ACOs: The Results So Far (It Depends)

by Gregg A. Masters, MPH

It might have been prescient but minimally it was perfect timing. While Fred Goldstein, President of Accountable Health, LLC, and me were prepping for our session to re-cap on PopHealth Week (@PopHealthWeek) some of the insights from our deep dive series into Population Health and ACOs, reporting insights from embedded executives at physician led, hospital sponsored and health plan enabled ACOs respectively, CMS yesterday (August 25th) posted the results from their participants in the MSSP and Pioneer Programs.

The Pioneer results are displayed below (for a description of the Pioneer program click here):CMS_ACO_Results_Pioneers
Again, while we’re still very early in this game, one bit of ‘cognitive dissonance’ that I experienced is worthy of note and further exploration.

That being the Heritage ACO a physician led enterprise fielded by managed care industry veteran and disruptive innovator Richard Merkin, MD, et al (including my former American Medical International colleague Mark Wagar, President Heritage Medical Systems and most recently CEO Empire Blue Cross and Blue Shield) untethered in any way from an institutional portfolio of healthcare infrastructure (i.e., hospitals) booked zero savings for distribution while hospital tethered and a card carrying member of the Association of American Medical Colleges (@AAMCtoday) (as the principal teaching hospital for Einstein College of MedicineMontefiore ACO booked massive (relative to ‘aligned beneficiares’) savings.

One must ponder the question and ask how can this be so?

It’s common knowledge that ACOs ‘untethered’ from (heads in beds) legacy hospital interests are more nimble and therefore better positioned to manage the volume-to-value transition. Further, when you add into the mix the history of successful risk assumption across a distributed network of ‘aware’ coordinated care practices (both IPA and medical group) you have a material competitive advantage.

So perhaps the ‘devil is in the details‘ as it often is, and the answers are to be found in the formulaic world of risk adjusters, corridors, baselines and severity of illness calculations. We hope top hear direct from Heritage ACO as this author has made that request a number of times previously.

Another interesting result that stands out as it arguably tethers to the presumptively competitively disadvantaged ‘health plan enabled‘ camp of ACOs is the incredible savings generated by the Banner Health Network (a Pioneer ACO), which if memory serves me well is a co-creation of Banner and Aetna via their ‘payor agnostic’ Healthagen subsidiary.

For complete details see the CMS release ‘Medicare ACOs Continue to Improve Quality of Care, Generate Shared Savings‘ and ‘Medicare ACOs Provide Improved Care While Slowing Cost Growth in 2014‘.

Meanwhile for a bit of reading the tea leaves color via Beckers Hospital Review see CMS releases 2014 Medicare ACO quality, financial results: 10 things to know):

1. Ninety-seven ACOs qualified to share in savings by meeting quality and cost benchmarks. Together, they earned shared savings payments of more than $422 million.

2. Fifteen of the 20 participating Pioneer ACOs generated a total of $120 million in savings in 2014, their third performance year. This is up 24 percent from the second performance year when they generated $96 million in savings. Of those that generated savings, 11 earned shared savings payments of $82 million.

3. Five Pioneer ACOs generated losses and three owed CMS shared losses of $9 million.

4. Pioneer ACOs increased their average quality scores to 87.2 percent in performance year three from 85.2 percent in performance year 2. They improved an average of 3.6 percent compared to performance year two on 28 of the 33 quality measures and showed significant improvement in medication reconciliation, clinical depression screening and follow-ups, and EHR incentive payment qualification…

Read complete article here.

Yes we do live in interesting times. And ideological prism not-withstanding there is no way this Genie (ACOs et al, and whatever formulaic derivatives may be forthcoming) gets put back in the bottle – the best efforts of Governor Scott Walker’s ‘bold’ The Day One Patient Freedom Plan (more likevaporware‘) effort to repeal and replace the Affordable Care Act.

This train has left the station. Time to deal with it?

ACOs and Population Health: The Value Narrative

by Gregg A. Masters, MPH

Before there was ‘accountable care’, the current full court press towards innovation – whether digital health app, platform or service delivery model, an emerging culture of transformation or the attendant pursuit of the triple aim, not to mention the most recent obsession with ‘retail as cure’ for that which ails healthcare, the best and the brightest minds (both clinical and administrative guided by thoughtful health policy wonks) convened in the grand theater of ‘managed care’ or managed competition.

