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Market Report: Dallas’ Slow but Steady Push Toward a Value-Based Care Future

November 8, 2017
by Rajiv Leventhal
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Texas healthcare leaders discuss the region's move to value-based care and how health IT will play a large role

Editor’s note: To align with our Dallas Health IT Summit in December, Healthcare Informatics took a deep dive into the Dallas healthcare IT and value-based care markets, providing an update on how the region is progressing in these areas.

Everything is bigger in Texas” is an old saying that Texans like to use to describe their home state, and when it comes to healthcare, this phrase also rings true; various patient care leaders in this region point to the Dallas-Fort Worth area specifically as being one of the fastest growing markets in the U.S.

According to a 2016 “Texas Healthcare Market Review” from Allan Baumgarten, a Minneapolis-based independent analyst and consultant studying trends and organizations in local health markets, hospitals in the state are expanding through acquisitions, partnerships and adding new convenient care sites, and all of the area’s major systems are making large investments in new facilities. Indeed, Baumgarten’s report specifically noted, “Bolstered by strong profitability, Texas hospital systems are pursuing a variety of strategies to gain market share, including acquisitions, partnerships and new facilities. However, inpatient utilization is flat or increasing slowly in much of the state. Texas health insurers have added a million Medicaid and individual members in the past two years, but large losses by a few insurers broke a streak of strongly profitable years.”

One type of partnership that this Texas market report is referring to is payer-provider collaboration, when a health system and an insurance provider link up to work on population health management and value-based care initiatives. Interestingly, Baumgarten said in a prior report on Texas healthcare that in the Houston region, there’s more risk sharing between insurance plans and providers than in the Dallas area. Said Baumgarten, “The bottom line is, in Houston, I do think that because they’ve moved toward a fee-for-value type arrangement to a greater extent, that their revenues and income are more modest than in Dallas/Fort Worth. They’re just moving that way today.”

Leaders at major Texas healthcare systems that were interviewed for this piece do acknowledge that historically, the Dallas-Fort Worth region is not the most advanced when it comes to risk sharing agreements and payer-provider collaboration, but in a broad sense, trends in this area are not too unlike other pockets of the U.S. Luis Saldaña, M.D., chief medical informatics officer (CMIO) at the 29-hospital Texas Health Resources (THR), based in Arlington, Texas, says that the Southern/Texas market in general runs a bit behind the North and the Northeast in terms of the penetration of value-based care. But, Saldaña, who has been in a leadership role at THR for over a decade, does add that C-suite executives at the health system are “certainly shifting their mindsets to the value-based world.” He adds, “We are strengthening our alignments with physicians, which you’re seeing in general, and we’re partnering with independent physicians, as well as with some key local partners for various different arrangements that would facilitate delivering population health.”

Similarly, Pamela McNutt, CIO at the seven-hospital Methodist Health System, based in Dallas, notes that years ago, there was a push in the region for providers to dip their toes into population health-specific products, but the population health initiatives didn’t grow as expected in Dallas-Fort Worth. “If you asked me [about risk sharing] a few years ago, the answer would have been about installing systems, and practicing and preparing for our Medicare Shared Savings [accountable care organization] programs so that this big shift to population health would happen. Pundits were saying that by this time, the payment model was going to totally shift and that population health would primarily be the way we would get paid. But that has not been the case,” admits McNutt.

Pamela McNutt

As Saldaña alluded to, the Dallas-Fort Worth region isn’t alone in its lag when it comes to advancements in taking on risk. Depending on the source, statistics might differ, but 2016 research from Salt Lake City, Utah-based analytics vendor Health Catalyst found that about 62 percent of health systems surveyed have either zero or less than 10 percent of their care tied to the type of risk-based contracts identified by the Center for Medicare & Medicaid Services (CMS) as “value-based,” including Medicare ACOs and bundled payments.

Nevertheless, the year prior, the government announced a plan to tie 30 percent of traditional fee-for-service Medicare payments to quality or value through alternative payment models such as ACOs and bundled payments by 2016, and to tie 50 percent of payments to these models by the end of 2018.

