A number of pundits are citing the systemic failure of ACOs, after additional Pioneer ACOs announced withdrawal from the program – Where do you weigh in on the prognosis for Medicare and Commercial ACOs over the next several years?”
Republished courtesy of MCOL
|Mark Lutes Chair, Board of Directors, Epstein Becker & Green, P.C.||
Certainly, if we dial back the rhetoric and the expectations for immediate system -wide transformation, we can expect accountable care organizations to make a contribution to incentivizing more efficient care. Shared savings methodologies are a significant contribution to the arsenal of provider incentive systems. However, they are not magical. Like other incentive systems that have been implemented over the decades since the federal HMO Act was passed, shared savings methodologies are going to enjoy their greatest success where the participating providers have a large percentage of their professional income subject to (hopefully coordinated) value based incentives.
There is also no magic to calling a network an ACO as compared to the nomenclature of IPA, PHO, or PPO. The alchemy governmental and commercial payors seek, in contracting with any such network, is alignment around efficient quality care. The likelihood of the alignment succeeding flows in part from the adequacy and timeliness of the data available as well as from the ability to lock in and incent enrollees — each deficiencies in the current MSSP design. Also, as in any provider or other personnel incentive system, the carrot must be attainable and the “juice must be worth the squeeze.”
Therefore, as we prepare to comment on the next round of CMS’ MSSP and as we negotiate commercial shared savings arrangements, we will be well served to always move the programs in a direction in which they give participating providers the tools for success and in which they will be credible motivators. Most importantly, policy makers, carriers and self-funded employers will be most pleased with the efficacy of shared savings if they work together to align large percentages of payment streams in support of shared savings. If the shared savings tool is not applied in a context where it is worth the effort for providers to vary from the volume based mind-set, we will be asking and expecting too much of and from it.
|Henry LoubetChief Strategy Officer Keenan||
The recent withdrawal of nearly 40% of the Pioneer ACO participants is indicative of significant concern but does not represent the systemic failure of the model. While these Medicare ACO programs did not perform as well as hoped, there were many factors affecting savings and quality improvements including geography and diversity of the populations served. A recent article published by the Brookings Institute analyzes the two-year results in some depth and that many of the ACOs continuing to participate in the Pioneer ACO program are achieving notable success. In the California marketplace, Brown & Toland Physicians and Monarch HealthCare were among the better performing ACOs in the study.
ACOs continue to demonstrate great promise on the commercial side. Anthem Blue Cross and Blue Shield of California have been leading the way in California in taking the ACO model to the next level. For more than 20 years, the delegated/capitated model of health care delivery has been in existence in California, and it is not surprising that two of the largest health plans have been behind the development of successful ACO structures. Anthem’s ACO has seen increases in HEDIS quality metrics and patient engagement. Blue Shield continues to expand the geographic reach of its ACOs, adding a number of new medical groups to the program. ACO efforts between CalPERS/Dignity, Hill Physicians and Blue Shield can also be classified as successful ACOs. In addition, the Kaiser Permanente integrated care model that ACOs emulate has been in existence here since the 1940s.
Certainly adjustments to procedures, the structure of incentives and improved alignment between the cost and quality of health care are needed to achieve the highest objectives of the Accountable Care model. These changes take time and some organizations will be able to improve their performance better than others. Far from being a systemic failure, the ACOs that have shown dedication to the model are showing that the program is having some successes and have demonstrated that improvement in financial and quality outcomes are possible within a reasonable time horizon.
As a member of the Editorial Board of Population Health News, I was asked to provide some personal perspectives for the October 2014 issue.
Here’s a quick sample:
Optimal population health will depend on obtaining and applying the “right” data — data to analyze individuals and populations, discern patterns, predict high risk/cost patients, enable needed behavior change or interventions and measure and monitor progress.
You can read the full interview by clicking here.
Editorial Advisory Board–Population Health News
Peter Edelstein, M.D.
Chief Medical Officer
LexisNexis Risk Solutions, Atlanta, GA
Frederic S. Goldstein, M.S.
President and Founder,
Accountable Health, LLC
Chair, Board of Directors
Population Health Alliance, Washington, D.C.
Thomas R. Graf, M.D.
