Let’s call this “The New Core,” vs. the basic EMR which will soon be the old core. It’s from these core tools focusing on managing the health of populations that the new age of care will be enabled.  Think of more provider-led health plans, consumers who get much more engaged in their care. Think of health systems that follow their patients from different risk categories as they migrate through the health system from pre-hospital/ambulatory settings to inpatient to post-acute and on into the home. Payers will still have an important role as efficient intermediaries and as government-sponsored healthcare expands so will the need to outsource the capabilities to manage the new lives covered. Think of a whole new world for physicians and other more empowered caregivers who get paid to take care of patients the way they were trained instead of being handlers of “care transactions” as in the past.

The momentum we’re seeing from CMS-designated Pioneer Accountable Care Organizations (ACOs) and the number of large physician groups seeking MSSP status is enough to showcase the HIT changes afoot. Today nearly 40 Pioneer ACO organizations – such as Sharp Healthcare, Allina Hospitals & Clinics, Partners Healthcare, Texas Health Resources, Atrius Health, and others – are taking on risk for large populations of Medicare patients that they weren’t previously responsible for. We’re seeing top-performing physician groups – including WESTMED and Cornerstone Health – applying for MSSP status and investing in these new tools, as they recognize the future of bearing and managing risk is inevitable. As we look ahead, I envision the impact of these changes to be:

1. Provider risk and integrated care models: By the end of 2012 I believe there will be a minimum of 50 major health systems and physician groups managing full risk on at least 10% of their patient population – a lofty goal perhaps but one that is already well underway. Whether the motivation for these new partnerships is cost reduction, market share, experiments with provider employee populations or payer-led efficiency programs, the end result will be the same – more provider organizations doing more than just dipping their toes in the risk-bearing water. I’ve talked to the C-suites of more than 200 health systems in the past 18 months and can assure you that there is no longer a question of whether they will become more accountable, but instead they’re looking at when and how to accomplish this.
2. Revenue cycle management: Hospitals leak revenue more than any other business in any other industry – with the average health system collecting only 33% of what they actually bill under the current fee-for-service (FFS) system. On top of this they will be burdened by the introduction of new fee-for-value (FFV) payments. Just meeting the basic requirements and maintaining status quo in this new environment will be challenging. As a result, 2012 will bring an emphasis for hospitals on closed-loop revenue cycle management, making it easier to adapt to new coding systems and offer long-term improvements, rather than quick fixes that are not sustainable. If they’re smart, they’ll act sooner rather than later to enable them to have the cash on hand to be ready for it all.
3. ICD-10: Less than 10% of healthcare providers are halfway to ICD-10 readiness, but with the introduction of up to 155,000 new reimbursement codes by 2013, ICD-10 could be an insurmountable challenge. Without preparation, hospitals face lost productivity and denied claims, which coupled with under coding, could deliver a financial hit of as much as $850,000 for an average 250-bed hospital. The implementation of computer-assisted coding systems that ease this transition takes time. The time to prepare is now, and in 2012 I see more hospital systems jumping on this critical bandwagon.

2010 was the year that the “Accountable Care” buzzword arrived en masse, 2011 was the year that government regulations were sorted out and private partnerships around shared risk were developed, and I believe 2012 will be remembered as the year the ACO translated into new models of care, with hospitals and large physician groups engaged and starting to manage risk and deliver care in a much more integrated fashion. This will also be a transformational year for health IT.  The New Core is here From a new breed of analytics that help measure quality outcomes, to secure networks enabling physicians to share patient information in a more integrated fashion, to clinical actuarial tools that help caregivers manage cost and quality at the same time … Wait. What? Clinical people managing costs? Welcome to the new world! More on that in my next post.

