Preparing to go for the new Medicare payment opportunity involves risks and rewards-and likely an overhaul of your organization's IT strategy
The inclusion of the concept of accountable care organizations (ACOs) in the comprehensive federal healthcare reform legislation passed last March could well prove to be a watershed development both for healthcare in the U.S., and for the healthcare IT sector. Indeed, say industry experts, the success of ACOs-which will collectively accept payment for coordinated care for patients, and receive back from the Medicare program a portion of the cost savings they achieve-will rely on equal doses of strategic thinking and planning on the one hand, and intensive data management and analysis capabilities on the other.
THE MOVEMENT TOWARDS INTEGRATING QUALITY AND OUTCOMES WITH THE OVERALL COST-EFFECTIVENESS OF CARE IS SOMETHING THAT WE'VE BEEN TALKING ABOUT IN THE INDUSTRY FOR THE WHOLE 24 YEARS I'VE BEEN INVOLVED IN IT.-MARK JAMILKOWSKI
The Patient Protection and Affordable Care Act (PPACA), the federal healthcare reform law, created a provision for accountable care organizations, with a Medicare Accountable Care Organizations Shared Savings Program to be established by Jan. 1, 2012. The federal Centers for Medicare and Medicaid Services (CMS) defines an ACO as “an organization of healthcare providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.” Importantly, the legislation was written with a purposeful flexibility so that a variety of combinations of physician group types, hospitals, and hospital-physician partnerships could qualify to become ACOs. What's more, say experts, once the federal program gets going in earnest, there's no question that private insurers will start exploring the potential to create private versions of the concept as well.
For healthcare IT leaders, the challenges of ACOs are tremendous, and experts see only a very small minority of patient care organizations nationwide that are optimally positioned right now to take advantage of the new law. Fundamentally, experts see hospital, medical group, and health system leaders struggling with the same core problems when it comes to preparing for ACOs as across other areas: a landscape of fragmentation, with silos of data that can't be accessed or understood in a timely way, in order to make the clinical interventions needed to improve care and control costs, that will drive success under ACO arrangements (as of press time, the federal government had not yet released the specific regulation to give providers the level of specificity they'll need when applying for the program).
“I think the movement towards integrating quality and outcomes with the overall cost-effectiveness of care is something that we've been talking about in the industry for the whole 24 years I've been involved in it,” says Mark Jamilkowski, a senior manager in the Health Care Advisory Practice at the New York-based KPMG LLP. “And I think previous attempts have come in fits and starts. We haven't had the information technology or the data to do it properly. But now that we have the clinical knowledge itself, combined with the ability of information technology to really analyze the data in multiple ways, it really creates a robust environment to support a quality-based, comprehensive care management approach to healthcare delivery.”
One well-known industry leader who says he sees the shape of the future is Brent James, M.D., chief quality officer at the Salt Lake City-based Intermountain Healthcare, and executive director of the Intermountain Institute for Health Care Delivery Research. James was one of the leaders behind the announcement in mid-December that six leading healthcare organizations-Intermountain, Cleveland Clinic, Dartmouth-Hitchcock, Denver Health, the Geisinger Health System, the Mayo Clinic, along with the Dartmouth Institute for Health Policy-were forming a collaborative to share data on outcomes, quality, and costs, across a range of common conditions (beginning with total knee replacement), with the intention of rapidly disseminating knowledge and insights to improve care quality and cost-effectiveness (key goals of the federal government in creating the ACO concept within healthcare reform). Not surprisingly, James believes that Intermountain itself could very quickly be prepared to apply for ACO status as an integrated health system, based both on its integrated approach to care across multiple hospitals and medical group sites, and its history of IT innovation.
WE'RE STILL WAITING FOR THE REGULATIONS TO COME OUT OF THE ACO LEGISLATION; BUT THEY KNOW SO LITTLE ABOUT IT IN THE WHITE HOUSE THAT WE'LL HAVE THE FREEDOM TO EXPERIMENT.-BRENT JAMES, M.D.
