Additional Ingredients for ACO Success: Communication Training, Support Tools and Culture

Pity the hospital CEOs, EVPs and Chairs and their "Accountable Care Organizations" (ACOs). They've lined up the doctors, invested in an electronic record, hired some care management nurses and signed the risk contracts.

And then Matthew Press and colleagues come along with this AJMC article on Care Coordination in Accountable Care Organizations: Moving Beyond Structure and Incentives.

Their message? You may have what's necessary, but it's not sufficient. Organization and incentives are not enough.

What's also needed are:

1. Training: physicians need education on coordination, collaboration communication and teamwork.  The education should be an organizational priority and typically involve course work, observation and feedback with continuous evaluation.  This cannot be accomplished in a one day workshop.  An example of what it might take can be found here.

2. Support tools: since efficient information transfer must to be built into ACOs' workflows, informal "situation" or "personality" dependent communication between docs and nurses need to be transformed.  An example of the kind of framework that Kaiser instituted can be found here.  While you're at it, think about HIPAA-compliant texting, wiki-enabled EHR records and patient activity streams.

3. Culture: if front line staff are going to support the delivery of high quality and optimum cost care, the organization will need to protect time for care coordination activities, multi-disciplinary meetings, forums to share best practices and incentives that recognize collaborative behaviors.

Looks like the work has only just begun.

The Relationship Between Discharging Patients From the Hospital Too Early and the Likelihood of a 30 Day Readmission: Treat, Street and Repeat.

I'm baaaaack!

When persons are admitted to a hospital, insurers' payment rates are based on the diagnosis, not the number of days in the hospital (known as a "length of stay").  As a result, once the admission is triggered, the hospital has important economic incentive to discharge the patient as quickly as possible.  The Disease Management Care Blog's physician colleagues used to refer to this as "treat, then street."

Unfortunately, discharging patients too soon can result in readmissions.  That's why the DMCB has agreed with others that diagnosis-based payment systems and a policy of "no pay" for readmissions were working at cross purposes.  Unified bundled payment approaches like this seem to be a good start.

But that's all theoretical.  What's the science have to say?

Peter Kaboli and colleagues looked at the push-pull relationship between diagnosis-based payment incentives  and the likelihood of readmissions in a scientific paper just published in the Annals of Internal Medicine. 

The authors used the U.S. Veterans Administration (VA) Hospital's "Patient Treatment Files" to examine length of stay versus readmissions in 129 VA hospitals.  The sample consisted of over 4 million admissions and readmissions (defined as within 30 days and not involving another institution) from 1997 to 2010. The mean age started out at 63.8 years and increased to 65.5 years, while the proportion of persons aged 85 years or older increased from 2.5% to 8.8%. Over the years, admissions also grew more complicated with a higher rate of co-morbid conditions, such as diseases of the kidney (from 5% to 16%).

As length of stay went down, readmissions should have gone up, right?

The answer was yes and no.

Yes, if the data were trended over time: Over the 14 year period of observation, the number of days in the hospital (length of stay or LOS) decreased from 6.0 days to 4.3 days.  Yet, as LOS decreased, readmissions also decreased from 16.6% to 15.2%. 

The decreases held up when the LOS was risk-adjusted for hospital and patient characteristics.  There was also no increase in mortality rates

No, if hospitals were compared to each other:  Hospitals with risk-adjusted low lengths of stay had higher readmission rates compared to their average peers.  In that group, each day of saved LOS was associated with a 6% increased rate of 30-day readmissions.

It gets even more complicated.  As the LOS increased beyond the average, each additional day in the hospital was associated with a 3% increased rate of 30-day readmissions.

What should the DMCB learn from these data?  Keeping in mind that the VA is not necessarily generalizable to the typical community medical center,

1. Over 14 years of worth of VA data for 129 hospitals suggest it is possible to have your cake (a lower LOS) and eat it too (lower readmissions).  That's the good news.

2. While overall performance improved over the years, between hospital comparisons showed there is a "U" shaped relationship between days in the hospital and the likelihood of readmission.  The DMCB agrees with the authors: premature discharge before the patient is ready is associated with an 6% per day readmission rate, while patients who are very sick and have to stay a few extra days in the hospital are also at risk to the tune of 3% per day.  That's the sobering news.

What are the implications?

Overzealous efforts to discharge patients can backfire with readmissions.  It appears there's an optimum length of stay that minimizes, but will never eliminate, readmissions.

Patients who do go home "too soon" or need extra days in the hospital appear to be at special risk.  Accountable care organizations and population health management service providers should use this information to target patients at special risk of "treat, street and... repeat."

Of "Antifragile" and Accountable Care Organizations (ACOs)

Emboldened by yesterday's economics post on the U.S. "headwinds" that are marginalizing the "fiscal cliff" negotiations, the Disease Management Care Blog now turns it's attention to a magnificent new word:

"Antifragile."

