Measure of Doubt
Fear of unknown has physicians and practice management specialists clamoring for direction on accountable care
Many medical practitioners and practice management consultants want to be involved on the ground floor of the formation of Accountable Care Organizations (ACO). Exactly how this new format will work remains unclear, and gathering groups of physicians across specialties, geographic lines and health systems has proven to be a daunting task.
Even though the potential for significantly increasing healthcare providers’ bottom line with incentives has turned heads, the fear of the unknown looms, especially because the startup costs associated with forming an ACO are projected to be outrageous.
“The current discussion in the healthcare world over ACOs will soon develop into a debate about their value and sustainability,” said Monte Shields, a medical malpractice specialist with The Keane Insurance Group Inc., in St. Louis. “One side seems to think that ACOs will help solve our national healthcare crisis, while the other criticizes the idea as just another program muddying the waters and confusing patients. Some say ACOs aren’t going to be cost-effective and that they’ll be tossed out in the long run, while others tout them as the best way to provide quality care for Medicare patients.”
By providing incentives for physicians, hospitals and other healthcare providers to collaborate on patient care and reduce hospitalization, Centers for Medicare and Medicaid Services (CMS) Administrator Don Berwick, MD, is convinced that “improving coordination and communications among physicians and other providers and suppliers through ACOs will help improve the care Medicare beneficiaries receive, while also helping lower costs.”
Early projections show that collaborating groups will save Medicare $960 million over three years by combining care by different medical specialties into one group.
“The current system rewards doctors for doing more procedures and hospitals for keeping beds full,” said Shields. “According to CMS, the proposal is to pay based on outcomes, while still providing a fee for services performed.”
Unlike managed care organizations, ACOs are formed on a voluntary basis by providers and are set up to give patients more choices than limitations.
“Because the majority of Medicare patients suffer from multiple conditions, they usually receive care from multiple providers and clinics,” said Shields. “When a patient who has arthritis, high blood pressure and diabetes sees four or five different physicians who don’t communicate with one other, care is often duplicated and the risk for errors is increased. Many of these patients are frustrated by their lack of control over their healthcare. The goal of the ACOs is to eliminate that frustration by giving physicians within an ACO better information about their patient’s medical history. Treatment, medical records, charts, prescriptions and other patient information will be shared among the group.”
The incentive for the physicians: they keep a portion of the money saved, said Shields.
“CMS will monitor ACOs for quality and cost efficiency,” he said. “Where costs are reduced, a percentage will be given back to the group. Exactly how this will work is still not very clear, but defenders of the plan say it will significantly increase the healthcare provider’s bottom line. Opponents argue that the incentives are actually very small and would be of little help offsetting the reduction in Medicare reimbursements on the horizon.”
The American Hospital Association (AHA) projects start-up costs for a 200-physician ACO could range from $1 million to $11 million.
“While it’s been proposed that advance payments be given to help with start-up, contestants claim that incentives offered aren’t nearly enough to pay for the initial investment required,” said Shields.
Shield urges group administrators and physicians to consider many aspects of changes that may occur when applying for ACO status: technology, computer systems, electronic medical records systems, data integration, privacy, security, administration, staffing, and management of the group.
“It appears that it could take years to recover the costs of getting ACOs off the ground,” he said. “Because of the expense of forming an ACO, early indications are that hospitals are more likely to be able to afford the upfront costs.”
A national report shows that 60 percent of the 164 identified ACOs are hospital-sponsored; only 23 percent were physician-formed. Health plans and other organizations comprise the balance, Keane noted.
“The program is still new and we may see more physician groups forming ACOs as the results are reported,” he said. “Some may see this as an opportunity, while others may reject the idea altogether.”
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Rather than focusing on restructuring, physician practices should be looking at ways to ensure more accountability, said Rita E. Numerof, PhD, co-founder and president of Numerof & Associates Inc., (NAI) in St. Louis, who suggests seven steps that she admits “aren’t easy to operationalize.”
“They require an integrated effort and shared accountability between administrative and clinical leaders,” she said. “They also require organizations to set cost and quality of care goals that go hand in hand. They cannot be segregated and addressed independently.”
1. Establish process metrics, such as costs by procedure. “Use this data real time to manage cost variability and to identify opportunities to improve efficiency,” said Numerof.
2. Establish quality and outcome metrics. “Use this data to manage variability as well as to improve quality and outcomes,” she said.
3. Explore new reimbursement models. “Traditional payment methods create little incentive to increase accountability, making improvements in cost and quality difficult,” she said. “Alternatives, such as bundled pricing, have been introduced in an effort to create shared financial incentives that encourage providers to improve collaboration, integration, and as a result, accountability across the healthcare continuum.”
4. Develop predictive care paths. “Mapping out your process for delivering care is essential to promoting collaboration and accountability, managing variability, and improving clinical practice across your organization,” she said.
5. Develop competencies and incentives that support increased accountability. “Providing guidance in process improvement and change management can enable clinicians to be more effective in monitoring, evaluating, and improving outcomes while controlling costs,” she said. “Establishing performance expectations and incentive structures will encourage greater ownership.”
6. Use evidence-based medicine. “While achieving behavioral change can be difficult, incorporation of evidence-based practice can support the objective of achieving better outcomes at lower cost,” said Numerof. “Additionally, external research can serve as a benchmark for your organization’s improvement efforts.”
7. Take steps to facilitate provider coordination. “Your organization should be a vehicle for effective, efficient, and transparent provider collaboration,” she said. “Developing the IT and system integration capabilities to implement a uniform EHR system will allow providers to communicate with each other seamlessly.”
“All decisions in the care model have to be in the dual context of the economic and clinical value that would result,” said Numerof. “Accountable care is about improving this dual value proposition.”