But while CMS has said that these targets are on track, others disagree. Notes William Paiva, executive director at the Stillwater, Okla.-based Center for Health Systems Innovation at Oklahoma State University, when asked about the value-based care progress seen across the country, “Maybe about 10 percent of healthcare billings are running through some form of a value-based system and then the rest are still going through fee-for-service models. So we have been talking about it forever, but 90 percent of the market is still dominated by fee-for-service.”

Dallas-Area Healthcare Organizations Make Advances

Last May, THR and Aetna announced the creation of a jointly owned health plan company in which ownership and accountability would be shared equally between the provider and the insurer. The partnership was the first of its kind in North Texas to fully align the incentives and capabilities of a national insurer and major health system, according to officials at the time. The joint venture, called Texas Health Aetna, will primarily be focused on value and quality, notes Saldaña.

Indeed, as reported by D Healthcare Daily, in a meeting this summer among Texas Health Aetna senior leaders, Aetna’s vice president of consumer health and services, Gary Loveman, noted that the new venture focuses on improving population health and pushing value-based care. He added, according to the report, “For the first time, we have a unified set of initiatives [across different health organizations] that are based around improving health.” The new company’s CEO, Jeff Cook, also stated that his job is to be a liaison between the provider and the insurer and “to be more transparent about quality and cost of care.”

THR also recently teamed up with University of Texas Southwestern Medical Center in Dallas to form Southwestern Health Resources, a clinically integrated healthcare network that officials at the time said would not be a merger in its traditional sense, but rather a commitment to combine electronic record keeping and coordinate patient care across a team that includes 3,000 physicians and 27 hospitals throughout North Texas.

Both of these commitments from THR point to one overarching goal, says Saldaña: to ensure that the system serves the needs of the Dallas-Fort Worth healthcare market, which he says is one of the fastest growing markets in the country, adding that Texas has the highest uninsured rate of any U.S. state. “There is continued growth here. And the first thing is a need for foundational growth in our IT infrastructure to support the growing market,” he says. And regarding Southwestern Health Resources, Saldaña says since there is now data from UT Southwestern physicians who are also interfacing with THR systems, “We now have to look outside [our organization] to see where information flows happen and be sure that we facilitate that to support the work we’re doing to improve the health of this market.”

Honing in on Data

In his report, Baumgarten, who stated that “inpatient utilization is flat,” noted that providers face challenges in this area, such as being penalized for having too many patients be readmitted to the hospital. To combat this challenge, and many others that patient care organizations are currently facing as they shift to a value-based care environment, leveraging data and analytics has become a critical endeavor.

THR’s Reliable Care Blueprinting initiative is centered on “hardwiring” evidence-based best practices into the processes at all of its hospitals. The idea is to improve on how to deliver the best care for patients with sepsis, or how to avoid hospital-acquired conditions, for instance. As explained by Healthcare Informatics’ Senior Contributing Editor David Raths in a story this past February, the Reliable Care Blueprinting process first involves a design phase. The design teams are multidisciplinary and include physicians, front-line nursing staff, and pharmacists—everybody in the process is represented on the design team. After the deployment, there is a sustainment phase. “We have learned that once you have deployed something, often you have to go back and make adjustments. For sepsis, we might have new guidelines come out,” Joni Padden, nursing informatics specialist at THR, told Raths.

THR leaders then use tiered dashboards to track progress on metrics. “We have process measures to make sure the process is working as intended,” Padden explained to Raths, noting, “but we also have outcome measures that we are looking at. You have to make sure those are lining up.”

Padden said THR learned early on that it had to have an informaticist on the design teams. “With the EHR [electronic health record], we want to make sure we support the clinical practice these teams are designing and that we will be able to provide the different metrics they are looking at,” she added. So the design is done in tandem with the IT analyst work. Padden said to Raths that THR is already seeing impressive gains in some outcome measures. When its clinicians use the sepsis module and order set, THR is seeing a 4 percent reduction in sepsis mortality. When its clinicians use the catheter-associated urinary tract infection (CAUTI) workflow, it is seeing a greater than 15 percent reduction in CAUTI rates.

