Accountable Care, ACO

On Lessons NOT Learned from Managed Healthcare v1.0 and Beyond

by Gregg A. Masters, MPH

First in a series of lessons NOT learned tweets to be enhanced and re-posted to @ACOwatch.

In the 80s Sanford C. Bernstein analyst Kenneth Abramowitz predicted for-profit hospital systems would dominate the market by 2000. One of the strategy ‘diversification arrows‘ in the quiver of hospital system executives was to enter the insurance market via managed care strategies of various strains. During this consideration phase, my then employer American Medical International (AMI) elected (against my counsel) to build its own insurance company dubbed ‘AMICARE’ vs. creatively ‘parter’ with the insurance sector. /1

Editors Note: See: ‘SuperMeds Hoping to Reshape System‘ by colleague Michael Millenson.

/2 Context: Abramowitz predicted the relative competitive under-performance of 501c3 hospitals & thus their parents. Too clunky and with the wrong governance structure they’d be swarmed by their more nimble for profit operators with easier access to the capital markets required to support a full range of acute care services.

/3 Hospital Corporation of America (HCA) (follow @HCAhealthcare), National Medical Enterprises (NME)  & AMI (merged into @tenethealth) dominated the emerging for-profit sector. Humana was actively repositioning itself from a hospital owner/operator into a health insurance company with a robust portfolio of managed care products.

From major academic medical centers (see: ‘Corporate Takeover of Teaching Hospitals‘) to regional non-profits, c-suite strategists were aggressively courting their engagement given bond debt service coverage requirement concerns amidst an uncertain future.

/4 While all major systems where looking into ‘integration model 1.0’ (recently and cleverly rebranded as ‘pay-vidor’) the mission critical decision in board rooms was: ‘do we make, buy or lease’ the infrastructure? Some sensibly chose the ‘payor neutral’ route, while others built brands.

/5 As then ‘director health system development’ @ AMI California, and previously serving as founding member of Preferred Health Network (PHN) now portfolio company @UnitedHealthGrp post Pacificare acquisition, I counseled AMI to NOT build AMICARE, but partner with the ecosystem as a payor neutral aligned, managed delivery system.

/6 The theory was don’t compete with insurance companies but learn to partner and co-brand local market products from PPO to HMO to POS and ‘OWAs’ (other weird arrangements). Furthermore hospital operations & insurance company cultures were ‘oil and water’ and would not mix. More later (think pre @texashealth formation where Presbyterian Healthcare and Harris Methodist Health Services merged and the health plan leadership where shown the door while DFW market dominant Harris Methodist Health plan was shopped to Pacificare).

/7 Rather than ‘risk’ the payor neutral, lack of vertical integration control (the lessons forged at PHN) and what I advocated at AMI, most majors’ (including 501c3s) with some local market (operations & branding) variations chose to ‘build’ vs. partner. #wrong #move 

/8 I digress. On the branding thing (another wrongly reasoned corporate brand extension decision), what’s wrong with the pictures above? At AMI I advocated that the product/service is the local market asset (a co-branded insurance product) and NOT an extension of corporate nameplate!

/9 I reasoned hospitals serve as ‘hubs’ of community trust (not too mention economic engines and potential integrators of the then dominant independent practice of medicine) & thus the assets to brand & market locally. A sensibly if not delicately calibrated blending of corporate vs. local market identity is more likely to create the goodwill & trust to build upon. Again I was over-ruled by corporate marketing gurus shopping a corporate branded nameplate. For example, all AMI hospital names were preceded by AMI, e.g., AMI Tarzana Regional Medical Center, AMI Irvine Medical Center, etc. 

/10 There’s much more to the story here. This is just an install in the hospital/insurance dance we’ve witnessed in the 80s-00’s playing out today and in some respects completely oblivious to painful lessons of the past (think NorthWell Health’s strategic entry and rapid exit from provider sponsored health plan ownership due to massive losses).There’s a similar story on hospital/health system side (both branding and strategy), to be elaborated in a separate post. 

/11 Concluding thread as follows. So what happened to those systems who elected the ‘build’ option? Massive losses & write-downs were reported with d/c operations posted to the balance sheets of public companies’. The gamble of assuming ‘insurance risk‘ was repelled as if the plague. Health plan or health insurance division employees were looked upon with suspicion. Welcome to FFS maximization era which reigned supreme until the recent round of re-engagement with managing the burden of the total costs of care (think triple aim) envisioned by various risk transfer provisions in the Affordable Care Act (ACA), where Accountable Care Organizations (ACOs) serve as the principal – but not exclusive – workhorse.


