Categories

Tag: Accountable Care Organizations

ACOs: We’re NOT There Yet

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…

How Using a ‘Scorecard’ Can Smooth Your Hospital’s Transition to a Population Health-based Reimbursement Model

The US healthcare system’s myriad of problems again seized the headlines recently with the release of an Institute of Medicine report, which found that 30 percent of healthcare spending in 2009 – around $750 billion – was wasted. Citing the “urgent need for a system-wide transformation,” the report blamed the lack of coordination at every point in the system for the massive amount of money wasted in healthcare each year.

One critical area in particular need of transformation is the business and operating model that drives healthcare in the US. There is broad-based agreement across the healthcare industry that the current fee-for-service model does not work, and needs to be changed. The sweeping health reform law enacted in 2010 included a range of more holistic, value-based payment structures that are now being referred to as “population health.”

Population health is an integrated care model that incentivizes the healthcare system to keep patients healthy, thus lowering costs and increasing quality. In this value-based healthcare approach, patient care is better coordinated and shared between different providers. Key population health models include:

· Bundled/Episodic Payments – This is where provider groups are reimbursed based on an expected cost for a clinically defined episode of care.
· Accountable Care Organizations (ACOs) – This new model ties provider reimbursement to quality and reduction in the total cost of care for a population of patients.

Continue reading…

ACOs: Is There a “There” There?

recent analysis of the ACO market by Oliver Wyman market suggests we’re well on our way toward being “there.”

My personal take on this report:

Provocative, fresh, thoughtful, well reasoned, expansive — albeit a bit of a stretch

However, I suspect many others will describe it as:

Speculative, harebrained, unsupported, overly extrapolative, out-to-lunch, wishful to the point of being woo woo.

So now that I hopefully have your attention, what’s this report all about? In a nutshell:

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.

Let’s dig in to the report. In this blog post, I’ll summarize their math, surface their critical assumptions and observations, and comment on their reasoning. I’ve indented direct quotations from the report.

While I don’t agree with all of Oliver Wyman’s math and assumptions, I applaud them for the process they have gone through. Please take my commentary as “quibbling at the edges” and that overall I’m on board with their methodology and conclusions.

Continue reading…

Health Care Reform Gangnam Style

So I read an article the other day about a new company called Rap Genius. The company consists primarily of a website that relies on crowdsourcing to explain rap lyrics to the masses who are not down with the urban vibe (aka, people over 30).  The company takes lyrics such as these from Kanye West’s Gold Digger….

She was supposed to buy your shorty Tyco with your money
She went to the doctor got lipo with your money
She walking around looking like Michael with your money.”

…and explains that they mean, to wit:  The ex-wife was supposed to buy your baby some toys with the child support money but instead spent it all on so much plastic surgery that she looks like Michael Jackson (presumably before he died―my edit).

Here’s another example:  Nelly’s song Grillz gets explained thusly:  “Got 30 down at the bottom, 30 more at the top, all invisible set in little ice cube blocks” refers to the fact that Nelly is wearing “grillz” aka jewelry worn over the teeth, which are worth $30,000 on the top and another $30,000 on the bottom, with diamonds set right into the gold.  So now you know.

According to the article about the $15m investment that venture fund Andreesen Horowitz put into Rap Genius, the company’s goal is to “annotate the Internet” and, beyond rap music, “the company is slowly spreading to other categories such as literature, political speeches, and science papers.”  Let me just digress for a moment and say that the website I would love to see is the one that turns political speeches into rap lyrics―wouldn’t it be sublime to see Joe Biden and Paul Ryan speak jive?

Continue reading…

Study Says, Something Other Than What We Were Expecting. EHR Portals Increase Hospitalization Rates

Hey there Accountable Care Organization executive.

