Insufficient IT and analytics capabilities are retarding the ability of even the largest and almost advanced medical groups in the U.S. to take on financial risk in risk-based contracts either with the federal government, or with private health insurers. That reality is reflected in the results of a survey of medical group senior executives released on Sep. 17 by the Alexandria, Va.-based American Medical Group Association (AMGA), whose member medical groups are among the largest and most highly evolved in U.S. healthcare.
Indeed, Chet Speed, AMGA’s vice president, public policy, says that he and his colleagues at the association are learning that the senior executives in AMGA member groups are finding themselves distressed at how challenging the taking on of financial risk in accountable care organization (ACO) contacting is turning out to be. That is the case whether such contracting is taking place under the aegis of the Medicare program—through its Pioneer ACO Program, its Medicare Shared Savings Program (MSSP), or its new Next-Generation ACO Program—or whether it is through any number of commercial ACO contracts that virtually all of the major private U.S. health insurers are now offering.
The “AMGA Survey on Risk Readiness,” conducted this summer, captured the views of 115 respondents, representing 101 member organizations. Those who responded to the survey represented the following types of organizational structures: multispecialty medical groups (43 percent), multispecialty medical groups with their own health plans (5 percent), integrated delivery systems (37 percent), and integrated delivery systems with their own plans (15 percent). In terms of the numbers of physicians involved, the bulk of the organizations involved encompass 151-500 physicians (42 percent), and 51-150 physicians (31 percent). Smaller numbers of organizations encompass 500-1,000 physicians and 1,000-plus physicians (10 percent each), and 3-50 physicians (7 percent).
Meanwhile, the revenue sources of survey respondents’ organizations are indeed shifting, though not as rapidly as some might think. On the federal side, their current mix as of this summer was an average of 45 percent fee-for-service Medicare; 22 percent Medicare Advantage; 11 percent MSSP/Pioneer ACO, or NextGeneration ACO; 10 percent Medicaid managed care; 10 percent Medicaid fee-for-service; and less than 4 percent bundled-payment. Those numbers will shift in 2016 to: 41 percent fee-for-service Medicare; 24 percent Medicare Advantage; 12 percent MSSP/Pioneer/NextGeneration ACO; 11 percent Medicaid managed care; 9 percent fee-for-service Medicaid; and just under 4 percent bundled-payment. In 2017, the averages will be: 34 percent fee-for-service Medicare; 27 percent Medicare Advantage; 15 percent MSSP/Pioneer ACO/NextGeneration; 12 percent Medicaid managed care; and 8 percent fee-for-service Medicaid.
Things are shifting more rapidly on the commercial insurance side. In 2015, 78 percent of surveyed organizations’ revenues are coming from fee-for-service health insurance payments; 7 percent from shared savings and ACO programs; 5 percent from shared risk programs; 4 percent from partial-capitation contracts; about 2 percent from full-capitation contracts; and less than 2 percent from bundled-payment contracts. In 2016, those averages will be as follows: 68 percent from fee-for-service payment; 12 percent from shared savings/ACO contracts; 8 percent from shared-risk contracts, 4 percent from partial-capitation contracts; 5 percent from full-capitation contracts; and 4 percent from bundled-payment contracts. In 2017, the averages will be 59 percent from fee-for-service payments; 14 percent from shared savings/ACO contracts; 11 percent from shared risk contracts; 6 percent from partial-capitation contracts; 7 percent from full-capitation contracts; and four percent from bundled-payment contracts.
In a key set of measures, executives responded to the question of how long it would be before their organizations can accept downside financial risk in contracts. Just 18 percent said they would be able to do so within one year; 24 percent said they would be able to do so in between one and two years; 41 percent said between three and five years; and the remaining 17 percent said it would take at least 6six years to do so. Among different types of organizations, multispecialty medical groups with their own plans, not surprisingly, had the highest percentages of readiness, with 80 percent saying they could do so within a year, and the remaining 20 percent in between one and two years. Among survey respondents from all the other types of organizational structures, only between 12 and 17 percent believed they could accept downside risk in a year, and another 17-33 percent said they could do so within two years.
Now, what are the impediments to taking on risk-based contracts? Here were the responses on the federal side. On a scale of 1 to 5, with 5 being the highest, the average responses are thus: ineffective attribution methodology (4.4); non-standardized data submission/feedback process (4.2); risk adjustment methodology (4.1); benchmarking methodology (4.1); insufficient IT/analytics infrastructure (4.1); insufficient patient engagement opportunities (3.8); insufficient care management capabilities (3.7); physician compensation issues (3.7); ineffective quality measurements (3.6); insufficient administrative/financial structure (3.6).