Population Health, Risk-sharing Vital for Accountable Care

January 07, 2016 - Accountable Care Organizations (ACOs) were established in order to strengthen care coordination among a multitude of medical facilities, improve population health management, and stabilize rising healthcare costs. Through the Medicare Shared Savings Program, various quality improvement goals and cost reduction strategies were implemented.

However, early results show that Accountable Care Organizations may not be fully meeting the aspirations initially attributed to these models of care. In 2014, only 22 percent of ACOs that participated in the Medicare Shared Savings Program earned shared savings payments by reducing their overall cost of care.

Also, one study found that there may be little correlation between quality of care and earned savings in Accountable Care Organizations. Nonetheless, there are ACOs that are achieving significant cost savings such as Blue Shield of California and its relevant Accountable Care Organization, which saved $325 million since beginning the program five years ago.

Other Accountable Care Organizations that have successfully brought better care through population health management and quality improvements include the Health Share of Oregon, the Hill Physicians Medical Group, and the Marshfield Clinic.

To learn more about the steps Accountable Care Organizations need to take to earn shared savings payments and improve quality, HealthPayerIntelligence.com spoke with Mark Wagar, President of the Heritage Provider Network.

HealthPayerIntelligence.com: How can Accountable Care Organizations move further in gaining cost savings for the healthcare industry and the federal government?

Mark Wagar: “While they need to be careful about assuming more risk, I think the biggest thing for ACOs [to gain cost savings] is to be more aggressive. There are too many healthcare organizations with potential that are sitting on the sidelines and saying ‘Let’s do just shared savings because we can’t lose. We will bill for fee-for-service and if we happen to improve things, we get a bonus but otherwise, we don’t lose.’”

“While that may be a comfortable spot for healthcare organizations that aren’t familiar with value-based care in its more mature forms, it limits how much they can really control decision-making. Particularly if you’re a physician-driven organization like Heritage, it’s very important to assess best practices quickly, put them into effect quickly, and be candid with your physicians and the entire delivery system about best practices, disparities between different delivery systems, and ways to get the best outcome.”

“At this point, as a general healthcare delivery system issue in the United States, I think physician-driven organizations need to step up and demonstrate they can make a difference. They need to collaborate more with the larger organizations like Heritage.”

“I think physicians and other provider groups are justifiably frustrated when they invest money in making changes and save some money but not enough to hit their target and get nothing because of these costs. We need people moving in a positive direction.”

“If you believe there is 40 to 50 percent waste in the system, you have to spend 20 percent of the 50 percent to net 30. That’s huge. You need to be free to do that and it’s hard to do that if you’re just in a pure shared savings-only environment.”

HealthPayerIntelligence.com: How has the Heritage Provider Network worked to strengthen their population health management across multiple facilities?

Mark Wagar: “There’s a couple of things we did. For one, maintaining and developing a robust database is necessary. The advantage we’ve had is it’s a physician organization creating the database and having the most impact.”

“[We store] any and all pieces of information about patients – their living circumstances, their social and economic circumstances. When all that comes together, we’re able to list profiles earlier than some organizations as a result and get information that’s actionable in the hands of our primary care physicians.”

“Our specialists collaborate with hospitals on a fact-based basis and about what would be most helpful to complex patients and their families who need lots of services. [A large database of patient information] could delay the onset of further complications, reduce severity, or eliminate them altogether in the future.”

“It’s physician-owned and driven at Heritage, but we use all kinds of providers, care workers, and collaborate with local organizations. You have to pull all this together to really help a person in their total circumstance.”

“It’s not just they have a bad hip. They may be elderly and may have five or six other complicating problems related to addressing the hip. There could be family situations.”

“I think we made a mistake years ago as a healthcare industry in carving out behavioral health because it’s so integral to your medical health. You find out different things that you don’t find out in the traditional delivery system.”

“You might have wonderful offices and facilities and you’re waiting to take good care of somebody when they fall and injure themselves, but you haven’t discovered the thing that could have prevented that altogether or lessened its severity. That’s the biggest difference – we’re enabling our physicians and other providers to be proactive rather than just wait for people to show up when they feel they are in bad shape and need to see somebody.”

HealthPayerIntelligence.com: With only one-quarter of Accountable Care Organizations earning cost savings in the Medicare Shared Savings Program, do you feel that, over time, most ACOs will meet the goals of the program?

Mark Wagar: “I think there is potential positive news with the movement of the federal ACOs toward risk-sharing and risk-assumption. When we got into our Pioneer ACO, we were one of the first and we’re still staying in it and will move onto the next phase because we want to help demonstrate that independent practices as well as our large group organizations can have impact.”

“The way the baseline is constantly reset, the way the population attribution churns all the time is sort of artificial. The first phase of ACOs has been helpful to demonstrate there’s potential there – some organizations have been able to show that.”

“I think there is a way to meet the goals of the program, but they’re going to have to keep evolving the payment policy to a more truly value-based and population-based payment rather than try to keep making something out of fee-for-service.”

“You have a lot of elements that still would rather not move in that direction [toward value-based care] because they’re afraid of moving off on their current approach to their business side. But it has to happen. We can’t keep using the same payment method that would otherwise be unnecessary if we’re able to apply a best practice.”

“The end result is that you have to be doing the right thing as fast as you can for the patient and their family and their particular living situation. We know from large-scale organizations like Heritage is that it brings better quality, better health status, and lower overall cost.”

“We need more delivery systems to do that rather than everybody continuing to say they want to do value-based care but not wanting any of their approach to generating revenue to change. It has to.”

“Essentially, when you have a big delivery system saying that they don’t want to do this too fast, that’s saying that you want to do things that are not needed or completely unnecessary for patients. That’s not what it should all be about.”

HealthPayerIntelligence.com: What are the biggest benefits of accountable care for the health payer industry? Are there any disadvantages?

Mark Wagar: “The biggest benefit is it has gotten so many more provider organizations, physician organizations, and others excited about the opportunity. The vast majority want to do things right and do things better. This provides a potential to create an economic model where they can be successful at creating positive change faster.”

“It’s opened up opportunity not just for government coverage of beneficiaries but across the whole commercial spectrum. It’s got people talking and taking action.”

“The disadvantages – you want this to be a dynamic and constant improvement effort. You don’t embed things in the laws along the way or regulations that are too hard to change when a better practice comes along.”

“A good example is the bundled payment system. On the one hand, bundles are a step better than not doing anything. It causes people to be accountable for an entire episode over a period of care and follow-up. But other developments in technology, drugs, and new approaches to care management as well as preventive intervention, some of these bundles will disappear as a best practice preferred method of taking care of patients.”

“For example, there’s a risk that that’ll be the payment method for handling certain types of cardiac care and, if you can’t change it quickly, you’ll spend too much time continuing to complete that bundle’s requirements even though it’s no longer the preferred method.”

“You see that in other industries too. It’s hard to move away from approaches that become established. It takes time, but our job on the physician side of healthcare is to make that possible.”