Tag: Accountable Care Organizations

The Eight-Year Journey to Accountable Care

Nov 6, 2012• 1

By Justin Barnes

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.

Dr. Yes

Oct 19, 2012• 10

By David Dranove

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.

Health IT and Dad

Oct 12, 2012• 2

By Rob Cronin

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.

Instadoc!

Oct 9, 2012• 31

By Rob Lamberts, MD

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?

Health Plan Case Studies: A New Florida Blue

Oct 8, 2012• 1

By Kent Bottles, MD

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.

Are Hospital Business Models on a Burning Platform? Not Yet, But It’s Inevitable.

Sep 6, 2012• 8

By Vince Kuraitis

From reading recent headlines, one might easily get the impression that hospitals are resistant — or at least ambivalent — in their pursuit and adoption of accountable care initiatives.

Are Hospitals Dragging their Feet on Accountable Care?

Commonwealth Fund: “only 13 percent of hospital respondents reported participating in an ACO or planning to participate within a year”

KPMG Survey: “(only) 27 percent of [health system] respondents said current business models were either not very or not at all sustainable over the next five years”

Health Affairs: “Medicare’s New Hospital Value-Based Purchasing Program Is Likely To Have Only A Small Impact On Hospital Payments”

The Bigger Picture

Do hospitals today perceive their current business model on the metaphorical “burning platform” — when the status quo is no longer an alternative?

The answer from the headlines above might suggest “no”, but I believe the correct answer is “not yet, but it’s inevitable”. Hospitals are feeling the heat, but it’s just not yet hot enough to jump off the platform and abandon existing business models.

Economics and Health Systems

Sep 5, 2012• 3

By Conor Green & Chris Hoffmann

Two of the largest healthcare systems in the Twin Cities have announced plans to merge – and if approved it will created the second largest hospital system in Minnesota in terms of revenue (Mayo Clinic is first).

For those non-Midwesterners – the geographical environs of the Twin Cities Metro area comprise a 50 mile circumference anchored by Minneapolis to the west and St. Paul to the east. At a high level, this move essentially links West (Park Nicollet) and East (HealthPartners) and according to news releases from both organizations, the combined health system will include more than 20,000 employees and 1,500 multispecialty physicians. However, there is a more compelling angle to this story.

On the surface the motivation for this move could be primarily economic: The average operating margin for a U.S. hospital is 2.5% — tough financial sledding in a disrupted and crowded market. Overly simplified, the economics of a hospital requires keeping beds full (aka “heads in beds”) … and as hospitals today strive to better align with physicians in order to get more than their fair share of referrals, a range of new business models and ways to engage consumers are emerging in the marketplace.
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The EHR “Final Rule” (Finally)

Aug 27, 2012• 4

By Ashish Jha, MD

Six months to the day after the Centers for Medicare and Medicaid Services (CMS) released the “preliminary rules” for Meaningful Use, the final rules are in. For clinicians and policymakers who want to see Electronic Health Records (EHRs) play a key role in driving improvements in the healthcare system, there’s a lot to like here.

For the Office of the National Coordinator (ONC), the agency that oversees the federal health information technology incentive program, the Meaningful Use rules are a balancing act. On one hand, ONC wants to get as many clinicians and hospitals on board with simply adopting EHRs (and thus, the need to set a low bar). On the other hand, they want to ensure that once people start using EHRs, they are using them in a “meaningful” way to drive improvements in care (and thus, the need to set a high bar). I think ONC got that balance just about right.

Let me begin with a little background. In 2009, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act, setting aside about $30 billion for incentives for ambulatory care providers and acute-care hospitals to adopt and “meaningfully use” EHRs. Congress specified that the executive branch would define Meaningful Use (MU) and would do so in three stages. The first stage was finalized in 2010 and its goals were simple – start getting doctors and hospitals on board with the use of EHRs. By most metrics, stage 1 was quite successful. The proportion of doctors and hospitals using EHRs jumped in 2011, and all signs suggested continued progress in 2012. Through July 2012, approximately 117,000 eligible professionals and 3,600 hospitals have received some sort of incentive payment.

All Hell Hath Broken Loose

Aug 21, 2012• 46

By Robert Laszewski

I’ve never seen a week in health care policy like last week. The media reports have to be in the thousands, all trying to make sense of the furious debate between Obama and Romney over Medicare.

As someone who has studied this issue for more than 20 years, it has also been more than exasperating for me to watch each side trade claims and for the press to try to make sense of it.

This blog post is quite long because the subject matter is complicated. If you want to cut to the chase, see my conclusion and summary at the end of this post.

Allow me to list a few of the questions people are asking and give you my take on it.

Will current seniors suffer under the Romney-Ryan Medicare plan?

No. Let me start by saying something that will likely surprise you. If I could be king for a day, I would prohibit anyone over the age of 60 from voting in this election. This election is really about the future and the big decisions on the table are about the long-term government spending and entitlement issues that should be made by younger voters who will have to pay for them and will benefit or suffer from them.

Those in their 60s and older are almost surely going to cruise to the end with the benefits they now have.

Whether its Obama’s Medicare plan, based heavily on the Medicare cost control board imbedded in his health reform bill (which doesn’t begin to impact hospital costs until 2020), or the Romney/Ryan Medicare premium support plan (that has no effect on anyone now over the age of 55), today’s seniors’ benefits are insulated from this issue.

Will Government-Directed Healthcare in Mass. Really Contain Costs?

Aug 7, 2012

By Josh Archambault

Governor Patrick signed a new healthcare law today aimed at cost containment, and the rhetoric soared assuring all that Massachusetts has “cracked the code on healthcare costs.” Unfortunately, with no debate on the underlying bill in the House of Representatives and only little debate in the State Senate, the 349-page statute, which was released just 14 hours before the legislative final vote, is little understood and brimming with unintended consequences.

Real cost-containment is only possible when we encourage patients to reward low-cost, high-quality providers with their business. We’ve said it over and over again throughout this process.

Instead, the law being signed today re-imagines and repackages so many failed top-down approaches from the past. The acronyms may have changed, but this bill looks a lot like past approaches that trusted government, not patients, to drive big, systematic changes in how we purchase healthcare. For some reason our state policymakers expect completely different results this time around.

Rather than provide financial incentives for individual patients to take charge of their own medical care, this legislation rearranges the system based on accountable care organizations (ACOs) and governmentally-imposed changes in payment methods. Real-life evidence that these approaches contain costs is mixed at best; as a result, the law misses the mark by a long shot and will not lead to long-term, sustainable containment of health care costs.