While the federal Centers for Medicare & Medicaid Services (CMS) unveiled the proposed rule for accountable care organizations (ACOs) on March 31, numerous patient care organizations have already been developing ACO-type arrangements in the commercial health insurance sphere. The steps being taken to begin coordinated care initiatives range across a spectrum from very preliminary work to some more advanced models (while some medical groups have already done work with CMS through its earlier ACO demonstration project).

One medical group executive who has had some preliminary experience with working to coordinate care, and with leveraging clinical IT in that effort, is Kersten Kraft, CEO of the Santa Clara County Independent Practice Association (SSCIPA), which is comprised of over 800 physicians (just under 300 of them primary care physicians), and is based in San Jose, Calif., while serving the entirety of Santa Clara County. SSCIPA is an affiliate of Stanford Hospital & Clinics in Palo Alto.

Under Kraft’s leadership, SSCIPA has moved forward into a variety of contracting initiatives; and in tandem with those efforts, his organization has moved forward in the clinical IT sphere as well. Kraft—who in addition to leading his organization as its CEO, continues in practice as a urologist—spoke with HCI Editor-in-Chief Mark Hagland earlier this spring, shortly before the proposed rule on ACOs was released. Below are excerpts from that interview.

Tell us about your organization’s experience in leveraging clinical information systems to support care coordination.
Like many IPAs, as our organization grew and had more contracts, and with the need for care data, we ended up developing our own software, which we call Access Express. It was an in-house-developed software that became popular enough internally that we decided it could be used by others; so Hill Physicians in Northern California, and NAMM (North American Medical Management) in Southern California, and Monarch, have all used it. It was not a medical record; it was basically for authorizations.

So when it came time to implement an EMR, we looked around, and found a software program in the U.K. that was built on the same platform as our software, and could be integrated. It started out as clinical information-gathering by an anesthesiologist who had trouble getting pre-op information on his patients, and went on to be a chronic care product in the U.K. They had no need for the patient coordination part, because they have a single-payer system. So a little over a year-and-a-half ago, we met with them and agreed we would use their software, and integrate it into a complete package and distribute it in the U.S. The integrated package we call Access Express 5.0; their software is called Exelicare, and the company is called AxSys Technology, Ltd., and the company is based in Glasgow, Scotland. Their only real venture outside the U.K. is as the provider for a chronic care software in Ontario.


Kersten Kraft, M.D.

When did you go live with the EMR solution from AxSys?
The EMR part went live on some beta sites in October, but in terms of being truly functional, the go-live was in November. Everybody has been introduced to it, and all the physician offices are using it for patient office visits, radiology, and pharmacy data.

What are your plans in the ACO arena?
As we’ve looked the ACO world, it’s been clear to us that nobody knows what the concept—in its various public and commercial forms—is actually going to look like two or four years from now. We’ve been solicited to do a project for Blue Shield of California for CalPERS [the Sacramento-based California Public Employees’ Retirement System], with O’Connor Hospital here [in San Jose]. But what we think is going to happen is that the amalgamations will be broader than that. So our core goal is to have all our core hospitals involved with us, however these ACOs come down to us, whether by the insurers or employers.

You’ll also plan on participating in the Medicare ACO program?
Yes. And we already have over 5,000 patients in a Medicare HMO, so we already meet that criterion. We’re hoping our physician organization will ultimately be in a funding arrangement with all of our major hospitals. I’ve met with each of the CEOs of the hospitals, and they’re all OK with that. Each of the hospitals to date is interested in doing a pilot ACO project.

Do you have any concern over the potential for hospital-hospital and hospital-physician infighting?
Oh, I absolutely know that there’s going to be infighting; I’m not naïve about it. But for the first time in memory, the hospitals realize they are going to have their dollars controlled at least in part by physician care. And hospitals are realizing they won’t be able to engage in practices like phantom billing anymore. Conversely, the physicians realize that in order to continue to receive reasonable reimbursement, they’ll have to provide care in a cost-effective and quality manner; and until recently, physicians haven’t wanted anyone to tell them how to practice medicine.

So the physician organizations that will win will be those that will have created a culture of accountability, transparency and quality. We’re in the process of maturing our own culture, in that regard. And if a letter comes into a physician saying you have to change your prescription, the doctor will be unhappy. But if it’s an electronic message in real time, asking the physician to use an approved generic, that change is no longer onerous. And most of our physician offices are used to working within the EMR now. And every physician now knows how to log on and knows they’re expected to use the system; and they’re being tracked and nudged to use the system.

Do you think physicians in your organization realize that this is the way healthcare has to evolve?
Yes, I think there’s a realization, finally, especially with the threat of massive Medicare cuts all last year, and the fact that Medicare just stopped sending money for periods of three weeks at a time—I think that made every physician realize that something had to happen. And not all physicians embrace everything in federal healthcare reform, but there wasn’t a big uprising against it, either. I personally think we have to make these kinds of changes, apart from specific details. Now, I’ve been in practice for over 30 years now. And we’ve done all the low-hanging fruit—the days where you could easily cut a day off of a hospital stay; we’ve done all that. So we need to move forward to make care more effective.

The most elegant proof of a math equation is the fewest number of steps to a right angle; and I still believe medicine has to be done that way. We need to identify what the right way is to practice, and not have redundancies of approval and utilization management. And the great thing about the computer is that you can practice every day and see how you’re doing.

It’s all about accountability and transparency, correct?
Yes, and we’re trying to do those kinds of things. I don’t pretend that we’re as far along as some, but we’re moving forward. And one thing to note is that 40 to 50 percent of the patients in California are a part of Kaiser. And I’ve always maintained a close relationship with my patients who go into and out of Kaiser, as their employers change contracts. But Kaiser has made reimbursement lower, frankly, in Northern California, while the cost of doing business is higher here than in other parts of the country. So we’ve already got certain elements in our landscape now.

What kinds of things are needed, IT-wise, to make ACO organizations successful?
I’m not a super-fan of EMRs in terms of the improvement in the quality of records in the EMR; but you do know when a patient was seen, what they were seen for, and so on; and that is finally now being done in a way that the EMR can be usable and of benefit. And let’s face it: the big dollars are spent in the hospital. The amount of money spent on outpatient care is relatively tiny. And so the quality of inpatient care is going to have to continue to be improved.

All patient care organizations and clinicians will also have to be working forward in terms of systemically averting unnecessary readmissions as well, correct?
Correct. And I think the way to avert readmissions is to be able to know what happened before they were admitted in the first place. And the second thing is that you have to avert emergency room visits. And the easiest thing for the emergency room doc, no matter how well qualified, is to admit a patient to the hospital.

What have your lessons learned been so far?
One thing is that we thought some of the oldest physicians who we thought would be the most recalcitrant, have been some of the most embracing of chronic care management and of clinical IT, both because they think they will both help them practice longer, and will bring younger physicians more readily into their practice. A second lesson learned is that every physician practice is different, and EMR rollout is not easily made “cookie-cutter-able.” In terms of the physicians being willing to stick with it, it has to be easy, and it if takes 14 clicks and they get lost in the system, they won’t stick with it.

One of the things that makes us lucky is that we have IT infrastructure and an IT team. The MSO [medical services organization] that supports us—Pacific Partner Medical Systems, Incorporated, or PPSI—has a team of 90 employees, and about 15 of them are IT employees.