ACO Onramp: Reading the Pioneer [Exit] Tea Leaves

By Gregg A. Masters, MPH

Whenever someone buys a stock for the most part they make a decision that weighs available public (and sometimes ‘non public’) information and concludes that the company’s value exceeds (currently or shortly will) that which is expressed in the bid/offer price points the day the purchase is executed. Yet, there is always a seller who may more often than not hold the opposite opinion. After all why is he/she selling if the stock price undervalues the company’s enterprise fundamentals?buy sell

Absent the expressed manipulation of a third party intermediary (broker dealer, hedge fund, etc.) this buy vs. sell ‘call’ can reasonably and accurately reflect the aggregate market based ‘tug of war’ between the public perception and actual fundamentals of a company – at least as reflected in it’s stock price or ‘market cap’.

This same tug of war might equally apply to the battle for the ACO narrative at least as it relates to interpreting the reported ‘signals’ of movement inside the accountable care space.  However, instead of stock prices we’re looking at certain metrics including the number of players entering or conversely exiting the accountable care theatre as a proxy for the underlying health or efficacy of the Affordable Care Act – or at least that piece allocated to the provision in the Act specific to ‘accountable care’.ACO growth medicare vs non medicare

Of late the headlines have predictably served up a mixture of news for public consumption and therefore fodder for the talking heads to spin in the media and the ‘credible’ blogosphere writ large to explain to their audience.

If only healthcare where as simple as buy/sell equity transactions on public exchanges (lets not get into ‘dark pools’) mostly immune from ideological spin as to the broader significance of a move up or down in standing, valuation or growth vs. contraction. Unfortunately the health reform space is littered with agenda driven spin to drive an ideological outcome in one way or the other. And we know who the usual suspects are…

Meanwhile, several headline examples meriting interpretation including original source links are posted below. Further, since the launch of Aledade and several other entrepreneurial players (Privia Health) to bolster the vision, leadership, capacity and management infrastructure including the healthIT spine that supports independent physician led participation in the ACO initiatives, we include a recent Commonwealth Fund deep dive titled Profile: Rio Grande Valley ACO Health Providers’ exploring a physician led ACO effort in the Rio Grande Valley of Texas.

Context for the ACO pulse check narrative is perhaps best framed via a JAMA piece titled: The Pioneer Accountable Care Organization Model Improving Quality and Lowering Costs which is instructive on the significance of select Pioneer exits, while a deeper dive into the weeds of ‘Shared Savings in Accountable Care Organizations: How to Determine Fair Distributions (abstract only) addresses a problem most ACOs would aspire to have, i.e., a formula to distribute actual savings generated. 

The later abstract notes:

Accountable care organizations (ACOs) are playing a major role in health care reform. In the last 2 years alone, Medicare ACOs have proliferated to cover more than 5 million Medicare beneficiaries in more than 360 organizations nationwide.1 In ACOs, individual clinicians (including physicians, physician assistants, and nurse practitioners, among others), group practices, and, in some cases, hospitals contract with payers to be jointly accountable for the health outcomes and expenditures of a defined patient population. By meeting specified quality measures while keeping expenditures below defined benchmarks, ACOs share in the monetary savings generated.

Over at Modern Healthcare, Melanie Evans notes in ‘Medicare’s Pioneer program down to 19 ACOs after three more exit‘: 

Franciscan Alliance in Indianapolis, Genesys PHO in Flint, Mich., and Renaissance Health Network in Wayne, Pa., have exited the program, which is now in its third year.

For further discussion into quality performance measurements checkout ‘Medicare gives first glimpse of ACO quality performance’.

Perhaps the biggest piece of news was wrapped into the announcement of the launch of Vivity Health, see: ‘Reform Update: Will Anthem’s Vivity gain traction among large employers?‘.

This ambitious announcement by Wellpoint spawned the following two tweets today:

.’s ambitious ‘Vivity’ alliance [a response to ] will make merger look like a walk in the park!

