Accountable Care, ACO, Affordable Care Act

The Evolution of ACOs

by Gregg A. Masters, MPH


Recently the accountable care industry’s leading ‘skin in the game‘ PPMC 2.0 aka ACOcor equivalent (think PhyCor, MedPartners, FPA Medical, et al) of our time – though Aledade’s model is anything like the pyramid scheme of the PPMC (physician practice management companies) of the 1990s, reviewed the Center for Medicare and Medicaid Services (CMS) recent Notice of Proposed Rule Making (NPRM): CMS Proposes “Pathways to Success,” an Overhaul of Medicare’s ACO Program‘. 

Below are key take-aways from the presentation. The entire webinar is accessible free upon registration here

I will post the Q & A thread that Farzad Mostashari, MD, CEO and Travis Broome, VP, Health Policy, respectively Aledade shared on twitter as well.

Meanwhile, here’s the gist of their analysis and message:

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Accountable Care, ACO, Affordable Care Act, health reform

National ACO Association Weighs In On Sector Performance

by Gregg A. Masters, MPH

Amidst the aggressive assault on the Affordable Care Act (ACA) via an unrelenting but unsuccessful ‘repeal and replace‘ agenda, much conversation and debate in the health reform theater since Donald Trump was elected the 45th President of the United States has witnessed considerable speculation about the probable directional vector(s) of reform. The initial source of these speculative insights have been from available ‘tea leaves‘ interpretation associated with key Trump administration appointments to craft and seed a ‘TrumpCare‘ alternative.

Trump’s first appointment to serve as Secretary Health and Human Services (HHS) was Tom Price, MD, a conservative Republican Congressman and orthopedic surgeon from Georgia. Tom Price’s credentials as a warrior against legacy Medicare and Medicaid regulations and incentives is well known, as is his advocacy for a ‘putting patients first‘ narrative.

Trump also tagged Seema Verma, MPH as Administrator of CMS who’s credentials included advocacy for and implementation of Healthy Indiana, a waiver enabled block grant to the State of Indiana, intended to introduce both flexibility and opportunities for ‘innovation‘ in their Medicaid program. While a sexy and somewhat logical idea, ie, delegate block (capped) funding to the state and let it innovate on the delivery and financing side, the results of block grants nationally including Indiana’s have been admittedly mixed.

With Price’s controversial tenure and the successor appointment of Secretary Alex Azar to lead HHS, Seema Verma remains at the helm of the Centers for Medicare and Medicaid Services and is advocating for and introduced a number of reforms to both CMS and the Center for Medicare and Medicaid Innovation (CMMI) operations.

Amidst the leadership deck shuffling and shifting sands of policy initiatives offered via the a series of related Notice of Proposed Rule Making (NPRM) processes, many in the ACO space have been heads down but mindful of how amended Federal policy would affect the operations and viability of ACOs active in the Medicare Shared Savings Program (MSSP) and sequelae, ie, Next Generation ACO models and now the offered NPRM ‘CMS Proposes “Pathways to Success,” an Overhaul of Medicare’s ACO Program‘. 

EDITOR’s NOTE: For additional reflection see summary via Evolent Health: ‘CMS’ New MSSP Proposal: The Five “So What’s” Every ACO Exec Should Know.’

Meanwhile, ACOs are reporting results and the community is weighing in on the efficacy of the ACO model with respect to its intended deliverables, see: Farzad Mostashari, MD, CEO of Aledade recent unbundling of results on twitter, here and a recent New England Journal of Medicine piece Medicare Spending after 3 Years of the Medicare Shared Savings Program‘. 

Perhaps the most comprehensive take on the state of the industry is to be found in a recent study commissioned by the National Association of ACOs. The introduction to its Executive Summary is pasted below:

Introduction

The stated goal of the Medicare Shared Savings Program (MSSP) is to lower the rate of growth in healthcare spending while improving patient access to quality care. (12) MSSP Accountable Care Organization (ACO) progress toward this goal of achieving savings or reducing expenditure growth has proven controversial, in part because there are a variety of ways to measure savings that may generate different results. In this report, we describe the Dobson | DaVanzo team approach13 to measuring MSSP savings and contrast this with reported findings from CMS. We also compare our results to other published work.

Dobson | DaVanzo & Associates was commissioned by the National Association of Accountable Care Organizations (NAACOS) to conduct an independent evaluation of MSSP ACO cost savings.

