Meet Aledade An ACO Management Company Putting Docs at the Head of The Table

By Gregg A Masters, MPH

farzad mostashari MDWhen Farzad Mostashari, MD not too long ago sported a Federal business card his principal mission was to stimulate and evangelize the adoption of electronic health records (EHR) in his capacity as the lead official for the Office of the National Coordinator for HealthIT (ONC). This important market transformational role was enabled by the American Recovery and Reinvestment Act (ARRA), and in particular the provisions to ‘HITECH‘, the Health Information Technology for Economic and Clinical Health Act signed into law on February 17, 2009:

‘to promote the adoption and meaningful use of health information technology.’

Amidst ‘silo-ed medicine’ the enabling role of health information technology and specifically EHRs to the care management, care coordination and generally the principal upside of the ‘managed care’ vision has been recognized for quite some time. In fact, ‘clinical integration‘, i.e., a network wide EHR platform, shared by independent physicians who were otherwise competitors in a specific market (absent legal integration) was one of the exceptions if not ‘safe harbors’ to antitrust vulnerability.  In other words, a ‘shared healthIT spine’ of sorts allowed physicians to collaborate with each other without getting ‘married’ – if you will.

Since the passage of the Affordable Care Act (ACA), the ‘urge to merge’ is strong particularly at the hospital or institutional health system level, with many corporate parents acquiring medical practices at a pace unwitnessed during the prior ‘integration generation’ circa the 1980 – 2000 vertical integration and subsequent turbulent unwinding timeline.

Inside the ACA the majority of the ‘chop wood and carry water’ provisions of the anticipated transformation or ‘disruption’ are clearly laid at the doorstep of ACOs and the broader ‘accountable care’ framework it has set into motion via both Government and derivative private sector initiative.

Inside this market shift and not un-noticed by many healthcare ecosystem stakeholders (both pre and post passage of the ACA), many argued for the modulation if not regulation of the institutional ‘integration impulse’. Absent restraint, many provider mergers would amount to de-facto ‘too big to sail’ (i.e., more costly) enterprises via asset concentration for anti-competitive pricing leverage. Against this ‘unintended consequence of the law’ (more costly vs. less) some have stepped  up to lend support to physicians as the principal organizers and aggregators of clinical delivery (if not financing) assets. The theory goes, un-beholden to costly hospital infrastructure, physicians are the ‘free and informed agents’ to competitively purchase and allocate needed clinical assets across the care delivery continuum.Aledade ACO

Clearly the wildcard in this formula is an ‘empowered network of physician aggregators.’ Since most physicians are NOT infrastructure nor business savvy per se, a third party enabler to harmonize performance around this ‘triple aim’ (better care, better outcomes, lower costs) fueled vision is essential.  In other words, build and support the crosswalk from volume value where care is not incentivized by unit volume to support incomes and lifestyles but what’s right for the patient.

Enter ‘ACOcor’ (see: ‘Waiting for ACOcor?‘) as in Aledade, the new vision and initiative of Farzad Mostashari, MD and his capital partners at Venrock, specifically ACA advisor Bob Kocher.

Today on ‘This Week in Health Innovation‘ with my co-host Dr. Phil Marshall, we chat with Dr. Mostashari about his vision at Aledade.

 

Former ONC Director Farzad Mostashari, MD Launches @AledadeACO

By Gregg A. Masters, MPH

Aledade ACOOn July 8th 2011 I penned a blog post titled: Waiting for ACOcor? pondering the question of whether this time will be different in the managed competition positioning dynamics we’re likely to witness post roll-out of the Affordable Care Act. Afterall, the ‘chassis’ on which to graft if not build an ACO can be found in iterations of prior physician led vehicles including IPAs, medical group Medicare Advantage contractors and even PHOs (Physician Hospital Organizations) where the ‘institutional partner’ (ie, the ‘H’ hospital) serves as a limited partner to the medical group or IPA which operated the PHO as ‘the general’.

Today we learned that the former Director of the Office of the National Coordinator for Health Information Technology, Farzard Mostashari, MD has launched – with an infusion of $4.5 of investment capital from Venrock and Bob Kocher, MD taking the lead – an ‘ACOcor’ of sorts tagged ‘Aledade‘.

