The 5th Annual ACO Summit

By Gregg A. Masters, MPH

Can’t make the annual gathering in DC? Why not follow the conference via Twitter?

ACO Summit 5th Annual MeetingIn years past, I registered the ACO Summit as a conference with the healthcare hashtags registrar @Symplur.

While the dashboard has not been updated with current information (the program description dates back to 2012), the conference hashtag remains #ACOsummit.

So check out the twitter stream, pull real time analytics including ‘reach’, impressions’ and tweet frequency here.

 

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!

 

My Chat with Nicole Bradberry

This Week in Accountable Care Meet Nicole BradberryOn the anniversary of the launch of the Florida Association of ACOs and the vital role of MSOs in supporting the operations of disruptive business models chasing the sustainable healthcare ecosystem I had a round two conversation with Nicole Bradberry, President and Chief Operating Officer of Orange Health Solutions and CEO of the Florida Association of ACOs.

Listen as we learn more about the accountable care market one year later, including insights on the investment by Great Point Partners in Orange Health Solutions enabling the acquisition of MZI Healthcare including it’s suite of products built on the EZCAP chassis.

 

 

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.

123 ACOs Join the Shared Savings Dance Card

By Gregg A. Masters, MPH

CMS has announced another round of certified ACOs participating in the Medicare Shared Savings Program effective for January 1, 2014. The complete list is available here.

One observation I’ll make is Universal American (UAM) seems to remain active in building a national footprint of managed ACO collaborations. Their risk sharing model was previously addressed here. Yet, all is not well in ‘dodge’ as Zack’s recently downgraded UAM to ‘strong sell.’ For the complete Zacks piece, see: ‘Universal American Slips to Strong Sell.’

Per their reasoning (and this doesn’t bode well for the UAM business model – at least yet). Earlier in the 90s there was a similar ‘roll up’ i.e, venture backed top line fueled growth by American Healthcare Services, Inc. (AHI) that seems somewhat of a similar glide-path – we shall see.

Why the Downgrade?

Universal American witnessed downward estimate revisions following weak third-quarter 2013 results, which included a negative surprise of 214.3%. Shares of this life-insurer lost nearly 5.2% since the company reported soft results on Nov 7 and given its expected negative earnings growth rates in the upcoming quarters, we feel it has more downside left.

Meanwhile, per the CMS press release on December 23rd, 2013, here are the details and preferred narrative on ACO growth:

More partnerships between doctors and hospitals strengthen coordinated care for Medicare beneficiaries  

123 New Accountable Care Organizations Join Program to Improve Care for  Medicare beneficiaries

Doctors, hospitals and other health care providers have formed 123 new Accountable Care Organizations (ACOs) in Medicare, providing approximately 1.5 million more Medicare beneficiaries with access to high-quality coordinated care across the United States, Health and Human Services Secretary Kathleen Sebelius announced today.

CMS App ClippedDoctors, hospitals and health care providers establish ACOs in order to work together to provide higher-quality coordinated care to their patients, while helping to slow health care cost growth. Since passage of the Affordable Care Act, more than 360 ACOs have been established, serving over 5.3 million Americans with Medicare.  Beneficiaries seeing health care providers in ACOs always have the freedom to choose doctors inside or outside of the ACO. ACOs share with Medicare any savings generated from lowering the growth in health care costs when they meet standards for high quality care.

“Accountable Care Organizations are delivering higher-quality care to Medicare beneficiaries and are using Medicare dollars more efficiently,” Secretary Sebelius said.   “This is a great example of the Affordable Care Act rewarding hospitals and doctors that work together to help our beneficiaries get the best possible care.”

“This program puts the control in the hands of physicians and allows them to take the lead in an innovative way to deliver the right care to the right patient at the right time,” said Kelly A. Conroy, executive director of the Palm Beach ACO and South Florida ACO.  “We are honored to be a Medicare Shared Savings Program Accountable Care Organization, and after 18 months in the program, can proudly say that we have seen measurable success.  We are so impressed with our participating physicians’ enthusiasm towards the cultural shift, and it demonstrates that physicians are primed for the future of medicine.”

