Accountable Care: Do you have the right plan?


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U.S. healthcare sector is seeing turbulent times, driven by ballooning costs and the contentious Patient Protection and Affordable Care Act (PPACA). What’s more that despite spending more than double the OECD average on healthcare, the U.S. remains one of only three nations in the OECD forum that lack universal health coverage, says the author, an associate vice president at Infosys Public Services.

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Accountable Care: Do you have the right plan?

  1. 1. Insights Accountable Care Do you have the right plan? - Siva Nandiwada The healthcare sector in the United States is going through a turbulent period driven by ballooning costs and the contentious Patient Protection and Affordable Care Act (PPACA). What’s more troubling is that despite spending more than double the OECD (Organization for Economic Co-operation and Development) average on healthcare, the U.S. is one of the only three nations in this group to lack universal health coverage.
  2. 2. Why Accountable Care The current healthcare model, which reimburses providers with a fee for services rendered, is seriously flawed in that it rewards the volume of treatment rather than its The healthcare industry is wrestling quality. Accountable care does exactly the opposite by establishing an outcome-led with multiple challenges around model of reimbursement in which both payers and providers share risks (penalties) rising costs, inconsistent quality and as well as rewards (incentives) that are linked to the cost savings achieved. Second, inadequate access to care through accountable care aims to plug the holes and redundancies in care management concerted transformation programs. with an integrated approach. Research suggests that poor care coordination wastes These initiatives are driven by the between 5 and 6% of total U.S healthcare spend, a loss amounting to over US$ 25 considerations of affordability, wellness billion. An integrated care management model will go a long way in improving and patient-centricity. In other words, efficiency. Last, accountable care will improve data transparency and accessibility the goals of transformation are to: by means of electronic health records and the exchange of data among providers. • Enable the delivery of quality healthcare at the right (read Accountable Care Models transparent and fair) price; There are several models of accountable care broadly determined by the primary • Improve disease prevention and sponsor. In addition, there could be variations, based on the implementation of core patient well-being, and principles. However, risk sharing is common to all. • Uphold patients’ interest by empowering them and making Provider-led ACO both payers and providers Healthcare providers are the biggest supporters of accountable care. A recent study accountable for outcomes. found that two out of three identified ACOs were backed by hospitals or hospital A survey conducted by Infosys Public systems. The main reason behind this finding is that hospitals have the financial Services in October 2011, highlights and infrastructural resources required to practice accountable care, not to mention that close to 40% of payers plan on the support of physician groups, which are participating in various health plans. implementing accountable care- related solutions by the end of 2012. In Payer-led ACO December 2011, the Wall Street Journal Large players, some of whom have taken the initiative to create new accountable published the results of a survey care models, mainly drive this type of organization. For example, several “Blues” according to which 15% of hospitals have created an “Alternate Quality Contract”, which aims to slow down the trend were already engaged with an ACO of medical expenditure in the next three to five years. Other national payers have (Accountable Care Organization) launched a Collaborative/ Comprehensive Care initiative, and have enabled their and another 40% were likely to do so processes and systems to contract with different ACOs and Patient Centered Medical by 2013. These numbers indicate a Homes (PCMH). dominant and mature trend towards accountable care. Employer-led ACO Employers can choose between different ACO models or create one that best serves the needs of their workforce. For example, a self-funded employer could sponsor and organize its ACO, just as other organizations with their own health plans or on-site clinics, have done. Another employer might choose to contract directly with a provider system with an ACO. Others may want to access an ACO through a health insurer. PCMH This approach shares some of the principles – such as care coordination and payment reform – governing ACOs, yet differs from them in other ways. While ACO models share risk as well as reward, PCMH models do not levy any penalty on providers. PCMHs focus primarily on preventive care driven by Primary Care Providers (PCPs) in partnership with the care coordination team, in contrast to ACOs, which focus on the entire continuum of care including PCPs specialists, hospitals, labs etc. Payers2 | Infosys