Mostahari outlines his rationale and reasoning pathway to this ACO consulting and turnkey management company as follows:

Today, I’m launching a new company, called Aledade.

Aledade partners with independent primary care physicians to make it easy and inexpensive for them to form and join Accountable Care Organizations (ACO) in which doctors are paid to deliver the best care, not the most care.

This is good for patients who will find that their trusted primary care doctors are more available and better informed than ever before. It’s good for doctors who want to practice the best medicine possible, the way they always wanted to. It’s good for businesses and health plans looking for healthcare partners that deliver the highest possible value and outcomes. And it’s good for the country as higher quality, lower cost care will help lessen the strain on our budget and our economy.

The world of start-ups may not be the usual path for those leaving a senior federal post, but it’s the right decision.

For me, Health IT was never the “ends,” but a “means” to better health and better care, and I continue to believe that better data and technology is the key to a successful transformation of health care. And it is why the attempts to do so now can succeed, where they have failed before.

Empowering doctors on the frontlines of medicine with cutting edge technology that helps them understand and improve the health of all their patients- that is the mission of our new company, and one that has animated my entire career.

During the seven years I spent working for Tom Frieden and Mike Bloomberg in NYC, it was exhilarating to be able to push the frontier in what was possible — to innovate at the edge.

Working with my team, we were able to: invent new statistical methods for outbreak detection , develop new data visualization methods, create visibility into population health down to the neighborhood level, bring decision support and rapid diagnostics to the point of care, automate electronic quality measurement, and implement novel financial incentives and hands-on technical assistance to support care transformation in small independent primary care practices. It was exhilarating.

When I moved to HHS in 2009, the transition to federal service also meant a change in perspective.

As the National Coordinator for Health IT, my key responsibility was now to ensure a minimum national “floor.” We had to push the country as a whole towards a common core set of data and capabilities. We applied creativity and grit to do what needed to be done, using the best tools available to us: encouraging the private sector; organizing and scaling state and local efforts like the inspiring work of the regional extension centers; and — yes — through the blunt instrument of regulations too.

I’m extremely proud of the work we did, and the foundation we put in place. The country is in a massively different place, and the age of data has finally come to healthcare. But in that role, I was also acutely aware of the compromises and incremental half-steps that have to be taken when the goal is to move an entire nation. I was inspired by those that pursued improvement not “compliance” and did not mistake the floor for a ceiling.

I’ve had the good fortune for the past nine months to be ensconced among some truly great thinkers at the Brookings Institution, and to go on a “walkabout” – talking to and visiting with leading practitioners throughout healthcare. I have come away with a rare stereoscopic view of the changes sweeping through health care — the anxiety of those with “one foot on their old business model’s grave and the other foot on their new business model’s banana peel”, mingled with the excitement of those who would disrupt the status quo.

And during this process, I have also found my cause.

It’s to help independent primary care doctors re-design their practices, and re-imagine their future. It’s to put primary care back in control of health care, with 21st century data analytics and technology tools. It’s to support them with people who will stand beside them, with no interests other than theirs in mind. It’s to promote new partnerships built on mutual respect, and business arrangements that will truly reward them for the value that they uniquely can bring- in better care coordination, management of chronic diseases, and preventing disease and suffering. It’s to achieve lower cost through better care and better health.

I believe in this. And this is the mission of our new company. And to realize it, we will be back at the vanguard, helping to lead this transformation in health care that has been underway for years but is quickening and coming faster than ever before.

This is clearly an idea who’s time has come – in fact, it’s been here a while. Yet the white water of health[care] ecosystem reform remains, witness: Universal American: A Sign of Things to Come?  The key strategic question is: can Aledade build upon and leverage the collective experience and insights of the past in the development of independent physician networks (IPAs) or their management companies (MSOs) to put physicians back in control via risk assumption at the population health level? In other words, can they succeed in tapping if not channeling the vital community physician leadership to deliver on the culture as well as the mission critical objectives (i.e., the triple aim) of the ACA levied principally on the ACO community writ large?