Hey @VinceKuraitis, please checkout thread 1 – 11 below. Would love your thoughts and commentary. c #ACOchat #phychat #hcldr #JPM19 @jpenso1 @DonCrane @Farzad_MD @bobkocher @DrShlain @sgschade @davidmuntz @RejuvalifeBH @NACOMSO @NicoleBradberry @drnic1

Gregg Masters MPH @2healthguru

Replying to @2healthguru @jpenso1 and 10 others 

Vince Kuraitis @VinceKuraitis

Nice thread. On point.

IMO the jury is back — high probability of failure/$$ loss. (Most) hospitals do not have expertise, culture, patience, scale to become successful health plans.

Newer model of hospital/health plan JV MUCH more promising, e.g., Aetna + Inova.

John Moore @john_chilmark

Replying to @VinceKuraitis @2healthguru and 11 others

It may be promising Vince but we’ve been studying this for several years and still dumbfounded by the shear amount of distrust between provider and payer.

Requires a degree of transparency that few are willing to abide


Accountable Care, Affordable Care Act, health innovation challenges, public health

‘Non-Profit IDNs’: Where’s Da Beef?

By Gregg A. Masters, MPH

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

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

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

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

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

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

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

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

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

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

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

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

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

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


ACO, Affordable Care Act, Triple Aim

Some Context and Perspective on Standing Up the ACO

By Gregg A. Masters, MPH

I am passionate and write a fair amount about health reform, innovation in business models and the pursuit of a ‘sustainable healthcare ecosystem’ as I’ve been intimately involved in serial efforts to restrain the appetite of a change resistant industry that Shannon Brownlee aptly frames in Escape Fire the hard hitting documentary that recently aired on CNN, that:

…we’re in the grip of a very big industry and it doesn’t want to stop making money.

For more context on the nature of that ‘grip’ and it’s persistent hold see: Mayo v. McAllen – The Battle for the Soul of American Medicine?

Most of the readers of this blog don’t know me personally, so let me offer some historical perspective that may shed light on my standing in the conversation, and why you might want to heed or discount some of the warnings and arguments I have been making since it’s launch in 2010.

First up, I am a founding member of what was the disruptive innovator in the PPO space in California back in the mid to late 80s. We were a start-up joint venture (JV) between Los Angeles and Orange County flagship hospitals and their medical staffs.  As a condition for participation in the contracting network, member hospitals formed ‘PPGs’ (professional practice groups) which later morphed into IPAs as we expanded our book from discounted fee for services (FFS) contracting to at-risk contracting under the forerunner of Medicare Advantage, i.e., Medicare Choice, program and later Maxicare’s commercial IPA ‘Window Project’.

More on point though, we were organized as a payor agnostic ‘3rd generation PPO’ since we repriced claims to contracted amounts (both hospital and physician) and cut a contract sensitive ‘expected EOB’ for the payor to process (later we were extended check writing privileges for selet payors); AND we had ‘attorney-in-fact authority’ on behalf of member hospitals and PPG physicians to enter into contracts vs. shuttle them back and forth as was customary for prevailing ‘messenger model’ PPOs then and even to some degree now.

So posit the ‘payor neutral’ or ‘agnostic’ frame of reference coupled with a claims repricing engine and attorney-in-fact standing as an optimally positioned contracting entity or management services organization (MSO) in the managed care value chain.

Second, during the run up where the major commercial insurers and payors (i.e., Aetna, Blue Cross, Blue Shield, the Equitable, Prudential, et al), and then market leading hospital management companies (i.e., Hospital Corporation of America/HCA, National Medical Enterprises/NME, and American Medical International/AMI – the latter two merged to form Tenet) strategized their entry into the managed care space by creating their own or JV’d ‘insurance vehicles’ I actively counseled (initially via back channels and later direct) principals at AMI to not invest in AMICARE, but to position a payor neutral contracting vehicle, much like the one referenced above, to contract with any and all payors that made portfolio sense in their respective markets, given net revenue and physician alignment goals. The guidance was shunned, and approximately 36 months later, AMI discontinued AMICARE taking a charge in the neighborhood of $350 million.