The model and industry writ large (both public and private sectors), variably expressed as HMO, PPOs and derivative strains of contracting models stimulating the development of IPAs, PHOs, PPMC’s, MSOs and DPOs (direct purchasing organizations) had a run from the mid 70s until its abandonment as the official vehicle to restrain the rising cost and variable quality of healthcare in the late 90s. What followed was somewhat of a meandering decade of incremental tweaks here and there to an otherwise burning platform of fee-for-service healthcare delivery and financing.

In 2015 with healthcare costs now approaching 20% of the U.S. Gross Domestic Product and the viability of the entire U.S. Government at risk to projected costs increases and unfunded liabilities of the Medicare and Medicaid programs (estimated at $64 trillion), business as usual fee-for-service medicine is no longer an option and the many cathedrals of medicine built by ‘do more to earn more’ largesse are clearly at risk in the shifting sands of value based care.

While the ‘value’ v. volume agenda has been around for a while via risk based contracting including case rates, bundled payment and even capitation – both global and professional only versions – their penetration of mainstream medicine was relatively modest – until now. That is if you can believe the growing prevalence and penetration of risk bearing ACOs arrangements, a tapestry of bundled payment participation via Federal programs and a less transparent portfolio of privately negotiated ‘value based arrangements’.

Into this theater steps one of the trophy consulting companies with both wide (global) and deep (extensive client penetration into the health plan, provider and IDN communities) aka Accenture Health (follow via @AccentureHealth).

value based care meklausInto this developing narrative with a ‘value tutorial’ of sorts steps Gerry Meklaus, the Managing Director of Accenture North America for Clinical & Health Management Services. We speak with Gerry Wednesday at 12 Noon Pacific/3PM Eastern at Pophealth Week where my colleague and co-founder Fred Goldstein, President of Accountable Health, LLC will engage Gerry in the value conversation and the many touch points between a value framework for ACOs and population health strategies of provider organizations.

Key terms to un-bundle and digest are the ‘BIG Three’: 1) to ‘improve outcomes’ via emerging best practices, the reduction in variation and effective engagement of the patient in shared decision making, 2) the effective lowering of costs from a ‘total cost of care’ perspective (not just niche wins – if you will), and 3) the well known challenge to de-silo the many silos in the healthcare ecosystem driving fragmentation, redundancy and a less than patient centric experience.

Join us as we gain insight into the challenges and successes in the market to date!

Another Milestone Marker in Favor of the ACO Model?

by Gregg A. Masters, MPH

I awoke this morning to an email from a PR rep who supports outbound news for one of the emerging ACO management companies enabling physician led participation in the Medicare Shared Savings Program (MSSP) aka Aledade (@AledadeACO).

I then copy, pasted and tweeted the headline: ‘Aledade Creating New Medicare Accountable Care Organizations in Seven States.

I usually ignore ‘PRs’, yet this announcAledade newsement is material as it lends support via a growing body of evidence on the viability of the ACO model and its enabling ‘consciousness’ if not ‘sentiment shift’ in the prevailing market narrative.

While some still slam the ACA – and by proxy it’s ACO ‘workhorse’ – via relentless yet ‘diminishing returnsimpact of the ‘government takeover‘ fear mongering fueled by strategically sourced oppositional research, there is a building steady body of evidence supporting both the model and the broader context of efficacy of the competitive dynamics the ACA has unleashed on the stewards of our at risk (some say collapsing) healthcare economy.

Ergo my tweet:

Aledade news tweet

Ever since the Senate Finance Committee took up the debate and relentless series of ‘amendments‘ proffered by the ‘Rs’ trying to ‘improve‘ the proposed legislation that eventually emerged as the Patient Protection and Affordable Care Act (I NEVER use the pejorative term ‘Obamacare’), I’ve been a voice in the narrative of trying to get the facts of competitive market dynamics into the post political conversation around reforming our complex healthcare economy.