– Todd Cozzens

An important consideration in the transition to ICD-10 is Clinical Documentation Improvement (CDI), which seeks to improve the quality of provider documentation, helping clinicians better reflect the services rendered and most accurately represent the complete patient encounter. The simplest type of CDI is educating providers about potential documentation weaknesses from both the clinical and financial perspective. While helpful, this is more impactful when coupled with specific examples of deficient documentation. Even so, retrospective analysis and feedback are limited to influencing future behavior and are dependent on follow-on audits to validate changes.

A more proactive approach to CDI works to identify potential documentation deficiencies while the patient is still at the facility. With this approach, CDI specialists, healthcare information management or care management teams work closely with clinical teams to review and help fill documentation gaps, ideally before or soon after the patient is discharged. This approach also has its downsides: it can be very labor intensive, requiring highly trained specialists to execute well; it is typically not possible to review every chart, but instead only to select patient encounters with the greatest opportunity for improvement to review; physician queries must also be communicated back to the provider, which can be difficult to integrate into the provider workflow.

Computer-assisted coding (CAC) technology is a valuable tool to support better clinical documentation and physician education efforts. CAC can help make the process more automated, accurate and measurable, but not all CAC solutions are created equal and the natural language processing (NLP) engine is the key to successful CDI. Accurate NLP can boost the productivity of CDI specialists, allowing them to review the results and quickly identify relevant information in the chart that could indicate missing or incomplete documentation. A specialized NLP engine can flag clinical facts that may indicate certain conditions that were present and services delivered, even if the full documentation is not present. This capability in particular will be very important in the transition to ICD-10, where codes are often more complex and require a compositional approach to combine information from multiple parts of the medical record.

CDI specialists face the same challenges as coders ─ limited time to completely understand complex medical records ─ and because CDI opportunities may involve more complex medical encounters, the demands are even greater. NLP can serve as the automated CDI specialist that reads every chart to find the ones with the greatest need for follow-up. As we’ve said here before, the time to act is now ─ rather than risk losing revenue, instead tackle the challenges of CDI today so that you survive the ICD-10 shift.

– Mark Morsch

In this guest post, Joel Hoffman, senior vice president at OptumInsight, sounds off on the impact not knowing their “hurdle rates” has on organizations that have applied to CMS to be Medicare Shared Savings Program (MSSPs) Accountable Care Organizations (ACO).

For an MSSP ACO to succeed, it must deliver care to its attributed Medicare fee-for-service population for less than it costs CMS. Comparing an ACO’s actual cost of care to CMS’ pre-determined value of what it is expected to cost them ─ or the ACO’s “hurdle rate” ─ determines if an MSSP ACO will be able to participate in gain. But as of now, CMS hasn’t released these hurdle rates ─ making it very difficult for an MSSP ACO to ascertain whether success is possible under these parameters, and therefore to decide with any confidence whether or not to proceed to contract with CMS.

Complicating this predicament is the fact that hurdle rates aren’t easily calculated ─ they are not necessarily a straightforward extrapolation from the Medicare fee-for-service experience in an ACO’s proposed service area. The recently released MSSP hurdle rate formula requires a blending of multiple years of baseline Medicare fee-for-service experience, trended to the contract year at national experiential trend rates, with adjustments for attributed members and decedents. Simply put, hurdle rates are not easy to calculate – not even with access to the appropriate historical Medicare baseline experience. Thus, absent CMS providing the hurdle rate, an MSSP ACO can’t easily work-up a proxy.

Modeling ACO rules now is critical to understanding the opportunities for success as well as the potential roadblocks that may lead to failure in the future. So what can a budding ACO do now to understand the most important variable ahead – what they will be measured against to decide their success?

Now more than ever, aspiring MSSP ACOs need to tap into expertise in these CMS rules with access to Medicare research databases that can actually estimate a specific MSSP ACO’s hurdle rate. There is clearly an arbitrage opportunity in CMS’ ACO hurdle rate calculations ─ based on the rules, some ACOs will have savings already built into their hurdle rates (i.e., hurdle rates greater than a traditionally determined, projected unintervened baseline) while others will have a more difficult road ahead (i.e., hurdle rates less than a traditionally determined, projected unintervened baseline) to get to a gain share position with CMS. These imbedded savings/losses have proven to be not at all immaterial.

