Q4 2012-ACOs


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Read about the Tipping Point in Healthcare: Are ACOs the Way to Go?

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Q4 2012-ACOs

  1. 1. “ACOs offer a way for disparate providers to come together and act as if they are clinically integrated,” says Albert Tomchaney, M.D., senior vice president and chief medical officer of Franciscan Alliance in Indianapolis. “In most cases, care coordination hasn’t been set up this way. Patients have had to make sure themselves that all their medical activities are coor- dinated. But ACOs, by design, are supposed to be about administering care across a care continuum.” In recent years, the medical community has amassed more and more data about patient outcomes, and “it just doesn’t make any sense when we see incredible variation in care,” Tomchaney says. “That data has helped set a platform for the realization that we have a better way to move forward.” For some organizations, that better way is to form or join an ACO. Here’s what you need to know about them. A Foundation for ACOs The Affordable Care Act specifically mentioned ACOs and paved the way for hospitals and physicians to form accountable care organizations. Earlier this year, 32 leading health-care organizations from across the country began participating in a new Pioneer ACO initiative, which was expected to save up to $1.1 bil- lion over five years, according to Health and Human Services Secretary Kathleen Sebelius. Tipping Health Care at a But ACOs are not an entirely new idea. “Models like this have been talked about for 10 years or more,” Tomchaney says. “The Mayo Clinic, the Cleveland Clinic and others have long been clinically integrated, where nothing happens in a silo. And Elliott Fisher Point wrote about such a model at Dartmouth years ago.” In addition to the models in practice at some lead- ing academic medical centers, the concept of clinical integration has even been attempted by Medicare before. Modern ACOs are linked to the Medicare’s Physician Group Practice (PGP) Demonstration, which ran from 2005–2008, says Bill Woodson, A senior vice president and national thought leader Are ACOs the Way Forward? for Sg2, a health-care intelligence and information services company based in Skokie, Ill. In that project, ccountable care organizations 10 large physician groups participated “in something (ACOs), included in the Patient that looked like an ACO,” Woodson continues. “In the Protection and Affordable Care end, they all achieved quality improvements, but they Act as a new model for deliv- didn’t necessarily cut costs.” ering services to patients, have However, much was learned from the PGP received a great deal of atten- Demonstration that can inform the formation of ACOs, tion. The model is intended to encourage primary care including “what tools to use and how to conduct out- doctors, specialists, hospitals and other caregivers reach to a population,” Woodson says. to provide better, more coordinated care for people In addition to the lessons learned from past attempts, with Medicare while cutting costs. But as with any technology has been improved and widely distrib- change to patient care delivery, joining or forming an uted, which makes a new attempt at coordinated care ACO is not an easy fix. more feasible. “The electronic era and information24 The Source | Fourth Quarter 2012
  2. 2. technology, while still working through some issues, cost more and do not necessarily yield better quality,are supportive of this model,” Tomchaney says. Wessels says. At Franciscan Alliance, which is part of the Pioneer “A lot of people have back pain, for example. It mayACO, a common IT platform across ACO provider be just a fact of being human, but it can be treatedoffices, as well as electronic medical records and other with surgery. A lot of physicians end up doing a lot ofbuilt-in tools, have allowed for better communication procedures that create relief temporarily but in theamong providers. In addition, modern decision support long-term, the outcomes for those who have surgerysoftware—incorporated across ACO providers—helps and those who don’t have surgery are the same. Eithereach entity provide the right care at the right time, he way, the patient is convinced the doctor helped himsays. For instance, if a patient visits his primary care or her—either by relieving the pain with surgery ordoctor, who has the ultimate responsibility for manag- by helping them deal with chronic pain. If we can geting all his chronic conditions, the doctor’s computer doctors on the same page to discuss what is the mostsystem will tell him “what the patient has done to meet conservative thing we can do to treat this commondesired outcomes, as well as what he hasn’t done,” problem, the outcomes improve.”Tomchaney explains. This clinical integration is the major selling point for ACOs. By working in concert to treat a communityBanking on Advantages of patients, “care will shift to less costly settings and “It can be Updated technology and new processes have led to readmission rates will decrease,” Woodson says. “As challenging toearly successes for ACOs, highlighting the advantages a result, ACOs will improve the health status of the undertake thethat these models can bring to a community and to population they serve.” prospect ofpatients. For providers, “it’s about innovating in their In order to accomplish these results, ACOs realign an ACO whileservice delivery area,” says Gunter Wessels, partner the incentives of health-care delivery, paying