Clearly Mostashari’s work in building out the HealthIT infrastructure and population health connectivity that enables the vision if not spine of any ACO or accountable care initiative (better care, better outcomes & lower per capita costs) is mission critical insight. Improvements in healthIT and reach of REC’s (Regional Extension Centers) is one big difference since the ambitious if not technologically ‘pre-mature’ launch of Healtheon and the associated rise and collapse of the PPMC (physician practice management company) industry. [Editor's Note: For additional PPMC context, see 'The ‘Medical Aggregators’: Are We Entering Round Deux?']

This one is worth watching very closely!

 

 

 

 

 

Care Innovation Summit: A Very Sober Assessment!

By Gregg A. Masters, MPH

This session is well worth the time invested. Two veteran healthcare wonks weigh in on the fundamentals of healthcare transformation and where we stand in the glide-path towards sustainability or fulfillment of the ‘triple aim’.

Former CMS Administrator and healthcare attorney turned investor Tom Scully (Bush I Administration, see Wikipedia profile) and Peter Orszag (former CBO and OMB Director respectively, with tenures in both Obama & Clinton Administrations) reflect on health reform and more.

[NOTE: Their session begins at the 1:45:00 mark.]

Just some amazing and hard hitting reflections on where we are, where we need to go and just what we might be aiming for business model-wise. Spoiler alert: It starts with a ‘C’.

Also, earlier is a worthwhile session from Patrick Conway, MD, Chief Medical Officer, CMS and the Director of the Center for Medicare and Medicaid Innovation (CMMI). Dr. Conway touches on quite a bit including a deeper dives into the many moving parts of the CMMI innovation mission.

CMS Innovation Portfolio

 

Conway also iterates on the status of ACOs, including what may be generalized from the ‘lessons learned’ via Pioneer ACOS that may be infused in the MSSP class via statute or national ‘scaling.’ [Note: watch for insightful comment about press and question asked by one reporter in audience].

Accountable Care Organization Update

This may be one of the best and candid discussions I’ve heard to date on the ACA, ACOs and where and how we’re going to transform the rapacious appetite of the ‘healthcare borg’. Scully is a brother from another mother, referring to MedPartners and PhyCor in the same breath.

Who says there is no value to institutional memory or grey hair per se! Some of us have been to this dance before!

 

 

 

 

Universal American: A Sign of Things to Come?

By Gregg A. Masters, MPH

Per the recent investor call [to listen via archive replay click (and register) here] the theme was perhaps best set via the following comment:

We just want to stop the bleeding… Robert Waegelein

UAM P&L Q1 2014When CMS issued the final rule for ACOs one of the first enterprising companies out of the gate to proactively roll-out an ‘ACO template’ of sorts, that was market specific yet spawned by a ‘mega MSO corporate parent’ was Universal American (UAM).

Branded via the ‘healthy collaboration’ moniker, the company was a first mover into the ‘ACO space’ intent upon building multiple regional if not an assembled national footprint.

As an experienced Medicare Advantage operator, UAM’s approach was to leverage their network and risk management core competencies and structure ACO ‘win/win’ gain sharing scenarios with their network partners – principally physicians who were not risk averse with perhaps some prior or current involvement in the Medicare Advantage program. Afterall, ACOs are merely ‘MA lite’, no?

The UAM collaboration philosophy was detailed in a prior post titled: ‘Universal American: A Healthy Collaboration?’

Who can argue with aligning incentives and sharing the savings? This is a perfect fit for the foundational principles enshrined in the Affordable Care Act and articulated in Medicare Shared Savings Program. It should work, no?

With some baseline experience UAM and other ACOs are beginning to see what works, what doesn’t and perhaps even discerning the reasons why.

Suffice it to say, the clear lessons UAM is drawing from these early ACO results (at least as reported in this conference call) include the need for scale (member concentration) in the market. A couple of hundred Medicare beneficiaries distributed over a loosely tethered provider network neither gets attention nor provides the pricing leverage the company needs to manage to a margin.

Below is a snapshot of UAM’s operations and financial position:

UAM Operating Profile 2014

 

For additional context and speculation as to the meaning of UAM’s market exits on the continued growth and expansion of ACOs, see: ‘Reform Update: Insurer’s retreat from ACO investment raises questions about Medicare’s program.’

