In the Wake of the Next Generation ACO Reveal: Getting Real About IT and ACOs | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

In the Wake of the Next Generation ACO Reveal: Getting Real About IT and ACOs

January 18, 2016
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Industry experts agree that strategically leveraging IT will be more important than ever

It was excellent last week to speak with three experts on the development of accountable care organizations (ACOs), in the wake of the full unveiling of the Next Generation ACO Program on the part of senior officials at the Centers for Medicare & Medicaid Services (CMS). As we noted on Monday, Jan. 11, CMS officials reported on that day that “21 ACOs are participating in the Next Generation ACO program. Those ACOs are in the following states: Maine, Massachusetts, Pennsylvania, North Carolina, Florida, Michigan, Indiana, Wisconsin, Illinois, Minnesota, Iowa, Texas, Arizona, and California.”

Among other things, CMS officials noted in last Monday’s announcement that “The Next Generation Model participants will have the opportunity to take on higher levels of financial risk – up to 100 percent risk – than ACOs in current initiatives. While they are at greater financial risk they also have a greater opportunity to share in more of the Model’s savings through better care coordination and care management. In addition, the ACOs will receive their budgets prospectively, in advance of the performance year, to plan and manage care around these financial targets from the outset. The ACOs will also be able to select from flexible payment options, such as infrastructure payments that support ACO investments in care. “And the announcement quoted Patrick Conway, M.D., Deputy Administrator for Innovation and Quality and Chief Medical Officer for CMS, as saying that “Accountable Care Organizations are improving quality of care and spending dollars more wisely. These new initiatives place patients at the center of a coordinated care delivery system and give providers the tools to achieve better outcomes.”

All worthy goals, of course—no question about that. But how will all this play out in practice? By and large, industry experts have expressed positive reactions to last week’s announcement—with a few caveats. Among the experts I spoke to last week were, from the Charlotte-based Premier Inc., vice president, population health management, Joe Damore; and from The Advisory Board Company (Washington, D.C.), Rob Lazerow and Nicole Latimer. All are deeply involved in advising the patient care organization leaders developing ACOs, on broad strategic and process issues, as well as, to varying degrees, some of the specifically health IT-related challenges around accountable care.

And each of these three consultants shared significant perspectives on all this with me. Lazerow began by stating that “I am not an IT expert; my role is to look at broad trends. But,” he said, “there absolutely is an IT and analytics component, especially as they need to segment their populations—and that involves effective delivery and efficient resource utilization. And it also involves providing clinicians with the resources to do care management and care coordination, and there’s a CRM element of that that requires a big IT backbone. And the need to share comprehensive medical information, and to understand referral and care patterns, and the quality of care being provided.” He further agreed that marrying clinical and claims data is particularly challenging, “because providers need to understand their populations; and some of that involves understanding broad trends around health status, as well as social factor trends. So providers are having to learn to manage broad, diverse sets of data.”

Some of the challenges involved will inevitably involve health risk stratification around rising-risk patients, those not in the highest-risk group and already identified, but who might soon join those ranks. As Damore told me, “They’re people with chronic conditions that are currently well-managed, or for example, asthmatics developing secondary conditions. But as we mature in learning how to manage populations, that will become more and more important. And really, before all this evolved, our economic system didn’t reward anyone to manage the 5 percent high-risk patients. In fact, the incentives were to care for people episodically. I take the example of the diabetic: everybody made money off taking care of complications from diabetes. But now organizations are managing diabetics, and that care management really works, and works for at least five other key chronic populations as well. But that’s really the low-hanging fruit. And that’s where the improved analytics will really help.”

The Advisory Board Company’s Latimer agrees that marrying clinical and claims data poses a major challenge in all this. “Yes, it’s definitely difficult, along multiple dimensions,” she noted to me. “First is the difficulty  involved in the actual physical matching of clinical and claims data—you have to make sure you’re matching the right data for the right Mrs. Smith. We have a patient-matching algorithm that requires 12 separate elements need to create a match; and I’m sure others have other algorithms. And those algorithms need to be made more sophisticated and successful. Then, once the data is merged, it’s hard to figure out what I should be looking for, absent a ton of knowledge about specific disease states.”

So clearly, the strategic—as well as tactical—IT challenges are many and multi-dimensional going forward. On the one hand, CMS officials have opened a new path forward for those who would engage on ACO development, a path that offers greater flexibility and potentially greater financial reward—but with concomitant greater risk.

And there is absolutely no question that the IT issues are both broad and deep, and inextricably intertwined with strategic, process, organizational, and cultural issues. Given that, this situation offers a tremendous opportunity (with associated risk) for healthcare IT leaders, most especially CIOs and CMIOs of patient care organizations, to truly lead change. But to be successful, they’ll have to take on personal risk—and show personal leadership. And this will take a tremendous amount of work.

But if ever there were a true opportunity for healthcare IT leaders to show personal leadership, now would be the time, and the Next Generation ACO Program—as well as all the CMS-sponsored ACO programs, and all the commercial health insurer-sponsored ACO programs—would be the place in which to do so. The next few years will be extremely significant, even determinative, in all this. And the opportunities, and risks, are there, in equal proportions.

So anyone paying even the remotest attention to what’s going on with the Next Generation ACO Program should feel intrigued, and challenged, to help their organization truly move forward to make the promise of the program a reality. Will it be easy? Absolutely not. But I’m also hearing some encouraging things from industry experts who know what they’re talking about. And that is encouraging in its

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