The ACOs must meet quality standards to ensure that savings are achieved through improving care coordination and providing care that is appropriate, safe, and timely. The Centers for Medicare & Medicaid Services (CMS) evaluates ACO quality performance using 33 quality measures on patient and caregiver experience of care, care coordination and patient safety, appropriate use of preventive health services, and improved care for at-risk populations.

The new ACOs include a diverse cross-section of health care providers across the country, including providers delivering care in underserved areas. More than half of ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries. Approximately 1 in 5 ACOs include community health centers, rural health clinics, and critical access hospitals that serve low-income and rural communities.

Affordable Care Act provisions have a substantial effect on reducing the growth rate of Medicare spending.  Growth in Medicare spending per beneficiary hit historic lows during the 2010-2012 period, and this trend has continued into 2013. Projections by both the Office of the Actuary at CMS and the Congressional Budget Office estimate that Medicare spending per beneficiary will grow at approximately the rate of growth of the economy for the next decade, breaking a decades-old pattern of spending growth outstripping economic growth.

The next application period for organizations interested in participating in the Shared Savings Program beginning January 2015 will be in summer 2014.

More information about the Shared Savings Program, including previously announced ACOs, is available at:http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/News.html.

For a list of the 123 new ACOs announced today, visit: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/2014-ACO-Contacts-Directory.pdf.
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From FutureMed to ACO Congress and Health Insurance Exchange West Summits

By Gregg A. Masters, MPH

Today I drove north some 150 miles or so from San Diego to the Century City Plaza Hotel complex in Los Angeles on the suitably named ‘avenue of the stars’ adjacent to the Fox entertainment empire. The Sunday session at FutureMed hosted at the Hotel Del Coronado was infectious and upbeat with as usual forward thinking and doing entrepreneurs, scientists and the people who love, follow or aspire to be one of them. BYQPw7vCUAAVaWr.jpg-large

The day was packed with inspirational speakers and concluded with a keynote than none other than San Diego’s digital health superstar and agitator for the creative destruction of medicine – Eric Topol, MD.

For a tweetchat dashboard of the action at FutureMed – the event runs through this Wednesday – click here. For the program agenda and schedule click here, while the transcript to date can be accessed here and the digital dashboard chronicling reach of the footprint is here.

Meanwhile here we are at the current sessions of the 4th National ACO Congress and the 1st ‘Health Insurance Exchange Summit West’ which will no doubt be a annual affair for the near term – given the disastrous rollout of HealthCare.gov and the contrasted ‘successful’ reviews of those state administered exchanges in California aka Covered California and Kentucky aka Kynect.

As I sat in the audience at FutureMed hearing the passion of the presentors I regularly kept asking myself, ok this is all awesome stuff – from 3D printing/manufacturing of just about everything from organs to guitars, but how does it assimilate and disrupt our house of cards if not ‘calcified hairball’ (per Esther Dyson) of a healthcare financing and delivery system? And coincident as it turns out, the session I am attending for the next two days represent the best and brightest – if you will, of the aggregators if not orchestrators of the sustainable healthcare ecosystem envisioned by the triple aim?

We shall see! I will be monitoring both event hashtags via #ACOcongress and #FutureMed - and so can you.

ACO’s as Sinkhole Medicine? Nah…

By Gregg A. Masters, MPH

sinkhole

As the battle for the accountable care narrative grinds on both in the media and the respective P&Ls of participant ACOs, a recent article in Healthcare Finance News titled: Accountable care organizations: cost-effective solutions or financial sinkholes? is noteworthy.  At first I chuckled, then thought, more headline ‘eye porn’ or is there really a message here?

