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Are Providers Underinvesting in Accountable Care Technology?

September 17, 2012
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Health plans outspending hospitals on ACO infrastructure, IDC survey finds

For those of us who write about health information technology, one of the challenges of covering the era of accountable care is explaining the shifting relationships between providers and payers. Specifically, we have to understand how the partnerships between the two impact IT leadership and investment decisions.

A recent survey by IDC Health Insights suggests that health plans are being more aggressive than hospitals in making the kinds of IT investments necessary to supports accountable care organizations. The research firm surveyed 40 hospitals and 30 health plans in May 2012 about their accountable care plans. It found that 75 percent of health plans are investing between $1 million and $10 million on technology to support accountable care, and 80 percent said that budget would increase; meanwhile, 75 percent of provider organizations said they had invested less than $1 million, and 58 percent said the budget would increase. More than 80 percent of health plans said they were adding IT staff to focus on ACOs in 2012, while only 42 percent of provider organizations are.

“Health plans are embracing accountable care as a strategic business initiative,” said Cynthia Burghard, IDC Health Insights’ research director for accountable care IT strategies, speaking during a recent webinar on the survey. Insurers plan to make technology offerings available as a service to providers. The providers, on the other hand, are looking at it as an externally driven reform initiative, she added. “Payers see it as the future,” she said, “and they have better access to capital to make these investments. Providers see it as Medicare changing reimbursement, so they have to do it.”

The providers are somewhat overwhelmed already dealing with meaningful use and ICD-10 initiatives, Burghard said, but she warned that underinvesting in the infrastructure for ACOs would have dire consequences, especially for the ones that are owned and operated by providers.

“What does underfunded accountable care look like?” she asked. “It’s not a pretty picture. There’s no data for physicians to manage patients with, no tools to identify and monitor at-risk patients, no improvement in quality, and no focus on patients.”

Drilling down into what providers and payers are investing in, analytics is the top priority. “Risk identification and predictive modeling is where they are investing, and health plans are investing more,” Burghard said. Many providers are seeking partnerships with payers that have expertise in that area. So far, 64 percent of ACO business models involve plan/provider partnerships, the survey found. Burghard said there is no need for providers to reinvent the wheel in terms of risk analysis. Developing those tools themselves would make them too late to market, she added. Health plans such as Aetna are creating ACO solutions groups that own technology involving health information exchange, analytics, care management, and patient engagement and communications.

But investment in analytics to drive care management can start small, she noted. One small physician group in Texas invested in electronic health records, got their meaningful use incentive money and used that funding to start identifying patients with combinations of chronic diseases or with many prescriptions to follow more closely.

“The first mountain to climb is the availability of data for all stakeholders anywhere anytime,” she said. You need to start accessing real-time data rather than retrospective data to understand enterprise performance measures that are key to financial and clinical improvement.

She identified four models developing for provider analytics, listed here in order of increasing sophistication:

• Providers using payer analytic tools for risk identification;
• Purpose-built EHRs with analytic capabilities;
• Collaborations between payers and providers to build a clinical analytics platform; and
• Using “Big Data” such as IBM’s Watson to tap unstructured data to discover drivers of readmissions.

Burghard also reminded listeners that they must build a flexible infrastructure in order to react nimbly to market changes. “Frankly, all of this is going to change,” she said. “As the market matures, there will be new requirements around analytics as ACO evolve.

She closed by acknowledging the difficulties health IT leaders face. “This is all new and it’s all hard,” she said. . Her advice is to “start fast and fail fast and get back up again.” Accountable care is a journey, Burghard said, not a destination, “and I recommend you get started today.”



Providers are under-investing in ACOs because they are operating under the assumption that programs such as the MSSP ACO are "free money" and require little to no investment, aside from some high level analytics reports, etc. It amazes me how many providers disregard the need for HIE when going for an ACO. I believe the <$1M number for provider investment to be very accurate for a typical mid to large provider organization.

Health plans are being more aggressive in the ACO market because they have the analytical and finacial capital to get the job done. In other words, they are used to undertaking big data projects, whereas providers are not.