Incidentally the collective proprietary entry of hospital systems into the ‘business of health insurance’ met with a similar unwinding at various points in time including the respective charges to balance sheets and income statements. In addition there followed an extended period wherein a residual culture war between those with integrated delivery system DNA, and the traditional dye in the wool ACHE types, played out for the hearts and minds of the prevailing paradigm of hospital leadership and forward vision.

Then in the mid 90s I was retained by a major hospital system, an HCA spinoff dubbed ‘HealthTrust’ to propose and implement a managed care strategy for 12 hospitals in its Houston Region. Shortly after my arrival in the Lonestar state, my best strategic counsel was to leverage the creation of a super MSO that contracted on behalf of the region’s hospitals, and their associated physicians once again tethering to the principal of a payor agnostic solution, partnered with independent physicians via IPAs, participating medical groups or direct. Unfortunately, the then prevailing ‘corporate wisdom’ and business model was to create the capacity for staff model like HMO delivery capabilities via the outright acquisition of certain primary care physician practices. In Texas that vehicle is known as a ‘501.a’ entity where the hospital (or other non physician sponsor) can be the sole member and acquire the assets of a physician’s practice and in turn employ him or her even though Texas is a corporate practice of medicine state.

Over time, that commitment unwound much like the previous iterations noted above as the model was untenable and did not produce the revenues, physician loyalty nor productivity assumed in the buyouts, let alone contracting objectives the hospital system had for it’s local market and associated physicians.

Finally, and the last seasoning experience since this sheds fair amount of insight into present day ACO challenges. Two major hospital systems merged in the Dallas Fort Worth market during the mid to late 90s. At it’s core, it was a strategic merger of two fundamentally oppositional cultures.

Party A, though a hospital system none-the-less made a commitment to the health insurance [or perhaps more accurately characterized integrated delivery system paradigm] fielded the largest provider sponsored HMO, including some innovative spinoffs up to and including a parallel ‘payor agnostic’ contracting platform that dealt with other payors, in addition to operating flagship hospitals in their north Texas service areas.

Party B was a more traditional hospital system with the usual inpatient, outpatient and niche services folded into an institutional assets portfolio with geographic distribution that engaged in managed care via downstream relationships with health plans across successive iterations of PHO configurations. Risk contracting was part of the mix, but the hospital system was not a top line sponsor of an HMO nor other insurance product strategy deferring to downstream participation.

Post merger of the two hospital systems Party B’s physician partner in the PHO asserted ‘a change in ownership’ and demanded the provisioned ‘mandatory redemption’ ie., share buyout option to effectively eliminate the ‘H’ from the P/H/O. In other words, the PHO would become a PO (physician organization).

As a senior player in the conversation, I advised the leadership of Party B to not take the ‘divorce’ personally, but stand down and focus on ways to play into a value added partner relationship to the PO, primarily via contractual arrangements and a coordinated contracting game-plan. This was not to be the chosen strategy and there developed a considerable tension and back tracking on established goodwill between the hospital system parent and it’s engaged physician leadership.

As it turned out, there were much bigger issues on the table, and while forging new relationships between Party B’s PO and hospital leadership was a priority, what took center stage was what would be the ‘successor culture’ amidst an insurance vs. traditional hospital operations mindset in the newly minted merged organization? In the former scenario (Party A’s culture), hospitals are cost centers, not the traditional nor familiar ground of operating them as revenue centers. Bottom line, the hospital culture prevailed, and shortly witnessed a sequential ‘return to core business operations’ where non core assets were shopped to strategic suitors, i.e., the HMO was sold to a publically traded entity looking for a commercial market share gains in the North Texas communities. Physician Standing Up the ACO

So believe it or not, we’ve been here before. There is institutional memory to tap, and leverage from direct if not indirect lessons forged from a combination of serial strategic misfires as well as purposeful vertical integration plays. The hospital scenario mentioned above is timely as it plays out against the downside of provider consolidation disproportionately favoring pricing discrimination against patients or their health plan proxies to restrain price hikes associated with undue asset concentrations. Hospital operators have quite rationally simplified their operating strategies, perfecting the unit production driven revenue formula, and have managed to their benefit in the North Texas market as well as elsewhere as a by product of risk push-back and a return to their core strengths, i.e., maximizing the unit performance of their hospital operations. A modest tweak in the formula is re-admission risk, shared savings targets, and meeting quality metrics.