Progressing with Information Exchange

Beyond data analytics, regional health IT leaders are well aware that exchanging patient data with other health systems in the area is also necessary to improve the quality of care. In Texas, there are various HIEs that are functioning, with the Healthcare Access San Antonio (HASA) HIE announcing two years ago that it would be expanding to the Dallas-Fort Worth region.

Last September, THR went live on HASA, which connects the regions of North, South and West Texas. But Saldaña notes that THR actually has its own, self-developed HIE as well, but the challenge has been embedding it into the EHR workflow. “It has to be in that workflow for physicians to use it effectively. They can’t go outside the EHR workflow; they won’t do it,” he says.

Luis Saldaña, M.D.

Saldaña adds that THR has found that using Epic’s Care Everywhere platform, designed for interoperability, has actually been easiest for data exchange compared to any HIE. “We do feed into the state HIE, but we have found that using Care Everywhere and the work Epic has done with [Carequality] to tie in all of the data has been [efficient] for us,” he says, adding that it’s easier to work on this platform with local partners than it is to bring in national Veterans Affairs (VA) data, for instance. Saldaña’s colleague, Mary Beth Mitchell, R.N., chief nursing informatics officer at THR, agrees that sharing patient information, particularly around pediatrics, is made easier since the Dallas-Fort Worth area is largely on Epic. “We have two large pediatric organizations in the Dallas-Fort Worth area, Children’s on the Dallas side and Cook’s on the Fort Worth side, so being able to share those records is really helpful as patients move from one organization to another,” says Mitchell.

Meanwhile, Methodist’s McNutt points out that the HIE in the Dallas-Fort Worth region “stood up” back when there were incentives, as it was not sustainable. So at the moment, Methodist is not connected right now to any of the Texas HIEs. “We were an early connector in the one that started in the Dallas-Fort Worth region, but just two organizations actually ever joined it before it became unviable. The whole [process] is very expensive. However, in this market, because almost all of us are on Epic, and also because of direct messaging, and now  EpicCare Link (Epic’s web-based service that provides access to patient EHR data), we are exchanging thousands of records every day. This exchange is happening with non-Epic providers, too,” she says.

What Other Tech is Booming?

There are other ways in which regional leaders are leveraging health IT for better care, too. Many might correlate Texas with telehealth, but not because providers are so advanced with it; rather, the ability of telehealth companies to do business in the state has long been complicated. But lately, more hurdles are starting to be cleared, with Texas earlier this year becoming the 50th and final state to enable physicians to utilize telemedicine services with patients they haven’t met in person.

McNutt says that now rules and restrictions around telehealth “have become more relaxed,” providers are moving further forward in their advancements. “Many people [in this region] have a pocket of telehealth, such as tele-neurology in your ED, and what we are doing [at Methodist] is urgent care-type telehealth. But we’re just starting at a basic level,” says McNutt. Adds Saldaña, “You are seeing more applications for telehealth, and we know that is something that’s continuing to grow. Our ED group is doing work with patients that have been seen in the emergency room and trying to prevent bounce-backs by doing telehealth visits post-ED discharge, so we can identify if there are issues that can easily be fixed or addressed. We are seeing lots of innovation in telehealth,” he says.

Saldaña also feels that health innovation trends in the region will likely mirror consumer trends, pointing to voice interfaces as one example, something he believes will be a “satisfier for physicians” while also seeing them becoming usable in the EHR, and in supporting the patient experience. He does note there is “nothing magic in the Dallas-Fort Worth market,” but that “there are lots of startups in the area, and THR is always on the lookout for such partnerships.” He opines, “[Partnerships] help manage the risk that comes with your innovation. And they help leverage different parties’ strengths. So you may have a startup that doesn’t have the scale, so how can we support that?”