That's the term invented by Nassim Taleb in his latest book. In it, he counterintuitively suggests that political, business and economic systems can benefit from recurring and unexpected mishaps. The sucess of antifragile systems is based on their fragile constituents that rise and fall on their own merits. One "antifragile" example is the local restaurant industry in many large cities. It may be beset by recurring single unit bankruptcies but it ultimately provides the marketplace with a dependable set of gustatory options every Saturday night. 

The converse are "fragile" systems that are ironically made up of highly stable individual units. An example is the highly regulated U.S. banking industry, which amply demonstrated its collective vulnerabilities in the 2008 crash.

The terms "antifragile" and "fragile" speak to the threat of unknown and potentially catastrophic "Black Swan" risks, such as torrential superstorms and toxic mortgage assets.  Many New York restaurants rebounded (by candlelight), while the banking industry almost took down the entire U.S. economy.

The erudite Dr. Taleb often turns to mythology, molecular biology, physics, history and more to make his points, but the DMCB is naturally thinking cinema.

In The Godfather, after the Corleone family goes to the mattresses, Clemenza explains periodic war between the New York families is a good thing because it gets rid of a lot of "bad blood" (the Mafia is antifragile).

In the silly Underworld vampire movies, chief bloodsucker Viktor condemns the successful liaison between his race and the werewolf "Lycans" as an "abomination" that upsets centuries of rigidly enforced stability (vamps are fragile).

In one of the Star Trek movies, engineer Montgomery Scott deftly disables a new star ship after pointing out "that the more they overthink the plumbing, the easier it is to stop up the drain" (warp drive-enabled space ships are fragile). 

And finally, Pandora's ecosystem in the movie Avatar may be teeming with all manner of scary survival of the fittest, but its antfragility is what ultimately prevails against the despicably avaricious humans.

Which makes the DMCB naturally worry about fragility of accountable care organizations, which are arguably comprised of highly stable hospitals and clinics in an intensely regulated environment.    While you may be tempted to tut-tut the DMCB's antifragile infatuations, recall AHERF's spectacular failure and the Medicare Health Support Demonstration disaster.  When they started out, both were the darlings of health policy makers and both were torpedoed by large and unexpected catastrophes that were only identified in retrospect.

What Black Swans could take some ACOs down?

Many savvy DMCB readers may disagree about ACOs, but you have to admit, "antifragile" will be a great word guaranteed to impress colleagues, co-workers and bosses.  For example

"Broadening our provider network to those three new counties may be risky, but it'll make our managed care organization more antifragile!"

"Buying a single source electronic record will reduce our health system's antifragile competitive advantage!"

"By limiting my access to modern electronic gadgetry, the DMCB spouse is risking a system-wide entertainment failure of epic antifragile proportions!"

And so it goes......



 

The Electronic Health Record (EHR) On-Line Portal Increases Hospitalization Rates



"Hi doc! I used my on-line
portal to make an appointment!"

Hey there Accountable Care Organization executive.

You're probably willing to continue to commit millions of dollars toward an electronic health record (EHR) coupled to an online patient portal.  That's because you've been told by your leadership team that electronic consumer empowerment, patient-provider communication and the substitution of efficient two-way messaging for costly face-to-face visits will increase quality, reduce expenses, generate shared savings and guarantee that your life-sized portrait will be prominently displayed in your flagship hospital's lobby.

Well, after you've read a just-published JAMA research study by Ted Palen, Colleen Ross, David Powers and Stanley Xu, you may want to tell your administrative assistant to cancel that appointment with the portrait artist.

The article's title is Association of Online Patient Access to Clinicians and Medical Records With Use of Clinical Services.

How the study was done:

Kaiser Permanente Colorado added "MyHealthManager" (MHM) to their EHR in May 2006. MHM allows patients to view tests, records, problem lists as well as care plans, schedule appointments, request refills and message their doctors. By June of 2009, over 375,000 Kaiser patients had signed up for MHM. Of those, about 45% had used the system at least once.  Of this number, Kaiser researchers pulled the records of 44,321 persons who had been continuously enrolled in the Kaiser system for at least two years. 

This group was retrospectively matched to a control group of Kaiser patients who had not signed up for MHM.  The authors did this through "propensity matching." This found a similar number of patients, based on age, gender, race, number of chronic illnesses and baseline office visits who, using logistic regression analytics, appeared to be the type of patient who would otherwise sign up for MHM.

The results:

Compared to non-MHM patients, the MHM experienced an increase in hospitalization rates (20 per thousand patients) and emergency room visits (11 per thousand).  In other words, for every hundred patients, the on-line portal seemed to lead to 2 extra hospitalizations and 1 extra ER visit. Both differences were statistically significant.

There were also increases in the number of office visits (.7 per patient per year), telephone calls (.3 per patient per year) and after-hour clinic visits (18.7 per thousand patients per year).