Can independent ACOs reverse if not control for the downsides of hospital asset concentrations? Perhaps, but only with proper vision, management, infrastructure and capital to weather the unavoidable transitional storm. It is not a level playing field, nor are the financial incentives harmonized with the end game. Until hospitals are seen as cost centers in a reconfigured population health or community based context, they will remain responsive to volume driven (vs. value oriented) sick-care assets in the health and wellness continuum. The hope is ACOs properly equipped the the authority, standing and scale may able to align healthcare assets into the sustainable healthcare ecosystem that works for all of us – a rather ambitious undertaking by any measure.

The jury is out, the chatter is intense and no resolution in sight anytime soon. Stay tuned!

ACO, Affordable Care Act, HealthIT, Triple Aim

Are Institutionally Led ACOs ‘DOA’? I Say Heck Yah!

By Gregg A. Masters, MPH

At the end of the [business model and strategic positioning] day, it’s all about the intangible but mission critical ‘C’ word, i.e., culture, and whether two traditionally oppositional styles (physician v. hospital) can mash-up and ‘meaningfully integrate’ (clinically, legally & workflow wise) where previous attempts during the 80s and 90s failed.Are Hospital Led ACOs DOA?

Truth be told, fast forward a couple of decades and that cultural divide has yet to be reconciled a least on average. Granted there are some exceptions (most notably progressive integrated delivery systems who’ve aligned financial incentives but more importantly ‘vision’), and many of the oppositional dinosaurs (physician ‘free agency’ and solo practice are on an accelerated decline) are retiring or otherwise stepping aside. Yet even with the emerging digital natives sporting MD degrees, the cultural divide between clinicians and administrative types (or latter day suits of all stripes), remains a geopolitical land grab just beyond the reach of the individual ‘P’, “H’ and thus ‘O’. Yet, all healthcare is local right, so clearly there are differences based on locality and market considerations.

What’s different today?

Most will say that the difference between PHO 1.0 (for the casual reader or those with a professional event horizon shorter than a decade plus, PHO = a physician/hospital/organization), and the ACO movement spawned by the Affordable Care Act and most visibly iterated as PHO 2.0 roll-ups (since many of the more visible and publically tagged ACO efforts include an ‘H’) nets out to an accessible if not the ‘new and improved’ ubiquitous technology edge, coupled with smarter ‘productivity’ systems to hold docs accountable post acquisition (risk transfer) of practice assets or hiring.

Back when the internet was just getting going circa the 1990s and Jim Clark was pushing the Healtheon vision – an ambitious agenda to virtualize if not harmonize the complex healthcare ecosystem, we did not have the ubiquitous connectivity and prevalence of user friendly devices including mobile and tablets or the enabling bandwidth let alone national coverage.

Reading the ‘tea Leaves’

Yet even in the face of ‘smarter people’, ‘better systems’ and increasingly accessible, ‘robust cloud based services infrastructure’ (IT and otherwise) with attractive price points, is the people challenge any different today? At least two data-points suggest otherwise evidencing the underlying ‘dis-ease’ associated with the implementation complexity of a ‘soft sell’ re-engineering of American healthcare via the aggregate market uptake of ARRA, HITECH and key ACA (ACO) provisions.

According to a Athena Health’s 2012 ‘Physician Sentiment Index‘:

  • 69% believe EHRs can improve patient care, down from 75% the year before.
  • 75% believe achieving Meaningful Use is a burden.
  • 53% believe the Affordable Care Act will be detrimental to patient care, up from 50% the year before.
  • 58% believe most or all of the Affordable Care Act should be repealed, and 26% believe that some elements should be repealed. Only 16% said to keep it as is.
  • 63% believe the shift to Accountable Care Organizations (ACO) will have a negative impact on profitability, up from 48% last year.
  • 54% believe the quality of care will decrease over the next five years.

Add to the mix the following headline: ‘Physician Turnover Hits New High as Demand for Primary Care Increases’, which reveals:

physician turnover reaches the highest rate since the first year data was collected in 2005, and exceeds pre-recession levels. Medical groups reported an average turnover rate of 6.8 percent in 2012, according to the 8th annual Physician Retention Survey from Cejka Search and the American Medical Group Association (AMGA).

The survey also reported turnover of 11.5 percent among advanced practice clinicians (APCs), which includes physician assistants and nurse practitioners.