In the end, Saldaña and others interviewed for this story are in agreement that as much as anything, they need to be focused on process innovation internally so that they’re more efficient and effective—something that has become imperative organization-wide as they move into value-based care healthcare models.


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When It Comes to The Big Debate on ACOs, What Is “Big Enough” Savings?

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The back-and-forth interaction between CMS Administrator Seema Verma and the ACO community is unfolding at a key inflection point in the evolution of the MSSP program

Intense debates on every subject are constantly swirling in the healthcare policy sphere; that has always been the case. But one debate that is both impactful and being closely watched is the intensifying argument between the Centers for Medicare and Medicaid Services, particularly CMS Administrator Seema Verma, and some leader organizations in the accountable care organization (ACO) area.

At its base, the proposal on the part of CMS, as outlined in a proposed rule published in August, to push more ACOs into two-sided risk, is being pushed back against by many ACO leaders, particularly by their nationwide association, NAACOS (the Washington, D.C.-based National Association of ACOs). As Managing Editor Rajiv Leventhal noted in his report Dec. 5, CMS’s “core aim” is “to push these organizations into two-sided risk models—so that Medicare isn’t on the hook when ACOs overspend past their financial benchmarks—suggested to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years.”

As Leventhal noted, “One option, per CMS’ proposal, would be the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk. The second option would be the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program. But where CMS, in its proposals, truly clamped down was through two core recommendations that stakeholders took issue with: shortening the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years; and cutting potential shared savings in half, from 50 percent to 25 percent for one-sided risk ACOs. These proposals, if finalized, will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.”

Clifton Gaus, Sc.D., NAACOS’s president and CEO, recently gave Leventhal an interview, and in that interview, he confirmed his association’s stance that the reduction of shared savings and the shortened time allowed in one-sided models are two of the biggest problems the group has with the proposal. Indeed, Gaus said in that interview that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

In fact, Gaus said, in polling their members, NAACOS’s leaders asked them whether they would in theory join a federal ACO program knowing that, at least at first, they would be limited to 25 percent of shared savings at most; and, in fact, “the near universal response was no, they wouldn’t have joined the program,” Gaus said, adding that “The potential of 25 percent savings just isn’t enough to offset our investment costs of starting and operating the ACOs,” noting that ACOs have to obviously put up money to get going, and sometimes it’s very hard for medical group practice-dominant ACOs to buy IT systems, not to mention the whole clinical transformational aspect of ACOs where they are typically hiring nurse coordinators, and in some cases opening 24/7 call centers. “There is a real start-up and operational cost that’s involved, and [getting] 25 percent of the shared savings doesn’t return enough income to offset those,” he said.

Meanwhile, this morning, NAACOS issued a new press release focused on the value that the MSSP program has created for CMS. “In the latest data proving the financial benefits of accountable care organizations (ACOs), Medicare’s largest value-based care initiative – the Medicare Shared Savings Program – saved $859 million in 2016, an independent analysis published today shows,” the press release began. “Since 2013, the first full year of the program, ACOs have saved Medicare $2.66 billion, well above the $1.6 billion calculated by the Centers for Medicare and Medicaid Services (CMS).” What’s more, the press release reported, “After accounting for bonuses paid to ACOs for hitting spending and quality targets, the program, which accounts for 561 ACOs and 10.5 million patients nationwide, netted more than $660 million to the Medicare Trust Fund between 2013 and 2016, contrasting the net loss of $384 million CMS estimates.”

And the press release quoted NAACOS’s Gaus as stating that “These results are the latest data point in a growing body of evidence unequivocally proving ACOs’ value. ACOs are saving American taxpayers hundreds of millions of dollars at a time when it’s most needed.” Indeed,  he added, “Given the natural lag time in collecting and analyzing data and the well-established trend that ACOs need a few years to start demonstrating results, we are only seeing the beginning of the nation’s return on investment in accountable care. This data doesn’t even mention the quality benefits ACOs have generated, which have also been substantial.”