Caveats:

The authors correctly point out that this study is not perfect.  Retrospective propensity matching is not as good as a randomized clinical trial; it's possible that the patients who self-selected for MHM were already realtively more interested in or likely to increase their use of health care services.  Results at Kaiser may not apply elsewhere.

Implications:

Despite the limitations, this study should be a wake-up call for those who believe EHR portals is a savings panacea.  By increasing access to on-line services, physicians and patients may paradoxically use the system to address concerns that otherwise wouldn't come to medical attention.  In other words, the EHR portal exacerbates the classic health care economics problem of supplier-induced demand.

Image from Wikipedia

More On Why The Prognosis of Accountable Care Organizations (ACOs) Is Guarded and How Should Population Health Management Providers Position Themselves

For a long time, the more than 5000 regular visitors to the Disease Management Care Blog have been aware of the gap separating the promise and reality of Accountable Care Organizations (ACOs). That's why the DMCB salutes the editors of Health Affairs, who have decided it's time to extend the same courtesy to its readership with a well written article by Lawton Burns and Mark Pauly titled "Accountable Care Organizations May Have Difficulty Avoiding The Failures Of Integrated Delivery Networks Of The 1990s."

Remember the 1990's style integrated physician-hospital delivery systems? The DMCB sure does. Like the modern ACOs, these systems' business model were also based on care coordination, incentives alignment, risk bearing, salaried physicians and horizontal and vertical organization.

According to Drs. Burns and Pauly, they flamed out because they paid physicians too much for their practices, lacked adequate information technology, failed to achieve economies of scale, couldn't coordinate care and entered into "piecemeal" capitated contracts.  Last but not least, the typical 1990's style integrated system was never really "integrated" at all: it was made up of multiple provider entities that were simply bolted together.

ACO advocates argue it's going to be really different this time. Information technology is cheaper and more robust, new payment approaches (such as upside risk and bundled payments) are more user friendly, health care administrators are more adept at squeezing costs from the system and purchasers are demanding value over volume.  Toss in patient-centeredness, accountability, transparency, paying zero for physicians' practices and the momentum of federal payment reform, and it's easy to see why ACO-skeptics like the DMCB readers are being viewed as paper-medical record-loving party-pooping pinheads who pine for fee-for-service.

For the record, the DMCB categorically denies being a pinhead. But it and Drs. Burns and Pauly agree there are plenty of reasons to be skeptical.  Among the article's points that resonated with the DMCB are:

1) Most attempts at hospital-physician integration have not ended well, thanks to conflicting goals have not achieved quality, cost, cooperation or integration. Will economics and information technology finally trump culture?  We'll see.

2) Care coordination is no less difficult compared to the 1990s because it not only relies on timely information, but patient self management and nurse coordinators. The parallel flame-out of early versions of disease management also taught us that it is not a panacea for all patients with all chronic conditions being cared for by multiple providers in open networks. It works best when it is targeted at persons with a high burden of disease with readiness to change.

3) Medical homes take years to develop, thanks to years of transformative change management. Just because you're an ACO doesn't mean you're good at it and, what's more, you don't have years.

4) Clinically-based health information technology such as point-of-care decision support, electronic records and computerized physician entry have been inconsistently successful. And that's being generous.

But the authors don't stop there.  They describe four ACO "Achilles heels":

1) If PCPs are truly the linchpin to ACOs' success, it should also be pointed out that they are in short supply. It remains to be seen if they'll welcome a loss of professional autonomy or be willing to accept compensation that remains a fraction of their specialist colleagues;

2) Assuming large integrated systems comprised of a hundred or more physicians are truly able to achieve economies of scale, they won't spontaneously appear.  They take years to develop and mature.  See medical homes above.

3) Utilization of health care services outside an ACO's network not only outside their control but is very expensive, and

4) Maybe ACOs are a "disruptive technology" but the ultimate judge will be consumers.  They have yet to weigh in.

Implications for the population health management (PHM) service providers:

1. As ACOs struggle with their primary care providers and scramble for medical home and large health system-style care coordination services, "outsourced" nurse-based coaching will be very much in demand. But you already know this.

2. Given their national footprint, PHM providers may be in the best position to assist with those out of network or out of state ACO enrollees.  That's a new thought.

3. Keep a Plan B available just in case, and despite your help, ACOs collapse of their own weight.

Everything You Need to Know About Health Care Reform, Thanks to a 25 Minute Video, Courtesy of Managed Care Magazine

Thanks to Managed Care Magazine, the Disease Management Care Blog can post this interesting 25 minute interview with Princeton healthcare economist Uwe Reindardt.  Suitable for desk-bound meal-break viewing by overachieving DMCB readers, the modest and insightful Dr. Reindardt gets it mostly right:

No, the slowdown in the U.S. rate of health care costs cannot be ascribed to passage of the Affordable Care Act.  It started wayyyy before Obamacare was passed and is more likely due to the economic slowdown and increased consumer cost-sharing.

