Tag: ACOs

Aledade: Mandy Cohen joins, Farzad speaks

Feb 16, 2022

Aledade is the “build an ACO out of small independent primary care practices” company. It was founded by former ONC Director Farzad Mostashari and has been growing fast and profitably in the last few years, having raised just shy of $300m. Farzad recently both tweeted out the latest and put up a slide deck about their financial and business progress. Aledade also announced a major star signing in Mandy Cohen, previously Secretary of HHS in North Carolina, who is becoming CEO of a new division called Aledade Care Solutions. I had a wide ranging conversation with both of them about what Aledade has done and what it is going to do, as well as the general state of play in primary care and risk taking–Matthew Holt

TRANSCRIPT (lightly edited for clarity)

Matthew Holt:

Okay, it’s Matthew Holt with THCB Spotlight. I’m really thrilled to have Farzard Mostashari and Mandy Cohen with me. So, both of these two doctors have spent a lot of their time in public, much of their career in public service, Farzad for many years was in New York City, and then later was at ONC. Mandy was at CMS, and more recently, was Secretary for Health in North Carolina. In fact, towards the end of the Obama administration, Farzad was doing venture capitalism in a bar and got given a check and founded Aledade. And the news just recently, was that Mandy, who has just finished her term in North Carolina, is now going to join Aledade and start a new division there. So, I thought we would chat about how Aledade’s doing, what it’s doing, and what it’s going to do in the future and hopefully, yeah.

Can Startups Save Primary Care?

Mar 3, 2020• 4

By ANDY MYCHKOVSKY

Today, primary care is considered the bee’s knees of value-based care delivery. Instead of being viewed as the punter of the football team, the primary care physician (PCP) has become the quarterback of the patient’s care team, calling plays for both clinical and social services. The entire concept of the accountable care organization (ACO) or patient-centered medical home (PCMH) crumbles without financially- and clinically-aligned PCPs. This sea change has resulted in rapid employment or alignment to health systems, as well as a surge in venture capital being invested into the primary care space.

Before we get too far in the weeds, let’s first begin with the definition of primary care. The American Academy of Family Physicians (AAFP) defines a primary care physician as a specialist typically trained in Family Medicine, Internal Medicine, or Pediatrics. Some women do use their OB/GYN as their PCP, but these specialists are not traditionally considered PCPs. Now if you’ve gone to your local PCP and noticed that your care provider is not wearing a white coat with the “MD” or “DO” credentials, you are either receiving treatment from a hipster physician, nurse practitioner (NP), or physician assistant (PA). Two of the three professionals are trained in family medicine and can provide primary care services under the responsibility of an associated PCP. At least one of the three has a beard.

The crazy thing is, despite the industries heightened focus on the importance of PCPs, we’re still expecting a shortage of primary care providers. In April 2019, the Association of American Medical Colleges (AAMC) released a report estimating a shortage of between 21,100 and 55,200 PCPs by 2032. Given we just passed 2020, this not that far off. The primary reason for the shortage is the growing and aging population. Thanks mom and dad. Digging into the numbers will really knock your socks off, with the U.S. Census estimating that individuals over the age of 65 will increase 48% over that same time period. Like a double-edged sword, the issue is not just on the patient demand side though. One-third of all currently active doctors will be older than 65 in the next decade and could begin to retire. Many of these individuals are independent PCPs who have resisted employment by large health systems.

THCB Spotlights: Lightbeam Health Solutions

Apr 9, 2019

By ZOYA KHAN

Today, THCB is spotlighting Lightbeam Health Solutions. Lightbeam is an end-to-end population health management solution, which means they build everything from the ground up (i.e. no acquisitions or 3^rd party interfaces are used). “Interface to innovation” as Jorge Miranda, CRO of Lightbeam, states, allows Lightbeam to build a health system’s value-based contracts relatively quickly. Their main focus is to generate data insights for ACOs and other provider systems, to engage care teams in the coordination of patient care. This is Lightbeam’s 6^th year in the health care field, and with 100 customers and over 20 million patients in their enterprise data warehouse (EDW), they have no signs of slowing down.

Lightbeam has 4 main focuses: data ingestion, data insights, the engagement of the team with the data gathered, and the patient outcomes that result from that data. Lightbeam seeks to use their insights to empower care teams by giving the information back to the caregivers, physicians, and patients. According to them, this creates more transparency in the entire process as well as allows the patient and caregivers to play an active role in their health care process.

The ultimate value that clients (health systems or providers) receive from Lightbeam’s system is cutting costs and improving quality. Lightbeam does this by monitoring engagement numbers and patient outcomes based on the data and insights they gathered, ensuring costs savings for clients as well as an effective approach to cutting the high cost of care today. Lightbeam’s ultimate goal is to replace a manual process that is currently being done by multiple people and using multiple resources, to refocus the target on improving care for everyone involved in the health care system.

Zoya Khan is the Editor-in-Chief of THCB as well as an Associate at SMACK.health, a health-tech advisory service for early-stage startups.