Further, the press release noted, “A sizable amount of recent data show ACOs are saving money: 472 Shared Savings ACOs generated gross savings of $1.1 billion and netted $314 million in savings to the Medicare Trust Fund last year; CMS’s August 17 proposed rule estimates the overall impact of ACOs, including ‘spillover effects’ on Medicare spending outside of the ACO program, lowered spending by $1.8–$4.2 billion in 2016 alone.”

So now we reach the rubber-meets-the-road place. Here’s the fundamental question: Do Seema Verma and her fellow CMS and HHS (Health and Human Services) senior officials truly understand the complexities involved in what they’re asking of provider leaders? Verma and her fellow federal healthcare officials are facing a kind of Scylla and Charybdis situation right now. On the one hand, as everyone knows, the Medicare actuaries have predicted that total U.S. healthcare spending will explode from $3.1 trillion annually (in 2014) to $5.4 trillion annually (by 2024), in the next several years, amounting to a 70-percent increase in less than a decade, and bringing the percentage of GDP spent on healthcare in this country from 17.4 percent in 2013 to 19.6 percent in 2024.

On the other hand, as Clifton Gaus and the NAACOS folks have pointed out, based on surveying their membership, patient care leaders are going to recoil at the over-intensification of change mandates coming out of CMS. That feeling is quite widespread. As one ACO CEO told me just two weeks ago, Seema Verma is deluded if she thinks that ramping up the downside-risk requirements in the Medicare Shared Savings Program is going to inspire more patient care leaders to join the MSSP program or renew their participation in it. And, as this morning’s press release notes, ACO community leaders are documenting real progress in capturing savings.

The million-dollar (or maybe, $1.1 trillion-dollar?) question is, is the broad level of savings that ACOs are netting for CMS, progress enough? Indeed, what is “enough”? And what is “fast enough”? Because Administrator Verma and her fellow senior federal healthcare officials seriously risk cratering the MSSP program, the core federal ACO program, if they push too hard on the downside-risk issue. On the other hand, if they don’t push hard enough, the progress made so far could simply be dwarfed, in the broader scheme of things, by the current acceleration of overall U.S. healthcare spending inflation.

So right now really does feel like an inflection point—but one without an obvious resolution. Only time—and the interactions of federal healthcare officials and providers—will tell.

 

 

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At UPMC, Turbo-Charging Quality Improvement Efforts through Data Analytics

December 11, 2018
by Mark Hagland, Editor-in-Chief
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At UPMC, Dr. Oscar Marroquin is leading a team of data analysts whose work is facilitating intensive efforts around readmissions

At a time when the leaders of patient care organizations are facing intensifying pressure to shift away from a dependence on volume-based payment and to plunge into value-based care delivery, some U.S. hospitals, medical groups, and health systems are helping to lead the way into a future of continuous clinical improvement and of clinical transformation. That topic—of organized continuous quality improvement—was the subject of the fourth-quarter 2018 Healthcare Informatics cover story. Numerous leaders of pioneering organizations were interviewed for their insights into the health system change focused-quality improvement movement that has been emerging across the U.S. healthcare system.

Among the leaders interviewed for that cover story was Oscar Marroquin, M.D., a practicing cardiologist and epidemiologist, who is helping to lead a team of clinical data experts at the vast, 40-hospital UPMC health system in Pittsburgh. Dr. Marroquin and his colleagues have been busy harnessing the power of creating and nurturing purpose-specific teams focused intensively on the management of data to power performance improvement, particularly in the clinical area. Marroquin’s team, of about 25 data specialists, was first created five years ago. Of those, half are IT- and infrastructure-focused, and, says Dr. Marroquin, “The rest are a team of folks dedicated to data consumption issues. So we have clinical analysts, data visualization specialists, and a team of data scientists who are applying the right tools and methods, spanning from traditional analytical techniques to advanced computational deep learning and everything in between. Our task is to use the clinical data, and derive insights”—and all 12 clinically focused data specialists report to him.

