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ACOs: Premier's Blair Childs Sees Healthcare Payment's Future

July 13, 2012
by Mark Hagland
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The nationwide health alliance’s senior public policy executive looks at the emerging landscape around accountable care arrangements

The Charlotte, N.C.-based Premier health alliance has been on the front lines throughout the healthcare reform debate and everything that has developed since passage of the Affordable Care Act in March 2010. Among other elements in the ACA was an extensive provision for the creation of accountable care organizations (ACOs); and Premier executives and staff have been very busy helping hospital, physician group, and integrated health system member organizations move forward to create and develop ACOs, through the creation of the alliance’s ACO collaborative and other mechanisms.

As a result, a number of Premier member organizations were on the roster when the Department of Health and Human Services announced a list of 89 ACOs joining an initial group, for a total of 154 to date (including 32 Pioneer ACOs), now participating in the Medicare Shared Savings Program (MSSP) under the federal Centers for Medicare and Medicaid Services (CMS).

Shortly after that list was announced, Premier’s senior vice president for public affairs, Blair Childs, based in the alliance’s Washington office, spoke with HCI Editor-in-Chief Mark Hagland regarding the current state of ACO development, in the wake of the Supreme Court’s June 28 overall affirmation of the constitutionality of the ACA, and the policy landscape ahead for ACOs. Below are excerpts from that interview.

What was your reaction to the release of the list of 89 new ACOs?

First off, it pretty much doubled the number of ACOs. So I think it’s a very positive sign, and I think this has been the biggest challenge we’ve had in healthcare, is that the payment system discourages innovation, and really, more efficient and effective care delivery. So I just think that all of this movement in this direction is a very positive sign. And it’s interesting, the acceleration that’s gone on with the Pioneers and this MSSP group, shows the level of acceleration that could occur here. I also think that the Supreme Court decision was significant in that there’s still going to be debate around coverage expansion, but the potential for everything having to start all over isn’t going to happen, and therefore, these payment and delivery system reforms aren’t going to change. So the movement is very clear in this direction. There will be ongoing questions about Medicaid expansion. But in terms of the payment and delivery reforms, this will now move forward.

Blair Childs

I didn’t hear anyone speak out against these kinds of reforms during the healthcare reform debate two years ago.

Well, you know, the Republicans were in an awkward position [following the passage of the ACA, and leading up to the Supreme Court decision on June 28], in that they kind of had to broad-brush everything. But if the entire law had fallen, and we had had to start all over, who knows where it would have gone? At this point, it’s tweaking, in terms of payment reform. There aren’t going to be fundamental changes in terms of the overall direction.

As I wrote in a blog earlier this week, a lot of self-appointed experts may have been surprised, in that they had predicted that only very market-dominant integrated health systems would volunteer to participate in the Medicare Shared Savings Program [MSSP].There were a lot of relatively small physician networks, yes?

Yes, and that’s even more true with the first MSSP list. But your point is spot-on.

Why do you think so many smaller networks, and physician-driven networks, have moved forward to participate in the program?

I’m not surprised that smaller physician networks would participate; some people believed that those types of networks wouldn’t try this, but looking at the final rule, we thought many would, so we weren’t surprised at all. And I think physicians see the opportunity to gain more power in the market, if they have a defined and loyal group of patients to work with; I think they feel this is a way for them to be rewarded in the process. And point two, there are insurance companies encouraging this, because they’re building networks using MSSPs and ACOs; so there’s a Medicare market aspect and a commercial aspect to this, that’s appealing to some of them.

Do you believe this entire phenomenon might move forward relatively fast?

Yes, absolutely. My point about acceleration is, I think people are going to start going in this direction. And because of the way the rule is designed, with three years at no risk, I think that will encourage people to jump into this. And we also see that once an ACO develops in a community, you have a community reaction, and you tend to have more than one in a community, because it changes the dynamics of interaction. So you’ll see that it metastasizes in certain areas, because it changes the whole market dynamic.

Do you believe that the Innovation Center within CMS might create more potential opportunities, with the possibility of iterative change around accountable care?

Yes, we anticipate that CMS might come up with a new rule that would expand or add to this; we’ve been talking about these specific things.

What do you think will be learned in the first couple of years by these organizations?

It’s really learning how to identify high-risk, high-cost patients, and better manage them. And there are a lot of different ways that folks can innovate on patient care management.