“I would argue that the Intermountain model is the furthest down the road, mostly because we got started early,” James says. “We had a 20-year jump on people, but so many good groups are coming in.” And he adds, “We're still waiting for the regulations to come out of the ACO legislation; but they know so little about it in the White House that we'll have the freedom to experiment.” James believes that the 30-plus organizations that want to work with the Intermountain-Cleveland Clinic-Geisinger-et al collaborative will learn some things very quickly and turn them into ACO success.
Some physician group leaders believe their organizations are well-positioned as well. Karen van Wagner, president and CEO of the 600-doctor North Texas Specialty Physicians, says her IPA-based group's work taking on risk through Medicare advantage plans-plus the fact that her organization owns its own Medicare PPO advantage plan-positions it quite well for the coming change. And from her standpoint, there is a single key IT-related requirement for success: “a community-wide HIE,” she says. “You need to know what just happened to Mrs. Smith, and you need up-to-the-minute data, not just retrospective claims-based data-though you need that also,” van Wagner says. And only community-wide health information exchanges will give providers the full picture, she asserts, especially given how many patients inevitably utilize services from health systems not affiliated with one another.
DATA DEMANDS SEEN AS INTENSE
And while a number of organizations nationwide could move fairly rapidly to create ACOs, the data and IT demands involved will be very intense, caution Dan Herman, managing principal, and Doug Watson, associate principal, at the Pittsburgh-based Aspen Advisors LLC consulting firm.
Watson says he sees several key areas that provider leaders need to look at: first, the ability to truly coordinate care for a patient, which means that “you've got to have that single source of truth available” in terms of the patient's record. Second, is the kind of preparation required to handle a standard managed care contract: the ability to do utilization review and associated processes. “A lot of that has really been retrospective, but our clients are starting to work towards making it more current-to be able to make real-time interventions,” he notes.
What's more, Watson says, one of the underlying and largely unrecognized challenges of creating ACOs, is that “ACOs will be a more or less voluntary structure. The patients won't be locked in; you'll have to create incentives for them to stay in network.” Watson believes that being able to leverage social media and social networking will be important in that respect.
Keith Figlioli, senior vice president of health care informatics at the Charlotte-based Premier healthcare alliance, says most CIOs have only a vague notion of how complex all this will be in practice. “At a basic level,” he says, “there are three layers involved. First, is your base transactional system, which is more than just the EMR; it also includes your ERP (enterprise resource planning) system, and everything that supports reimbursement, patient accounting, revenue cycle management. Then there's the layer up from that, which is, how do you take the data out of those systems, and move it around? Historically, it might have been a message broker within the hospital; then the step up from that would be a health information exchange. Then there's the third tier, which is what I call the overlay systems, which involves analytics.” Only those patient care organizations whose leaders can truly leverage data and information across all the IT layers will succeed at the complex task of building an ACO, Figlioli says. That's one reason Premier is intensively involved right now in helping its members to move forward in this area. Among other things, Figlioli is close to publishing a model of ACO IT development that will be similar to the EHR development schematic created by HIMSS Analytics.
Given the current uncertainty about the specifics of the ACO shared savings program, and the need to move forward to put the IT foundations in place, what should healthcare CIOs be doing right now?
“I think the first thing is to really understand from their management team what it's going to look like from a management perspective; because some organizations are really far ahead, and they've started to operationalize this,” says Aspen Advisors' Herman. “In some organizations, it's still pie in the sky. But if you're further down the road, there are some specific priorities you might want to focus on, depending on where you're at with personal health records, with integrating service lines across the organization to support the operationalization.” The other major area, he says, is “the retrospective business intelligence data analysis,” in order to determine what the true opportunities will be in the ACO landscape for success.
Healthcare Informatics 2011 March;28(3):12-14