A study published online this week in Health Affairs offers some of the best analysis yet, based on survey data, around where ACO (accountable care organization) development and risk-based contracting are headed in the near future; and it includes some findings that might surprise some in the industry.
Published in the Health Affairs Blog, “The 2017 ACO Survey: What Do Current Trends Tell Us About The Future of Accountable Care?” was authored by Kate de Lisle, Teresa Litton, Allison Brennan, and David Muhlestein. The researchers’ findings are based on a nationwide survey of ACO leaders conducted from January through April of this year, with 240 ACO executives responding, representing Medicare, commercial and Medicaid ACOs, and “ranging from urban to rural organizations, single to multipayer contracts, and physician- to hospital-led to integrated ACOs. The participation breaks down this way: 78.1 percent of the ACOs are in Medicare contracts; 44.2 percent are in commercial contracts, and 7.4 percent are in Medicaid contracts (and of course, the numbers total more than 100 percent, as many organizations are contracting with multiple types of payers).
Further, 65.1 percent of the ACOs represented in the survey are physician group-led; 28.4 percent are hospital-led, and 6.5 reported being “both” (led by both hospitals and medical groups).
Meanwhile, the authors note, “While Medicare ACO contracts tended to be smaller relative to commercial arrangements (approximately 30,000 versus approximately 60,000 lives respectively), Medicare contracts were said to represent the same levels of risk as commercial and Medicaid arrangements.” What’s more, they report, “A little more than half of ACOs (53 percent reported bearing the same levels of financial risk in their commercial and Medicaid contracts as their accountable care contracts with Medicare. Furthermore, one-quarter (26 percent) reported less commercial and Medicaid risk, suggesting that commercial and Medicaid plans are not pushing provider-borne risk faster than the Centers for Medicare and Medicaid Services (CMS). This,” they state, “is likely a function of the flexibility and variability of commercial and Medicaid contracts. When programs are optional, and often subject to negotiation, risk levels may remain low.”
And while nearly 90 percent of survey respondents reported that they had at least one upside-only shared savings contracts, 50 percent had at least one active contract that included downside risk of either shared savings/shared losses (38 percent), or capitation (12 percent).
What’s more, 47 percent of those surveyed indicated that they were considering participating in, or already have, firm plans to participate in at-risk arrangements, with 47 percent pursuing shared savings/shared losses, and 38 percent pursuing capitation.
So a number of fascinating questions arise from these responses, and the team of researchers attempted to parse some of the survey results. An important point here is that CMS regulations require ACOs to assume risk no later than the start of their third three-year agreement period, which means that the longer ACOs are in the Medicare Shared Savings Program (MSSP), the more likely they would be planning to participate in a shared savings/shared loss arrangement.
Very importantly, the authors note, “In fact, there are 114 MSSP ACOs in their final Track 1 agreement period ending in 2018, representing nearly a third of ACOs in the MSSP. Consistent with past performance results from both the NAACOS [National Association of ACOs] and Leavitt Partners, which indicate that more experienced ACOs are more likely to achieve shared savings, the longer an organization participates as an ACO, the more attractive, or at least tolerable, two-sided risk becomes. Not only are ACOs planning to pursue two-sided risk, but many are preparing to do so quickly,” the authors state. “Among all ACOs (beyond MSSP participants) that indicated they were planning to participate in a risk-bearing arrangement, the average estimated time before beginning the actual contract was 10 months for shared savings/shared losses and 17 months for capitation. These estimations of time to contracts with greater risk are more aggressive than expected. However, some ACOs report that they will not be ready to assume risk for a number of years, and other ACOs expressed concerns about ever being in a position to assume downside risk.”
So while the results present a mixed bag in terms of how far along ACO organizations are right now, it is quite striking to note how many of those organizations either already have at least one risk-bearing contract (50 percent), or will have one soon (47 percent).
How is care management evolving forward?
Meanwhile, as important as what and how they’re organizing, it is also important to know what the leaders of ACOs are doing, in terms of population health management and care management activities. “The stages of adoption of key population health management activities suggest that ACOs are still largely focusing on the initial steps of care redesign,” the researchers write. “For example, when tackling unscheduled care, ACOs tend to seek to prevent emergency department (ED) use with outpatient options instead of using strategies within the ED, indicating a focus on working with primary care practices before integrating more specialized providers.”