Innovators Worth Watching: Hennepin Health ACO

Apr 4, 2019• 2

By REBECCA FOGG

As U.S. providers continue their slow but steady march away from fee-for-service reimbursement and toward value-based payments, they’re increasingly seeking means of addressing patients’ health-related social needs. That’s because social determinants of health—life circumstances including socioeconomic status, housing, education, and employment—are estimated to have at least twice the impact on risk of premature death than health care. So addressing them is an important part of value-based strategies aiming to improve health while reducing health care costs.

Hennepin Health, a safety-net Accountable Care Organization (ACO) serving Medicaid patients in Minneapolis, Minnesota, is an encouraging example of the trend. Hennepin Health’s ACO is a partnership between the county’s local Human Services and Public Health Department, a local teaching hospital, a Medicaid managed care health plan, and a Federally Qualified Health Center. Its innovative care model is designed to meet the unique needs of the partners’ shared, “high-risk” members, whose complex combination of issues—such as mental illness, addiction, homelessness and/or other hallmarks of social deprivation—often prevent them from accessing or receiving appropriate care through the traditional health system.

The ACO is staffed by an integrated care team comprised of physicians, nurses, pharmacists, social workers and community health workers. Unlike traditional care processes, which often only involve medical assessment, Hennepin Health’s begins with an assessment of members’ social needs, like housing and food insecurity, or lack of transportation and unemployment, so that its care team can tackle those barriers to health in conjunction with members’ medical problems. And throughout members’ care, the team strives to develop and maintain a trusting relationship with members, many of whom have been let down by traditional health care, so that they can continue to identify and assist with more health and social needs over time.

Results thus far has been impressive—according to a Commonwealth Fund case study, the ACO’s medical costs fell an average of 11% per year between 2012 and 2016. And, between 2012 and 2013, its members’ emergency room visits decreased by approximately 9%, with hospital admissions remaining flat and outpatient visits increased by 3.3%. Assuming its results have continued on the same trajectory (we could not find more recent figures), Hennepin Health’s innovative care model shows significant promise.

But does it have the potential to disrupt America’s traditional, episodic, acute care delivery model? We put it to the test with six questions for identifying a Disruptive Innovation.

Not Fake News! A Trump Administration Rule Models Government Civility

Jan 9, 2019

By MICHAEL L. MILLENSON

A Trump administration regulation issued just hours before the partial federal shutdown offers quiet hope for civility in government.

What happened, on its face, was simple: an update of the rules governing a particular Medicare program. In today’s dyspeptic political climate, however, what didn’t happen along the way was truly remarkable – and may even offer some lessons for surviving the roller-coaster year ahead.

A regulatory process directly connected to Obamacare and billions in federal spending played out with ideological rhetoric completely absent. And while there were fervid objections to the draft rule from those affected, the final version reflected something that used to be commonplace: compromise.

Think of it as Survivor being replaced by Mr. Smith Goes to Washington. Or, perhaps, a small opening in the wall of partisan conflict.

More on that in a moment. First, let’s briefly examine the specifics.

Where is Relationship, Authority, and Trust in Health Care Today?

Dec 28, 2018• 8

By HANS DUVEFELT MD

Healthcare is on a different trajectory from most other businesses today. It’s a little hard to understand why.

In business, mass market products and services have always competed on price or perceived quality. Think Walmart or Mercedes-Benz, even the Model T Ford. But the real money and the real excitement in business is moving away from price and measurable cookie cutter quality to the intangibles of authority, influence and trust. This, in a way, is a move back in time to preindustrial values.

In primary care, unbeknownst to many pundits and administrators and unthinkable for most of the health tech industry, price and quality are not really even realistic considerations. In fact, they are largely unknown and unknowable.

The Importance of Patient Engagement in Post-Acute Care

Dec 19, 2018• 5

Brian Holzer, patient engagement, post-acute care

By BRIAN HOLZER MD, MBA

Leaders in hospitals and health systems as well as post-acute care providers such as skilled nursing facilities (SNFs) and Home Health Care (HHC) agencies operate in a complex environment. Currently, the health care reimbursement environment is largely dominated by fee-for-service models. However, acute and post-acute leaders must increasingly position their organizations to prepare for, and participate in, evolving value-based care programs—without losing sight of the current fee-for-service reimbursement structure.

With that said, the call to action for acute and post-acute providers working at both ends of the reimbursement spectrum is real. The time is now to innovate, test and adopt new post-acute care models to support each patient’s transition from hospital to post-acute settings, and eventually home to enable a better care experience for patients and their care teams.

This is especially relevant for Skilled Nursing Facilities (SNFs) and chains that meet the current Medicare requirements for Part A coverage. Increasingly, the SNF industry is under pressure from the Medicare program to improve coordination and outcomes. Medicare’s hospital readmission policy and value-based purchasing program (VBP), bundled payments, and ACOs encourage SNFs, and other post-acute settings, to avoid readmissions. In addition, earlier this year, the Centers for Medicare and Medicaid Services (CMS) finalized a new patient-driven payment model (PDPM) for SNFs, which will go into effect on October 1, 2019. The overhaul of the entire system will require significant staff focus and operational changes.

Can CMS’ Proposed ACO Changes Really Help Medicare Beneficiaries?