This is no easy task as the complexity of both the political process and objective reporting of how legislation becomes law including its contextual historical narrative is addressed in ‘A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History.

A challenge recognized upfront via admittedly ‘apolitical’ or ideologically agnostic ‘law librarians’ (yeah, you know those agenda driven bullies):

“Using the health care legislation passed in 2010 as a model to show how legislative procedure shapes legislative history, this article posits that legislative procedure has changed, making the traditional model of the legislative process used by law librarians and other researchers insufficient to capture the history of modern legislation. To prove this point, it follows the process through which the health care legislation was created and describes the information resources generated. The article concludes by listing resources that will give law librarians and other researchers a grounding in modern legislative procedure and help them navigate the difficulties presented by modern lawmaking.”

Since social media was starting to pick up in 2009 – 2010 time-frame, and given the angst associated with the public’s consumption of the ACA, I started ACO Watch and latter the hashtag #healthreform to track tweets associated with ACA consideration.

None-the-less, 5 years later the disinformation campaign persists though some of the pieces of the ACA are starting to show some promise of the law’s original intent. ACOs often referred to as a flawed model, perhaps an ACO lite if you will or too little too late to make a difference, the emerging datasets (both government and private market tea leaves) are building a case that the law is working.

Tomorrow on PopHealth Week, join my colleague, co-host and co-founder Fred Goldstein as we chat with Aledade Founder and CEO Farzard Mostashari, MD. This month we’re conducting a series on Population Health and ACOs talking to leadership from each ACO type: physician led, hospital sponsored and health plan enabled.

Listen here! We’re live 12 Noon Pacific/3 PM Eastern, and on demand thereafter.

The ACA, ACOs and Health System Reform 5 Years Later

By Gregg A. Masters, MPH

In the relentless sound byte and laughable misrepresentation of facts proffered by ideologues intent upon diluting if not repealing the ACA, one consistent voice of reason and evidence mindfulness is that presented by the cogent and thoughtful reflections on the indicia of ACA implementation courtesy of ‘team Commonwealth Fund’ aka @CommonWealthFnd.aca_5 years out

Published recently in the New England Journal of Medicine by the Commonwealth Fund‘s CEO and former National Coordinator for HealthIT David Blumenthal, MD (@DavidBluementhal) is one to consume, one provision at a time.

The full NEJM article is posted here.

The relevant discussion to readers of this blog specific to ACOs is pasted below:

Accountable Care Organizations

The ACA encourages health care providers to form new organizational arrangements called accountable care organizations (ACOs) that are intended to promote integration and coordination of ambulatory, inpatient, and post–acute care services and to take responsibility for the cost and quality of care for a defined population of Medicare beneficiaries. Under the Medicare Shared Savings Program (MSSP) of the ACA, providers who create such organizations and who also maintain or improve the quality of care can share part of any savings they achieve.
Providers can also elect to become so-called Pioneer ACOs, which not only share savings but also accept substantial risk if expenses for Medicare patients are greater than expected. Recently, CMS announced still other variations on the ACO theme, including arrangements in which ACOs function very much like Medicare Advantage plans.17 Indeed, many observers see ACOs as a bridge from fragmented fee-for-service care to integrated, coordinated delivery systems that resemble the tightly organized Medicare Advantage plans.
The two existing varieties of ACOs have spread with considerable speed. The MSSP has 405 participating ACOs serving 7.2 million Medicare beneficiaries (14% of the Medicare population).18 Quality measures have generally improved for the 33 indicators tracked by MSSP, and patients report better care experiences in some respects than Medicare beneficiaries who are not part of ACOs.19 CMS estimates the savings at approximately $700 million, as compared with control populations not enrolled in MSSP. A total of 32 organizations started in the Pioneer program; 11 transitioned to the MSSP track, and 2 withdrew entirely. The secretary of health and human services reports that the Pioneer program saved $385 million in the first 2 years, as compared with fee-for-service Medicare beneficiaries.20 These cost and quality results are early and modest, and further evaluation is needed before definitive judgments can be made.

A most useful and interesting Appendix re-capping and categorizing the many moving parts of the ACA enabling payment and health system delivery reform is available here.