You’re probably willing to continue to commit millions of dollars toward an electronic health record (EHR) coupled to an online patient portal.  That’s because you’ve been told by your leadership team that electronic consumer empowerment, patient-provider communication and the substitution of efficient two-way messaging for costly face-to-face visits will increase quality, reduce expenses, generate shared savings and guarantee that your life-sized portrait will be prominently displayed in your flagship hospital’s lobby.

Well, after you’ve read a just-published JAMA research study by Ted Palen, Colleen Ross, David Powers and Stanley Xu, you may want to tell your administrative assistant to cancel that appointment with the portrait artist.

The article’s title is Association of Online Patient Access to Clinicians and Medical Records With Use of Clinical Services.

How the study was done:

Kaiser Permanente Colorado added “MyHealthManager” (MHM) to their EHR in May 2006. MHM allows patients to view tests, records, problem lists as well as care plans, schedule appointments, request refills and message their doctors. By June of 2009, over 375,000 Kaiser patients had signed up for MHM. Of those, about 45% had used the system at least once.  Of this number, Kaiser researchers pulled the records of 44,321 persons who had been continuously enrolled in the Kaiser system for at least two years.

Continue reading…

The Eight-Year Journey to Accountable Care

Now that the healthcare industry can work with clarity on care coordination strategies and programs, a new expansion of ACO models, trends in patient behavior and the companion issue of provider scope of practice have quickly emerged as critically-relevant spotlights. Historical perspective helps.

Simply put, even with the political tumult this fall, there is strong bipartisan support for aligning payment and care delivery models with improving quality to create a smarter and sustainable healthcare system, backed by historical precedent.

For me and my colleagues in the trenches of pursuing fiscally sound care delivery nearly a decade ago, it is well remembered that the origins of accountable care reside within a 2004 HHS document entitled “The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care.” This “Framework for Strategic Action” (as it is also known) was delivered to then-HHS Secretary and GOP-appointee Tommy Thompson. And it was delivered by the nation’s first National Coordinator for Health Information Technology, Dr. David Brailer.

The document’s goals of introducing health IT solutions to clinical practices, electronically connecting clinicians, using “information tools” to personalize care and advance population health reporting followed an executive order calling for widespread adoption of interoperable EHRs within 10 years.

Continue reading…

Dr. Yes

Last week I attended a conference on health policy at the University of Chicago, where I moderated a panel that examined implementation of the Affordable Care Act. For much of our time, the panel focused on Accountable Care Organizations. Panelists and attendees wondered whether ACOs would meet the same fate as Integrated Delivery Systems of the 1990s. Some in the audience mentioned that when it comes to integration, electronic medical records could be a game changer. EMRs could be used to monitor and reward cost saving decision making, for example. But most ACOs are still figuring out how to use EMRs for clinical decision making; their use in helping managerial decision making remains far off.

As more and more speakers expressed skepticism about the future of ACOs, a physician in the audience offered a truly fresh perspective, one that makes me feel much more optimistic. I never learned this physician’s name, so I will call him Dr. Yes. Before I summarize Dr. Yes’ argument, it is helpful to turn back the clock to the late 1990s, when IDSs were taking the health industry by storm. Perhaps the defining feature of IDSs in the 1990s was the integration of hospitals and primary care physician practices. This strategy failed in large part due to classic agency problems. In a nutshell, an agency relationship can fail because of incentive problems (the principal is unable to effectively motivate the agent) or selection problems (the principal employs the wrong type of agent.) IDSs suffered both. When hospitals acquired physician practices, they converted entrepreneurs into employees who resisted any kind of incentive payments. As employees, primary care physicians did not work as hard or show as much commitment to their practices. Moreover, those physicians most eager to give up their autonomy were those looking to dial down their practices and lead the “quiet life.” In these ways, IDSs experienced both incentive and selection problems, with devastating results.

Continue reading…

Health IT and Dad

Health information technology has, in many ways, been a calling for me. I passionately believe in the ability of technology and information to reduce costs, improve quality and transform healthcare. For the last seven years (I won’t say the “better part” as my wife and kids would probably not appreciate that characterization…on the other hand, they would quickly confirm that it has consumed most of my waking hours), I have collaborated with hundreds organizations in healthcare and technology across the public sector and the private sector to try and positively influence the adoption and use of health information technology. By many measures, this work has been successful.