Accountable Care Organizations remain an "iffy" experimental proposition because they "don't go all the way like Kaiser."

Republican proposals to let health insurers sell their products across state lines are hardly a health reform panacea, because prices (and therefore premiums) are not a function of where the insurer is domiciled, but where the care is rendered.  Texas insurers would still have to pay New York prices.

Americans use fewer pills, occupy less bed-days and see fewer doctors, but we pay more because providers can charge more.  Despite being relatively small vs. the behemoths like Aetna and Cigna, regional hospitals have considerable market power that translates into take-it-or-leave it local single seller monopsonies.   Europeans, in contrast, have lower prices because their system is dominated by single purchaser monopolies.

We're headed toward a three-tier system comprised of 1) the indigent safety-net public programs, 2) the middle class "reference pricing" "networks" where consumers pay the difference if they want to buy up and 3) "boutique" health care for the 5%.

There's reason to be optimistic about the next five years thanks to a sluggish labor market (making it easier to impose networks and even more cost sharing) and innovation (computational capacity is putting meaningful quality measurement within reach, while techy gizmos are making self-care simultaneously cheap and fun). 

Plus, there's reason to be of good cheer.  Compared to the U.S. education and the legal systems, health care is far more efficient and consumer-friendly.  Stop beating up on yourselves.

(The DMCB didn't quite agree with Dr. Reinhardt's views on worksite wellness.  He finds the notion counterintuitive and intrusive, preferring that insurers own wellness.  He neglects to mention that the employers who invest heavily in wellness are typically self-insured and that employers have an arguable stake in improving the quality of their human capital.)

Shared Decision Making for Hip and Knee Replacement Candidates

Osteoarthritis (a.k.a "degenerative arthritis) of the hip and knee just... sucks. Characterized by activity-related pain in the affected joint, many otherwise physically fit persons have to resort to pills, injections and, finally, an appointment with an orthopedic surgeon to talk about joint replacement surgery.

What is less appreciated is that osteoarthritis can have a waxing and waning course with periods of relative remissions. What's more, conservative treatment options can lessen or delay the need for surgery. Last but not least, the surgery itself involves months of recovery and the possibility of a nasty complication.

The primary care physician Disease Management Care Blog presided over this many times with its arthritis patients.  It was generally reluctant to refer a patient to an orthopedic surgeon because it knew that the patients would be more interested in the potential benefits and pay less attention to the downsides of surgery.

Enter shared decision making (SDM). Defined as care that is respectful of and responsive to individual patient preferences, needs, and values and ensures that patient values guide all clinical decisions, the premise is that by giving patients the information they need, they'll be able to ultimately determine the course of their care.  That would include patients with severe hip or knee osteoarthritis who are thinking about surgery but who also need to consider the option of conservative management.

That's why this just-published Health Affairs study is noteworthy. All the 27 orthopedic surgeons in the 5 Group Health Cooperative clinics introduced shared decision making (SDM) for patients who were being evaluated with knee or hip osteoarthritis.  The intervention consisted of DVDs and booklets (from this company) that were ordered by the surgeon prior to an appointment.  The materials could also be viewed on Group Health's website at any time.

The study itself was quasi-experimental.  To be included in the study, patients had to 1) have knee or hip arthritis, 2) ) be continuously enrolled in the Group Health Plan for 12 months prior to the orthopedic clinic visit and 3) have a visit itself that was first index visit by the patient for that problem being evaluated by that particular specialty.

Outcomes from the 18 months of the SDM intervention period (January 2009 through July of 2010) were compared to the observation period of January 2007 through July of 2008.

Recall that the surgeon had to proactively order the SDM prior to the visit.  As a result, only 41% of the hip patients and 28% of the knee patients received the DVD, pamphlet or viewed the on-line materials.
 
Nonetheless, during the 6 months after the initial visit, the SDM patient population had 0.34 hip operations per 180 person-days (your DMCB offers an explanation of this counter-intuitive metric below*), compared to the control population of 0.46.  The difference was statistically significant. 

There was also a statistically significant reduction in knee operations: 0.09 per 180 person-days vs 0.16 per 180 person-days. 

All the differences held up after the authors statistically adjusted for differences in age, sex, obesity, co-morbid conditions, use of prior x-rays, joint injections, insurance factors and the clinic site.

Like all good authors writing in a high quality journal, they point out that this research was not pristine. The comparison period may not have been a representative baseline and, from 2008 to 2009, other factors may have caused a drop in hip and knee surgeries.

Nonetheless, this is an example of a "real world" study that credibly demonstrates that when osteoarthritis patients are exposed to SDM, more will opt for conservative management.  While that helps decrease health care utilization and ultimately costs, that's not the most important point: the patients who really wanted surgery got it and the patients who were less sure about the benefits of surgery chose not to have it.  What's more, this didn't involve a lot of expensive face-to-face care management, it involved some DVDs.