The CMS method of measuring ACO performance is based on an administrative formula that creates spending targets constructed with ACOs’ historical expenditures that are used to determine whether they will receive bonus payments. It is problematic when this financial target setting approach is used as if it were a program evaluation. Indeed, when independently evaluating both the Pioneer ACO and Next Generation ACO programs, CMS contractors used a difference-in-differences regression approach to estimate savings rather than the CMS benchmarking methodology used to set financial targets and calculate bonuses or penalties. (14,15).  The CMS benchmarking methodology addresses the question “How has ACO spending changed compared to prior years’ spending?” While this may be an appropriate way to set performance benchmarks, it produces a biased estimate of program savings when compared to what may have occurred in the Medicare Fee-for-Service market had the ACO program not been in place. Instead, evaluation of program savings should incorporate a carefully designed comparison group or counterfactual to account for prevailing trends in order to address the question: “How have ACOs changed expenditures compared to other providers not participating in the ACO program?”

Read the complete report from National Association of ACOs, here

Florida Association of ACOs - FLAACOS

Given the release of the NPRM and the October 16th deadline for comments with an expected ‘go live’ date in early 2019, the Florida Association of ACOs (FlaACOs) upcoming annual meeting in Orlando is a timely event to compare notes and process the impact of CMS’ proposed changes with your peers.

For those of you in the Southeast with an interest in ACOs or valued based healthcare models and their performance in the greater Florida market, take note the Florida Association of ACOs (FlaACOsconvenes in Orlando, October 18th and 19th for their fourth annual meeting.

This year’s impressive faculty line-up and agenda include a keynote presentation by former Health and Human Services Chief Technology Officer Todd Park

For the 4th year in a row, Health Innovation Media, publisher of ACO Watch, including Fred Goldstein, President, Accountable Health, LLC and me will be onsite interviewing keynote faculty and select participants at the FlaACOs conference.

A video recap of last year’s gathering is here, as are two recent interviews with Farzad Mostashari, MD, CEO Aledade, and David Bjork, CEO, Commonwealth Health Advisors.

Wednesday, September 12th at 3PM Eastern, 12 Noon Pacific, we chat with FlaACOs CEO and founder Nicole Bradberry on PopHealth Week.

Join us!

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Accountable Care, ACO, Affordable Care Act

On ACOs and their ‘Stealth’ Upside via @Farzad_MD CEO @AledadeACO

by Gregg A. Masters, MPH

For those of you not on twitter and not following the former National Coordinator for HealthIT and now co-founder and CEO of ACO ‘Management Company’ Aledade, Farzad Mostashari, MD, I’m pasting his rich thread on ACOs and the prospects for its near term future as a tool in the healthcare finance and delivery arsenal. Conventional wisdom is and for the most part remains that ACOs are a ‘mixed bag‘ of predominantly ‘upside only’ (gain sharing), HMO-lite value based healthcare initiatives under the Medicare Shared Savings Program (MSSP) with at best mixed results on projected savings (variably calculated) to the Medicare Trust Fund.

Recently, CMS Administrator Seema Verma upped the value based transitional ante accelerating ACO movement into ‘risk’ issuing the Notice of Proposed Rule Making (NPRM) “Pathways to Success,”  see ‘CMS Proposes “Pathways to Success,” an Overhaul of Medicare’s ACO Program‘.

NOTE: For additional context on the thread offered by Farzad, check out: Founder and CEO of ACO Management Company Weighs in on Regulatory Uncertainty‘.

Posted Thursday, August 30th 2018 by Farzad Mostashari, MD  @Farzad_MD

1/ 2017 #MSSP#ACO Results! ACOs have scaled rapidly across the country! In aggregate, the 472 ACOs were accountable for nearly 9 million Medicare beneficiaries and $95 Billion – that’s a quarter of all fee for service, and almost half of the entire Medicare Advantage market.

2/ If you add up all the actual costs versus benchmarks, these 472 ACOs were collectively $1.1B under their benchmarks (more on whether that’s the right counterfactual later). Medicare shared $780 million in payments with the ACOs, netting the taxpayer $313M.

But wait! There’s lots of evidence that the benchmark underestimates the savings produced. @JMichaelMcW et al have shown convincingly that a true “difference in difference” approach would show substantially higher net impact. The green eyeshades folks at CMS OACT said add 60%.

3/ So that means that the best guess for MSSP savings is actually $1.75B in 2017, with Medicare paying out $780M (45%) – not a bad deal for the taxpayer!!! That does NOT count savings that come from lower costs to the taxpayer from Medicare Advantage rates that are And on quality – the average ACO earned 92% on their quality scores- and the scores improve the longer you are in the program according to the ACO Rule’s Regulatory Impact Assessment. 