It makes sense that an ACO would appreciate the benefit of understanding their hurdle rates now ─ that is, will they be starting out in a favorable or unfavorable position ─ as they decide whether to contract with CMS and prepare and execute their operating plan.

– Joel Hoffman, ASA, MAAA, FCA

This week’s guest post comes from

The idea of implementing bundled payments can be intimidating for any hospital CFO. But, as a way of paying providers that combines all the services needed to treat a patient, bundled payments are an inevitable step for both payers and providers as the industry heads toward accountable care.

The challenges of implementing bundled payment models are more operational than conceptual – improving the flow of information between provider and payer, collecting and delivering the right information about services delivered to these patients across multiple care providers, and ensuring consistent reimbursement. It’s obvious how the task can seem overwhelming – as most providers are much more comfortable focusing on the appropriate care model for specific clinical conditions like diabetes or hip fractures – but here’s how every provider can prepare to make the shift:

• Get Organized – Providers need to determine how to assemble claims into bundles, how much a specific bundle actually costs, and which requirements for treating a patient have been met as part of that bundle. They need tools to notify payers that a patient is covered by a bundle and when the package of services begins and ends. Finally, they need to bundle data across multiple providers in a single claim for payers, and tools to properly distribute reimbursement funds.
• Divide and Conquer – Payers need to learn how to identify bundled claims within the stream of thousands coming in the door on a daily basis. To do this, they need tools to help understand which providers are involved with each bundle and enable communication with them. They also need a mechanism for identifying services with special exemptions and determine payment details (how much to pay for a bundle and to whom).
• Crunch the Numbers – Finally, to really change the way care is delivered, both parties need to track how the patient has been treated in different provider settings, and what appropriate care looks like. A database with the ability to query the shared data from both sides, close to real-time, will improve coordination and enable more effective patient management.

Providers need to think carefully about the costs associated with the care decisions they make to successfully implement bundle payment programs. By aligning the incentives between payers and providers to deliver high-quality care to patients, bundled payments are a necessary step to success in any accountable care model. Follow the steps above, and the transition should seem more manageable.

–Dean Farley, PhD

In this week’s guest post Dr. Miles Snowden, chief medical officer at OptumHealth, offers tips for stimulating patient accountability in the age of accountable care.

While payers and providers are usually in the spotlight when it comes to accountable care, the most successful models will be the ones that place a strong focus on patient accountability. More and more frequently patients are selecting doctors with the best outcomes, asking proactive questions, and taking an active role in their lifestyle and behaviors. Empowering patients with the support and tools to be responsible for and more involved in their own health is critical to improving outcomes and reducing costs as part of any accountable care environment.  In fact, Optum found that when given more information about a planned elective surgery, 1 of every 15 patients change course – either deferring, choosing a less intensive option, or changing facility or proceduralist.

Currently, patients navigate the medical system to achieve the best outcome in the shortest amount of time, but physicians are incentivized to provide more services. If the decision-making process of the physician and patient are not fully aligned, then it is not reasonable to deploy a strategy focused solely on stimulating greater accountability in the patient. An alignment of goals for the highest quality and most financially efficient care can help to ensure patients are never in a position to make a health decision against the advice of their physician. The burden of responsibility has to be directed equally at all stakeholders. Once alignment is established, strategies to stimulate greater patient accountability can be deployed.