What’s more, they note, “One strategy that is consistent across nearly all ACOs is the use of care coordinators to help manage the population, with 95 percent of ACOs using these staff (Exhibit 10). Not only have most ACOs prioritized care coordinators, but nearly 90 percent of those surveyed said that care coordinators are very important or extremely important to the success of the ACO. For example, one respondent reported that care coordinators are the “cornerstone” of the ACO, while another referred to care coordinators as the “glue connect[ing] a disjointed care delivery system.” Many respondents noted that care coordinators educate and engage patients and providers alike, which translates into meaningful performance improvement. When analyzing the ways in which ACOs are deploying care coordinators, we see a broad range of functions. ACOs are increasingly using care coordinators as connectors—identifying patients’ needs and ensuring a warm hand-off with the appropriate ACO or community resource. Coordinators also fulfill an assortment of administrative and clinical functions.”
In descending order, survey respondents cited the following as roles that care coordinators have taken on in their ACOs: “hospital facility discharge follow-up,” “coordinate with post-acute providers,” “coordinate community resources,” “coordinate with family/caregivers,” “schedule follow-up care,” “connect patients with non-medical services,” “health education phone calls,” “reconcile medications,” “coordinate referral visits,” “discharge planning,” “coordinate transportation,” “home visits,” “appointment reminder phone calls,” and “coordinate insurance prior authorizations.”
Importantly, the researchers also surveyed ACO leaders on their investments in IT. What they found is that “ACOs are increasingly using technology to equip clinicians with information to inform their care delivery practices (for example, analytics, health information exchanges, decision-support tools).” Still, they are facing interoperability challenges, given that, “According to the survey, the average number of electronic medical record (EMR) platforms used within an ACO network was 13.”
In descending order, here are the technologies that survey respondents reported having implemented: a patient portal or personal health record (84 percent); e-prescribing (81 percent); population analytics (80 percent); a statewide or regional health information exchange (60 percent); automated patient reminders (60 percent); patient/provider email communication (58 percent); decision support tools (56 percent) e-visits (45 percent); an internal HIE (40 percent); electronic medication reconciliation (40 percent); and home telemonitoring (30 percent).
What about the level of IT investment? “ACOs reported spending an average of $600,000 on operating expenses for health IT, analytics, and reporting, which is relatively low compared to the reported average investment of $1.1 million on care management. This may suggest,” the authors write, “That ACOs are able to invest more in clinical care services and patient support, possibly because infrastructure costs, such as health IT, are now more established in ACOs. Still, expenses of both types represent a significant investment, particularly for smaller organizations.”
And all of that emerges out of a context in which ACO leaders reported the following as their biggest challenges: “1) ability to save money, 2) prospect of participation in mandatory downside risk, 3) payer collaboration/flexibility, 4) government regulations, 5) health IT requirements, and 6) ability to reach required quality benchmarks.”
Implications for healthcare IT leaders
There are many, many implications in all this for healthcare IT leaders. First, provider leaders are moving pretty quickly now to sign ACO and at-risk contracts with the public and private payers of healthcare (and, incidentally, more are also becoming involved in direct contracting with self-insured corporations). Given the pace of development, healthcare IT leaders need to be preparing right now to lay the IT foundations for this ACO work. That means a strong focus on interoperability work, and on data management and data analytics, including the creation of strong, robust enterprise-wide data warehouses.
It also means implementing a very robust suite of clinical decision support and other support tools for clinicians, especially physicians, including clinical performance and population panel analysis dashboards—and that need will be presenting itself among physicians with all types of connections to patient care organizations—not only the directly employed ones, but also all those with all levels of contractual relationships and affiliations (and that in itself will present a full set of challenges). And it means creating the foundations for improved care coordination processes, including via nurse call centers, care management teams, and the like. And of course, it means ramping up all the capabilities needed to collect and report out outcomes data to payers, at more robust levels than in the past (and present).
And of course, as mentioned just above—intensive data analytics capabilities will be absolutely essential.
So the findings of this study, based on a strong nationwide survey, are important, and should be considered very thoughtfully by healthcare IT leaders across the U.S., regardless of where their individual patient care organizations are right now—because this train is moving faster than many in the industry ever expected that it might; and healthcare IT leaders need to be prepared.