4/ Here’s how the CMS actuaries put it:

And on quality- the average ACO earned 92% on their quality scores- and the scores improve the longer you are in the program according to the ACO Rule’s Regulatory Impact Assesment. (The Aledade average quality score applied was over 95%, and as high as 99.8% #GoKANSAS)

farzad aco data quality

6/ Lemme say that again…. ACOs saved Medicare over a Billion dollars in 2017. Cheaper than FFS, cheaper than MA. And they did it without cutting payments to doctors or narrow networks And they did it with higher patient quality. That’s called delivering what was promised.

7/ the Track 1 ACOs more than held their own here Best guess is that Track 2/3 generated 190M in savings (w 60% spillover) and received $95M (50%) Track 1: $1.5B in savings, $685M in payments (44%) (I’m still a believer in moving to 2-sided risk to help weed out ACO squatting).

8/ You know what was a great investment? Giving small and rural physician-led ACOs an advance payment to help them invest in infrastructure and setup costs. It was critical to the success of several of our @AledadeACO. More commercial payors should do this!

farzad aco data49/ But what this initial release does not help us do is see which type of ACOs are creating the most value. My guess is that it’s not much different from what the CMS actuaries found for PY 2016 – ACOs that include hospitals and directly control more of the cost of care do worse.

farzad aco data510/ The “low revenue” ACOs (in the OACT analysis – less than 10% of total cost of care came to them) were only a third of the lives in the program, but generated roughly 98% of the savings. THAT is why in the ACO Rule CMS proposed letting them stay in low risk models longer.

farzad aco data611/ That was the entire thesis behind “the paradox of primary care leadership” that informed the founding of @AledadeACO That is also why @AledadeACO partners with independent physician practices, not hospitals like others do. jamanetwork.com/journals/jama/…

12/ A quick analysis by the amazing @Travis_Broome divides these 2017 results by whether the ACOs included a “facility/CCN” (CAH, RHC, FQHC don’t count for this purpose) – Same pattern- 95% of the savings are coming from the ACOs that don’t include hospitals.

farzad aco data7

13/ Only 3.5M of the 9M ACO – attributed benecificries were cared for by the smaller ACOs that didn’t include a hospital facility- and they generated 95% of the savings. If you’re an independent practice seeing these results and the policy direction, why would you join a hospital ACO?

So how did @AledadeACO do? We are always very transparent with our results- even when things didn’t go our way- to look for ways to be better, and to make policies better that are holding back broader success. This article 2 years ago was full of pain. ajmc.com/journals/issue…

15/ This was a good year for @AledadeACO. Only 1/7 freshmen ACOs made savings – but we have learned to set expectations – it’s a long game. But 5/8 ACOs that were sophomores or older will get checks. And 2/3 that didn’t get MSSP crushed it in commercial contracts.

16/ But I’m more proud that EVERY ONE of our @AledadeACO have measurably improved health for the patients we are accountable for. We have increased wellness visits, transitional care, and chronic care management- and that’s translated into lower ED visits and readmissions.

farzad aco data8

17/ So where do we go from here? The #MSSP#ACO program has been a hugely successful motivator of nationwide transformation, but it can be reformed, and I believe @SeemaCMS is on the right track. Here’s what I would expect might change between the NPRM and the final ACO rule:

18/ The GlidePath to risk reduces ACO squatting, and brings revenue-based downside risk to MSSP, but the lowered gainshare in 1st 2 years (25%) is not enough to get new entrants and ACO investments. (as suggested) “low revenue” ACOs should get higher gain-share and lower MSR.

farzad aco data9

19/ The refined benchmarking method gives greater predictability by allowing risk adjustment and regional trending-which is great! But the cap on risk adj (3% over 5 years?!) don’t control for rising risk and introduces gaming on falling risk Instead of a cap, do renormalization.

20/ Concern about “windfall profits” led to an ill-advised proposal to cap regional efficiency at 5% – In Medicare Advantage if you are efficient, you get to keep the difference, which has spurred huge innovation in the space. why blunt improvement? 100% tax brackets are not good.

21/ Credit to CMS for trying to fix the unintended “regional comparator” problem – where rural ACO savings are reduced in direct proportion to market share. But the “national trend blend” proposal makes NO SENSE. Let’s just take ACO beneficiaries out of the regional comparison please!

22/ But the biggest impact of these results on the proposed rule should be on the idea that the way to benefit the Trust Fund is to protect it from ACO earnings. These caps, etc reduce ACO earnings – and ACO motivation/participation- and therefore reduced benefit to Medicare.