Although saw light when it green-lighted as chassis to build out/express MA care delivery innovation.

Finally until job descriptions change reflecting better deployment of professionals working at the ‘top of their license’, as well as non clinical or administrative staff support re-engineered workflows, we’re probably not witnessing the movement of the needle towards the triple aim. In ‘ACOs, other delivery reforms shift job roles at hospitals’ we learn a little more about this continued labor pool tweaking.

We Don’t Need No Stinkin’ Gatekeepers: Oh Really?

Some have suggested that ACOs are a new and improved as in ‘consumer friendly’ version of their managed care predecessors – HMOs.

Editor’s Note: For an excellent historical overview on the genesis of the American sick-care industry, check out ‘Health Care Coverage in the United States: A Brief History.

As an ‘HMO lite’ derivative of sorts ‘accountable care collaborations’ (including Medicare certified ACOs and a growing pool of commercially negotiated arrangements), ACOs are emerging as hybrids of traditional managed care while incorporating increasing elements of consumer or patient centric care.HMO Said I Ws Fine

Back in the day (circa 1980s & 1990s), HMOs (and there were are range of models from staff to group to network or IPAs) most were of the ‘gatekeeper’ variety – wherein primary care physicians aka ‘PCPs’ were assigned the ‘care coordination’ or care management responsibility to provide basic health services and prudently refer specialty or tertiary care services to a preferred panel of vetted (quality and cost) consultants or specialists.

While sound in theory the real world didn’t work as smoothly as network designers – if not their quant actuaries envisioned. Many PCPs provided little if any of the assumed medical necessity determinations and/or care coordination. They either routinely referred all cases, or none at all. There simply wasn’t a quality set that guarded against ‘sloppy’ or less than standard of care practice, while promoting a more prudent utilization of clinical resources. As a result, HMOs got a bad wrap which came home to roost in the movie ‘As Good As It Gets‘, when actress Helen Hunt expressed the then prevailing sentiment most felt towards these ‘mother may I’ barriers to quality healthcare.

Postscript: As a testimonial to the power of popular culture, shortly after this film United HealthGroup decided to abandon the gatekeeper HMO model and permitted direct access to specialists, thus in one fell swoop the premise (and promise) of gatekeeper medicine came to an end. 

However, one BIG difference between HMOs and ACOs is the latter must indirectly ‘traffic’ referrals ‘in network’ in order to have a shot at meeting savings benchmarks established by CMS. Whereas HMOs typically drove patients into their contracted and thus discounted network of preferred (or even exclusive) providers prospectively via gatekeepers and/or the ‘mother may I’ bureaucracy.

CMS received quite a bit of input on the disproportionate risk assumed via a ‘hands-off’ retrospective ‘attribution’ mechanism. In other words, at the end of the reconciliation period and after all member incurred costs are attributed to an ACO accounting pool, the hope was there would be savings sufficient for distribution and sharing. In a way, this represents the best in a ‘faith based’ performance model.

So at one level one might say, be careful what you pray for! Providers (not just members) also lobbied against gatekeepers and heavy handed managed care overlords, and ACOs are what we got. We shall see whether the faith placed in an accountable care ‘triple aim’ paradigm will be sufficient to drive referral patterns and prudent utilization of delivery system resources, or whether ‘the old is new again’ and gatekeeper medicine returns via a 2.0 iteration.

A recent study published by the American Medical Association in JAMA Internal Medicine titled ‘Outpatient Care Patterns and Organizational Accountability in Medicare‘ is drawing timely attention to the ‘leakage experience’ reported by many ACOs. Specifically:

 66.7% of office visits with specialists were provided outside of the assigned ACO. 

So who knows? Maybe it’s days ain’t over!

The complete results are posted below:

Of beneficiaries assigned to an ACO in 2010, 80.4% were assigned to the same ACO in 2011.

Of those assigned to an ACO in 2010 or 2011, 66.0% were consistently assigned in both years.

Unstable assignment was more common among beneficiaries with fewer conditions and office visits but also among those in several high-cost categories, including the highest decile of per-beneficiary spending.