And that work—“allowing people to ask questions to generate opportunities”—has paid off handsomely. Among the advances has been the creation of a data model that predicts the chances of patients who are being discharged, being readmitted. The model, based on the retrospective analysis of one million discharges, is also helping case managers to more effectively prepare patients for discharge, specifically by ensuring that patients being discharged are promptly scheduled for follow-up visits with their primary care physicians. “If those patients are seen within 30 days of discharge,” he notes, “there’s a 50-percent reduction in their 30-day rate of readmission.” The program is now active in six UPMC hospitals.


Oscar Marroquin, M.D.

Below are excerpts from the interview for that cover story that Healthcare Informatics Editor-in-Chief Mark Hagland conducted with Dr. Marroquin this summer.

From your perspective, what does it really mean to be data-driven, in the pursuit of continuous quality improvement and clinical transformation?

From my perspective, I’m very passionate in that I feel that you really can’t do any of the things that doing in terms of moving towards value, without having a robust data infrastructure, a robust strategy on how to use data and analyze it, and without then deriving evidence for how you’re going to transform your organization. There are a lot of buzzwords involved in all of this, but the only way to get from a buzzword to a true action of transformation, is if it’s data-driven.

I’m a cardiologist by training and an epidemiologist; I still practice. Over the past five or so years, I’ve been asked to oversee how we’ll derive insights from clinical data in our system; in other words, this work is around anything related to big-data analytics, with those analytics being used to help our clinicians. In order to do that, we’ve had to do many different things, including more intelligently aggregating our data, and focusing on specific analytical purposes. They’ve been structured as databases for transactional systems, but not with the intent of improvement.

So we’ve spent a lot of time creating a purpose-built environment for analytics. That’s involved a lot of technical work, to create tables, what we call our consumable layers, for analytical purposes. And we’ve created a team whose only job is to do analytics. We’ve had folks in the past managing back-end databases, who have generated reports, but that doesn’t lead to a sustainable way of using data. And so we have a team that is dedicated to maintaining the warehouse and consuming the data.

With regard to the team of 25 data analysts, do all of them report to you?

The 12 who do data consumption report directly to me; the others have a dotted-line report to me. They sit on our infrastructure team within our IT Information Services Division. Both teams are part of the Clinical Analytics Team. Data analytics—Health Services Division. Integrated team. Two sides of the same coin.

When did these teams come together?

There have been different phases. The analytics program development started in 2012, and we learned a lot of lessons. A lot of the work early on had to be dedicated to technical issues—identifying data sources, etc. That was a pretty labor-intensive process. We really got enough aggregated data to use it consistently in 2015, so from 2015 on, we’ve had this structure of teams dedicated to doing this as I’ve described.

Can you share a few examples of key advances that your team has made so far?

When asked what our team does, I tell folks we do work at the higher level in three different buckets. The first bucket is the entry point for the majority of projects. Not everybody in the system necessarily knows which questions to ask.

We allow people to ask questions to generate opportunities. Off of that, two things will happen. One, hypotheses can be generated, and so we can do hypothesis testing, we can do comparative effectiveness studies, we can formal testing of hypotheses. Also, when insights get generated, one can say, oh boy, there’s a lot of heterogeneity in this population, why is one group more at risk? So we can identify who is at high risk of a condition, and who within the high-risk category is at high risk of developing specific conditions? And the third level or bucket, we apply machine learning and AI tools to develop models that allow us to do a variety of things, from more precise phenotyping of our populations; we can build predictive models to identify patients at various levels of risk. And we also use these models to do unsupervised learning, where we can start to generate hypotheses. So most people in this space love to talk about the latter part, the predictive modeling, and we have done a fair amount of work there, with things like identifying patients at highest risk of rehospitalization after 7 or 30 days of discharge, and we’re using that in our hospitals to guide clinicians. There are resources everywhere.

So we developed a model derived out of retrospective analysis of one million discharges, and we’ve prospectively verified that the model allows us to identify patients at the highest risk of readmission, so our case managers can help us identify plans to help those patients transition from hospitalization to post-acute care in a more effective way. And we see that if they’re seen within 30 days of discharge, there’s a 50-percent reduction in their 30-day hospitalization if they get in to see a clinician. So we make sure that the patient has an appointment made and is ready to see their doctor once they’re discharged, to address any issues.