23/ The NPRM RIA estimates through 2024 these caps push $390M in lower ACO earnings, but lower ACO participation under these policies will INCREASE claims costs by $60M- and would prevent beneficiaries from receiving the benefits of the program. That’s not the right balance.

farzad aco data10

24/ The magic of accountable care is when physicians & Medicare partner together to sustainably align financial incentives, help beneficiaries and the Trust Fund. Medicare hasn’t behaved like some commercial payers who are still seeing zero sum. Let’s hold onto that partnership.

POSTSCRIPT:

As someone who’s been at the strategy table for hospitals, parent health systems, IDNs, or managed care joint ventures of all stripes AND an early adopter of this medium (I signed on to my twitter account in August 2008) believing the technology has the potential to ‘democratize healthcare’ from it’s provider centric DNA and fee-for-services fueled addiction to build ‘Cathedrals of Medicine’ separated by moats and silos from the very constituency they ostensibly ‘serve’, I’ve alternated from optimism to pessimism.

While we’ve seen some progress to date with a fair amount of co-opting, compromise and commercial exploitation along the way, I remain committed to the medium and those I follow who offer me both insights, and the connectivity to continue to refine my thought process and leadership contributions whether it be on twitter, our podcast series at This Week in Health Innovation, Health Innovation Media‘s video library,  PopHealth Week or ACO Watch blog posts. If you are NOT following @Farzad_MD or @AledadeACO, and are in the value based healthcare or accountable care space, I strongly recommend you do!

Accountable Care, ACO, Affordable Care Act, health reform

Founder and CEO of ACO Management Company Weighs in on Regulatory Uncertainty

by Gregg A. Masters, MPH

It’s been a while since my last post. I hope everyone is enjoying their summer. In California we’re dealing with very serious wildfire threat. Please hold space in your thoughts and prayers for all of those in harms way – especially the first responders putting their lives on the line for people, their animals and property.

Farzad Mostashari MD CEO Aledade ACO

Today, while scanning my twitter stream, I noticed a thread by Farzad Mostashari, MD, co-founder and CEO of ACO management company Aledade.

Considering the drift we’re experiencing in the absence of health policy clarity, the former National Coordinator for Health Information Technology offers his insights via this medium to senior health policy officials including Health and Human Services (HHS) Secretary Alex Azar and Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS).

Since the election of 2016 and preceded principally by Republican leadership bully pulpit messaging of an impending material health policy shift enabled via non-stop ‘ObamaCare is failing’ narratives – proffered by Donald Trump and echoed relentlessly by a mostly health policy illiterate Congress – we’ve been in a conflicted state as to the likely directional vectors reforming our ‘cottage’ industry’s $3.3 trillion spend in 2016 with a per capita $10,348 figure, accounting for 17.9% of U.S. Gross Domestic Product.

This is troublesome given the absence a clear path or unified agenda according to CMS:

‘under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for 2017-26 and to reach $5.7 trillion by 2026. While this projected average annual growth rate is more modest than that of 7.3 percent observed over the longer-term history prior to the recession (1990-2007), it is more rapid than has been experienced 2008-16 (4.2 percent).

In the recent survey titled ‘Third annual study of physicians and health plan executives‘ Quest Labs discloses ‘stalled progress on the road to value based healthcare, noting that 67% of health plan executives and physicians believed the U.S. has a fee-for-service healthcare system versus a value-based care system (27%).

This is noteworthy given several decades of ‘managed care innovation’ designed to advance the value based healthcare agenda. Clearly there is and has been resistance to this shift, health policy benchmarks advanced by HHS and CMS notwithstanding.

Now back to today’s timely thread advanced by Dr. Mostashari – the context for which is ACOs skittish over MSSP rule delay as CMS silence creates mounting uncertainty c/o @DB_Sweeney at Fierce Healthcare. 

Farzad Mostashari @Farzad_MD

It’s July 30, which is a hugely significant date to ACOs- It’s normally the day before the deadline to submit applications to @CMSGov for new and renewing ACOs. But the whole cycle has been delayed waiting for @OMBPress to get the MSSP proposed rule out.

fiercehealthcare.com/payer/medicare…

Farzad Mostashari @Farzad_MD

The administration has committed to accelerating the pace of alternative payment models and making improvements to shared savings programs. @SecAzar has appointed @AdamCMMi to help accelerate value-based payments. @SeemaCMS has spoken clearly about the need for reforms.

Farzad Mostashari @Farzad_MD

The ACO notice of proposed rule making was received at OMB on May 1, nearly 3 months ago! This is what regulatory uncertainty looks like, and it’s hurting physician practices and businesses who are waiting to make significant financial decisions. @MickMulvaneyOMB

Farzad Mostashari @Farzad_MD

There are thousands of physician practices who are weighing whether to move towards what congress asked them to do in #MACRA- move away from fee for service and towards alternative payment models. In many cases, physician-led ACOs are being weighed against joining the hospital.