Establishing a primary care relationship is key for patients because it provides them with the opportunity to view care more holistically, gain a better understanding of medical alternatives, and feel supported by an advocate for better personal health. Group visits can also encourage patient accountability by allowing patients to connect with others who have similar conditions, and providing physicians with an opportunity to educate and promote better overall patient health. In addition these strategies, tools to enable patient engagement are paramount. We’ve bucketed these accountability enablers into three categories:

• Demand Management: Stakeholders too often demand a greater intensity or frequency of service than necessary to achieve clinical success—experiencing more readmissions, ER visits, and MRI or CT scans than needed for example. It may sound simple, but asking discharged patients questions such as “Where will you go post discharge?”, “Are you certain any equipment or physical therapy has been arranged?” and “How can we reach you?” counters some of the system inefficiencies and better moderates unnecessary demand in the medical system. In fact, such efforts can cut in half the readmit rates.
• Population Management: According to a commercial insured 2010 population analysis, half of high cost claimants had minimal to no engagement with the delivery system in the prior year, indicating that providers need to better engage with individuals who are not active in the system, not just at the point of care. This is a significant challenge that can be overcome by partnering with organizations that specialize in identifying and engaging individuals who will become future sources of medical costs. It is particularly important for providers to reach out to individuals with a low intensity of need that don’t consider themselves patients and individuals with immobility or lack of access to care.
• Network Management: Oftentimes, individuals choose to access care at the wrong place. Transparency of information on physicians and specialists ensures that patients are receiving the best care at the lowest cost. By facilitating transparency providers can influence patients’ decisions, increase patient involvement and open the door for better communication across the care continuum.

All patients across the care continuum need to be participants in their own care, and providers should be implementing strategies to encourage this accountability both at the point of care and, more importantly, once the patient goes home. The focus should not be directly on changing a physician’s practice or reducing a hospital’s patient load, but instead on implementing an accountability model that aligns both physician and patient expectations to improve the health care system as a whole.

–Dr. Miles Snowden

Defensive medicine: I agree entirely that any discussion of the cost of medicine should pull in the defensive medicine costs. There are people much better qualified to do that than I am (Dr. Dan Sullivan MD, JD comes to mind), but I think that the cost of medical care driven by fear of litigation is consistently underestimated. I’m certain it has had an effect in my own practice. My last shift was Sunday, and I probably was overly cautious with a bronchiolitis child that might well have done well at home, and a mystery abdominal pain got a pretty aggressive (and negative) workup. How much defensive medicine effect was involved is impossible even for me to say, but like most of my colleagues I have been named once (and a jury found in my favor) and it is something I will work hard to keep from happening again.

Regarding any perceived criticisms of the ED/ED physicians: I love the emergency department and I always have. It is risky, unpredictable and difficult, and as I get older my feet hurt and my body complains after every shift (hats off to all of you who have done this a lot longer than I), but I still love giving critical care to someone who needs it. The cricothyrotomy on a young person this year who made it with his brain intact will keep me going for another few years, although I will retire happy if I never do another. I also understand that as good as the ER is at taking care of all comers (and yes EMTALA requires it), we are better at some things than others.  Regardless of our skills and commitment, our ability to take care of business the way we currently do will run into the simple fact that the cost of medicine to Medicare and Medicaid to the federal budget will not grow forever. We have been hearing the word “unsustainable” for years, and to those who think this is just one more episode of many, just call your billing company and see what your bad debt is on commercial insurance. As the cost continues to rise, more employers are passing a significant fraction of care on to the patients, who can ill afford it.  Deductibles of $2000.00 are now common, and I have seen them up to $10,000, which simply results in more medical bankruptcies and patient calls for system change.

Addressing the cost of care means becoming more efficient, and that means tackling where much of the waste is, in coordinating care for complex patients that are chronically ill. Medication reconciliation is step one there, and we need to get better at a wide range of similar activities because our patients are getting older and sicker. If that is not going to affect your practice, I am pleased for you, but it will be affecting mine. Personally, when I have 12 medications and 5 medical problem, I want all of my doctors on the same page about what the plan is for my care. Very personally, my father had a craniotomy and hematoma evacuation while taking Coumadin after being put on Levaquin. His INR was 11, and he did not sue his doctor because I get how hard it is, and my father likely didn’t connect his A-fib to his bronchitis and mention his medication history at all. Coordinated care there would have saved I don’t even know how many dollars over the years on just his case. As we see patients in the ED for the 5th, 6th, 7th time in a year, the opportunity is there for ED physicians to make a meaningful difference. To be clear, I am not suggesting that the ED physician needs to do the discharge planning and social work functions that could be so beneficial to these patients, but pointing out to your administration the need for care management, articulating the advantages of better social services support, and advocating for better outpatient support is a good way to start. Many physicians of all specialties are already doing so, and the ED has a significant place in this conversation.