Also noteworthy is from the report’s ‘Other Key Findings’:

‘Culture is the Top Controllable Turnover Factor: Lack of cultural fit was the third most common reason given for voluntary departures, and the most common factor within the control of a medical practice.’

‘Demand for Care Teams Intensifies: More than three-quarters (76%) of respondents plan to hire more primary care physicians in the next 12 months, 67 percent plan to hire more nurse practitioners and 61 percent plan to hire more physician assistants. Strong teamwork skills will be vital to successful coordinated care.’

Bottom Line

So that ‘primary care sucking sound’ (remember Ross Perot’s NAFTA warning?) mostly to build out and staff ACOs, medical homes and their derivative ‘high value’ networks, are creating an environment where the natives are clearly restless, while the disconnect between industry rhetoric and the on the ground reality of the transformational imperative has never been more acute, nor the stakes so high.

ACOs were purposefully visioned as physician led enterprises, yet as is often the case in healthcare innovation amidst a change resistent ‘just say no’ culture the capital partner steps in to steward if not direct the initiative’s vision of organization, governance and equity (fairness if not capital) issues. Moreover, hospitals (or their parent systems) are the likely source of ‘capital’ – financial, managerial and infrastructure, ergo they step into the void of physician leadership to move the needle albeit in their narrow view of self interest.

Most institutionally led ACOs therefore are dead on arrival unless there are compensating factors which infuse [group practice] physician culture at the center of the enterprise in pursuit of the triple aim, or hedges where hospital executives clearly see their role as transitional enablers and not drivers of a physician seeded transformational process amidst a sea of conflicting incentives, values and workflows.


Hospitals Back in Insurance Biz: Good News or Bad News?

By Gregg A. Masters, MPH

I awoke this morning to read the following headline:

Hospitals Look To Become Insurers, As Well As Providers Of Care

To wit, I ‘tweeted’:

OK, it’s reallly ‘deja vu’ all over again! ‘Hospitals Look To Become Insurers, As Well As Providers Of Care’

For complete original article, click here.

Mind you this is both a context and content appropriate knee jerk thought for those with an event horizon beyond the 24 hours ‘news’ cycle. Yet, upon further consideration, it may not be that simple.

Let me explain. Some of us battle weary ‘pioneers’ (you know, per Elliott Fisher, MD at ACO Summit 2012: ‘pioneers take the arrows, but settlers get the land’ types) who executed the business models associated with HMO, IPA, PPO, POS, and eventually PHO rollouts (including their management companies/MSOs) beginning in earnest in the 80s, morphing into the 90s before crashing at or about the millenium, have seen this dance before.

BREAKING: It failed, and failed miserably, with some exceptions. Lets put aside the mature integrated delivery systems who walked the talk then and continue to model best in class integrated or more recently dubbed ‘accountable care’ for the rest of us and just focus on mainstream medicine and the typical community hospital as epicenter.

Back then the ‘big four’ proprietary (vs. voluntary) hospital systems where: Hospital Corporation of America (HCA), National Medicare Enterprises (NME), and American Medical International (AMI), and Humana. Not to be left out, the nonprofit hospital braintrust eyeing the competitive threat these amassing for profit systems represented, turned to their leading trade group, the Voluntary Hospitals of America (VHA).

Thus, all four drank the strategic ‘kool-aid’ fed in part to them by the best and brightest consultants and entered the insurance space. HCA joint ventured with The Equitable to form ‘Equicor’, NME fielded ‘AVmed’, while AMI really stretched the boundaries of creative thought by branding ‘AMICARE’, while Humana fielded Humana Health Plans. [NOTE: I advised AMI NOT to enter the insurance business with their own branded product, later joining the company once they divested (a $350 million charge to discontinued operations) their ill advised misadventure as Regional Director of Managed Care for 21 California Hospitals.] While VHA partnered with Aetna to form “Partners National Health Plans’ aka ‘PARTNERS’.

Thus, the race was on. Senior hospital executives rarely able to deliver on the upside promise of scale in the hospital business, i.e., better care, lower overhead cost, best management practices via ‘corporate colleges’, group purchasing, reduced clinical variation, and greater accessibility to the populations served, chose to up the ante and leap the grand canyon of the hospital business (one they had yet to materially improve) and enter the unfamiliar and potentially cannibalizing business of insurance.

