Your Comment is in Moderation: ‘Why ACO Savings Aren’t About Location.’

By Gregg A. Masters, MPH

We’re having an interesting exchange over at The Healthcare Blog where Health Care Policy Lead at Aledade, Inc. Travis Broome posted a piece titled: ‘Why ACO Savings Aren’t About Location.’

I chimed in with some ‘contextually pro’ ACO thoughts with some significant push back by industry veteran, author, consultant, economist and President of HealthFutures, Jeff Goldsmith fka ‘tcoyote’.

Thanks Jeff… lovin’ the exchange! Just sayin’ metrics, metrics. depends on lens….
Bottom-line is we still live on a production driven healthcare ecosystem – ‘capitation’ (PMPM) still a fraction of total contract spend (even if you include ‘lite versions’ ie, bundled payment, DRGs, or ambulatory case rates, or OWA’s [other weird arrangements]).
Share of GDP has been and continues to disproportionately claim an obscene allocation of the U.S. (public, private) spend and growing; all while a grand COST SHIFTING CHARADE proceeds under the convenient ‘consumer directed/skin in the game’ brand play by payors/health plans/or more aptly put ‘benefits solutions providers’.
There are no more ‘health insurers’ per se. they’ve collectively failed to manage clinical risk. PERIOD. They are ‘transaction processors’ increasingly living off of ‘fees’ and investment returns as ‘banks’, with the great hope that ‘technology plays’ (mhealth, digital health, tech-enabled patient engagement), etc… can cure the beast.
So yes, today and in the near term, clever (and well paid) managers’ are subject to production incented growth or share objectives (even amidst declining units primarily due to the slowing (and cost shift) economy and reduced discretionary spending for elective services).
The handful of creative ‘comp plans’ that scaled the transformative shift from volume to value remain a fraction of total [see my piece 'Eating Glass' http://acowatch.me/2014/08/14/eating-glass-a-davita-healthcare-partners-hiccup-or-physician-integration-implosion/ about Craig Samitt's abrupt departure from DaVita/Healthcare Partners ] are at least on the table given the ACO triple aim sustainability mission. If units decline, skilled managers find ways to drive UP price. Consolidations are precisely that, no?
I remember when per diems and case rates were first introduced back in the 80s. The CFO calculus was pretty simple: budget revenue requirements divided by projected units of service and voila, you got your case-mix adjusted average basis for both service tiered or global per diem contracting. Pretty simpleton, but true!
When shift to ambulatory from inpatient began, Outpatient surgery/procedure case rates were benchmarked to historical inpatient revenue yield. Only growth of physician owned ASC’s forced some competitive restraint to price [ and that theme remains alive today via OIG report: http://www.beckershospitalreview.com/finance/oig-says-bring-down-hopd-rates-for-surgery-to-asc-rates-cms-disagrees-11-things-to-know.html ]. That the aggregate trend UP is rather obvious, no? It has not abated from a total cost of care perspective – the only measure that really matters.
Thanks for sharing Jeff. I am not an economist, just a grunt in the c-suite who negotiated a fair amount for global (hospital, physician, ancillary and pharma) full risk downloads (from licensed entity to risk bearing delivery system) via multiple health plans in different states.
Things don’t seem to change much in the ‘healthcare borg.’

Please consider offering your thoughts as well! The original blog post is here.

 

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.

Tom Scully Tutorial & Diagnosis of Medicare Program

By Gregg A. Masters, MPH

washington journal scully on medicareAn excellent ‘tutorial’ of sorts on the Medicare program is provided by Tom Scully, former Bush era (2001-2004) administrator of the Centers for Medicare and Medicaid Services, who opines on the Medicare and Medicaid Acts of 1965.

He discusses President Lyndon Bain Johnson’s vision of the bill and looks at the present state of the program including his preference for ‘means testing’, the role of Medicare Advantage and issues associated with the expansion of Medicaid via the Affordable Care Act.

Scully also fires a shot over the bow of the The National Committee to Preserve Social Security and Medicare claim via ‘Top 10 Reasons Americans Love Medicare‘ questioning the relative ‘efficiency’ of the program compared to it’s commercial equivalents or fee-for-service (‘traditional’) Medicare.

7.  Medicare is efficient. Only 1% of traditional Medicare’s spending is overhead compared to 9% for private insurance and 6% for privatized Medicare (aka Medicare Advantage plans).