The DMCB cautions that this successful study was carried out in a highly integrated delivery system and may not be transferable to other practice settings.  That being said, as Accountable Care Organizations struggle to meet their patients' expectations and save money, this application of SDM may represent an important option.

*The DMCB interprets "180 patient days" as one patient being followed for the entire 6 months of the study.  If that's correct, the average SDM knee patient referred to a Group Health orthopedist had a 34% chance of getting surgery versus a 46% chance in the prior control group.  For the knee patients, it was 9% vs. 16%

The "Coporatization" of U.S. Health Care: Why the Good Prognosis for Health Insurers & ACOs May Be Guaranteed

Corporatization

The Disease Management Care Blog is ashamed to admit it, but it's reading Edward Klein's The Amateur. While much of the book is a conservative-partisan rehash of Mr. Obama's alleged personal and political shortcomings, it did raise one issue that intrigued the DMCB:

"Corporatization."   It seems this White House likes it.

As the DMCB understands it, this is a policy agenda that favors the formation of huge corporate organizations that dominate the national business climate. Its argument is that, thanks to their size and scope, these gigantic private, public and not-for profit corporations are better able to marshal the resources it takes to launch transformative programs, achieve efficiencies, take risks and make profits that are beyond the normal reach of traditional commerce. Think about the hundreds of billions-of-dollars-approaches to housing, financial services, battery operated cars, high speed rail, solar power, privatized space travel and, last but not least, health care insurance and delivery.

A key ingredient of corporatization is "partnering" with government in a way that blurs the line between private enterprise and the public interest. Ingredients include government-backed financing, special tax breaks, loans, grants, mixed Boards of Directors and sovereign investment funds.  The downsides are quite familiar also: crony capitalism and too-big-to-fail status 

The best example of corporatization is China. Beijing centrally orchestrates many of its key economic sectors including finance, banking, housing, public transportation and heavy industry with an opaque mix of public and private companies. While political reforms and respect for human rights have been found wanting, the prospect that China could eclipse the United States in the next 25 years has prompted many in the U.S. to admire China and reexamine the merits of old fashioned capitalism and unfettered markets. For an interesting example of that thinking, see this editorial by Andy Stern that recently appeared in the Wall Street Journal.

What could this explain and what are the implications?

1. The abandonment of the government-run "public option" early in the course of creating the Affordable Care Act. Despite his hostile anti-insurer rhetoric, Mr. Obama's ultimate belief in large mega-insurance corporations, a) regulations and b) public subsidies that bind the behemoth insurers to D.C. won the day.  And it ain't going away anytime soon.

2. The near ideological support by this Administration for Accountable Care Organizations. Despite little track record that ACOs offer a viable business model, the notion of large regional providers partnering with and led by CMS is fully consistent with a belief in corporatization.  This makes the DMCB wonder if Mr. Obama's intent is to assure that ACOs succeed, no matter what.

Why The Tipping Point for Health System Consolidation May Be Closer Than We Realize: Lessons from Airline Mergers

Ready for take off

From time to time, the Disease Management Care Blog and other pundits turn to the airline industry draw lessons on the evolution of health care.  Integrated human-computer systems, safety check-lists, website-based Expedia-like price transparency, teaming and other such notions have infiltrated health policy PowerPoint presentations worse than Doritos bags in Seattle Hempfest crowd.

While the DMCB was mulling another lesson about the divide between coach (what vanilla insurance could turn out to be) versus business/first class (concierge-style direct pay), along came this interesting Wall Street Journal article by airline industry bad boy Robert Crandall about the American Airlines - US Airways merger.  He argues 1) mergers that lead to bigger are better (no surprise there) and 2) if some airlines are allowed to go big, the only way for others to compete is to go bigger also.

That latter argument is important, and may also hold lessons for health care. 

Mr. Crandall argues that once the furies are released and one or two regionally dominant service providers are allowed to populate the marketplace, smaller competitors are at a disadvantage.  As a result, they have no choice but to also seek alliances and mergers.  How well government reconciles consumer interests and business profitability will remain an open question involving lawyers, bureaucrats and politicians.

Ditto regional health care systems, accountable care organizations and integrated provider organizations. 

Once one of these behemoths is unleashed in a city or corner of a state, smaller neighboring provider systems will naturally circle the wagons and seek permission to consolidate so that, just like the airlines, they can compete. They make a good argument, because without the size, they could go bankrupt. 

As health reform continues, geographically large systems that can access capital, achieve economies of scale, become accountable and take insurance risk will grow in number and complexity. That will only fuel the further consolidation of small local hospitals and smaller physician practices.

In other words, the lesson from the airlines may be that that "tipping point" for nationwide health system consolidation may be much closer than we realize.

Image from Wikipedia

Doubling Down on Accountable Care Organizations and Health Information Networks

Want to achieve effective health care, reduced costs, increased quality, population health, widespread prevention and seamless health information access? 

It's easy, says  this article in Population Health Management: mix one part PHO with one part HRB to create a HAPPI.

