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In 2011, the health care industry went through some interesting changes – from Meaningful Use attestations and delays to ICD-10 – but one of the less publicized milestones was one that may have a deeper and longer lasting effect on how we care for patients and that was the CMS final rule on the Medicare Shared Savings Program (MSSP). I believe that this rule, and the types of new provider risk-bearing models it encourages, will spawn a whole new generation of health information technology. A generation that focuses not just on patients currently seeing doctors and being admitted to hospitals and appearing on a census, but on a much broader spectrum of analytics, clinical transformation tools, wellness/prevention solutions and automated care management systems for comprehensive management of patient populations.
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.
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.
I appreciated all the dialogue that my recent post on KevinMD’s blog, “The emergency department in an ACO world,” has generated over the past week or so – the number of comments is a great indicator that ED physicians are not just letting this topic go by. I’ve compiled the following post to address as many as I can:
In the era of accountable care, you’ll notice that many hospitals and health systems are already driving towards more collaborative workflow. The integrated delivery network (IDN) is changing significantly, and for the better. But in high-acuity care areas, like the emergency department (ED), the challenge of treating patients more holistically in what is already a fast-paced environment is concerning for physicians evaluating the pay-for-performance model.
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.
For this week’s guest post we welcome back Joel C. Hoffman, Senior Vice President with OptumInsight Payer Solutions.
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:
It’s been one busy week! As director of the newly launched Optum Institute for Sustainable Health, I’ve been presenting our first set of findings at the The World Congress 2nd Annual Leadership Summit on Accountable Care Organizations (ACOs) in San Diego, flying all over the country to meet with providers, and on the phone with health care reporters who’ve been interested in our study – everyone from HealthLeaders to Healthcare Finance News to USA Today. Who needs sleep, right??
In my more than 20 years in health care, the Optum Institute is the most exciting organization I’ve been lucky enough to lead. As someone with a true passion for health care, I’m like a kid in a candy store. Our job is to be an authoritative source of information on trends in the marketplace – especially new collaborative care models – and a resource for folks who are working to make healthcare sustainable. We’ll do that by conducting research, monitoring trends, working with leading experts around the industry to keep a finger on the pulse of all things accountable care, evaluating what works and what doesn’t, and helping develop best practices to propel our industry forward in the development of Sustainable Health Communities.
To kick things off right, we went big, surveying 1,000 US-based physicians, 400 hospital executives, and 2,000 health care consumers to get a sense for how each group views this inevitable evolution of care, and to identify the most immediate opportunities for positive change. Some of the results surprised us and others were in line with our expectations, but here my favorite highlights:
Like many folks in the healthcare industry, the “light reading” that has graced my nightstand over this past week or two has consisted of 700 pages of the Department of Health and Human Services’ Final Rule on Medicare Accountable Care Organizations (ACOs). Overall, the changes from the draft proposal, aimed at nudging providers away from a fee-for-service model and into one of shared savings and risk, are both substantial and encouraging, with a number of key improvements in three key areas:
While many things remain undefined when it comes to the industry’s move to pay for performance, one thing is certain – one size does not fit all. Encouraged by the regulations around Medicare’s CMS-based ACO, providers, physicians and payers are teaming up in a variety of ways to create new models of collaborative care. Although the CMS-defined ACO model has the lowest downside and many health systems will need to adopt it due to competitive pressures, the following models allow for the ability to scale to various-sized populations and design customized shared savings arrangements tailored to the needs and demographics of each community:
With financial, clinical and regulatory pressures increasing steadily, and the new and confounding acronyms appearing daily, many hospitals and health systems today are wondering where they should first put their focus — building a robust Health Information Exchange (HIE), or preparing for an Accountable Care Organization (ACO) or other payment reform model?
Each variety of HIE — statewide, regional or private/IDN — has different goals. Privately held HIEs are rooted in the desire to achieve clinical and operational excellence among physicians within a health system, while regional or statewide systems are focused on sharing patient information across providers in a geographic area. We all know that trying to connect these disparate systems can be challenging, and that linking into a larger network requires additional infrastructure investment. But rather than implementing a less robust system that will need to be replaced in two years, the inevitability of some kind of payment reform and shared risk model coming to a town near you means that health care organizations need to invest in an HIE that both enables meaningful use now and has the power to support collaborative care models later.
What a difference a year makes! I am amazed how mindsets are changing in an industry that typically takes its sweet time to make any changes of significance.
In a sense, the whole debate around healthcare reform — both before and after it was enacted — shocked those who were not happy with the proposed models into starting their own initiatives around new models of care. We have entered a new era of collaborative care and provider transformation and, whether you believe in state-sponsored health insurance exchanges and ACO’s or not, one fact holds true: the lines between payer and provider are becoming blurred. Take the recent controlling interest that Pittsburgh insurer Highmark Inc. took in West Penn Allegheny Health System as an example. Hospitals, which are the core of this new wave of accountable, integrated care, are moving to models where they will take on more risk, and they are in dire need of new expertise and tools to help them manage populations rather than care episodes. This is something that payers have done for over 50 years, and they are now jumping in to help hospitals get there.