Farzad Mostashari @Farzad_MD

There are hundreds of practices who are finishing their existing ACO contract periods and considering whether they move to 2-sided risk models as per admin pref, or drop out of the program, depending on whether the benchmark problems and unpredictability have been addressed.

Farzad Mostashari @Farzad_MD

These delays mean that ACOs will have a very short amount of time to make financially significant decisions in great uncertainty.

Every day of delay at OMB magnifies the probability of fewer physicians taking on advanced alternative payment models

That would be an “own goal”.

Recent converts notwithstanding, those of us who’ve been at this re-tooling or paradigm shift away from volume to ‘value based’ incentives – via a series of innovative delivery system models – for a while do get that ‘healthcare is complicated’. So aligning the stakeholders to move the needle from volume to value is a condition precedent in an already transformation resistant ecosystem.

Let’s keep it up and weigh in via this and other social mediums to keep the pressure on health policy leadership!

 

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Accountable Care, ACO, Affordable Care Act, Triple Aim

ACOs Fudging the Numbers?

by Gregg A. Masters, MPH

I came across this piece on the Healthcare Blog penned by Kip Sullivan, Esq, critiquing this article posted in Health Affairs last May ‘Bending The Spending Curve By Altering Care Delivery Patterns: The Role Of Care Management Within A Pioneer ACO‘. Sullivan raises valid points as the the legitimacy of claiming or inferring statistically insignificant results as a meaningful contribution of the subject ACO (a Partners Health sponsored venture) to ‘bending the cost curve’.

Sullivan un-bundles his argument effectively and raises issues for the industry writ large – including participating ACOs, their sponsors, the regulatory crew at both CMS and CMMI – and even the health policy press covering the sector.

I post the first few paragraphs of the piece below, for full reference the entire article on the Healthcare Blog is accessible via On the Ethics of Accountable Care Research‘.

  • Is it ethical for health policy researchers to claim that a Medicare ACO reduced “spending” by 2 percent if the reduction was not statistically significant?
  • Is it ethical for them to do so if they made no effort to measure the cost to the ACO of generating the alleged 2 percent savings nor the cost to Medicare of giving half the savings to the ACO?
  • Does it matter that the researchers work for the flagship hospital within the ACO that was the subject of their study?
  • Does it matter that the ACO and the flagship hospital are part of a huge hospital-clinic chain that claims its numerous acquisitions over the last quarter-century constitute not mere empire-building but rather “clinical integration” that will lower costs, and the paper lends credence to that argument? 
  • Is it ethical for editors to publish such a paper? Is it ethical to do so with a title on the cover that shouts, “How one ACO bent the cost curve”?

These questions were raised by the publication of a paper  by John Hsu et al. about the Pioneer ACO run by Partners HealthCare System, a large Boston hospital-clinic chain, in the May 2017 edition of Health Affairs. Of the eight authors of the paper, all but two teach at Harvard Medical School and all but two are employed by Massachusetts General Hospital (MGH), Partners’ flagship hospital and Harvard’s largest teaching hospital. [1]

Partners has been on a buying and ….

Comment

As someone who’s been in this dance since the mid 70s (PSROs, HSAs, HMOs, IPAs, PPOs, EPOs & all derivative plays) launched into Medicare risk via TEFRA (the Tax Equity and Fiscal Accountability Act) which introduced us to ‘Medicare Choice’ the for-runner of Medicare Advantage, I can say Sullivan’s critique of fully ‘burdening‘ ALL transformational efforts is rarely – if ever – factored into the volume to value pivot ‘investment calculus‘ of the effects of the intervention (in this case a Pioneer ACO) on the national spend.

It should be noted, the entire managed care industry can be assessed a gigantic collective FAIL for that matter as well. Since managed care penetrated ‘mainstream medicine‘ principally via extension of the HMO model typically on an IPA (independent practice association) chassis (vs. group or staff models) with the exception of a brief period in the 90s premiums continue their relentless upward march; while most payors continue to write commercial business only via an enterprise and industry wide cost shifting (risk transfer) charade. The tacit admission that there is no there there in the prevailing health insurance industry zeitgeist. They’ve proven they can NOT manage clinical risk, period.

So Kip, you might want to go a little lighter on those on the front lines trying to tame the ‘rapacious appetite’ of our ‘healthcare borg‘!

