At the heart of the ACO issue is the notion that the continuum of care can be managed. The organization able to do so would be rather large and complete with most specialties and facility types. Ingenix is pushing the consultancy from their unique ability (part of United Health's empire that has United Health and Redden Anders actuaries among other assets) to manage data and reporting from their SLC location.
I've had chats with Pivot Health and others....most are wondering how an ACO would function and if it would be much different than an HMO; perhaps a new model will be forthcoming. On the other hand, experience shows we are certainly able to assist with the issues of managing patients along the medical axis of the care continuum.
Be well out there,
Paul Ridgely
Senior Field Management Consultant
Pro Pharma Pharmaceutical Consultants, Inc.
"Most of our assumptions have outlived their uselessness."
— Marshall McLuhan
Now law, the Patient Protection and Affordable Care Act of 2010 provides new incentives to stakeholders across the health care system – from health plans to physicians and hospitals – to consider new care delivery models that have the potential to both enhance the quality of care and reduce costs.
One promising idea – the creation of Accountable Care Organizations (ACOs) – is facilitated under the Medicare Shared Savings Program provision of the health reform legislation. ACOs are comprised of groups of providers that share the risk and assume accountability for their patients’ health across the continuum of care. These organizations also monitor treatment outcomes and costs, and receive incentives for efficiency and adherence to evidence-based medicine protocols.
“Studies have shown that medical errors in our current system contribute to 100,000 preventable deaths annually, with billions in associated costs,” according to Eric Cahow, senior director, Government Programs Management and Strategy at Ingenix Consulting. “Currently, more than half of chronically ill patients in the United States do not receive care consistent with evidence-based guidelines. With more than 16 percent of our gross domestic product consumed by health care services, it is clear that we need to consider new ideas.”
The Patient Protection and Affordable Care Act of 2010 states that an ACO “promotes accountability for a patient population and coordinates items and services under [Medicare] parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”
Under the statute, ACOs may include group practices, individual practitioners, hospitals, partnerships or joint venture arrangements between hospitals and ACO professionals, as well as other groups deemed appropriate by the Secretary of the Department of Health & Human Services. To serve Medicare recipients, ACOs are required to have a minimum of 5,000 Medicare fee-for-service beneficiaries; those that meet quality-of-care goals and reduce patient costs receive a share of the savings they earn for the Medicare program.
ACOs provide needed incentives to promote change
ACOs can help participating organization achieve their clinical and financial performance objectives. However, before joining or forming an ACO, providers should have a clear understanding of where and how they fit into the health care system.
Fee-for-service is the predominant model in the U.S. health care system. This means providers are paid for every unit of service, similar to piecework in a garment factory, Cahow explained, and a provider’s revenue increases as utilization increases. As such, there are few incentives to coordinate across the silos of primary care, specialty care and hospital care.
“The ACO model creates different incentives for primary care physicians to drive proactive care management,” said Cahow. For example, if reducing utilization is the goal, he noted, an ACO may incent providers – including hospitals – with bonus payments when they achieve a pre-determined benchmark such as lower hospital admissions while sustaining or improving the quality of patient outcomes.
All can benefit from ACO model :
All participants in an ACO – health plans, employers, providers and patients – are accountable for their own contributions to health and wellness, treatment decisions and payment. In Cahow’s view, “health plans and insurers must commit to tracking quality outcomes, establishing fair measures of those outcomes and rewarding providers for achieving them. Employers must consider programs and working conditions that optimize employee health. And individuals must commit to taking more responsibility for their own health-related behaviors and the costs associated with them. All of this can be built into the ACO’s structure.”
However, moving to an ACO model can be challenging. Adversarial relationships between some stakeholders are one of the primary obstacles to ACO success. “For ACOs to work well, each organization has to operate on a foundation of trust, transparency and good communication,” Cahow suggested.
Performance measurement is one of the linchpins to building this foundation, equalizing relationships between provider participants and payers, who can access qualitative and quantitative clinical performance and utilization data on their ACO partners. For example, ACOs can provide reports on the utilization of MRI services or the percentage of diabetic patients admitted through the hospital. “Facilitating access to this type of data across a group of ACO participants may support collaborative solutions to achieving group objectives,” said Cahow.
“Transformational improvement is the foremost objective to establishing an ACO,” said Cahow. “This requires committed physician leadership, an enduring culture focused on quality and a strong level of comfort with innovation and systems integration.”
Establishing an ACO requires planning, support
Be well out there,
Paul Ridgely
Senior Field Management Consultant
Pro Pharma Pharmaceutical Consultants, Inc.
"Most of our assumptions have outlived their uselessness."
— Marshall McLuhan
Now law, the Patient Protection and Affordable Care Act of 2010 provides new incentives to stakeholders across the health care system – from health plans to physicians and hospitals – to consider new care delivery models that have the potential to both enhance the quality of care and reduce costs.