Chief Medical Officer, Population Health and
Longitudinal Care Service Lines, Geisinger Health
System, Danville, PA
Paul Grundy, MD, MPH, FACOEM, FACPM
Global Director of Healthcare Transformation, IBM;
President, Patient- Centered Primary Care
Collaborative (PCPCC), Hopewell Junction, NY
James (Larry) Holly, M.D.
CEO, Southeast Texas Medical Associates,
Adjunct Professor, Family & Community Medicine,
University of Texas Health Science Center, San
Antonio School of Medicine; Associate Clinical
Professor, Dept. of I.M., School of Medicine, Texas
A&M Health Science Center, Beaumont, TX
Vince Kuraitis J.D., MBA
Principal and founder, Better Health Technologies,
LLC, Boise, Idaho
President, Disease Management Purchasing
Consortium International, Inc.; Founder and Past
President, Disease Management Association of
America, Wellesley, MA
David B. Nash, M.D., MBA
Dean, Jefferson School of Population Health,
Thomas Jefferson University, Philadelphia, PA
Tricia Nguyen, M.D.
Executive Vice President, Population Health, Texas
Health Resources; President, Texas Health
Population Health, Education & Innovation Center,
Fort Worth, TX
Jeremy Nobel, M.D., MPH
Medical Director, Northeast Business Group on
Health; Instructor, Center for Primary Care,
Harvard Medical School; Adjunct Lecturer, Harvard
School of Public Health Boston, Mass.
Samuel R. Nussbaum, M.D.
Executive Vice President, Clinical Health Policy,
Chief Medical Officer, WellPoint, Indianapolis, IN
Jaan Sidorov, M.D., MHSA
Principal, Sidorov Health Solutions; Chair, Board of
Directors, NORCAL Mutual Insurance Company,
What Types of Business Models are Commanding the Highest Valuations? Implications for Healthcare?
A. “Network Orchestrators”
Source: Dion Hinchcliffe, presentation at Salesforce Dreamforce conference, October 14, 2014
Where are there opportunities for “network orchestrators” in healthcare?
• Patient centered medical homes
• High-value health insurance networks
• Care management/population health management vendors & implementers
• Health information exchange networks
• …many others
Post permalink: http://bit.ly/1sKgADl
Tensions between health plans and care providers have taken an fascinating turn in Chicago. Blue Cross Blue Shield of Illinois (BCBSIL) is refusing to allow care providers “affiliated” through a clinical integration agreement to negotiate contracts jointly.
The ramifications for future network contracts are significant and could play out very differently in other health care markets.
In February 2014 Advocate Health Care and Silver Cross Hospital announced a clinical integration affiliation agreement. Advocate is the state’s largest hospital network and Silver Cross is an independent, suburban hospital. The Chicago Tribune reported on details:
Under terms of the affiliation, which is slated to last a minimum of five years, about 300 doctors who practice at Silver Cross will join Advocate Physician Partners, a 4,400-doctor organization jointly governed by Advocate and the physicians…
Although the hospital will retain its brand, board and balance sheet, it will enter into contracts with insurance companies and government programs under Advocate, and its physicians will fall under Advocate Physician Partners. Advocate will treat the hospital like any of its other 11 facilities financially, assigning pro-rata costs to the Silver Cross in the same way it would Advocate Christ in Oak Lawn or Lutheran General in Park Ridge.
As noted a February article in Crain’s Chicago Business, the intent of the agreement had been to allow Silver Spring to participate in Advocate’s accountable care organization network and to negotiate contracts jointly:
For New Lenox-based Silver Cross, the deal means participation in programs in which providers and hospitals are paid in part for good outcomes rather than volume. It wouldn’t have been able to launch these on its own due to the hefty investments needed to start from scratch. “It’s a make-or-buy decision,” said Ruth Colby, Silver Cross’ senior vice president of business development and chief strategy officer. “When we saw that we could do an affiliation, we felt we could rapidly get ready for changes in reimbursement.”
However, the state’s dominant health insurer has said “Not so fast”. The headline of an October 8 article in Crain’s Chicago Business read “Blue Cross delivers blow to small hospitals”
Blue Cross won’t negotiate reimbursement rates with affiliations created by separate health systems that clinically integrate rather than those under common ownership, Dr. Lee Sacks, chief medical officer of Downers Grove-based Advocate, said during a meeting yesterday with the Crain’s Chicago Business editorial board.