When was that program put into place?

We spent a lot of last year validating the data. And then this year, we started rolling this out to our hospitals in a phased approach, so throughout 2018, we’ve been deploying this to our hospitals, and we’ve trained and educated different hospitals to use the model, and we’re actively following patients to measure the impact of the tool. And as an epidemiologist, I’m always cautious about declaring victory too soon. We’re seeing good trends, our smaller hospitals are seeing decreases in patients coming back early.

So you don’t have any metrics to share yet?

We have three hospitals, smaller ones we started the program with first, that different units, have shown that this program has had an impact. The numbers are still small enough that I have reservations about absolute certainty. But already, we’re using the program in 20 of our hospitals.

What would your advice be for CIOs, CMIOs, and other healthcare IT leaders, as they consider these kinds of initiatives?

If we all are serious about transforming the way we care for patients, we need to do it in a data-driven way. There has to be a philosophical belief and commitment to do that. Number two, as a result of the institutional commitment and philosophy, then there has to be a team that’s dedicated to this work. I don’t think this is achievable in an ad hoc way, when people just have time. And three, it’s not for the faint of heart; it takes time and effort, but if you have the philosophical belief and institutional commitment, it’s doable. If I say to myself, I don’t ever want to leave my house and get drenched because I wasn’t prepared for a storm, then I need to check the weather app before I leave my house. In medicine, we haven’t yet taken that approach, but the data and analytics are there to guide us in helping us to make decisions, and making it a part of the everyday decision-making process. And in the same way I use examples of rehospitalization prediction, we also do condition-specific predictive analytics, around patients with asthma, kidney disease, etc., so there’s a lot of work going on there. And the message I give clinicians is, there will be companies that say they don’t’ sell you the predictive models they’ve developed; but in our experience, the models have to be a part of an organic process that leads to the building of the models. Clinicians won’t feel alienated, disenfranchised, or threatened, if you bring them in and engage them from the beginning.

 


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EXCLUSIVE: NAACOS President Foresees “Shrinkage in Accountable Care Movement” Pending MSSP Final Rule

December 5, 2018
by Rajiv Leventhal, Managing Editor
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If CMS doesn’t scale back some of its proposed changes to the MSSP, the government’s largest value-based payment program will be significantly affected, says one ACO leader

When the Centers for Medicare & Medicaid Services (CMS) released its proposals to overhaul the federal Medicare Shared Savings Program (MSSP), it was expected that industry associations, along with the ACOs (accountable care organizations) themselves, would push back strongly.

After all, in the August proposed rule, CMS, which has the core aim to push these organizations into two-sided risk models—so that Medicare isn’t on the hook when ACOs overspend past their financial benchmarks—suggested to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years.

One option, per CMS’ proposal, would be the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk. The second option would be the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.

But where CMS, in its proposals, truly clamped down was through two core recommendations that stakeholders took issue with: shortening the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years; and cutting potential shared savings in half, from 50 percent to 25 percent for one-sided risk ACOs. These proposals, if finalized, will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

One of the trade groups that has done much of the heavy lifting when it comes to pushing back on the government’s proposals, and offering evidence as to why ACOs need more time in one-sided risk models while being able to reap more of the shared savings, is NAACOS (the National Association of ACOs,) an association comprised of more than 360 ACOs across the U.S.

In a recent interview with Healthcare Informatics, Clif Gaus, president and CEO of NAACOS, confirmed that the reduction of shared savings and the shortened time allowed in one-sided models are two of the biggest problems the group has with the proposal. Specifically, Gaus says that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

He explains that after polling NAACOS’ members, asking them if they would hypothetically apply to be an ACO knowing that at first, they would be limited to 25 percent of shared savings at most, “the near universal response was no, they wouldn’t have joined the program.” Gaus adds, “The potential of 25 percent savings just isn’t enough to offset our investment costs of starting and operating the ACOs,” noting that ACOs have to obviously put up money to get going, and sometimes it’s very hard for medical group practice-dominant ACOs to buy IT systems, not to mention the whole clinical transformational aspect of ACOs where they are typically hiring nurse coordinators, and in some cases opening 24/7 call centers.