Finally, an ACO is about incentives. Right now the best way for me to pay for my kids college is to make sure my ED is full of sick people. Financially, I would be better off spreading the flu around than washing my hands. Obviously, I would never let those mis-aligned incentives impact my behavior or patient care, and I do not know one ED physician anywhere that would allow any incentives to practice to a patient’s detriment (although I did know one that partially owned a motorcycle dealer!) That said, when the incentives are a problem, the uninitiated and uncertain can become concerned. For example, I would have issues buying a car from a mechanic (my father waived HIPAA on his neurosurgery, but he won’t let me tell the car story). I think the public has a reasonable concern where the incentives are misaligned. The great benefit of an ACO is that under a good clinical integration plan a good clinical decision becomes a good financial decision from all points of view. I remain concerned about how to navigate the conversation around bundled payments, but I do believe it can be worked out where clinicians are engaged and are making decisions centered on the patient’s best care. To be clear, fee for service has done well for me, but I understand why the public (employers, payers, and patients) would like to see incentives change to something that rewards health more than illness. I am going to work very hard to make sure that I am helping to enable the best possible outcome for physicians, patients, and health systems. The comments here indicate that other physicians are paying attention to this issue, and are with me on the need to navigate change with the patient’s best interest in mind.

P.S. To those taking issue with my writing style/grammar. I will attempt to improve on that one, but I majored in biology and went to medical school and spent a lot of time in the ED while my friends were learning how to write. An informal style is the result, and is unlikely to change much.  Sue me (see paragraph 2).

–Mark Crockett, MD

According to the American Medical Association and the Markle Foundation, four in five American consumers believe that using an online patient health record (PHR) would yield major benefits to them in managing their health care. In spite of this, the usage of PHRs has been very low to date, due in some part to patient concerns about privacy of their personal health information.

There are similar privacy concerns with an HIE. However, the HIE plays a critical role in the population of PHRs with clinical data from sources around the health care community. HIE stakeholders — such as hospitals, health plans, individual practice associations, etc. — should consider sponsoring or supplying a PHR to patients that is not only already pre-integrated to the HIE, but also empowers patients by allowing them access to the PHR on their own terms. By letting patients set the consent policies and access rules for their records on the HIE, the HIE potentially is helping to quell these patient concerns.

Effective patient education is key to increased patient involvement and empowerment, and this can be achieved by PHRs connected to the HIE. Doing so enables them to send and receive health care information to their own PHR and share it efficiently with the professionals providing care. But how do you promote this participation successfully?

• One way is to go directly to the patient. They need to be presented with the facts about HIEs when they are registering. Registration personnel should be well-trained to explain the exchange and its benefits in layman’s terms, and address any questions from patients.
• Beyond just the patient visit though, HIEs can implement broader, community-wide consumer education programs to help garner patient participation. These campaigns often include radio or TV commercials/appearances, direct mailings, billboards, presentations at local community meetings, and/or fact sheets, and can serve as resources for patients who have questions about an HIE or concerns about participating in one.
• Alternatively, making clinical staff aware of the exchange and explaining the benefits of their participation allows them to advocate for an HIE and encourage patient participation. Physician champions can lead to increased buy-in from patients, peers, and community leaders.

The best marketing program for each HIE will depend on its unique market, but at the heart of it all is the educated consumer. Informed consumers are engaged consumers, and engaged consumers are satisfied consumers. As the health care industry becomes more competitive and moves toward coordinated care and market-based economics, business models that place the consumer at the center of the health care universe will be in positions of strength.