Quoting from the piece:

‘Universal American, a publicly traded insurance company that has invested heavily to become the largest operator of Medicare accountable care organizations, will no longer finance existing ACOs where its executives see little hope of financial return. The decision raises UAM Operating Profile 2014questions about Medicare’s ability to expand the program as the agency continues to seek new participants and hold on to those already experimenting with accountable care.

“Where we’re seeing it’s not working, we’re going to stop investing,” said Robert Waegelein, chief financial officer for Universal American, which contracts with local physicians across 13 states to operate 34 ACOs in the Medicare Shared Savings Program. That’s about one out of 10 ACOs launched under the program since 2012. “We just want to stop the bleeding,” he said.

We are at best in the bottom half of the first inning. There is a long way to go on this journey towards sustainability. So before we get too carried away and perhaps even write ‘the ACO obituary’, I say ‘more will be revealed’ –  so stay tuned!

 

Accountable Care Round Up

by Gregg A. Masters, MPH

One of the ongoing challenges in ‘new media’ is to effectively discern the content ‘signal to noise’ ratio given the ease of publishing these days. Everyone is a potential publisher and not all curation is of equal value nor newsworthy per se.

As heard at a Health 2.0 meeting some time ago, ‘there’s no such thing as information overload, only filter failure’. I’m not sure if I entirely agree, but I’m in there trying.

Meanwhile if this blog can contribute to the accountable care or more broadly cast quest triple aim conversation via a recap of  ‘must read’ articles, videos or podcasts posted elsewhere then so be it. What follows is week one of a round-up series that you might appreciate:

Managed Care Contract Negotiations Morph Under PPACA

In ‘Managed Care Contract Negotiations Morph Under PPACA‘  HealthLeaders author Greg Freeman points out that:

Negotiating a managed care contract is not the same as it was even a few years ago. Now all of the power providers have in managed care negotiations is in their ability to prove that they can manage quality and cost more effectively than the next guy, says one expert.

In it’s purest form the entire managed care industry experience comes down to an opaque mosh-pit of filing cabinets stuffed with ‘proprietary contracts rates and terms’ as well as the underlying ‘secret sauce’ business models to enable the contractual obligations assumed. One could make an equally plausible argument that the entire accountable care et al sequelae industry will reduce itself to a similar albeit virtual version of this opaque storage of a complex tapestry of provider/payor relationships – not much of a contribution towards transparency here.

One big difference in the mix today thanks mostly to the emergence of enabling health information technology but also ‘new and improved’ sets of performance indices is the more effective (at least in the view of some) measurement of the actual quality of healthcare delivered.

Just remember, ACOs are not gatekeeper entities that traffic patients (members) to their preferred contract network of providers. They must attract and have attributed to their ‘risk pools’ (or share savings budgets) their membership. In this ‘vote with your feet’ environment, a more friendly consumer facing image and experience of care AND better documented quality outcomes (improved population health) will no doubt be a material competitive advantage.

There’s more to the story but one I suggest you read in its entirety.

A risky future? Two-thirds of ACOs want rules to change

Over at The Advisory Board (always an excellent independent source of market intelligence) Chas Roades, Chief Research Officer vets the signal from the ACO community to CMS overlords with – you guessed it – more risk pushback: A risky future? Two-thirds of ACOs want rules to change Citing a recent survey from the National Association of ACOs (NAACOs):

  • About 67% of program participants say they are unlikely to adopt a two-sided risk model in the next round of contracts;
  • 46% of its members are “very unlikely” to accept two-sided risk in the next round; and
  • 21% are “somewhat unlikely” to take on greater risk.

So the dance between the regulators and the regulated continues. Whether this NPRM public/private mechanism to source, develop and issue industry ground rules can succeed in crafting a new paradigm of healthcare delivery and finance – short of single payer – that doesn’t bankrupt the country remains to be seen.