So lets start with the remark that caught my viscera –  the ‘sinkhole’ attribution. The piece is written by Paul Cerrato aka Twitter @plcerrato ‘a healthcare editor and writer for 30 years, publishing extensively in a variety of healthcare and business journals’. Pauls sets context for the sinkhole visual here:

But although the costs of care for all the Pioneer ACOs grew by only 0.3 percent, compared to 0.8 percent for similar Medicare beneficiaries outside the program, the fact remains that only 13 generated shared savings [emphasis mine]. Seven of the Pioneer ACOs have decided to move to other pay for performance programs that involve less financial risk, and two of the participating organizations have decided to leave Medicare accountable care altogether.

Then he tees up the underlying ‘Jerry Maguire‘ strategic question:

Given the uneven financial performance of these pilot ACOs, C-suite executives are no doubt wondering: What secret sauce allows some ACOs to succeed while others fall short of their financial goals?

While acknowledging the increased risk exposure to the Pioneers:

Any risk benefit analysis should keep in mind that ACOs come in many different sizes and shapes, and given that the Pioneer ACO model is riskier than the standard Medicare Shared Savings Program, it would not be fair to conclude that the ACO model is flawed, per se.

So digging a little deeper into Paul’s narrative, it’s not about the ACO model. The sinkhole remark is really about the de minimis cost impact associated with the performance of the Pioneer class. Yet, in defense of ACOs and the ACA (a position I am often in) we need take into account the key question of:

ACOs as sinkholes, compared to what? 

ACOs are proactive on a number of levels. Whether a statutory MSSP, or a pilot or demo via CMMI or a private mutation via the ‘ACO collaborations’ of Aetna, United, Humana or the Blues, they are something other than ‘biz as usual’. Anything less is the unrestrained appetite of the healthcare borg, i.e., a business as usual strategy. Bottom line is the current paradigm of healthcare costs, coverage and access is the SINKHOLE with or without an ‘ACO contribution’.

The article is worth a read since it points to both ‘culture’ and the ‘long term investment’ ACOs will require before generating an economic ROI. Unfortunately, tell that to CMS, as they are measuring two pillars of the triple aim (experience & quality), but the driver in the equation is fundamentally the third pillar – per capita savings at the population level.

 

 

An ACO ‘Shell Game?’ Of Arrows, Pioneers & Patsies’

By Gregg A. Masters, MPH

In ‘Pioneers Take Arrows While Settlers’ Get the Land’ I reported in a ‘just the facts ma’am’ fashion the developing narrative as proferred by Modern Healthcare, CMS, and the AMGA as to whether this was to be seen as good news or bad news.

Pioneer with arrow in backRecently the witty industry veteran and futurist  Ian Morrison weighed in via ‘Why Some ACO Pioneers Turned Back, as did Oliver Wyman via ‘The Year of the Pioneers’ and even the health policy braintrust, aka the ‘…aw shucks, we just really want to help Obamacare out’ cheerleading squad at the American Enterprise Institute weighed in via ‘Reforming Medicare integrated care: An alternative to the Obama administration’s accountable care organizations. Whoa can you say bandwidth consumption?

Indeed, rather than parse out each, I will address them separately via individual consideration. I just wanted to get them on the blog before more time passed.

I might add that as far back at June of 2012 at the jointly sponsored CAPG (California Association of Physician Groups) and IHA (Integrated Healthcare Association) ACO Congress word on the streeet had it  ‘all was not well in Pioneer land’. So fresh as some of these insights and realization may claim to be, some of the more chronic challenges have been on the record for quite some time.

You  might enjoy the reading ‘From ‘Unicorns to Multicorns” ACOs Morphing Below Radar’ which followed the ACO Congress.

As some say….

More will be revealed

The ACO Innovation Summit

By Gregg A. Masters, MPH

One of the few ACO gatherings I’ve missed since the birth of the industry (and there have been quite a few since there are ‘experts’ everywhere), but the line-up NEHI put together is well worth a look.