The Population Health Blog was confused too, but that's what's proposed by three smart academics from Johns Hopkins, Arizona State University and UC Berkeley.

As the PHB understands it, Population Health Organizations (PHOs) would be responsible for all medical, public health, community and social services in a defined geographic area and coordinate them with local education, housing and labor. Much of it would be paid for by a pooled risk-adjusted global or capitated payment (budget) from all insurers.

Each organization would be paired with a Health Record Bank (HRB), which would act as a huge data warehouse that not only stores all medical information, but any other publically available information on every individual enrolled in the PHO. The HRBs would be owned and operated by "trusted custodial organizations." Data access would be ultimately controlled by each patient.

The authors believe that patient payments would be a source of additional revenue for their PHOs. Examples include buying "apps" that are tailored to their individual health needs, or selling their personal health information, especially if it means helping physicians buy an electronic health record or access cutting edge research.

Combine a PHO and HRB and you have a Health and Prevention Promotion Initiative (HAPPI). Its size and scale would warrant contributions from community and provider organizations "without the need for additional reimbursement or outside funding." It would efficiently "align incentives" for insurers, hospitals and ACOs - with money left over for prevention, care coordination, decision support and a learning health system.

Breathtaking, isn't it?  If any PHB readers thought accountable care organizations (ACOs) and health information networks (HINs) weren't big enough, along comes Tyrannosaurus rex-sized PHOs, HRBs and HAPPIs. 

The PHB worries that while we'd want to see how pint-sized ACOs (not a slam dunk) and HINs (likewise not a slam dunk) perform before we apply the massive steroid doses, the opposite could happen: their messy failure could be just the justification for doubling down and going even bigger. 

As pointed out in a recent Wall Street Journal Notable and Quotable:

Economist Michael Munger writing in the Freeman, Aug. 11:

When I am discussing the state with my [academic] colleagues, it's not long before I realize that, for them, almost without exception, the State is a unicorn. I come from the Public Choice tradition, which tends to emphasize consequentialist arguments more than natural rights, and so the distinction is particularly important for me. My friends generally dislike politicians, find democracy messy and distasteful, and object to the brutality and coercive excesses of foreign wars, the war on drugs, and the spying of the NSA.

 

But their solution is, without exception, to expand the power of "the State." That seems literally insane to me—a non sequitur of such monstrous proportions that I had trouble taking it seriously.

 

Then I realized that they want a kind of unicorn, a State that has the properties, motivations, knowledge, and abilities that they can imagine for it. When I finally realized that we were talking past each other, I felt kind of dumb. Because essentially this very realization—that people who favor expansion of government imagine a State different from the one possible in the physical world—has been a core part of the argument made by classical liberals for at least three hundred years.

Image from Wikipedia

A Brainy Health Wonk Review on Health Reform, the Affordable Care Act and Lots More!

Welcome to the Disease Management Care Blog, your host for this edition of the Health Wonk Review. This is a linked summary of the latest and best postings from an informal community of health policy bloggers with informed insights that readers, business leaders, academics and policymakers won't find anywhere else. We invite you to sit back, get a beverage, enjoy a snack and feed your brain as you join thousands of your colleagues and competitors in gaining a deeper understanding of the U.S. health care system.

When when when (of a miscellaneous nature)

When researchers act like politicians: The falsification, fabrication and plagiarism that comprises research misconduct is the topic of a post by Donald Kornfled over at the delightfully named Wing of Zock. Causes include the fear of failure, perfectionism, ethical lapses, grandiosity and psychopathy. Dr. Kornfield reviews potential fixes, including training courses, better mentorship with monitoring and protections for whistleblowers.

When for-profits run amok: Roy Poses at Health Care Renewal scrutinizes one health care system's latest branding campaign and acquisitions, pointing out that the lack of any specificity seems to confirm that this is all about profits, not patients; commoditization, not caring; and corporatization, not community.  Unfortunately, this is not an isolated incident.  You've been warned.

When outcomes are based on flawed research: David Williams of the Health Business Blog asks Al Lewis why no one believes the numbers that underlie the reported effectiveness of population health management, the medical home and wellness. It's easy, says Al: the math has been unnecessarily complicated, actuaries make mistakes and there's selection bias, regression to the mean, confounders. pressure to show success and, most of all, a widespread and regrettable under-recognition of Al's vast expertise.

No Health Wonk Review is Complete Without the Affordable Care Act

Will it never end? If you're interested in even more obscure legal theorizing over the constitutional legitimacy of the Affordable Care Act, then head on over to the Health Affairs Blog. It appears the ACA may only authorize consumer subsidy tax credits in "state" run exchanges. The failure to include federal exchanges in the legislation could be a pesky wording oversight (argued here by Timothy Jost) that is overcome by a common sense understanding of Congress' original intent, or a craftily worded way of giving the states one more incentive to open their own exchanges (argued here by Michael Canon and Jonathan Adler) that could backfire and conveniently hobble the roll-out of the exchanges.