 

 

Accountable Care, ACO, LTPAC

Florida Association of ACOs Partners with Caredove

Sponsored Post:

22 Aug 2017 7:00 AM | Jacksonville, FL

Partnership Broadens Florida Based Organization

The Florida Association of ACOs (FLAACOs), the premier professional organization for Accountable Care Organizations (ACOs) and value based healthcare leaders throughout Florida, announced today a strategic partnership with Caredove, Inc. to provide its Statewide ACO membership with access to Caredove’s advanced, online e-referral platform which focuses on making it easy to transition patient care into home care and community services.  Under the agreement, Caredove will work with FLAACOs and its ACO members to establish and build out trusted networks between its ACO members and the organizations and agencies providing home care and community support services in the communities they serve.

Nicole Bradberry, CEO of FLAACOs, states:

“Our partnership with Caredove shows our continued commitment to bring additional value to our members and to take a leadership role in helping to address those aspects of care needs to help our member’s patients stay healthier in their homes and communities and to avoid costly readmission into the Acute care system”.

 It is anticipated that over 1000 home care and community agencies will be implemented on the platform, serving some 40+ ACOs across the state.  Caredove’s CEO, Jeff Doleweerd, said

“We spent thousands of hours examining how patients access service to different home care and community services. We saw the same problems over and over. Clinicians couldn’t locate helpful services, patients didn’t know what would happen next, intake staff were overwhelmed while triaging referrals, voicemails would pile up, and patients wouldn’t get connected with the care they needed. We created Caredove to solve these problems”. 

The development of the initial e-Referral networks in Florida under this agreement will pave the way for additional parties to join the platform.  We’re happy to be working with FLAACOs to bring Caredove to benefit the patients of their ACO members.”

Richard Lucibella, CEO of Accountable Care Options (Boynton Beach Florida) and FLAACOs Board member, is an early adopter on the Caredove platform. 

“As we’ve extended our Chronic Care Management efforts, we’ve gained a better understanding of the extent to which behavioral health and community social services can impact out patients’ health status. We’ve all known this to be an issue, particularly in the Medicare population.  Our CCM teams at Accountable Care Options continue our leadership position here on behalf of our patients, and are excited about the very real promise of the Caredove platform to support and potentially multiply our current efforts.”

“Overall, we’re seeing great interest and excitement about the platform in Florida and elsewhere”, says Jim Atkinson (Chief Growth Officer at Caredove), “and, we are working to expand the network through Community & Public Health groups as well as to bring Payers and Health Systems into the trusted exchange.”

ABOUT FLAACOs                                                                                                 

FLAACOs, also known as the Florida Association of Accountable Care Organization, mission is to provide members a vehicle to collaborate, ensuring that each healthcare organization grows and thrives. The Florida-based association aligns goals to help member ACOs shift physician incentives and improve health-care outcomes across the state. FLAACOs provides a voice for the accountable care marketplace and its participating providers, payers, and individual physicians. The goal of FLAACOs is to provide advocacy and support to all Florida accountable care organizations so that together they can become the health-care models of the future. To learn more click here.

ABOUT CAREDOVE                                 

Caredove is a healthcare solutions company providing its online platform to make it easy for patients to gain access to home care and community services.  Providers and care coordinators, as well as patients and family caregivers, can Search for geo-available home care and community services, Book appointments and e-referrals directly into those services, and Connect through secure data communication and organization-specific referral and intake workflows.  Caredove is a true healthcare platform that builds trusted webs between Referrers (Providers/Care Coordinators), Service Providers and their mutual patients.   Caredove currently covers over 80 categories of Home Care and Community Services.  On the platform referrals are always free and it’s easy to invite referrers and service providers to the network so there is no impediment to its growth in serving each local community. For more information, click here.

 

Accountable Care, ACO, Affordable Care Act

POTUS: The De Facto Health Wonk-in-Chief of the US?

by Gregg A. Masters, MPH

United States Health Care Reform

 

Love him or hate him President Barack Obama continues to demonstrate depth, insight, tenacity and a firm grip on the state of the U.S. Healthcare ecosystem dysfunction (and remedies) well beyond his formal training as a Constitutional scholar. Now as arguably one of the most legislatively accomplished President’s in U.S. history, particularly in light of the catastrophic train wreck he inherited from his predecessor and fueled by the nonstop ‘hell no‘ chorus of his disingenuous (often health policy clueless) political opposition he weighs in to set the record straight and for legacy purposes.

On July 11, 2016, JAMA released ‘United States Health Care Reform: Progress to Date and Next Steps‘ a rather scholarly construed unbundling of the state of healthcare then and now (pre and post ACA implementation). As a rather complex piece of legislation with many moving parts, and staggered implementation timelines (some as a result of political accommodation, some merely in tune with operational and prevailing healthcare delivery and financing legacy inertia) he steps up and in classic barrister narrative fashion lays out his case, and simultaneously calls out the next steps to remedy the U.S. healthcare conundrum.