Awareness levels and perceived value of health IT among doctors, hospitals, policymakers and many other audiences has improved dramatically. A wide majority of physicians in the U.S. have by now adopted technologies such as electronic health records and e-prescribing. Playing a small part in this progress to date has been the most gratifying work of my career.

But then came Dad and his own personal experience with health IT. My father’s experience as a patient has left me questioning the level of progress that has been achieved.

Continue reading…

Instadoc!

I grew up in Rochester, NY. Statistically, this means that I probably had a family member who worked at Eastman Kodak, as the company employed over 62,000 people in Rochester at it’s peak. I did, in fact, have two: my father and my brother-in-law. My brother and I both worked there during two fun and profitable summers of our college years in the delightful “roll coating” division. It actually paid quite well, but was miserable work.

Kodak was, at one point, the consummate American success story, dominating its market like few others. In 1976, it had a 90% market share of film, as well as 80% of cameras sold in the US. Kodak Park, the property at the center of manufacturing once employed 29,000 employees, with its own fire company, rail system, water treatment plant, and continuously staffed medical facility.

Fast-forward to 2012, and the picture changes dramatically. In a single year, Kodak declared chapter 11 bankruptcy, received a warning from the New York Stock Exchange that its stock was below $1/share for long enough that it was at risk of being delisted, announced it is no longer making digital cameras so as to focus on its core business: printing, and then a few weeks ago announced it was no longer making inkjet printers. The job force in Rochester alone has gone down by nearly 90%, to an estimated 7200 employees. (All of this info came from Wikipedia, if you wondered).

Adding pain for former Kodak fans was the announcement in April of this year that Facebook was buying the photo sharing company Instagram (which employed 13 people at the time) for an estimated $1 Billion.

So how could a company so dominant be overcome by one with only 13 employees? Didn’t the resources of Kodak give them anything better to sell than this small start-up? And what spelled the doom of a well-proven system of photography that fueled one of the most successful companies of its time? Was it acts of congress? Was it passage of a photography reform bill, or Obamachrome? Was it formation of ACO’s (accountable camera organizations), the use of the photographic centered media home, or the willingness of the government to pay photographers over $40,000 if they prove they use digital cameras in a “meaningful” way?

Continue reading…

Health Plan Case Studies: A New Florida Blue

One of the perks of giving keynotes all over the country is being able to hear what other health care leaders are saying without having to pay the conference fees. One of my major keynote themes is that everyone (patients, doctors, hospitals, employers, and health plans) will have to change in order to thrive during the current health care delivery system transformation.

Recently in Delray Beach, I stayed after my keynote to hear Florida Blue CEO Patrick Geraghty describe his first year of trying to change the Blue Cross/Blue Shield franchise to respond to health care reform. I have written elsewhere about the health plan response to the changing environment, but Geraghty’s speech highlighted how urgent and how difficult change can be when an industry business model is disrupted by federal legislation and market forces.

Geraghty has led the Blues effort in Florida to update their name, mission, vision, and values. Focus groups revealed that the new name Florida Blue was easier to say and communicated a less corporate, more friendly image than the old name Blue Cross Blue Shield which brought to mind adjectives such as corporate, distant, and expensive.

A four paragraph mission statement was replaced by a single sentence: “To help people and communities achieve better health.” The vision statement was rewritten to now describe the company as “a leading innovator enabling healthy communities.” The five corporate values now include the familiar “respect,” “integrity,” and “excellence,” and the more unusual “courage” and “imagination.”

What I found most intriguing and revealing was how these new efforts are being translated into concrete tactics such as opening retail centers and partnering with Disney on a new innovation institute.

Continue reading…

Registration

Forgotten Password?