–Glenn Keet

We’re excited to welcome Anand Shroff, vice president of product management at

It’s no secret that healthcare has historically been slow to adopt the latest and greatest in technology and even slower to embrace technological paradigm shifts, as evidenced by the continued presence of client-server computing in healthcare in the age of the Internet. While strides to catch up have been made in recent years – with shifts toward electronic health records (EHR), advanced health information exchange (HIE), and mobile computing devices – the world of business is changing rapidly, and the industry needs to do a better job of keeping pace.

Cloud computing is one such paradigm shift. Like other advances before it, cloud computing took root with consumers — think Apple’s iCloud and Google’s Gmail services — and has since triggered a shift in the way enterprises think about doing business. What began as a simple question of whether files could be stored in the cloud quickly shifted to a discussion of whether business processes could be hosted there as well, e.g. Salesforce.com. Now, entire business processes have been moved to the cloud and previously unthinkable workflows are achievable because of private (and public) cloud integrations made possible by secure cloud communications. Salesforce.com has built an entire ecosystem of extended business processes through its force.com platform, which relies on cloud-to-cloud integration.

Healthcare presents unique challenges to cloud infrastructures, operating under some of the most stringent data privacy and security regulations, but that doesn’t mean cloud is completely out of reach. As hospitals and health systems continue to adopt technologies to capture data and share it over an increasing number of miles, they’ll also need to think about how to store and access that data most efficiently, and cloud solutions could be the answer. Public cloud environments – where information is accessed entirely via the Internet and hosted outside the organization – may be too risky, but private cloud environments, which exist in healthcare today, can offer similar benefits and efficiencies with less risk. It’s also possible to take a hybrid approach, which is what I envision will work best in healthcare. For example, consumers could use their OpenID (public cloud technology) to authenticate with providers after passing additional levels of verification (private cloud offering).

Whether or not patients care about cloud, providers will have to care as their EHRs grow, but they aren’t the only constituencies that should pay attention. Vendors too will need to consider cloud infrastructures, privacy and security for its hospital customers. They’ll need to start with bolstering security, paying close attention to special certifications and solutions available to help instill confidence in cloud. Payers – given that they have such influence on the industry itself – are sure to capitalize on cloud computing as well.

Silicon Valley receives the attention it does for good reason. Whether it is business or consumer facing technology, human lives are transformed by the innovations made here. Healthcare can recognize the benefits of improved agility and efficiency by keeping closer tabs on how its technology industry counterparts are propelling the world forward.

–Anand Shroff

In today’s ED, patients may enter with a chronic condition that could be better managed by a primary care physician (PCP), but because ED physicians are incented to treat sick people in a fee-for-service model, they continue to take these patients on instead of referring them outside the ED walls. If instead both ED and primary care physicians operate as part of a team of care givers that are incented to ensure patients stay healthy and avoid hospital admissions and readmissions, they are headed in the same direction in terms of focusing on better patient outcomes vs. reimbursement dollars.

ED physicians used to be among the few physicians employed by the hospital, but that’s changing dramatically as IDNs snap up physician groups. The larger group working together will help make sure the ball isn’t dropped anywhere throughout the spectrum of care. If a patient with a laceration comes into the ED with diabetes, and that ED doc doesn’t think to check blood sugar – because that’s more of a PCP issue – that oversight will be visible in an ACO environment and the physician might be under the microscope in terms of the role played in ensuring quality outcomes.

Part of this movement requires implementing integrated technology solutions that provide greater visibility into the types of care needed in your community, allowing the health system to build care facilities that are catered to the population it serves, ultimately enabling the sustainable health community. But the real lynchpin for success is the collaboration between people, not just IT systems. This means choosing metrics to support each constituency that has a stake in the game – providers, payers, physicians and patients – so that they buy into the new strategy and are empowered to make changes that support lower costs, increased efficiencies and higher quality care. It takes strong leadership demanding teamwork across clinical, administrative and even third-party vendors, along with a shared passion for making sure patients are cared for in the best possible way to make this happen.

