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Value-Based Care News

The Role ACOs Play in Propelling Population Health Management

With more financial incentives coming from the federal government to reduce hospital readmission rates, healthcare providers including hospitals and ACOs are pursuing population health management strategies.

By Vera Gruessner

- Patient and family engagement, care coordination, data analytics, and population health management are all major goals when designing and adopting an Accountable Care Organization. The Commonwealth Fund outlines three different cases of developing an Accountable Care Organization in an effort to reduce costs, improve the quality of care, and essentially boost the health of populations including Medicare, Medicaid, and commercial insurance beneficiaries.

Accountable Care Organizations

The results show that payment reforms and data analytics drive accountable care and improved care transition strategies. The Accountable Care Organization is based on ensuring a reward system for a medical team’s improved performance levels through the participation in the Medicare Shared Savings Program.

Along with the Medicaid and Medicare programs, commercial insurers are also looking to partner with hospitals and clinics that focus on value-based care rather than fee-for-service payments. The formation of the Accountable Care Organization is based on reaching the Triple Aim of Healthcare – developing quality care improvements and enhancing population health at decreased costs.

Three case studies

The three case studies outlined by The Commonwealth Fund show the early successes that other Accountable Care Organizations can follow to ensure a more effective model of treatment and medical services. The case studies included the Medicaid-based ACO Health Share of Oregon, the hospital and health plan partnership of the Hill Physicians Medical Group, and the Marshfield Clinic, a Medicare-based ACO.

The Health Share of Oregon served nearly 230,000 ACO beneficiaries while the Hill Physicians Group served 41,000 and the Marshfield Clinic had 30,000 Medicare beneficiaries.

Some of the similar strategies these three organizations shared in common in pursuit of improved population health management include care redesign based on better coordination and healthcare delivery, care management of chronic and complex conditions, and patient and family engagement initiatives.

Using data analytics among ACOs

Each site also developed methods for integrating data analytics toward stronger care coordination. There were strategies that could help doctors identify which patients needed more intensive care and which ones needed assistance in transitioning from the hospital setting.

 “[Population health data management] refers to the information technology (IT) component of the clinical and administrative aspects of care,” a paper published in Health Affairs explains.

“This goes far beyond an electronic health record and requires IT resources and tools to collect data on individual health status; stratify and target populations based on their risk and need for care; engage people in their health using patient health records or online portals; connect to a health information exchange to ensure portability of records; and direct physicians toward appropriate, evidence-based care protocols. Equally important, all of these IT systems must be interoperable for seamless data flow.”

The Hill Physicians Medical Group had an alert system that analyzed data to warn physicians when patients were at risk of hospital admissions while the Marshfield Clinic developed methods for studying patient outcomes as a way to strengthen population health management.

“The ACOs also faced challenges. Chief among these was the difficulty of changing patient and provider behavior. The sites that have produced early results had an infrastructure for robust data analytics to monitor performance and identify opportunities for improvement,” the report stated.

“The Marshfield Clinic had an enterprise-level integrated health information system—including telehealth capability—that connected its geographically dispersed ambulatory care sites and physicians. None of the sites had access to a functional regional health information exchange. This capability would likely have accelerated ACO development efforts among partners in Health Share and the Hill–Dignity–Blue Shield ACOs, which improvised in sharing information.”

All three sites stressed the importance of sharing information in a timely manner across their ACO partners in an effort to ensure the best possible outcomes for their patient base. New payment models were also created in an effort to reduce costs across health plans and partnering medical facilities.

Cost Savings and Payment Models

ACOs that participate in the Medicare Shared Savings Program, for example, are able to share in up to 50 percent of its cost savings as long as the organization reaches quality performance standards and the minimum savings rate.

The final results from The Commonwealth Fund’s report finds that the Hill–Dignity–Blue Shield ACO and the Marshfield Clinic have established cost savings across the board. When it comes to the Medicare Shared Savings Program, it may need more time to exhibit significant cost savings especially now that ACOs are investing more in reducing spending in the post-acute care arena.

ACOs Drive Population Health Management

A study published in the Journal of Health Politics, Policy, and Law identifies some more ways that Accountable Care Organizations and hospitals can work toward improving population health management.

With more financial incentives coming from the federal government to reduce emergency room visits and hospital readmission rates, healthcare providers including hospitals and ACOs are pursuing population health management strategies.

The prior fee-for-service payment system reinforced healthcare providers in following a single-encounter health service for its patient base instead of a more holistic approach to treating a patient before a condition becomes severe and preventing disease across populations.

However, with new payment models and the Accountable Care Organization, more providers are being incentivized to contain rising healthcare costs and improve the quality of their services such as through stronger care coordination.

Through visiting nurses, email, and phone calls, better systems of care transition have been developing in order to help patients with chronic conditions such as diabetes or heart disease.

The paper goes on to define one problem with population health management, which is that ACOs are treating and improving the health of their particular beneficiaries, “but the patients of most ACOs constitute only a fraction of the people living in the ACO’s geographic area.” It may be more challenging to make a real difference for the overall health of entire populations unless ACOs and payment reforms are established throughout the entire healthcare industry.

“ACOs have neither the incentives nor the capabilities to address geographic population health. The incentives ACO contracts provide are to control the cost and improve the quality of care only for their attributed patients, not for the entire population of their geographic area,” the paper continued.

“Proponents of ACO and hospital investments to improve geographic population health argue that ACOs and hospitals need not try to do everything themselves or try to substitute for government efforts. But they could lead by example (with their own employees and in their own built environments), and they could help catalyze and cooperate with broader efforts to improve population health.”


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