“There is a real start-up and operational cost that’s involved, and [getting] 25 percent of the shared savings doesn’t return enough income to offset those,” he says.

Regarding the proposal to shorten the time in a one-sided risk model from the current six years to two years, Gaus points to CMS’ own data which shows that more experience in a federal ACO model drives more savings, but typically the first few years are not profitable for the ACO.

“We have many examples where an ACO has been in the program and was able to turn the corner by the fifth or sixth year,” he says. “Medicare has to have a long-term view of this. We are investing in a totally new redesign of the healthcare system, so give us time to learn how to transform that care into more efficient and higher-quality care. We are troubled by two years,” Gaus frankly admits. He believes that capping the time in a one-sided risk model at three to four years “is reasonable,” and is what many other associations have proposed.

Indeed, while NAACOS and other industry groups have made their arguments to CMS clear, the federal agency has so far taken a firm stance that upside risk-only ACOs have not been effective. A such, CMS seems to be fine with these ACOs leaving the MSSP— by far the largest federal ACO model, with 561 participants—if they are unwilling to take on more risk.

But Gaus believes that even though CMS did come out of the box with an “aggressive negative message” about one-sided ACOs, the agency has now moderated its views. To this end, a recent study from NAACOS and Dobson Davanzo & Associates, based on a different way of measuring financial success—by comparing actual costs over time in the ACO’s market as opposed to CMS’ method of calculating an initial risk-adjusted spending benchmark for each ACO based on its historical spending, without considering underlying market factors—revealed that MSSP ACOs generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by CMS.

“The whole dialogue has changed,” says Gaus. “We have met with Seema and a number of her staff over the last two months, and the driving factor to this change in dialogue is that the 2017 data, from CMS’ benchmarks, turned the corner and showed that net-net the ACO program was saving Medicare money. You don’t see CMS coming out anymore arguing that the program is losing money,” he says.

What a Final Rule Might Look Like

Gaus acknowledges that a core challenge for CMS is being in the precarious position of pushing down too lightly in its regulations, which could result in the pace of change being too slow, or pushing down too hard, which could result in provider organizations fleeing value-based care initiatives.

“We know the government is wrestling with this issue, and so are we,” Gaus says. “In the crafting of our comments to CMS, as well as the comments from the AHA [American Hospital Association], AMA [American Medical Association], and others, we felt that the balance is the issue here, and there needs to be some movement toward the direction that CMS is pushing. We do respect their concerns, to a degree, but we just thought they were too aggressive in their speed to risk, or speed to remove an ACO from the program,” he says.

Gaus is hopeful that the final rule on the future of the MSSP—which he believes could come by the end of the year, but no later than the end of January—will reflect the industry’s concerns. “History says that this administration, like many others, does listen to input from stakeholders that the rule affects. I believe that they really do understand our positions,” he adds.

At the same time, NAACOS’ position is that the reduction in potential shared savings, as currently proposed, is a “total deal breaker,” and that there is no wiggle room for a number between 25 and 50 percent, Gaus asserts. He adds, “If they don’t go back to 50 percent, we will see a long-term significant shrinkage in the ACO movement and a significant emanation of accountable care.”

Importantly, Gaus also notes that ACO programs are voluntary in nature, a key consideration that he believes CMS often forgets. “Nobody has to be an ACO. [Providers] are making a bet of their capital, that they can invest that capital in cost containment, in care transformation, and [in return], they will get back in the shared savings more than they invested. It’s almost like buying stock—you made the investment and you hope the return is worth it,” he says.

Gaus says that he has told Verma in their many conversations that in many ways “we are at a crossroads, and we have to get the balance right, or we are going to see a denigration of what still remains the largest government value-based payment program.”


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