One promising idea – the creation of Accountable Care Organizations (ACOs) – is facilitated under the Medicare Shared Savings Program provision of the health reform legislation. ACOs are comprised of groups of providers that share the risk and assume accountability for their patients’ health across the continuum of care. These organizations also monitor treatment outcomes and costs, and receive incentives for efficiency and adherence to evidence-based medicine protocols.
“Studies have shown that medical errors in our current system contribute to 100,000 preventable deaths annually, with billions in associated costs,” according to Eric Cahow, senior director, Government Programs Management and Strategy at Ingenix Consulting. “Currently, more than half of chronically ill patients in the United States do not receive care consistent with evidence-based guidelines. With more than 16 percent of our gross domestic product consumed by health care services, it is clear that we need to consider new ideas.”
The Patient Protection and Affordable Care Act of 2010 states that an ACO “promotes accountability for a patient population and coordinates items and services under [Medicare] parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”
Under the statute, ACOs may include group practices, individual practitioners, hospitals, partnerships or joint venture arrangements between hospitals and ACO professionals, as well as other groups deemed appropriate by the Secretary of the Department of Health & Human Services. To serve Medicare recipients, ACOs are required to have a minimum of 5,000 Medicare fee-for-service beneficiaries; those that meet quality-of-care goals and reduce patient costs receive a share of the savings they earn for the Medicare program.
ACOs provide needed incentives to promote change
ACOs can help participating organization achieve their clinical and financial performance objectives. However, before joining or forming an ACO, providers should have a clear understanding of where and how they fit into the health care system.
Fee-for-service is the predominant model in the U.S. health care system. This means providers are paid for every unit of service, similar to piecework in a garment factory, Cahow explained, and a provider’s revenue increases as utilization increases. As such, there are few incentives to coordinate across the silos of primary care, specialty care and hospital care.
“The ACO model creates different incentives for primary care physicians to drive proactive care management,” said Cahow. For example, if reducing utilization is the goal, he noted, an ACO may incent providers – including hospitals – with bonus payments when they achieve a pre-determined benchmark such as lower hospital admissions while sustaining or improving the quality of patient outcomes.
All can benefit from ACO model :
All participants in an ACO – health plans, employers, providers and patients – are accountable for their own contributions to health and wellness, treatment decisions and payment. In Cahow’s view, “health plans and insurers must commit to tracking quality outcomes, establishing fair measures of those outcomes and rewarding providers for achieving them. Employers must consider programs and working conditions that optimize employee health. And individuals must commit to taking more responsibility for their own health-related behaviors and the costs associated with them. All of this can be built into the ACO’s structure.”
However, moving to an ACO model can be challenging. Adversarial relationships between some stakeholders are one of the primary obstacles to ACO success. “For ACOs to work well, each organization has to operate on a foundation of trust, transparency and good communication,” Cahow suggested.
Performance measurement is one of the linchpins to building this foundation, equalizing relationships between provider participants and payers, who can access qualitative and quantitative clinical performance and utilization data on their ACO partners. For example, ACOs can provide reports on the utilization of MRI services or the percentage of diabetic patients admitted through the hospital. “Facilitating access to this type of data across a group of ACO participants may support collaborative solutions to achieving group objectives,” said Cahow.
“Transformational improvement is the foremost objective to establishing an ACO,” said Cahow. “This requires committed physician leadership, an enduring culture focused on quality and a strong level of comfort with innovation and systems integration.”
Establishing an ACO requires planning, support
Evaluating whether or not an organization is a good fit for ACO participation involves careful planning, analysis and technical and management support. Ingenix Consulting already is supporting number of ACO development projects, with advanced analytics to assess clinical and financial performance in the current system, and consulting expertise to inform design, implementation and operation.
“Ingenix Consulting provides management consulting to help players determine if an ACO is right for them,” Cahow said. “If so, we can help them establish the right relationships and provide the actuarial, financial and care management support they need to get started.”
Although health care reform may seem daunting, he continued, now is the time to engage and evaluate opportunities to participate in health care delivery models that may become part of the backbone of the future health care system.
“Participating in an ACO involves taking some risks,” noted Cahow. “Investment choices are always difficult. But with the legislative call to action, change is no longer just over the horizon. Ingenix Consulting can help clients decide where they want to go and how to take those first steps toward achieving their long-term goals.”
“Ingenix Consulting provides management consulting to help players determine if an ACO is right for them,” Cahow said. “If so, we can help them establish the right relationships and provide the actuarial, financial and care management support they need to get started.”
Although health care reform may seem daunting, he continued, now is the time to engage and evaluate opportunities to participate in health care delivery models that may become part of the backbone of the future health care system.
“Participating in an ACO involves taking some risks,” noted Cahow. “Investment choices are always difficult. But with the legislative call to action, change is no longer just over the horizon. Ingenix Consulting can help clients decide where they want to go and how to take those first steps toward achieving their long-term goals.”
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1 Sec. 3022, Patient Protection and Affordable Care Act, Pub. L 111-148. Article location: http://www.ingenix.com/thoughtleadership/innovations/04292010/
Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.