POTUS aka ‘Health Wonk-in-Chief‘ Barack Obama concludes:

Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.

I strongly encourage you to click on and read the entire piece. It is well worth your time and wholly consistent with the ‘accountable care’ narrative (the subject of this blog) driving Medicare ACOs, their commercial derivatives and large portions of the moving parts of the ACA including the entire spectrum of ‘value based’ healthcare initiatives.

For this piece, I want to focus on four areas of the ‘next steps‘ called out by POTUS, namely: the ‘Health Insurance Marketplaces’, associated ‘delivery system reform’, AND the introduction of ‘a public plan option in areas lacking individual market competition, and finally ‘taking actions to reduce prescription drug costs’.

Health insurance marketplaces

So much of the ACA oppositional cheerleading liked to stress the ‘buying across state lines‘, and ‘malpractice reform‘ as ‘freedom and choice‘ enabled solutions to the health insurance quagmire. Never mind the rampant marketing, churn, double digit premium increases, retrospective rescissions or opportunistic denial rates, coverage limits and lifetime caps so endemic in the space. Not to mention ‘mini-meds‘ or ‘junk insurance’ so prevalent in the market before some baseline notions of what constitutes ‘insurance‘ in the face of typical health, illness or accident challenges one may experience in life. Here again, coverage baselines and the need for consistency to shop, compare and ultimately purchase real health insurance seemed like too much regulatory over-reach in a market where choice absent basic ground rules somehow seemed like a more attractive solution – at least to the often clueless opposition. The entire over-reach narrative was wrapped up, sold and bought as a ‘Government controlled healthcare takeover‘ per the vacuous talking points proffered by ACA oppositional research.

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Yet, the value proposition of an ‘insurance market place‘ whether Federally run, ‘facilitated’ or state delegated exchange option makes total sense if a transparent consumer market is to emerge from the chaos that is principally the individual market (non employer sponsored health insurance), though the group, or self funded ASO market ain’t much to cheer about either. Yet such a model was/is a proven way (witness the explosive growth of private exchanges) to introduce orderly competition in an otherwise opaque industry.

If you’ve ever run a health plan, built a managed care organization or contracted for hospital, physician, ancillary and pharmaceutical services (I presided over several employer sponsored health plan initiatives, MSOs, PHOs and IPAs tackling both capitated and discounted fee for service plan launch and operational issues in for-profit, voluntary and academic health systems) you will know that prudent (empowered, informed, etc.) purchasing of health insurance options requires clear apples-to-apples covered services comparisons, exclusions and non-covered item disclosures coupled with understandable pricing transparency and the cost sharing burden associated with your election. Absent this comprehensive clarity, listing guidance and/or requirements that an exchange imposes to ‘qualify’ eligible participants as candidates to choose from is virtually impossible. Standing up the infrastructure (people,  process, culture, etc.) to enable informed choice requires such an exchange environment whether public, private or some combination thereof to transparently market their services to the consuming public.

Delivery system reform

This is clearly the ACA’s ‘achilles heel‘ as there ain’t much there, there other than aggregate ‘on the come‘ efforts to tip toe into the waters of ‘clinical integration‘, measured risk assumption and a range of payment reforms collectively recognizing fee-for-service (i.e., do more to earn more) medicine as a burning platform. The most tangible form of this commitment is represented by Secretary Burwell’s call to migrate increasing shares of Medicare beneficiaries (including me, as I turn 65 in August and have elected Kaiser Permanente Senior Plan in San Diego) into Medicare Advantage, ACOs and a broadly cast series of ‘value based‘ healthcare arrangements by certain dates.

Standing Up the ACOFor the most part, ACA focused on insurance market place reforms. While delivery system reform was principally invested in ‘nascent’ ACOs (which are mutating as we speak amidst some 5 and 1/2 years of operating experience under the Medicare Shared Savings Program (one I like to call ‘HMO-lite’ which incidentally and inevitably is morphing into its more traditional gatekeeper HMO predecessor vs. the retrospective attribution methodology that undermines successful ACO risk assumption performance).

Additional delivery system reform was to come from pilots, demonstrations and other ‘innovations’ the Center for Medicare and Medicaid Services (CMS) funded via the Center for Medicare and Medicaid Innovation (CMMI) – who’s budget the Republican controlled Congress is determined to cut.  Here, I might add at the ACO Summit circa 2012 one of the most seasoned and successful risk savvy players I had the opportunity to work for and with in Dallas, Texas Richard Merkin, MD, the founder and owner of Heritage Medical Systems and Heritage Provider Network described as the ‘hidden jewel’ in the ACA.