Among ACO-assigned beneficiaries, 8.7% of office visits with primary care physicians were provided outside of the assigned ACO, and 66.7% of office visits with specialists were provided outside of the assigned ACO.

Leakage of outpatient specialty care was greater for higher-cost beneficiaries and substantial even among specialty-oriented ACOs (54.6% for lowest quartile of primary care orientation).

Of Medicare spending on outpatient care billed by ACO physicians, 37.9% was devoted to assigned beneficiaries. This proportion was higher for ACOs with greater primary care orientation (60.0% for highest quartile vs 33.6% for lowest).

Signal to Noise Challenges in ACO Actuarial Data: Who’s ‘At Greater Risk?’

This post originally appeared at HealthHombre.

HealthHombre.com | BlogThe national health expenditure data released last week showed relatively modest 2011 growth, which promptly provoked a back-and-forth about what the figures truly say and what they portend for holding spending in check going forward.  Amid considerable mental gear gnashing, the data have been assessed in light of such potential cost influencers as lingering recessionary effects, clinical v. administrative drivers, and imminent arrival of the full-bore ACA.  Occupying several nodes along the public-opinion continuum, headlines ranged from “Spending Growth at 52-Year Low” to “Americans Boost Spending” to (out on the far edge of the limb) “Future is Not Clear.”

More clear is the sharp relief into which the expenditure data cast other data, detailed in a new analysis that suggests a greater risk of Medicare Shared Savings Program underpayment of ACOs in precisely this type of environment — i.e., when no one’s altogether sure about the ups and downs of health care spending.  As a CMS summary put it:

[T]he role of random fluctuations in year-to-year healthcare spending may play a larger role in savings measurement than previously anticipated. Although CMS is fairly well protected from the chance that an Accountable Care Organization (ACO) would be rewarded inappropriately for savings that did not truly occur, ACOs are much less protected from the analogous chance that they are inappropriately denied rewards for savings that do occur.  (emphasis supplied)

And so as CMS moves forward with the latest wave of ACOs, the agency seems to have its own bets pretty well covered.  ACOs themselves, however, could face “denied rewards,” with the risk that genuine savings will go unshared particularly acute for smaller ACOs.  The analysis mused that the new data may mean ACO participation will be skewed toward groups of larger providers better able to buffer themselves against the vicissitudes of future health spending patterns.

In a risky world, ACOs, perceived by some as potentially “fragile” to begin with, seem little strengthened by this latest confluence of data.

A Tale of Two Cities: The Worst of Times or the Best of Times? L.A. v. San Diego

By Gregg A. Masters, MPH

Comparing and contrasting healthcare markets or their essential component parts can be a perilous board room exercise if the intent is to make sense of strategy options, that inform enterprise or entity choice, and meaningfully benchmark forward progress.

In pursuit of the ‘triple aim': better experience of care, improved population level outcomes, and lower per capita costs, the quest to gage forward progress into the broad brush ‘new, new accountable care’ paradigm, it’s vitally important to understand the granular nature of markets, its constituent players, and the relative balance of power therein.

Los Angeles Study: California Healthcare Foundation ACO

In the run-up and consideration process of the rule set to articulate and map the glide path for the formation and launch of accountable care organizations (ACOs) and derivative – i.e., ‘off balance sheet equivalent’ – commercial or privately negotiated versions, much concern was directed to the potential complications of incentivizing such ‘wholesale’ provider integration. Many warned that disproportionate pricing leverage would result as modern day versions of Paul Ellwood’s ‘SuperMeds’ would rule their respective turfs. The net effect being the continued power shift away from purchasers or their health plan agents’ assumed ability to restrain the ‘rapacious apetite’ of an often expansionist, capital starved (you know the crane as mascot) and yet margin (contract restrained) challenged provider marketplace – not exactly the ‘shift’ outcome intended by either the ACA or subparts specific to ACOs.
San Diego Study | California Healthcare Foundation ACO
So courtesy of recent updates to previous market studies funded by the California Healthcare Foundation and fielded by the The Center for Studying Health System Change, we have insights into two emerging ‘accountable care’ Southern California strategy footprints. For details see: ‘Los Angeles: Fragmented Healthcare Market Shows Signs of Coelescing’, and ‘San Diego: Healthcare Providers Expand Capacity as Competition Increases for Well Insured Patients’