The record is clear. The group as a whole failed, and failed miserably. What’s changed? And how might we view this ‘extravasation‘ differently? I will explore what might be different this time, and perhaps present another way of framing the value proposition of bridging these two very different different businesses in the next post.


How Hospitals Can Test the Waters of Accountable Care

By Gregg A. Masters, MPH

Found on the Accountable Care Bulletin.

Hospitals considering accountable care strategies have plenty of options to choose from, but deciding where to begin can be confusing. Joseph Damore, Vice President of Engagement and Delivery for Premier, explores how hospitals can test the waters of accountable care, from engaging staff in wellness to partnering with local employers on population health.


Inside ‘accountable care’, challenges to the ACO

By Gregg A. Masters, MPH

We hear considerable chatter on both sides of the ACO or ‘AC/e’ for accountable care focused enterprise absent the organizational drama of fielding an entity per se with the right structural roots or cultural ‘DNA’.

Yet, as someone with principal leadership immersion both setting up and managing the ACO ancestry down line if you will, I am mindful of the continuing granular nature of the challenge from the patient’s point of view.

When one considers the ‘faith based’ trust voucher like programs place on seniors becoming prudent (empowered) purchasers if not negotiators on their own behalf, the following experience raises some fundamental challenges in re-engineering a patient-centric healthcare eco-system.

In March of 2011 my 80 year old mother embarked on the labored journey of being ‘diagnosed’ and subsequently treated for breast cancer. The patient, an otherwise ‘age appropriate healthy’ and vibrant woman, took the parsed delivery and serial but strained confirmation of the diagnosis as an attraction into women’s health advocacy – I will explain shortly, and thus attempt to illustrate the accountable care challenge in this ‘n of 1’ experience.

I emphasize diagnosis with a mild dose of intentional sarcasm, as while the process played out it revealed multiple systemic flaws within our overpriced, discontinuous, and increasingly from a value proposition perspective ‘diminishing returns’ sick care ‘confederation’. Which according to Wikepedia is defined as:

A confederation in modern political terms is a permanent union of political units for common action in relation to other units. Usually created by treaty but often later adopting a common constitution, confederations tend to be established for dealing with critical issues such as defense, foreign affairs or a common currency, with the central government being required to provide support for all members.

But wait, this is offered in the context of a political situation. Precisely! Our healthcare, ah hem, metastasizing, commission based sick care fulfillment industry is very much a confederation of political sub-divisions defending their ‘turf’ if you will. Unfortunately in healthcare we lack the central unifying governmental role. Yet, in the typical hospital setting simply look at the political subdivisions of medical staff organization vs. an administration generally supported by a ‘paramilitary’ nursing organization, with more often than not a challenged Board of overseers given their stewardship agenda. Need another metaphor, check the myriad of medical specialty societies and watch them define and defend their interests, i.e., distribution of the cognitive vs. procedural income pie. Case closed?

Now back to the story, but first additional context to color the emerging irony. The source of my mother’s care is a indisputably a ‘best in class’ academic medical center (AMC) recognized by many third party authorities including HiMSS (the Health Information and Management Services Society) as a ‘level 7‘ (the best) facility in terms of it’s adoption and implementation of EHR technology as mission critical infrastructure.

One minor issue though is the ‘cancer center’ as a service line aggregating entity for the primary oncology specialties (e.g., hem/onc, radio therapy, etc.), is not online with the medical center’s EHR hub aka EPIC.

Yet the patient has been in a long term relationship with her primary care physician of at least seven years duration and who’s department, internal medicine, was the first service to go live with EHR implementation. Yet the primary care physician (and the entire department for that matter) was unaware of any of the patients experience or care process in the cancer center.

Thus a bit of a ‘data liquidity’ and patient care coordination challenge when it comes to a seamless patient experience relative to coordination and scheduling over certain legacy departmental silos. Remember the mantra of ‘patient centricity?’

Thus even in a top performing academic medical center that represents itself as a ‘health system’ in advertising and branding copy, the gaps in patient care are real and many. As a result, ‘accountability’ for the essential care coordination and broader navigation interests to obtain high quality and responsive care is in many instances deferred to the patient and his or her family as principal advocate.