If you had to pick one good thing about the ACA, would this be it? Have you heard about the ACA's insurance co-ops? Think of these as smaller regional not-for-profit health insurance plans that are sponsored by consumer-based organizations. Jay of the Colorado Health Insurance Insider describes how, thanks to a loan from Uncle Sam, a new rural co-op is being launched in Colorado. It plans to open its doors in 2015 with a target of 10,000 enrollees.

And if you wanted to convince skeptical voters about the rest of the ACA, Anthony Wright of the Health Access Blog reminds us that the Brits proudly featured their National Health Service (NHS) in the Olympic Opening Ceremony for lots of good reasons.  The conservative DMCB not only wonders what marketing lessons CMS can learn from this (hint: opening ceremony at the World Series) but it has had its wacky closet Tea Party fears confirmed: "ACA" spelled backwards is "NHS" and its Maximum Kommissar will be First Citizen Don Berwick.

Massachusets reminds of what could follow the ACA: David Harlow of the HealthBlawg looks at what the Bay State is doing now that Romneycare's reforms neglected to tame health care cost inflation: Regulations that prohibit excessive provider price increases,promotion of the medical home and ACOs, greater market transparency, more public financing and physician liability reforms.

And what do the brokers think of the ACA? Hank Stern of the InsureBlog describes a blow back on the insurance provision that excess administrative costs must be rebated back to the beneficiaries.  Not only is it very burdensome to calculate in group policies with individual underwriting, but the tax implications are best considered in a "Michelob teaching moment" (that'll make more sense when you read the entire post, but trust the DMCB: it's not good).

Accountable Care Organizations?  Amazingly, only one HWR submission!

Is the DMCB really a DmCB?  DMCb?  Kerry Willis of the Health Talent Transformation blog calls on docs to resist the siren call of the ACOs' easy money. Look closely, he says, and you'll notice a strong resemblance the 1990s-style PHOs that were long on hospitals' interests and short on physicians' needs. He suggests that a better name would have been pHO. That's why he says unless ACOs use the physician-led patient centered medical home or concierge practices, a better name for them would be AcO.

Of Budgets, Priorities (and their evil architects)

In the taxpayers-get-what-they-pay-for-department, Liz Borkowsi of ScienceBlogs reviews a Health Affairs study on physicians' willingness to care for coming wave of new Medicaid beneficiaries. Based on a representative sample of docs, 69% are currently accepting such patients, but the numbers vary by geography (the rate is only 40% in New Jersey, for example).  The researchers estimate increasing payment rates to match Medicare's fee schedule would likely increase acceptance by an average of 10 points. One solution is expanding the nation's 8000 community health centers with the $11 billion allocated by the ACA. Unfortunately, that money has been a tempting target for budget-deficit minded politicians.

...and here's more on the taxpayers-get what-they-pay-for: Jason Shafrin of the Healthcare Economist blog looks at Medicare's reimbursement for for Alaskan physicians and finds evidence that new and established Medicare beneficiaries are having trouble finding a primary care physician. It seems the physicians would rather fill their clinics with better paying commercially insured patients.  If that income stream ever gets cut off, thinks the DMCB, the docs could always turn to the remunerative world of blogging.

How about what patients don't want to pay for? Medical student Justin Jones examines end-of-life care and finds doctors who forgo aggressive treatment of their incurable cancers may be role models for the rest of us.  Yet, despite some compelling anecdotes and the disdain for death panels and cost considerations, the provocative DMCB still wonders how insurers and their risk-bearing providers will reconcile an obvious conflict of interest over death with dignity and reducing claims expense with upside gain sharing.

In the physicians get annoyed-on-how-they're-monitored department, everyone agrees we need to measure health care quality and make providers more accountable.  Unfortunately, making that happen in the real world is proving difficult. Brad Flansbaum of the Hospitalist Leader blog offers a quick primer on CMS' early efforts at physician report cards in Kansas, Iowa, Missouri and Nebraska and explores the pros and cons of measurement at the individual, group or hospital level.

Tough Choices: Chris Langston, the Program Director at the John A Hartford Foundation blog points out that the dysfunctional economics of Medicare and Medicaid are ethically troubling. Decreased payments for geriatric services are part of a troubling pattern of discriminating against the poor and elderly. He asks if it's time to recast the political debate over the current scope of government insurance as a beneficiary rights issue.

I knew it! Is Republican VP candidate Paul Ryan a real budget hawk, or is his record in Congress marred by the realpolitik of partisanship and party loyalty? Joe Paduda finds compelling evidence of the latter.

Want more dirt on Paul Ryan? Harold Pollack over at healthinsurance.org says he's "extreme," a "pampered millionaire known to purchase $350 wine" with proposals "opposed by huge middle class constituencies" that would lead "between 14 and 27 million low-income Americans to lose health coverage" and cause "deep" cuts in highway repair, K-12 education, environmental protection, public health and law enforcement."