In my next post I’ll talk a little bit more about the kinds of metrics physicians will be measured against in this new environment and answer some questions from those who may be concerned about their new roles.

– Dr. Mark Crockett

Evaluating and managing population risk has traditionally been the payer’s role in the health care system. But as providers become increasingly accountable for populations, they will need to be equipped with many of the same competencies that payers have been relying on for years. This includes the right technology to capture both clinical and claims data, but also the ability to analyze and transform these data into actionable information that affords the delivery of high quality, efficient health care and ultimately real population health — that’s where actuarial services come in.

There’s a reason why actuaries are known for incessant number crunching, data collection and manipulation (along with the occasional pocket protector) — it’s a complicated field that first requires extensive training and then plenty of experience to practice effectively. Our team of over 175 actuaries, who are engaged on a daily basis to do this work, are hearing excitement, but also understandable caution from providers looking to assess and understand both the risk and the financial benefits of setting up any of a variety of accountable care models. Many providers — including some already approved for the more advanced CMS Pioneer ACO — just don’t know where to begin, so we’ve pulled together these tips for how to wear the “payer hat” when evaluating populations and assessing risk:

• Determine baseline utilization and expenditures: How well do you know your population? A clear understanding of what the patient population looks like from an exposure-based claims view — their demographics, morbidity, how and where they have been consuming medical resources and at what levels, etc. — is key. Without this, providers will be hard pressed to understand the gap between current performance and the appropriate number and type of services and level of care they should be delivering to a population in an accountable care model.
• Estimate the optimization of service utilization: Can I really improve — where and how? Providers need to dig deep into the data, analyzing it by type and place of service at a county (or even narrower geography) level to determine how their utilization of services compares to other regions, how physician performance varies in their own delivery system, and thus how to identify opportunities to improve by delivering a more optimal mix of health care. It should be expected that some services will be eliminated, some replaced and other added. These improvements can then translate into an opportunity through accountable care contracts.
• Identify tactics to achieve optimal utilization of healthcare: How can we make this opportunity “come to life” for providers? Identifying changes to make in the clinical setting to ensure the best possible patient care, appropriate utilization of services, and efficient clinical decisions is a first step. Then providers must execute on the fundamentals of care delivery, utilize actionable information at the point of care, put clinical programs in place, etc. to realize the full potential. Creating a definitive road map for their journey, placing needed tools in the provider’s hands, and wrapping them with the necessary clinical and operational infrastructure will be vital to both encouraging physician buy-in and facilitating their success. Payer partners can help with the latter. Providers must then execute on these opportunities without becoming overwhelmed with all the change — the reality is some physicians will need to alter very little in how they practice while others will have to make major changes to drive better system performance.
• Calculate the opportunity: How much upside is really available for the delivery system? This is where providers can decide how aggressive their transformation will be and over what time period. At this point they should also identify other levers to pull that will help them meet their goals — e.g. supportive technologies and/or engaging third-party vendors to facilitate the effort — and make sure that changes they make are sustainable. Providers not only have to think about improving the care they deliver but also about how to replace potential lost revenue (for example in the hospital as less-intense admits are avoided through better access to, and delivery of, ambulatory care). Quantifying the long-term opportunity for providers and understanding that achieving optimal performance will have to happen over time and will help them wrap their heads around the journey they will be taking.

In the age of accountable health care, providers need to act more like payers. In making this transformation, a tremendous amount of education and preparation is needed to enable providers to effectively assume more responsibility. While some providers can’t acquire enabling capabilities and services fast enough, others haven’t begun to see the need. The potential upside for providers can be enticing, but without embracing traditional actuarial consulting services and tools, providers may be at a loss — in more ways than one.

– Joel  C. Hoffman, ASA, MAAA, FCA