Court Rejects ProMedica Merger Opposed by FTC 

Court Rejects ProMedica Merger Opposed by FTCOne of the ‘counseled’ potential market risks via the ‘Notice of Proposed Rule Making’ process (NPRM) associated with the implementation of the Affordable Care Act and the provisions specific to enabling the formation of Accountable Care Organizations (ACOs) is provider asset concentration in markets to consolidate power, grow share and leverage price. Ergo, the recent unanimous decision via a three-judge panel in the U.S. 6th Circuit Court of Appeals in Cincinnati to deny ProMedica’s petition to overturn a 2011 FTC ruling that ProMedica’s bid to merge with Toledo-area St. Luke’s was anticompetitive is worth a read. Whether the judges can adjudicate pro-market equilibrium also remains to be seen.

DaVita lowers earnings forecast as medical group unit underperforms

Consider this next story as more narrative in the vetting of business models that might work in an ‘ACA implementation quiver’ portfolio of sorts. DaVita lowers earnings forecast as medical group unit underperforms

In today’s murky and mostly transitional but assuredly disruptive operating environment, layered with conflicting financial incentives and nominal to no effective alignment between health systems and their physician ‘partners’ the pursuit of ‘successor’ managed competition models is no sure thing. Sourcing and grafting clinically integrated (both virtual and otherwise) models into local footprints that can legitimately enable the sometimes mutually exclusive (or seemingly so) objectives of the triple aim (better experience of care, better outcomes at lower per capita costs), the acquisition by renal care center operator DaVita of Healthcare Partners and thus entry into the integrated medical group operational theater is one to watch and dissect for clues.

The investor call is well worth the listen, including the entire Q & A from the usual institutional suspects following the industry.

(NOTE: though obviously very smart and knowledgeable you might want to caveat analyst engagement of DaVita/Healthcare Partners leadership with the history of due diligence applied during the vetting of the PPMC industry – a Ponzi scheme that sold many into serfdom while broker/dealers and underwriters pocketed millions).

The rather clever but telling ‘formula’ articulated by Kent Thiry (beginning at the 00:18:50 mark), DaVita’s talented and straight talking CEO is revealing. He nets it out as follows, then articulates the company’s performance on across it’s two principal verticals:

effective rate (OI) – expense x volume x execution risk = performance 

The net for aggregate medical group operations of Healthcare Partners:

down/more down than up/unit growth very promising/legacy solid, new ventures poor

Again, the investor call is well worth a listen if you want a deeper dive into the nexus between strategy and the challenging real world of implementation.

FTC Examining Health Care Competition Workshop: Panel 3: Advancements in Healthcare Technology

 Examining Health Care Competition Workshop - Part 3 The FTC’s ambitious and timely exploration of ‘consumer facing issues’ albeit not in sound byte fashion is a rather compelling and insightful journey into the status of health information technology as enablers [or obstacles] of the integration vision (care management, coordination, de-siloing the silos of American sick care) albeit from a central or more accurately distributed ‘IT’ spine perspective.

The ‘Panel 3: Advancements in Health Information Technology (HealthIT)‘ session focused on the competitive considerations that FTC should incorporate into their process as they catch up with market changes.

This is a MUST watch series for all but especially e-patients and healthIT professionals. The eloquent exploration of industry issues and observations proffered by both former ONC Director Farzad Mostashari, MD and AthenaHealth VP for Government & Regulatory Affairs, Dan Haley are worth the effort of watching the entire clip. As an alternative you can scroll through the transcript of the session pasted here.

There’s more to share, but we’ll roll them into the next Round-Up.

***********

 

The Medicare Shared Savings Program: Class of 2015

By Gregg A. Masters, MPH

The clock is ticking and the CMS continues its community outreach via their series of National Provider Calls on the application process for ACOs interested in submitting for the Medicare Shared Savings Program.Medicare Shared Savings Program

The deadline for the class of 2015 is approaching with the next call scheduled for Tuesday, April 22nd 2014 from 1;30 – 3PM Eastern.

You can register for this call here.

Space is limited and demand for these calls often exceed available slots, so get your registration in early.

Meanwhile, the description of the program is as follows:

During this MLN Connects™ National Provider Call, CMS subject matter experts cover helpful tips on completing a successful application, including information on how to submit an acceptable ACO Participant List, Sample ACO Participant Agreement, Executed ACO Participant Agreements, and Governing Body Template for the Medicare Shared Savings Program application. A question and answer session follow the presentation.