for treat- maintainingand health-care practice principal at Total Innovation ment quality rather than treatment volume. “the mindsetGroup, Inc., which consults with ACOs on commer- of redefiningcialization efforts. “The reason for an ACO is to create Considering the Challenges value toalignment, to do the same thing to the same sorts of While ACOs sound promising, “making the required everyone.” Thepatients every time, so that quality is achieved.” cultural transformation is very hard,” Woodson goal has to be For instance, currently there is a focus on doing acknowledges. “And there are a lot of unknowns about an outcome ofmore complex and more severe procedures, which whether they will work.” better care at For physicians and health- a much lower care facilities, launching or cost.” joining an ACO usually means making significant investments Albert Tomchaney, M.D. of time and money to set up the systems and reconfigure their business models. “Medical practices need to transform into medical home models, which incurs costs in finances and resources,” Tomchaney says. “Providers are being asked to retool and redesign their processes, and right now, the amount they need to spend and the amount they will get back from the pay- ers is probably not a dollar for dollar exchange.” In addition to fronting the capital to switch to an ACO system, physicians and health- care facilities also must rethink their traditional methods of operating. Fourth Quarter 2012 | The Source 25
  3. 3. Moving Forward For hospitals and physicians who are considering a move to an ACO or similar coordinated care model, it’s helpful to have a broad understanding of the cul- tural transformation risk. When Sg2 clients consider launching such a collaboration, “we caution them that going into this model is very risky,” Woodson says. “You need to understand what your financial exposure is going to be. And be deliberate about your timing: Don’t be reactive.” To make an ACO work, advanced systems for transferring information are required. In many orga- nizations, a switch to electronic medical records and the use of mobile devices such as smart phones and tablet computers may have set the groundwork for a successful ACO, Tomchaney says. In addition to providing systems for various pro- viders to communicate with each other about patient care, successful ACOs also utilize technology to get patients more involved in their own care. “You have to have a transformation process that lets you reach out to patients in ways you haven’t before,” Successful ACOs utilize Tomchaney says. “For instance, Franciscan Alliance has a patient portal that allows patients to get online technology to get patients more to see their lab results, make their own appointments involved in their own care. and do other tasks. That helps empower the patient to be more accountable in their own care.” While not every health-care organization is rushing “Historically, we have been trained to do things to form an ACO, there is widespread agreement that in an opposite way,” Wessels says. “Physicians are the future model of providing care will look different having to change quickly, and health-care organiza- from today. tions were originally set up based on a compensation “Many of our clients see this as a transition model,” model that is changing before their eyes.” Woodson says. “It may not necessarily be the way Participation and leadership from physicians is we’ll end up, but it is a change that is moving us on vital in making ACOs work, according to Woodson. the way to where we’re going.” But in many places, the deeper pockets of a local What will the end result look like? Nobody can be“Many of our hospital or hospital group are required to finance sure, but there is likely to be considerable variation,Clients see this the technology, staff and other upfront costs associ- Woodson says. For instance, in some rural areas, ACOsas a transition ated with launching an ACO. While hospitals may may not be feasible. Academic medical centers maymodel. It may be needed to make an ACO work, they can also have relationships with ACOs but not be a part of one.not necessarily “become a cost center” when the model takes off, Each facility and group of providers must considerbe the way as the emphasis will be on treating patients in medi- the needs and resources of their local communities.we’ll end cal offices and keeping them out of the hospital to Even if forming an ACO is not the answer for yourup, but it is a cut costs, Woodson says. organization, it’s important to be asking questionschange that It can be challenging to undertake the prospect of and looking for the right solution.is moving us an ACO while maintaining “the mindset of redefining “The current costs of health care are not sustain-on the way to value to everyone,” Tomchaney adds. “The goal has able,” Tomchaney says. “The country is aging. If wewhere we’re to be an outcome of better care at a much lower cost.” think we have issues today, think of what it will be likegoing.” Finally, ACOs just won’t work well in all areas. 10 years from now, with no more money and lots moreBill Woodson “Not every geographic location can be an ACO area,” people needing health care. We are at a tipping point. Wessels says. “You can’t stack incentives in every This isn’t going to go away, no matter the outcome of place. The majority of the impact of ACOs will be the upcoming presidential election. The need for more in population centers.” coordinated care is here to stay, no matter what.” S26 The Source | Fourth Quarter 2012