Now back to the diagnosis issue. In March of 2011 an annual ‘routine’ screening mammogram created some diagnostic concern, as it was immediately followed by a (non routine) same day ultrasound. Shortly thereafter the departmental chair approached the patient with the following representation:

We see something we think is nothing but ask you to return in 6 months for a recheck [vs. the annual checkup interval]

The patient complies. Six months later a notice was dutifully received to return for the scheduled follow-up. This re-engagement interval began a series of progressively up-leveled and hierarchical interactions between an ultrasound tech, staff radiologist and ultimately the service or department chief with the following recommendation:

We still think it’s nothing but, I want a single fine needle aspiration biopsy done immediately

This call for ‘immediacy’ of the needle biopsy caused some genuine ‘terror’ in that moment for the patient. Unfortunately (perhaps at the time, though in retrospect a ‘good thing’), the procedure could not be scheduled until several days later.

Meanwhile in an alarmed state of an uncertain health status the patient called a women’s health activist for support. She recounted the facts of her encounters and AMC recommendations for follow-up. Upon hearing what played out, an appointment was immediately scheduled with a whole breast imaging (WBI) specialist outside the AMC’s medical staff. Prior to the appointment the whole breast imaging radiologist requested access to AMC’s mammogram and ultrasound imaging to date. The patient then journeyed back into the AMC requesting and obtaining same.

At the WBI center and post scanning the patient was told that of the two suspicious lesions identified by the AMC, neither where malignant. However, the whole breast imaging radiologist made a definitive call that another, deeper lesion not seen on the AMC mammograms or ultrasounds to date, was in fact ‘ductile invasive’ carcinoma.

Patient’s note:

Had I gone through with the recommended needle biopsies of the two suspect lesions, the likely results may have produced a ‘false negative’, with perhaps a return to the routine yearly screening schedule.

Needless to say this is not in the patient’s interest when an undetected malignancy goes untreated for another six or twelve months. [Editors’ Note: Clearly an incorrect diagnosis and resulting delay in appropriate care management can not be considered quality nor accountable care].

Now presented with conflicting diagnostic reads of her condition, patient returns to AMC for biopsies ordered by breast surgeon and presents WBI report to invasive radiologist who read it and says:

let’s go do the double core excavation biopsies.

Patient complies.

First lesion is ‘clean’ per radiologist. Second lesion caused some interactions between interventional radiologists centering on location and positional considerations of both breast and shoulder to correctly locate suspect lesion. Patient was not clear, i.e., she trusted the interventional process, as to whether AMC concerned themselves with ‘invasive ductile carcinoma’ call by the non AMC whole breast imaging radiologist.

To fast track forward, post multiple biopsies, and another MRI, the definitive diagnostic decision is delivered ‘you have cancer’ (some eleven days after WBI radiologist delivered the news).

This is one patient’s experience that raise issues on multiple levels, and may not be unique. Here are just some of the operational and system questions the experience raises on the path to accountable care:

  • Who is advocating for the patient when even in enlightened health systems too many of the constituent players remain domiciled in legacy departmental silos?
  • Why is the burden of delivering competent medical opinion outside of a network or health system solely on the patient to ‘make happen?’ Why such ‘data illiquidity?’
  • Who are the parties in interest to remedy systemic failures, i.e., departmental silos not communicating internally in an otherwise reasonably advanced health information technology savvy culture?
  • What role, if any, does the health plan have to re-mediate if not resolve systemic problems adversely impacting care coordination if not quality and outcomes of their ‘members’?
  • Can systems of care and academic systems in particular legitimately discount if not ignore ‘inputs’ provided by out of system participants? For instance, if a department of radiology dismisses whole breast imaging as a valid diagnostic tool, can they toss it aside and leave it solely to the patient to make it part of the diagnostic and treatment consideration process?

There is considerably more to this story. This includes only the breast cancer diagnostic and initial treatment process portion. The next phase will drill into the after treatment continuum and the many gaps in care that currently exist outside of tightly managed integrated delivery systems, and the real world impact this ‘black hole’ has on the patient both from a psycho-social as well as physical health status perspective.

The next blog post will focus on the role of the health plan to acknowledge and remedy apparent gaps in the downstream continuum of care once disclosed. We’ll attempt to frame the concern from both a population management and total health perspective under the triple aim umbrella. Considering the ACOs will assume broad systemic liability for the health status of the members assigned to the ACO all consequential gaps in care will need be remedied if the entity is to reduce readmission risk, and well as minimize the quality and cost consequences of delayed care due to incorrect or misdiagnosis of underlying disease, while restraining the growth rate of healthcare expenditures in an ‘at risk’ and aging population.