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Turning Healthcare’s Business Model Inside Out

February 27, 2012
by Jennifer Prestigiacomo
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Payers, Providers Must Align Incentives—Only then Will Technology Follow

Much of the industry is still hesitant to dip its toes in the murky waters of accountable care, according to industry observers and recent studies. Centers for Medicare & Medicaid (CMS) anticipates anywhere from 50 to 270 accountable care organizations (ACOs) to sign up for the Shared Savings Program in the next three years, says Richard Gilfillan, M.D., director, CMS Innovation Center. Undoubtedly, all eyes will be on the Pioneer ACO organizations to see if they can pave the way to develop workable business and IT infrastructure models. Many admit a big part of building ACOs will be extending the patient-physician interaction beyond the office visit using telemedicine tools, as well as using health information exchange (HIE) to aggregate data from multiple sources. Population health analytic solutions will be a key foundational element for these accountable care collaborations, but these care coordination tools can only be implemented after incentives are aligned between payers and providers.

Indeed, says Gilfillan, many of the rigorous parts of the proposed rule were amended in the final rule that was released on Oct. 20, 2011, like reducing the number of reportable quality measures and allowing ACOs to participate in a one-sided shared savings model for their first agreement period, but this still may not be enough to encourage broad participation.

Richard Gilfillan, M.D.

Industry experts cite several key technology fundamentals that organizations will need to begin building ACOs. Jim Adams, managing director, research and insights, at the Washington, D.C.-based Advisory Board Company, explains that there are three phases in what he calls the IT maturity model for accountable care. The first phase has 12 foundational elements that include establishing ambulatory EHRs, health information exchange, a disease registry, physician engagement, patient engagement, and a number of other components focused on quality improvement. The second phase involves creating performance risk and bundled payments models for end-to-end acute care episodes (i.e. surgeries) and for ambulatory episodes (i.e. chronic diseases). The third phase involves accepting utilization risk for a population of patients, and thereby reducing utilization by employing preventative medicine.

“I would be pursuing two tracks,” says Dan Coates, principal in the Pittsburgh-based Aspen Advisors. “Number one, to begin discussions with the NCQA [National Committee for Quality Assurance] on what steps need to be taken to form an ACO, and the second is to have discussions with the insurance companies and the self-insured employers that are responsible for a significant portion of your typical patient mix, and making sure they are on the same page,” says the Denver-based Coates.

Population Health Analytics
Population health analytic tools will be essential to mine clinical information to make informed, cost-effective care decisions. Anthony D’Eredita, EVP, Southwind, a division of The Advisory Board Company, is seeing gravitation in the market toward a product that supports a full continuum of data aggregation across in- and outpatient settings that also ties into disease registries and adds insight into referrals.

John Cuddeback, M.D., Ph.D., chief medical informatics officer for Anceta, the collaborative data warehouse owned by the Alexandria, Va.-based American Medical Group Association (AMGA), says that until recently the focus has been on the care of the individual, but with ACOs it will be about extending clinical decision support (CDS) to cover a population through comparative effectiveness research.

John Cuddeback, M.D.

He says that medical groups are using patient data, fed daily from organizations’ EHRs, within Anceta to develop predictive modeling to effectively target when interventions are necessary to prevent hospital admissions. “It’s the distinction of making the system as efficient as possible for the bulk of patients and providing individualized attention for the outliers, and the hard part is figuring out who is whom,” he says.

Barriers to Entry
Those still on the edge about jumping into the ACO deep-end can wait to see what comes out of the Pioneer ACO Model program. Gilfillan says that CMS will be sponsoring extensive shared learning activities designed to help Pioneer ACOs collaborate with one another on successful strategies. CMS will also help to document the organizational advances as they develop, which will feed into a continuing evaluation of the program.

There are many challenges that come with coordinating care among patient populations. The main barrier is as Adams puts “turning the healthcare business model inside out.” For starters, organizations will find it difficult managing in a mixed reimbursement environment, and then getting payers on the same page. “Providers need the collaboration of payers to make outcomes-based arrangements a reality,” says Gilfillan, “and some payers may not be ready to take that step.”