Sep 4, 2018• 3

By REBECCA FOGG

Earlier this month, the Centers for Medicare and Medicaid Services Administrator Seema Verma proposed bold changes to Medicare’s Accountable Care Organizations (ACOs), with the goal of accelerating America’s progress toward a value-based healthcare system—that is, one in which providers are paid for the quality and cost-effectiveness of care delivered, rather than volume delivered.

CMS has created a number of ACO programs over the last six years in an effort to improve care quality and reduce care costs across its Fee-for-Service Medicare population. In a Medicare ACO, hospital systems, physician practices and other voluntarily band together and assume responsibility for the quality and cost of care for beneficiaries assigned to them by Medicare. All ACOs meeting quality targets at the end of a given year receive a share of any savings generated relative to a predetermined cost benchmark; and depending on the type of ACO, some incur a financial penalty if they exceed the benchmark.

According to CMS’ recent analyses, ACOs that take on higher financial risk are more successful in improving quality and reducing costs over time. So one important objective of CMS’ proposed changes is to increase the rate at which ACOs assume financial risk for their beneficiaries’ care.

Seema Verma Hyperventilates About Tiny Differences Between ACOs Exposed to One-and Two-Sided Risk

Aug 21, 2018• 8

By KIP SULLIVAN, JD

There is no meaningful difference between the performance of Medicare ACOs that accept only upside risk (the chance to make money) and ACOs that accept both up- and downside risk (the risk of losing money). But CMS’s administrator, Seema Verma, thinks otherwise. According to her, one-sided ACOs are raising Medicare’s costs while two-sided ACOs are saving “significant” amounts of money. She is so sure of this that she is altering the rules of the Medicare Shared Savings Program (MSSP). Currently only 18 percent of MSSP ACOs accept two-sided risk. That will change next year. According to a proposed rule CMS published on August 9, ACOs will have at most two years to participate in the MSSP exposed to upside risk only, and after that they must accept two-sided risk.

That same day, Verma published an essay on the Health Affairs blog in which she revealed, presumably unwittingly, how little evidence she has to support her decision. The data Verma published in that essay revealed that one-sided ACOs are raising Medicare’s costs by six-one-hundredths of a percent while two-sided ACOs are cutting Medicare’s costs by seven-tenths of a percent. [1] Because these figures do not consider the expenses ACOs incur, and because the algorithms CMS uses to assign patients to ACOs and to calculate ACO expenditure targets and actual performance are so complex, this microscopic difference is meaningless.

“Two beellion dawlers”

Even if the difference is not meaningless – even if two-sided ACOs actually save a few tenths of a percent for Medicare – the impact on Medicare spending will be barely noticeable. Verma assures us, without a hint of embarrassment, that her new rule will cut Medicare spending by $2.2 billion over ten years. “The projected impact of the proposal would be savings to Medicare of $2.2 billion over ten years,” she declares in her blog comment.

Dr. Evil from Austin Powers

I feel like we’re in a scene from the Austin Powers movie where Dr. Evil announces he will hold the world ransom for “one meellion dawlers.” Dr. Evil’s sidekick, Number Two, has to advise him that a million dollars is peanuts. Verma’s estimate of 2.2 “beellion dawlers” is essentially zero percent of the trillions of dollars CMS will spend on Medicare in the next decade.

Why Do We Need ACOs and Insurance Companies?

Feb 26, 2018• 16

By KIP SULLIVAN, JD

Six years ago Ezekiel Emanuel and Jeffrey Liebman made the foolish prediction that ACOs would eat the insurance industry’s lunch. “By 2020, the American health insurance industry will be extinct,” they wrote. “Insurance companies will be replaced by accountable care organizations….” This would happen, they argued, because ACOs are just so darned good at lowering costs compared with insurance companies.

The first Medicare ACO programs began in 2012. Today there are 800 to 1,000 ACOs in business. [1] But ACOs aren’t even close to displacing the insurance industry. The most obvious reason is they don’t want to be insurance companies – they don’t want to bear full insurance risk. And the reason for that is they can’t cut costs. The performance of the Medicare ACOs, which are the only ACOs for which we have reliable data, illustrates both problems: Very few want to accept “downside risk” (the risk of losing money if they can’t cut costs); and they are incapable of cutting costs.

ACO hype confronts reality: Reality wins

Anyone paying attention to the research knew even before 2012 that ACOs wouldn’t cut costs for a general population (as opposed to a small slice of the population that is very sick). The Physician Group Practice Demonstration, which was widely seen as the first test of the ACO concept, raised Medicare spending. According to the final evaluation of the demonstration, the ten participating ACOs raised Medicare’s costs by 1.2 percent over the five years the demonstration ran (2005-2010), and it might have been worse if the ACOs hadn’t upcoded. [2] This failure to cut costs occurred despite the fact that the ten participating “group practices”/ACOs were very experienced in managing risk. They had names anyone who studies health policy would recognize, including Dartmouth-Hitchcock Clinic, Geisinger Clinic, and Marshfield Clinic. According to the final report on the demo, “Seven of the ten participants had currently or previously owned a health maintenance organization ….” (p. 15)