The Shared Savings Program Application web page has important information, dates, and materials on the application process. Call participants are encouraged to review the application and other materials found on this web page prior to the call.

Target Audience

Potential 2015 ACO Applicants

Presentation

The presentation for this call will be posted at least one day in advance of the call on the MLN Connects™ National Provider Calls and Events web page. Select the call date and scroll to the “Call Materials” section to locate the slide presentation. A link to the audio recording and written transcript of this call will be posted under the “Calls Materials” section in approximately 2 weeks following the call.

Registration will close at 12:00 p.m. ET on the day of the call or when available space has been filled.

Patient Engagement in an ACO World

By Gregg A. Masters, MPH

Last June I had the honor or moderating a panel on ‘unlocking innovation in patient engagement’ in an ACO World at MedCity News’s ENGAGE conference. Joining me on the panel are: Libby Webb, Director, Product Management, Athenahealth, Lanie W. Abbott, APR, Senior Communications & Outreach Coordinator, EMHS Population Health Management and Colin Ward, MHS, Executive Director, Greater Baltimore Health Alliance.

During the session we discuss ACO implementation issues and how early movers are mobilizing and organizing to drive sustained patient engagement while conforming to a complicated set of ACO policies. Patient engagement will continue to be the missing link in new value-based reimbursement programs until the quality of patient communications leads to consistent behavior. We discuss how new ACOs are investing in benchmarking tools and communications interventions that will measurably improve the quality of physician-patient communication.

More than Half of ACOs ‘Save Money’ Only 1/4 Bonus Providers

By Gregg A. Masters, MPH

In the narrative matters department and following CMS’s press release on January 30th, 2014 of the ‘interim financial results for select Medicare Accountable Care Organization (ACO) initiatives, an in-depth savings analysis for Pioneer ACOs, results from the Physician Group Practice demonstration, and expanded participation in the Bundled Payments for Care Improvement Initiative’ several downstream headlines are instructive in this continuing battle for the hearts and minds of the American public towards the Affordable Care Act.

Physician Standing Up the ACOOver at Healthcare IT News, Bernie Monegain, Editor chimes in via: ‘More than half of ACOs show savings: Accountable care organizations are helped by the use of health information technology.’

While at Kaiser Health News staff writer Jenny Gold notes: ‘ACOs Saving Some Money, But Medicare Is Short On Details.’

And Melanie Evans at Modern Healthcare asserts ‘Providers net uneven results from ACO experiment‘ re-capping the data as follows:

Slightly more than half of the 114 organizations to join one of two Medicare accountable care efforts in 2012 did not reduce health spending below targets during their first 12 months trying to do so, newly released CMS data show. 

Of the remaining organizations, 29 reduced spending enough to keep some of what they saved during the first 12 months. The rest slowed health spending, but marginally. 

Take your pick, there are plenty more to chose from and whether your view is from a glass ‘half empty’ or ‘half full’ perspective your answer to whether the ACA is working or not, and in particular, can ACOs enable the required transformation is likely to be shaped by whether you have a dog in the hunt if not personal skin in the game.

To sort through and make some sense of this nascent industry ‘report card’ are three industry veterans who will help us dive past the headlines and into the weeds of the ACO experience. Recognizing that ACOs not a homogeneous bunch and vary operationally and by market, there is a fair amount of context setting to actually interpret the results.

On the next episode of ‘This Week in Accountable Care‘ I am joined by three seasoned players in and around the space including Fred Goldstein, Jim Hansen and David Crais.

For live or archived replay of this episode, click here.

Join us for an informative chat and tag your tweets with #ACOchat and will put your questions and/or comments into the conversation.

It’s All About the Network

By Gregg A. Masters, MPH

2014 has kicked off to a challenging pace and doesn’t look to let up any time soon!

Over at Health Innovation Media where we follow health innovation from ‘idea to business model’ including accountable care platforms, ‘apps’ or infrastructure plays,  Dr. Pat Salber, CEO of early mover in the ‘rewards based’ crowd funding and innovation challenge space HealthTech Hatch and curator of The Doctor Weighs In and me are in workflow overflow from the mHealth Summit 2013 in National Harbor, VA.