  3. 3. drive care coordination in the PCMH model, whereasproviders do so in the ACO model. Interestingly, a coupleof Blues are in the process of implementing a hybrid PCMH Implementing Accountable Care – Key+ ACO model. Business Capabilities Provider Identification and Enrollment: Payers must first identifyGovernment Payers the providers to be enrolled based on their business objectives. InIntroduced in PPACA, the Medicare Shared Savings the PCMH model, payers, who have to contract with PCPs, need aprogram was formed to facilitate coordination and mechanism to track referrals. However, in an ACO model, payerscooperation among providers to improve the quality of typically engage with PCPs as well as specialists, hospitals andcare for Medicare Fee-For-Service (FFS) beneficiaries and laboratories to drive efficiencies and improve quality across thereduce unnecessary costs. care continuum.Designed for organizations with experience operatingas ACOs or in similar arrangements, the Pioneer Model Care Coordination / Team Setupwill provide ACOs that are successful in achieving shared In the PCMH model, payers need to plan care coordination, whereassavings in the first two years the opportunity to move into in an ACO model, this responsibility as well as ownership restspopulation-based payment in the third. The Pioneer Model with providers.will also require participating ACOs to engage in similararrangements with commercial and other payers. Stratification The most common approach to risk stratification of the populationImplementing Accountable Care – Key is based on claims, which traditionally comprised medical claimsSteps but now also includes pharmacy claims. Behavioral health data may also be integrated to improve the accuracy of stratification.Like any other transformation, the implementation ofaccountable care is accomplished in three broad phases – Attributionplanning, implementation and evaluation. Before gettinginto technology infrastructure and analytics, it is important Payers can choose one of many attribution methodologies, suchto put the basics in place: identifying business objectives, as the Dartmouth Model, the Employer Group based model orsetting up the provider-payer collaboration structure, and the PCP based model. They also need to establish mechanisms toestablishing performance measures and contracts. manage additions and terminations to the attributed population.Examples of business objectives include improvingprovider accessibility, reducing re-admissions and Performance Measures Definitionemergency visits and enhancing engagement between In an ACO model, payers need to identify population specificpatients and providers. There is more flexibility in care performance measures including potential incentives andmanagement, which was traditionally the preserve of penalties. In the PCMH model, payers need to identify key costproviders. Payers might collaborate with providers, or and quality measures and establish shared rewards.under the ACO model, loan the service to the ACO and Performance metrics include clinical quality measures, populationget paid for it. measures, patient engagement and experience, healthcare ITThe source of funding determines implementation. When capabilities, etc.payers contract with different entities in different markets, Budgets: Payers can predict costs based on historical claims datathe requirements of business processes and systems and set spending targets after assuming a certain amount (typicallyundergo a change. Therefore, adopting a phased approach in percentage terms) of savings.with nimble processes and architecture helps scale up forsucceeding phases. Care Plan ManagementThe shift towards accountable care is a years-long When payers follow an ACO model, most functions around caretransformation journey, which requires patience, management become the responsibility of the ACO. Providerssponsorship and the knowledge accumulated in previous create the care plans and track them without much involvementcycles. It also requires certain business capabilities, which from payers. In the PCMH model, the payer organization has to setare listed in the following section. up mechanisms such that PCPs create the care plan, monitor and track patient care with appropriate incentives. Infosys | 3
  4. 4. Implementing Accountable Care Key Technical Capabilities Meeting these business capabilities calls for some other technical capabilities. First of all, the entity needs portals and mobility capabilities to enable effective collaboration between various stakeholders, including providers and members. Integration and process orchestration is essential for care coordination. Data and analytics are critical components, since a significant number of business capabilities depend on leveraging data, setting goals, tracking and reporting. A “single source of truth” is needed to improve the accuracy of analytics. Analytics has a role to play in member attribution, health risk assessment, care plan analysis and performance measurement. Both PCMH and ACO models require budgets to be set at member or population levels based on historical patterns. Accurate reporting improves collaboration and operational efficiency. Also, as the ACO process matures, unified communication capabilities will improve collaboration between providers, patients and other stakeholders. About the Author Siva Nandiwada Associate Vice President, Client Relations - Healthcare, Infosys Public Services Siva Nandiwada is responsible for client relationships in Healthcare. He has over 14 years of experience in business consulting, managing senior client executive relationships, strategic planning, operations planning and marketing, and managing large scale technology-led business transformation programs. He is an alumnus of IIM, Ahmedabad, India.About InfosysMany of the worlds most successful organizations rely on Infosys todeliver measurable business value. Infosys provides business consulting,technology, engineering and outsourcing services to help clients in over30 countries build tomorrows enterprise.For more information, contact© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledgesthe proprietary rights of the trademarks and product names of other companies mentioned in this document.