Both Steven Shortell and Molly Coye are definitely change agents on the front lines as is the balance of the faculty. Molly is pulling levers of a major institution with, some might say, an impossible reinvention agenda given its governance complexity and cost efficiency obstacles – unlike many other private institutions similarly challenged, while Shortell has a pulse on the healthcare ecosystem DNA, the macro policy dynamics of managed competition, and the empirics of business or service delivery models that work.

 

Thanks to the organizational initiative of NEHI staff. A bit of a delay (this is raw footage), but fast forward to 9:10 mark for introductory remarks by NEHI President Wendy Everett, ScD. About NEHI:

‘…NEHI is a nonprofit, health policy institute focused on enabling innovation that will improve health care quality and lower health care costs. Working in partnership with members from across the health care system, NEHI brings an objective, collaborative and fresh voice to health policy. We combine the collective vision of our diverse membership and our independent, evidence-based research to move ideas into action.’

As discussed elsewhere the battle at the moment is for the narrative on ACOs and by proxy the Affordable Care Act aka “Obamacare”. For context see: The ACO Narrative: ‘Accountable Care 2.0 is a Journey, Not a Program’ or ‘ObamaCare is Toast’? 

 

Key take-aways from the summit included:

  • ACOs necessitate thinking about “packaged” innovations – the organizational culture, process improvements, and payment models that surround a particular innovation.
  • Bundled payments, global budgets and other new ACO payment innovations are beginning to create the “markets for health” that will move the system from a culture of care to a culture of wellness.
  • In an ACO world, physicians require comparative effectiveness research, real world evidence, and ongoing guidance from industry to achieve improved patient outcomes.
  • ACOs are transforming the research landscape by turning previously unintegrated health systems into research organizations.
  • ACOs have created new opportunities for cross-sector partnerships to share data and enhance the pace of innovation.

The ACO Narrative: ‘Accountable Care 2.0 is a Journey, Not a Program’ or ‘ObamaCare is Toast’?

Earlier today we spoke with Dr Jerry Penso, Chief Medical and Quality Officer for the American Medical Group Management Association (AMGA), and Jim Hansen, Vice President at the Accountable Delivery Systems Institute (ADSI) a unit of Lumeris.

To listen to the broadcast click on the ‘This Week in Accountable Care’ graphic below:

This Week in Accountable Care | @ACOwatch | Hosted by Gregg A. MastersThe context for the chat was the release by CMS of year one results reported by the 32 participants in the ACO Pioneer program.

For Jim Hansen’s thoughts on the ‘journey’ noted above, see: Accountable Care 2.0: It’s a Journey, Not a Program. Jim’s noteworthy highlights include the metrics reported below:

‘CMS released a long-awaited checkpoint status on its Pioneer ACO program. Of the 32 entities enrolled in the program, according to CMS:

  • 2 (6%) will leave the CMS ACO program altogether
  • 7 (22%) will eliminate the down-side risk component by reapplying under the MSSP program
  • 32 (100%) improved quality of patient care & rated highly on patient satisfaction scores
  • 18 (56%) achieved some cost savings, 13 (41%)saved enough to share savings with Medicare
  • 2 (6%) cost Medicare more and will owe $4M back
  • 12 (38%) did not achieve significant savings•
  • $140M in total savings, $52.4M in total losses, $76M in shared shavings to be returned to 13 (41%)Pioneers
  • $33M in net savings for the Medicare Trust Funds.’

For additional context – both narrative and ‘moving the needle’ transformational – with links to the original CMS announcement, see: ‘Pioneers Take Arrows While Settlers’ Get the Land?’ or Michel Millenson‘s informed, witty and dead on accurate take on ‘This Week in Health Innovation’. To quote Michael, per the attributed impact of the ACA irrespective of the relentless attempts to appeal ‘ObamaCare':

we’re finally moving the iceberg…