If that wasn’t enough of a stretch for our new media startup, we just concluded the better part of the week in Las Vegas covering digital health developments at CES 2014 (see: Amidst the CES 2014 Firehose: Brands, Blogs & ‘PR’ Compete for Relevance in the Digital Economy) and it’s internally nested ‘Digital Health Summit‘, only to return to California challenged by the depth and breadth of the proceedings from both the JP Morgan Healthcare Conference and lesser known OneMed Forum.

One vetted message with relevant context to accountable care and the associated quest for the triple aim is sourced from the above JP Morgan Healthcare conference. The inspiration for this post’s headline and specifically it’s inherent ‘managed competition’ wisdom is courtesy of the CEO of the most ‘transformational ACO payor partner‘ – at least from the point of view of KLAS‘s ‘Accountable Care Payers: Partners in a Changing Paradigm‘. That player is Aetna or perhaps an attribution more holistically made to the aggregate activities of it’s fire-walled innovation sub Healthagen.

JPM14 KLAS transformer recognition

In his talk Mark Bertolini Aetna Chairman, President & CEO a man who’s career was forged squarely in the belly of HMO culture inside a traditional service vs. indemnity play,  via a rust belt domiciled ‘Blue plan’ competitor lays out the challenge not just for Aetna, but anyone in the accountable care space whether payor, provider or hybrids intent upon the co-creation of a sustainable future.

(NOTE: The entire series of JP Morgan webcasts including decks (where supplied) are accessible here. You’ll  need provide your email for a one time registration process to access all sessions, but the benefits are well worth it).

Back to Bertolini’s message, here are some note-able quotes from a very insightful and smart senior executive who sets the transformational imperative as follows:

This is how people feel about the healthcare system, it was designed in 1945 after WW2. It was funded by Hill Burton, and not much has changed over that time period in the way we run our healthcare system.

We leave the consumer to try and find their way through the system without much information, without much transparency.

So our goal is to change the system to align the incentives on the provider side [with the payor], give the consumers the tools so these questions can be answered and they can find a direct line of sight about how to use healthcare.

Our view is the system should work around the member, that it should be all about the member and  that it should be a personalized experience where all of these issues come together in one way… [i.e., the triple aim]

JPM14 Aetna healthier world

 

 

‘Line of sight’ what?

Heresy one might say from a once ‘all in’ little-to-no copay access to comprehensive health benefits HMO guy to now espouse a role for a marquee health plan operator to drive ecosystem integration between a tech enabled but evolving retail medicine (aka consumer directed or high deductible health plan world) segment and the costly, inflated, siloed and opaque sick care non-system.

But there’s more as the story is not so simple, nor easily analogized.

Bertolini continues and goes to the fundamental drivers of the Affordable Care Act and the enabling ACOs, ‘accountable care arrangements’ or their derivative plays that will ‘chop the wood and carry the water’ of this unprecedented transformation of a WW2 vintage legacy paradigm on life support.

If you’ve seen one ACO, you’ve seen one ACO, we do not call all of our value based contracting an ACO.

We have 100’s of value based contracting arrangements and various incentive programs in place, but for us, an ACO is an enabled provider network that’s at risk with us to improve the overall outcome for the patient and get rewarded as a result of making that happen.

Branded health plans is the next step [in the KLAS continuum noted above] and our most recent relationship with Inova we have launched Innovation Health Plans which is a branded private product of the Inova Health System in Northern Virginia.

This whole idea is to create transformational relationships with providers that let them be in the business of providing health plans to their community, allow them to change their revenue model by enrolling their patients and getting [Aetna] out of the middle of that relationship. We provide the risk mechanism, the technology and the intellectual property to allow it to happen, and that is what our ACO model is.

Bertolini then pivots to adding value in this expanding ‘retail’ market where Aetna enables informed choice via tools that empower members with the requisite ‘line of sight’ and thus gain share given projected enrollment of 75 million by 2020.