So, what we have here is a new slant on an old issue — the fight for market power among health plans and care providers. Health plans will prefer a “divide and conquer” strategy, while providers will prefer a “united we stand” strategy toward pricing and contract negotiation.
Why It Matters
The Illinois scenario is a pretty good prototype of market dynamics in many other markets across the U.S. — a dominant health plan, a strong regional delivery system, and a smaller independent hospital. Similar affiliation scenarios are likely to play out in markets across the country, but will the results be the same?
I’ve written before about what economists call “The Penguin Problem” — No one moves unless everyone moves, so no one moves.
The healthcare Payment Penguin Problem goes something like this:
Care Providers: “We’re hesitant to jump into the water. While we understand that fee-for-service payments are perverse, they ARE in our best economic interests. We won’t invest in infrastructure and processes toward value-based care until we believe payers are serious in making the transition.”
Payers: “We’re hesitant to jump into the water. While we understand that value-based payments could improve quality and reduce costs, we don’t know whether care providers are serious in making necessary investments and changes. We also question whether they can pull it off. We’d like to see that providers are serious in making the transition.”
- The 2014 CPR National Scorecard for Payment reform documents that the Payment Penguin Problem has been solved!
- The implications are huge!
Last week Apple held a huge media event to announce forthcoming products, including the iPhone 6, 6+ and Apple Watch. Many of us in the healthcare world had been sitting on the edge our seats, hopefully awaiting news detailing Apple’s broader strategy in entering healthcare. We were disappointed — no mention of Apple HealthKit, no doctors on the main stage, only a few teasers about how the Watch might be used in fitness and health monitoring.
Apple is a consumer technology company, and it’s natural to think that their efforts in healthcare will be aimed directly at patients. However, I’ve been pondering whether that’s looking at Apple’s opportunity through the wrong end of the telescope.
Are physicians — 85% of whom own an iPhone — a much more natural and powerful strategic beachhead for Apple to focus on?
Our focus has been to figure out how to accommodate the 5% of patients that get their peace of mind knowing that they have absolute control of every piece of their data. Our focus really should be on the 95% that get their peace of mind knowing that when they show up in the ER, all of their data will be there.
Lawrence Garber MD, Internist/Medical Director for Informatics, Reliant Medical Group. Comment at ONC JASON Task Force, July 2014.
Ending insurance discrimination against the sick was a central goal of the nation’s health care overhaul, but leading patient groups say that promise is being undermined by new barriers from insurers. The Washington Post
In the past year, network adequacy has been one of the hot button issues for Qualified Health Plans (QHPs) in the Federal health insurance exchange. Network adequacy has focused on access to care providers and the narrow networks used by many health plans.
In the next year, the big issue will be around benefits adequacy, i.e., lack of coverage and high out-of-pocket expenses incurred due to high deductibles, co-pays, exclusions, etc. My shorthand for this is “Swiss cheese health insurance—so, so many holes.”
The Canary in the Coal Mine Letter
The canary in the coal mine is a recent letter signed by 333 patient advocacy groups (“the Letter”) to HHS Secretary Sylvia Burwell. (When’s the last time you saw a letter endorsed by 333 organizations!)
This post was originally published on the HIMSS blog with the title “Patient Digital Health Platforms (PDHPs): An Epicenter of Healthcare Transformation?”
Apple’s recent announcement about its HealthKit platform is a beacon of a much bigger trend. We are at the early stages in the rise of a new business and IT ecosystem:
Patient Digital Health Platforms (PDHPs)
These new platforms should be high on the radar screens of healthcare providers. While v1.0 of PDHPs is starting fairly narrow, companies will be highly incentivized to move up the food chain into mainstream health data exchange, workflow integration, and virtual care delivery. PDHPs portend both opportunities and threats.
I’ll pose and provide some early answers to how the PDHP ecosystem might shape up. Here’s a preview:
- What’s “The Healthcare Platform Void”?
- Who Are Initial Players in the PDHP Ecosystem?
- A Central Question: Will PDHPs Go Narrow or Broad?
- What Market Pressures Incentivize PDHPs to Go Broad?
- What Are Early Warning Signs that Some PDHPs Will Go Broad?
- How Long Will It Take For All This to Play Out?
Consider this an introduction to PDHPs—you will discover more questions than answers. I’ll use Apple HealthKit as a case study to illustrate some examples.