Big h/t to Blumenthal et al for this fact based and honest reflection of measuring the impact of the ACA five years out.

‘Non-Profit IDNs’: Where’s Da Beef?

By Gregg A. Masters, MPH

I have followed this narrative for quite some time albeit inside the industry contained debate of whether so-called ‘non-profit’ [501(c)3] hospitals or their parent systems (really more aptly characterized as “tax exempt”) actually earn this financial advantage via material ‘returns’ to the communities they serve.

NASI_Goldsmith studyAs can be expected you have the party line of the American Hospital Association (AHA) a trade group of predominantly non-profit members vs. that of it’s for-profit brethren The Federation of American Hospitals (FAH). You can guess which side of the argument each of them favor.

Now thanks to a recently published landmark study ‘Integrated Delivery Networks: In Search of Benefits and Market Effects’ by Healthcare Futurist Jeff Goldsmith, PhD et al, of the 501(c)3 cast of characters in the related but more often than not distinctly different ‘IDN culture’ we extend that line of inquiry into what has been a somewhat conversational ‘safe harbor of sorts’ – not any longer?

The Executive Summary notes both the rationale and basis to study the market ‘incident to’ a more focused pricing (via asset concentrations) power line of inquiry:

In January 2014, the National Academy of Social Insurance commissioned a study of the performance of Integrated Delivery Networks (IDNs), incident to its Study Panel on Pricing Power in Health Care Markets. The premise of this analysis was that any examination of the role that hospitals play in health care cost growth is complicated by the fact that in most large markets, the significant hospitals are part of larger, multi-divisional health enterprises. In these markets, hospitals may be part of horizontally integrated hospital systems operating multiple hospitals; vertically integrated health services networks that include physicians, post-acute services and/or health plans; or fully integrated provider systems inside a health plan (e.g. with no other source of income than premiums) like Kaiser Permanente. The latter two models are collectively labeled IDNs.

IDNs have very different stated purposes than mere collections of hospitals: to coordinate care across the continuum of health services and to manage population health. IDN advocates claim that these complex enterprises yield both societal benefits and performance advantages over less integrated competitors. The purpose of this analysis is to evaluate the evidence to support these claims.

And now for the less than surprising but wholly unacceptable answer albeit modestly caveatted by the limits of publically available information:

Despite more than 30 years of public policy advocacy on behalf of IDN formation, there is scant evidence in the literature either of measurable societal benefits from IDNs or of any comparative advantage accruing to providers themselves from forming IDNs. We have similarly found no such evidence in our analysis of 15 IDNs. Serious data limitations hamper anyone attempting to evaluate IDN performance based on publicly disclosed information. IDN financial disclosures obscure the operating performance of their hospitals and physician groups.

There does not appear to be a relationship between hospital market concentration and IDN operating profit [emphasis mine]. However, if the performance of the IDN’s flagship hospital is any indicator of overall systemic efficiency, the IDNs’ flagship hospital services appear to be more expensive, both on a cost-per-case and on a total-cost-of-care basis, than the services of its most significant in-market competitor.

This runs counter to the theoretical claim of IDN operating efficiency. Further, the flagship facilities of IDNs operating health plans or having significant capitated revenues are more expensive per case (Medicare case-mix adjusted) than their in-market competitors.

The authors would have greater confidence in these findings if they covered not only multiple years of information but also multiple institutions in the IDN portfolio (e.g. its suburban or rural hospitals, etc.). Further, the central question of whether IDNs have abused their market power in metropolitan markets can only be answered by examining actual service-specific payments to their hospitals by local health plans and by determining the profits generated by their hospital portfolio.

NASI_Goldsmith study_cohortI am struck by the reaction or better yet absence of a reaction in public discourse let alone in health wonk or big data evangelists circles particularly at time when there’s been so much mis-direction and battle fatigue surrounding the endless debate/efforts at repeal of the Affordable Care Act.

Such a profound observation and ‘counter intuitive’ result (i.e., ‘hey, there may not be a there, there insight’) based on frequent accolades and ‘innovation’ recognition extended to such trophy name plates as Kaiser Permanente, Geisinger Health, InterMountain Health and so little public debate (see complete list) causes me to question whether we’re paying attention to what matters?