For prior tea leave interpretations, see: IPA + HIT (aka technology stack) x MSO = ACO, and California Association of Physician Group (CAPG) CEO Don Crane’s take in Smart Money, ACOs and Risk Savvy Medical Managers. So which footprint is more in alignment with the intent of the ACA’s triple aim, you be the judge? I say, what up San Diego?

And the beat goes on….

National ACO Patient Engagement Benchmarking Survey

By Gregg A Masters, MPH

Earlier today Avado released a National ACO Benchmark Survey directed to select ACO avadoand accountable care industry executives. A core component of ACO success from both a financial and outcomes perspective, and critical to the fulfillment of the triple aim, ‘patient engagement’ is a broadly cast, locally flavored and otherwise rather ambitious undertaking. In an industry that typically did not have to think in such aggregate (population level or shared governance) nor granular (patient centric, beneficiary engaged) terms, this is no walk in the park. For an itemization of CMS indicia of patient centered-ness see:‘The ACO Must…’ Towards an Operational Definition of ‘Patient Engagement.’

Avado’s CEO Dave Chase introduces the survey as follows:

We invite you to participate in a benchmarking study on readiness for patient engagement. This survey is being sent to hundreds of ACO executives to elevate the importance of Patient Relationship Management (PRM) and the role they can play to positively impact the health and financial outcomes for ACO risk assumption.

The results from all participating ACO executives across the country will be compiled and sent back to you, along with an invitation to view a webinar about the top ten things to know about PRM with at least one of the authors of the forthcoming HIMSS book on patient engagement: “Engage! Transforming Healthcare through Digital Patient Engagement”, as a thank you for participating.

To access the survey, click here. The Deadline for completion is Monday, February 4th, 2013.

Chase continues:

Those who’ve studied patient portals have made the analogy that legacy patient portals are akin to pre-Google web search i.e., low-value and a “marketing checkbox”. Google demonstrated that there was value that could be unlocked. The organizations that understood this early such as Amazon and Expedia gained a massive advantage over their competition that their competitors never recovered from. Likewise, the organizations that recognize the value of PRM will gain a major advantage over their competition while better serving their patients.

‘The ACO Must…’ Towards an Operational Definition of ‘Patient Engagement’

By Gregg A. Masters, MPHaco patient engagement

In the realm of stuff we need to do and sometimes clouded by either ad copy or less than straightforward guru guidance cutting through the clutter can sometimes be confused by the words ‘may’, ‘should’ or other less obligatory statements. For instance:

M/U/S/T | a verb |to:

be commanded or requested to…
be urged to…
be compelled by physical necessity to…

You fill in the blank.

So it’s pretty clear that ‘must’ leaves little wiggle room or cause for doubt when it comes to meeting a certain legal or regulatory threshold or standard. In this case, we’re addressing certain global provisions in the Patient Protection and Affordable Care Act specific to Accountable Care Organizations (ACOs).

CMS previously described ‘patient engagement‘ via the rule making process as:

the active participation of patients and their families in the process of making medical decisions….

[and that] measures for promoting patient engagement may include, but are not limited to, the use of decision support tools and shared decision making methods with which the patient can assess the merits of various treatment options in the context of his or her values and convictions. Patient engagement also includes methods for fostering ‘‘health literacy’’ in patients and their families.

Also consider the balance of criteria or so-called CMS ‘indicia’ of patient centered-ness via Section 425.112: Required processes and patient-centeredness criteria:

“(b) Required processes.

The ACO must define, establish, implement, evaluate, and periodically update processes to accomplish the following:

(2) Promote patient engagement.