JPM14 Aetna retail projections

May I say, with the posting of this strategic glidepath the pivot of Aetna as a proxy for the legacy carrier health insurance business (including their forays into the HMO business) comes to an end. Rather re-skinned PPO’s, POS’s, and OWA’s morphed into ACOs of varying stripes intent upon passing increasing ‘skin in the game’ exposure to their members or insureds to vote with their feet and thus pocketbooks is now permanently enshrined as the defacto standard of ‘health insurance’ (whether ASO, fully or now retail/exchange based) in the U.S.

In this new model, health plans will morph into ‘utility companies’ who’s core competencies will center or transactional efficiency, member empowerment (to promote informed line of sight choices) and ecosystem stakeholder homeostasis largely as benefit solutions providers more and more with local or regional provider co-branding and sponsorship DNA.

Don’t get me wrong, I respect Mark and his chief architect Chuck Saunders, MD who’s assembling these consumer, informational and transactional empowerment capabilities inside the Aetna mothership via a ‘fire-walled’ Healthagen. From MediCity to iTriage and Active Health, this is precisely what the new zeitgeist requires of the legacy health insurance business.

Lets just call it as it is, AHIP and it’s member partners (principally the Health Insurance Association of America/HIAA constituency, exclusive of the Group Health Association of America/GHAA contingent) have failed at managing clinical risk and have effectively thrown in the towel, i.e., managed care was never more than mere contracting for discounted pricing, as armies of medical directors rarely denied more than 1% of referrals and/or admissions.

So today, surprise, surprise, it’s all about the network – as in ‘high value networks’ – tighter, smaller value based clusters of high performing provider collaborations.

Again, this is a fabulous pitch by Bertolini and one I highly recommend you listen to in it’s entirety.

Next up similar insights from AthenaHealth CEO Jonathan Bush followed by a somewhat anemic if not apologetic performance of Universal American’s CEO I’ll title ‘a not so healthy collaboration.’

As always, your thoughts, opinions or challenges are welcome.

Accountable Care, mhealth and the Triple Aim

By Gregg A. Masters, MPH

For those of you following this blog you know I write about ACOs and the emerging accountable care zeitgeist. My lens has been forged by decades of experience in the ‘managed competition’ experiment. For an earlier piece see: Some Context and Perspective on Standing Up the ACO.’ HCFA masthead

The managed competition industry – perhaps more widely known as ‘managed [though more accurately mangled] care’ – can be traced back to it’s regulatory oversight origins via an office in the predecessor agency to CMS, the Health Care Financing Administration (HCFA) titled the ‘Office of Alternative Delivery Systems’ (OADS).

The mission of the OADS was to monitor the then emerging (‘disruptive’) players in the HMO domain but also this little known but ‘HMO lite’ mutation dubbed ‘preferred provider organizations’ (PPOs). The alternative delivery system domain was typically populated by those operators who compensated their contracted network of physicians, hospitals and ancillary providers via other than routine fee for services based payment. Alternative compensation ranged from mere discounts of standard fee schedules to full or partial capitation for physician or even hospital services, thus ADS operators could be arrayed across a continuum of risk assumption.

It is interesting to note that what was then considered ‘alternative’ to prevailing or normalized healthcare financing and delivery is now the new ‘normal’. Yet, we hear more reference to ‘alternative delivery systems’ today as representative by such new age/zeigeist disruptors the likes of certain ACOs, medical homes or even the tapestry of direct, membership, retainer or even ‘concierge’ models of delivery – including hybrids (OneMedical).

So in a way, the first phase of the ‘integration 1.0′ cycle is complete and we’re now embarking on ‘integration 2.0′ using the same terms albeit applied to different vehicles. Instead of HMOs or PPOs, we’re talking about ACOs, medical homes or other care delivery innovations.

Clearly technology – both enterprise and consumer facing – are central to the complex deliverable of the sustainable healthcare ecosystem, yet the preferred ‘chassis’ onto which to stitch if not graft the organizational, governance and operational best practices remain somewhat elusive.  To many digital or mhealth enabled solutions seems to represent a fair amount of rational promise to emerging ACOs.

At the 5th Annual mhealth Summit in a session titled: ‘Mobile Enabling the ACO‘ we’ll here from:

…on the state of the merger between promising digital health technologies and ACO operational fulfillment of certain ACA performance requirements .

The session description and schedule is pasted below:

mobile enabling of ACO