How can we intelligently debate, discern and buildout the qualities and characteristics of financing and delivery system platform efficacy and business model innovation that delivers on the triple aim and lays a solid foundation for a sustainable healthcare economy if we do not understand their root DNA and the results (“community benefit”) they ostensibly generate?

Anyone?

Announcing the Launch of ‘PopHealth Week’

By Fred Goldstein

This week Gregg Masters (@2healthguru) and I (@fsgoldstein), along with Doug Goldstein (@eFuturist) are announcing the launch of PopHealth Week. This is a weekly Internet radio podcast (typically broadcast at 12 pm Eastern each David Nash MD MBAWednesday) with an associated website at www.pophealthweek.com. We intend to focus on all things population health. Our shows will feature 1) people, topics, news and analysis as we will 2) present the broad spectrum of what is and is not population health and 3) how it fits into the changing health and healthcare landscape, what’s working, how and by whom.

Our first show this Wednesday, May 20 will feature David Nash, MD, MBA, the Founding and Current Dean of the Jefferson School of Population Health. This show will focus on Population Health and Population Medicine.

The last Wednesday show each month will feature a roundtable discussion of recent news. So join Gregg, Doug and me as we discuss what’s happening in population health on May 27.

Coming up in June:

June 3jennifer-drago-feb-2013

Jennifer Drago, Executive Vice President of Population Health with Sun Health. Among her many jobs, Jennifer oversees the Care Transitions program which is a CMS Community-Based Care Transitions Program (CCTP), focusing on reducing readmissions, a major issue for hospitals, ACOs and other provider groups.

kaveh_safavi-21June 10

Kaveh Safavi, MD, Managing Director, Global Health, Industry Lead, Accenture. Discussing his thoughts on population health and where providers should be focusing early on.

June 17blumberg_steven

Steven Blumberg, Senior Vice President – AtlantiCare and Executive Director – AtlantiCare Health Solutions, an ACO in New Jersey discussing ACO’s.

June 24

Join Gregg , Doug and me as we monitor the pulse of the population health industry revealing its best practices and biggest challenges. We’ll help you sort out the ‘wheat from the chaff’ in this emerging space ripe with marketing claims while often light on documented use cases or outcomes efficacy.

More to come.

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Fred Goldstein is the CEO of Accountable Health, LLC, and co-founder as well principal co-host of PopHealth Week. This post originally appeared on Accountable Health, LLC.

An ACO Update via Leavitt Partners

By Gregg A. Masters, MPH

Just released is the continuing pulse of the accountable care industry (not just ACOs per se) via the consulting firm branded with the imprimatur of a former Secretary of HHS Michael Leavitt who opines from the Red State of Utah on the progress made by market driven initiatives outlined leavitt_acosin the Patient Protection and Affordable Care Act (ACA).

I will add my thoughts to the Leavitt commentary shortly, but the one slide that caught my attention y/e 2014 was the crossover by provider type from physician led to institutionally (hospital system) led ACOs.

One might say that the traditional revenue side vs. cost basis of a hospital group is now at the head of the class of ACO innovation is the wrong form of ‘disruptive leadership’.

Yet, it’s interesting to note that the American Hospital Association (AHA) is a principal partner if not co-sponsor of the report. Might this be a filtering outcome of the ‘fox guarding the hen house‘ or even the aggregate impact (conscious or otherwise) of strategy driven choices by CEOs of U.S. Health Systems?

By way of context, as a long as hospitals maintain their ‘revenue center’ primacy vs, their actual role (in the sustainable healthcare ecosystem food chain) as the true ‘cost centers’ they are – at least in legally, financially and clinically integrated delivery systems or networks (IDNs), how can ‘hospital culture’ be expected to pro-actively cannibalize a bread-and-butter fee-for-services business model in a reimbursement paradigm largely dominated by volume driven incentives even in 2015? Only a disinterested third party (aka physician led ACOs) can re-engineer the needed disruption of maldistributed, asset concentrated overpriced hospital services.

For the complete Leavitt Partners report click here.

ACOs by sponsor type Leavitt Partners