners (makes me want to bathe with a wire brush) they pulled it off pretty darn well. The Department of Health & Human Services (HHS) attracted hundreds of serious entrepreneurs… and hundreds more wannabes (who real entrepreneurs desperately need in order to feel cool).

And boy were there some great bloopers…

Kaiser came blistering onto the scene with an open API—to the location and hours of operation of its facilities! Kinda sounds like Yelp to me…I’d be surprised if developers will come a runnin’ to that one. Kaiser’s CIO (a very cool guy whom they or anyone in health care would be lucky to get) broke this news in a two-minute keynote speech. Imagine President Obama announcing, in a State of the Union address, that the green vegetables in the White House cafeteria were now much crunchier!

HHS Secretary Kathleen Sebelius applied similarly excessive fanfare announcing the release of cost data for 30 ambulatory procedures. The whole idea that Toddy (Park) was trying to get going with this Palooza was not to release REPORTS on things but to release the SOURCE data so that anyone with proper security and privacy clearance could INVENT a million reports that no one had ever conceived before!

So here are my thoughts on all of this, some of which I shared at the conference in my way-longer-than-two-minute keynote:

1. Release the data!! Secretary Sebelius announcing the release of cost data for 30 ambulatory procedures during her keynote felt like the Secretary of Energy serving up a can of 10W30 to oil companies to drill into.

Her words were great. To wit: “The fact that this [unlocking the data] is growing by leaps and bounds is a good indication that we can leapfrog over years and decades of inaction into an exciting new future.” YES! GO GIRRRL! OK, so…where’s the data?

3. Measure quality at the level of the organization, rather than the clinician.

May 26, 2013• 1

By Berenson, Pronovost & Krumholz

Historically, the physician has been viewed as the leader of medicine, with responsibility for the care and outcomes of patients; in iconic photographs and paintings, the physician is seen as a lone, heroic figure. Such a view has led to natural interest in the measurement of individual physicians’ performance. It is therefore not surprising that some information brokers, including the U.S. News and World Report and many city magazines like the Washingtonian, provide ratings of “top doctors,” often based mostly on reputation, warranted or not.

However, this focus on the individual is flawed for most measures of quality and presents substantial technical challenges. Systems-based care is emerging as a key value within health care and a vital component of high-quality care, while the notion that an individual health professional can be held accountable for the outcomes of patients in isolation from other health professionals and their work environment is becoming an outdated perspective. For example, better intensive care unit staffing sometimes mitigates the evidence that surgeons who perform more procedures achieve better outcomes [21].

The communication and coordination of services across providers is required to ensure that patients, many of whom have multiple conditions, are assisted through various health care settings [22]. For some aspects of care, such as diagnosis errors and patient experience, measuring at the individual physician level might be considered. Nevertheless, focusing measurement on an individual runs counter to our goals in promoting teamwork and “systemness” as core health care delivery attributes.

The ACO Failure Hypothesis: Likely But Not Inevitable

Apr 28, 2013• 14

By LES FUNTLEYDER

We recently participated in a program at Columbia Business School’s Healthcare Program on whether ACOs (Accountable Care Organizations) will fail. For those of you that don’t know, ACOs are one of the structures promulgated by PPACA (aka Obamacare) designed to encourage better cost control and quality improvement in the healthcare system.

The current zeitgeist among the commentariat is that ACOs will fail (examples: here and here). We think the reason for the one-sided nature of the question is that those of us who lived through the healthcare upheaval in the early and mid “90s” saw first hand the failure of PHOs, PPMs and IDNs (and all of the other acronyms now relegated to the dustbin of history). When ACOs are touted as a saving grace for the system, you can almost hear the collective groan of the industry veterans.

Ever the contrarian, however, we took the side of the debate that said ACOs will NOT fail. The premise of our argument was that since we already have a good idea of why the structure will fail, we can, a priori, fix the shortcomings, and though likely, ACO failure is not inevitable.

There is an extensive list of why list of why ACOs will fail. We put them into four general buckets.

Infrastructure: The system has mis-allocated resources so we have too many of some things and not enough of others leading to inefficiencies.

Technological/telecommunication: For a number reasons the healthcare system has not adopted technology as fast as other industries.

Cultural: Providers are habituated to fee-for-service payment mechanisms and patients aren’t likely to change their own healthcare behaviors.

Inertia: The well known system problems (e.g. asymmetry of information, the Pareto nature of patient demand, unexplained variation of care, counterproductive incentives) have been around forever and are difficult to overcome.

Because we spend most of our time identifying private healthcare companies with investment potential, we often get a view into what is happening in the entrepreneurial space under the punditry radar.

How Physician Practices Can Prepare for a Health Care Marketplace

Apr 24, 2013• 13

By Brian Klepper

What is the path forward for physicians who want to remain in private practice, outside the constraints of health system employment? How will the environment change and what new demands will that place on practices and physicians? What follows are the observations of one industry-watcher who has worked on all sides of health care, but who now spends most his time focused on the interests of those who pay for it. No crystal ball, but several trends are clear.

There are now concrete signs that health care’s purchasers are exhausted and seeking new solutions, that a competitive marketplace is emerging and getting increasing traction. As they abandon ineffective approaches, the paradigm that has dominated the industry for the past 50 years will be upended. The financial pressure felt by buyers will transfer to the supply side health industry that has come to take ever more money for granted.

For decades, fee-for-service payment, inclusive health plan networks, and a lack of quality, safety and cost transparency have been enforced by health industry influence over policy, effectively neutralizing the power of market forces.

Without market pressure, physicians have felt little need to understand their own performance relative to that of their peers. The variation of physician practice patterns within specialties has been high, with some physicians’ “optimizing their revenue opportunities” by veering wildly away from evidence-based practice. Even so, until recently in this dysfunctional environment, it has been nearly impossible to identify high and low performers.