Scully notes:

Yeah, I think that’s completely and totally wrong… I’m trying not to be partisan and be objective on this. But look  Medicare is a wonderful program. It’s incredibly efficient….but basically what Medicare is it’s a single payer system where the Government pays every doctor in Toledo and every hospital the same thing. So the problem is as you have in any system – in the history of any economy in the world – when you fix prices, is volume…. so what you get is competition over volume….which is what they are incentivized to do…  

Regarding CMS, on the ‘efficiency’ claim Scully notes, perhaps in a moment of hyperbole:

I love CMS. The employees are great. They have no clue what’s going on in the healthcare system…it’s just by design that they don’t.

The video segment is courtesy of Washington Journal with original source link here. For a chronology of Medicare see: ‘Medicare Turns 48‘ courtesy of AARP.

For additional Scully insights see: ‘Care Innovation Summit: A Very Sober Assessment!

NOTE: If only Scully type rationality were native to the ‘don’t confuse me with facts’ oppositional Republican mindset of some these days, we’d be more about fixing problems than blame – just saying.

‘Eating Glass?': A DaVita Healthcare Partners Hiccup or Impending Physician Integration Implosion?

By Gregg A. Masters, MPH

 

When Modern Healthcare somewhat ‘matter of factually’ and rather tersely reported the sudden [unexpected?] change in C-suite leadership at the DaVita acquired foray into physician global medical risk management (i.e., Healthcare Partners) of Craig Samitt, MD, I wondered what back-story this announcement might portend? samitt to leave healthcare partners

DaVita the market leader in End Stage Renal Disease (ESRD) care and its articulate CEO Kent Thiry has been publically outspoken about having ‘overpaid’ for Healthcare Partners and rather aggressively warranting analysts on conference calls of no more hiccups in execution, i.e., those that were responsible are no longer with us (paraphrased).

This article appeared on July 18th, 2014. Twelve days later Modern Healthcare then reported ‘DaVita again lowers earnings projections for HealthCare Partners despite Q2 improvement‘, listen here.

Samitt has been a long term and visible player in risk savvy medical group culture as a thought leader and modeller of best practices at The Dean Clinic, see:How Dean Clinic Redesigned Primary Care‘, with previous stints at Fallon Clinic,  Harvard Pilgrim Healthcare and (Atrius Health founding member) Harvard Vanguard Medical Associates. In other words his ‘street cred’ in the integrated delivery system space was/is – well – impeccable.ACO Summit

I last saw Samitt at the ACO Summit in DC 2013 where he gave an excellent presentation on how Dean was bridging that elusive volume-to-value divide via incremental though progressive blended shifts in physician compensation from production to outcomes based incentives – including the underlying though mission critical enabling cultural shifts. Brilliant I thought! Just the ticket many will need to vision and implement the broad tenets of the Affordable Care Act, especially the likes of DaVita a best in Craig Samitt ACO Summit 2013class though single specialty services provider.

So when this abrupt and (short lived tenure) departure was announced, I found myself wondering what could possibly be wrong with this marriage? It just fits too well….

We shall see as more is revealed over time. I invite any of you with inside information to share what you know. Better yet, Craig can you willingly provide any perspective here?

 

 

 

 

 

 

 

Meet Redwood Community Care Coalition: A Health Center Nested ACO

By Gregg A. Masters, MPH

Wrapped in the ‘population health’ angle but clearly a unique play in the ACO space – at least from the participation point of view of Federally Qualified Health Centers (FQHC), former CEO Steve Ramsland (a 10% allocated FTE) addresses the audience about their market, approach to ACOs and the deployed healthIT spine (they use cClinical Works CCMR).

More information on Redwood Community Health is available here and via 2012 Annual Report. The ACO is an interesting construction of member entities up to and including ‘a doc in private practice’.Redwood Community Care Coalition ACO HealthIT

In the article noticing the Ramsland resignation – which is interesting on it’s face in terms of back-story if any, the service area for the FQHC includes:

…health centers in Marin, Sonoma, Napa and Yolo counties, including some of the largest FQHCs such as Petaluma Health Center, Marin Community Clinics, Clinic Ole in Napa and West County Health Centers in Sonoma County, among others.

The Redwood Community Care Coalition ACO is NOT aligned with a hospital partner, it is solely sponsored by its founding members.

Atul Gawande Opines on Post ACA Agenda

By Gregg A. Masters, MPH

‘The debate about whether to provide coverage for healthcare is over…’ Atul Gawande

I had a front row seat for this one at the 5th Annual (and last) ‘Health Datapalooza‘, a label affectionately coined by the former ‘athenista’ though always energetic and singularly determined Todd Park, U.S. Chief Technology Officer and Assistant to the President. Some pretty amazing insights from this public health sensitized and Harvard trained surgeon who’s simple proscription for checklists in hospital surgical suites has no doubt served the interests of many patients who may have otherwise been subject to an unacceptable pool of recurrent adverse hospital events, see: The Checklist Manifesto’.