As much as we’ve progressed into ‘managed care‘ whether discounted, bundled, case rates, per diems or global or partial per member per month (PMPM) capitation or percent of premium the majority (estimated at 80-90%) of healthcare payments are still of the fee for services variety. Back in the 80s when American Medical International (AMI) retained me to develop and preside over their managed care strategy for the California Region’s 19 hospitals I elected ‘Director of Health System Development‘ vs. Regional Director of Managed Care as a title, since I saw the strategic imperative of building and operating a hospital system as a partnership with payors, health plans and employer groups, in order to create value. Since ‘payors’ (as a group) were our customers to grow market share we needed ‘dots on the map‘ to effectively service their employees, members or insureds. That vision and strategy collapsed before taking root since quarterly earnings per share incentives of the hospital CEOs precluded the longer term strategy of acquisitions and divestitures consistent with a dots on the map game-plan could take hold.

Today, many years later health systems are ‘getting [payor/provider partnership] religion’ at least rhetorically, yet the prevailing provider/payor mindset remains ‘your revenues are my expenses‘ – not much progress! So don’t hold your breath on material delivery system reform other than the equivalent of re-arranging furniture on the deck of the Titanic while the ship sinks. Mergers, acquisitions, the ‘death of independent‘ medicine and rise of mega institutionally led health systems more or less ‘clinically integrated‘ notwithstanding.

A public plan option in areas lacking individual market competition

While POTUS stresses the individual market as the target ‘book of business‘ most at risk and dysfunctional absent effective reform the need for a ‘public option‘ across the board (group, self funded/ASO, fully insured, etc) is rather compelling, in my view. The recent failures of the ACA enabled ‘CO-OPs‘ notwithstanding (i.e., startup insurance companies or health plans rarely if ever achieve profitability in such a short timeline given the threshold need for ‘the law of large numbers‘ for actuarial credibility and the inherent volatility of the underwriting profit/loss cycle) do nothing to undermine the argument and need for a public option writ large.

I’ll go one step further and say ultimately our worshipping of ‘pluralism‘ in healthcare delivery and finance will ultimately give way to a ‘Medicare E‘ version as in Medicare for everyone. If public/private partnerships and business models could successfully manage clinical risk and meet the health and healthcare needs of their constituents we would have solved the problem in the 80s and 90s. Who remembers the ‘Harry and Louise‘ narrative battles (‘if the Government choses, we lose‘) on the Clinton Health Security Act aka ‘HillaryCare‘? So perhaps we’ll get there once we exhaust every other option to avoid ‘single payor‘?

Actions to reduce prescription drug costs

This seems to me the segment the easiest to resolve. Here I’d empower Medicare to negotiate direct and on behalf of it’s entire pool of beneficiaries, rather than dilute the market power via a tapestry of variably (under) performing ‘PDPs’. The political compromise that birthed Medicare Part D (the Prescription Drug Plan) materially undermines the market power of the ‘law of large numbers’ to extract best price from vendors, suppliers or providers of services. This make NO sense, and we’re paying the price! Here, politicos assured Medicare could NOT intervene with such market clout instead they routed the business upside to a pool private participants.

Add to this macro market efficiency undermining the challenges of orphan or rare disease market segments and the egregious and unaccountable pricing practices most recently popularized by ‘bad boy’ Martin Shkreli of Turning Pharma and more recently Valeant‘s abusive pricing admissions.

Yes, specialty pharma is at risk and a major source of heartburn for AHIP and it’s employer allies, yet PHRMA has a point. The drug discovery and commercialization process/pathways to market are unpredictable and fraught will high failure rates. Coupled with the long development runways and high costs, but absent a ‘ceiling’ or ‘pricing accountability framework’ pharma’s management credo will remain ‘whatever the market can bear‘ strategy lest ProPublica‘s (et al) investigational journalism (see their guide to investigating non-profit health systems) marshals sufficient public attention and shame forces reconsideration or retraction of Pharma’s lazy over-reliance on raising ‘P’ (Price) vs. the more complex market challenge of driving ‘U’ (units via share gains) becomes their duty and ultimate measure and basis of ‘success’.

So thanks BO! Despite all odds, you (and Max Baucus et al) pulled it off. And yes, it’s only a beginning and there’s lots of work to do. In the words of then Acting CMS Administrator, Don Berwick, who was wrongly blocked (by you know who) for permanent appointment [I paraphrase below]:

This will require no less than an all hands of deck, full court press to make happen [i.e., the triple aim].