These processes must address the following areas:
(i) Compliance with patient experience of care survey requirements in § 425.500.
(ii) Compliance with beneficiary representative requirements in § 425.106.
(iii) A process for evaluating the health needs of the ACO’s population, including consideration of diversity in its patient populations, and a plan to address the needs of its population.
(A) In its plan to address the needs of its population, the ACO must describe how it intends to partner with community stakeholders to improve the health of its population.
(B) An ACO that has a stakeholder organization serving on its governing body will be deemed to have satisfied the requirement to partner with community stakeholders.
(iv) Communication of clinical knowledge/evidence-based medicine to beneficiaries in a way that is understandable to them.
(v) Beneficiary engagement and shared decision-making that takes into account the beneficiaries’ unique needs, preferences, values, and priorities;
(vi) Written standards in place for beneficiary access and communication, and a process in place for beneficiaries to access their medical record.

(3) Develop an infrastructure for its ACO participants and ACO providers/suppliers to internally report on quality and cost metrics that enables the ACO to monitor, provide feedback, and evaluate its ACO participants and ACO provider(s)/supplier(s) performance and to use these results to improve care over time.

(4) Coordinate care across and among primary care physicians, specialists, and acute and post-acute providers and suppliers.

The ACO must—
(i) Define its methods and processes established to coordinate care throughout an episode of care and during its transitions, such as discharge from a hospital or transfer of care from a primary care physician to a specialist (both inside and outside the ACO);”

The pathways to achieve these indicia of patient engagement are perfectly clear, right? Perhaps in the world of mature integrated delivery systems infused with a patient centric mission and committed physician group practice embracing a team based, seamless care culture. But the average ACO tethered to one or more community hospitals via ‘in name only’ cowboy medical groups, I think not.

Now consider the crosswalk and ‘best case(?)’ staged implementation timeline perhaps most accurately reflected in the National eHealth Collaborative’s ‘Patient Engagement Framework’.

Patient Engagement Framework | NeHC

Truth be told we have a way to go before the proverbial ‘rubber meets the road’, both in terms of the technical fulfillment or health information technology side as well as the ‘fit’ inside an ACO given our national state of ‘readiness’ or maturity if you will.

One bit of news likely to add some clarity to the muddy state of affairs that we’ve learned of recently, and is due to be released shortly by Dave Chase et al at Avado, is a survey of ‘Patient Engagement Readiness’ directed to the ACO industry at large including CEO, CMOs, CIOs, CMIOs and others at the center of this ACO/technology/patient interface. We’ll preview this timely and relevant industry survey and will post the results here as well.

Stay tuned, more to follow shortly!

Universal American: A ‘Healthy Collaboration?’

By Gregg A. Masters, MPH

JP Morgan Healthcare Conference | Universal AmericanI intended to post updates from Aetna and Cigna next in this series, yet today I received a tweet by Vince Kuraitis, aka @VinceKuraitis, calling attention to Universal American a managed care player I’ve not spent much time on. Yet they present a rather interesting profile and operating footprint some of which I will highlight below.

According to their website Universal American (UAM):

…provides health benefits to people with Medicare. We are dedicated to a Healthy Collaboration, working together with healthcare professionals in order to improve the health and well-being of our members.

The JPMorgan Healthcare conference deck is here, and webcast here (you may need to register). Of note is with the recent release of CMS certified ACOs, UAM now operates ’31 ACOs approved for participation in the Shared Savings Program which include more than 2,000 participating physicians covering an estimated 300,000 Original Medicare beneficiaries in 13 states.’ So not only are they a player in Medicare Advantage (the end game for risk bearing ACOs), they have a presence in the gateway market as well. For complete details, click here.

Two pieces from their narrative tell the story, 1) the ‘healthcare landscape':

Universal American Healthcare Landscape
And, 2) a proforma ACO funds flow in their 50/50% ‘healthy collaboration’ provider/healthplan partnership benchmarked to actuals driving a bottom-line:
Picture 5