Heroes vs. affordability: While the U.S. military has increased the visibility of post traumatic stress disorder (PTSD), Lynch Ryan of Workers Comp Insider blog reminds us that our nation's police force members are not immune. Cops are far more likely to die by their own hand than be killed in the line of duty, and their rate of suicide per 100,000 matches the U.S. army. Lynch explores the workman's compensation implications: should treatment of the disabling stress of witnessing violence be covered, or is this part of the job?

Your next host for the Health Wonk Review will be Louise Norris of the Colorado Health Insurance Insider Blog.

A Generic Ready-To-Go Accountable Care Organization (ACO) Press Release

Is your health care organization about to launch an "accountable care organization" involving a commercial insurer? Welcome to the club, says the Disease Management Care Blog.  Now that you've joined the hundreds of other providers in this latest craze, the first thing you need to do is to get your public relations folks to fashion a press release.

The DMCB feels your pain.  Having to explain just how actuarial cost trend "accountability" really works to a public relations department that already has trouble telling the difference between diabetes and dialysis is bad enough.  You don't understand it either!

The DMCB to your rescue with a generic press release.  It's been reading a lot of these lately and has discovered that the ideal announcement 1) uses a lot of jargon and 2) offers no details on how the ACO will actually work.

Feel free to copy, cut and paste to your organization's letterhead as needed.

PRESS RELEASE

Media Contacts: Lotta Jargon
The Titan Clinic
noidea@monopolycare.com

Titan Clinic System and Behemoth Insurance Collaborate to Create Accountable Care Initiative

ROSY GLASSES, WT  – Aug 7, 2015 – Behemoth Insurance (NYSE:TBTF) and the Titan Clinic System have initiated an epic collaborative accountable care initiative that will epicly initiate expanded patient-centered access to a triple-aim focused and consumer-centric health care initiative. This collaboration will drive health outcomes, utilize the patient centered medical home neighborhood, maximize self-care, prevent chronic conditions, achieve wellness, reduce medical costs, lower admissions, improve quality of life, grow community partnerships, measure patient satisfaction, invent shared savings, boost consultant employment levels and return honor to the sport of badminton.

Titan is a modern not-for-profit hospital and physician organization that is not the same as a 1990’s physician hospital organization (PHO) that coordinates, manages, disseminates and monetizes care resources and technology to maximize bottom-line tax-free surpluses. A pioneer in specialist-dominated medicine, Titan discovered that it had 5 primary care clinics all along. This insight led it to to buy another 40 to refer a patient base of 500,000 patients within a 3 hour driving radius to Titan.

"Titan’s CEO, Ivan Bigego, is a nationally recognized speaker on the topic of accountable care, which is why we think the Clinic is a good fit for our insurance company,” said Behemoth’s Chief Executive Officer Max Gains. “We believe this arrangement offers an opportunity for us to market that we improve health care quality, lower medical costs and help our patients lead healthier and more productive lives.”

"This accountable care program will coordinate a preexisting suite of integrated services that support and rebrand the electronic record, care management informatics and aligned reimbursement methodologies that we invested in years ago." declared Ed Vertising, Chief Marketing Officer of Titan.

"We're pleased to be part of the Behemoth family of nation-states," noted Dr. Ego. "By relabeling the services we've been providing all along, we can minimize disruption for both our patients and physicians." he said.  "They won't notice a thing," he added.

“Like Facebook’s business model, claiming to enhance the patient care experience to the advantage of our organization will result in a strong patient-centric and outcomes-based cash flow,” noted Behemoth’s Board Chair Garner Shekels.

Can Physician Loyalty to Their Profession Be Superseded by Loyalty to their Employer?

Whenever the Population Health Blog heard the "value-not-volume" health policy operatives drone on about "provider alignment of incentives," it wondered.... really wondered.... if this Kool-Aid had completely convinced the ACO Adminosphere's inhabitants that their physicians' loyalty to their profession could be superseded by loyalty to their employer.

Sure, running a private-practice sucks and Obamacare's economics favor consolidation, but that's not necessarily enough to capture hearts and minds.  The PHB recently heard a local ACO executive explain that her long-employed physicians were still (yes, still) challenged with EHR implementation, teaming, shared savings, quality metrics, practice management, joint ventures and the role of patient educators. 

Other than that, Mrs. Lincoln, how was the ACO play?

And then there's a tweet from @VinceKuraitis on how a group of St. Louis cardiologists are "leaving" hospital employment and striking out on their own. Vince asks if this is a random blip or start of a trend.

Good question.

If this does turn out to be the start of a trend, don't be surprised. As someone very wise pointed out millennia ago, people do not live by bread alone.

Image from Wikipedia

Pioneer ACO Program Results: Why Saving Money for CMS Doesn't Mean The Business Model is Viable

According to South Dakota researchers, the predator status of Tyrannosaurus rex can no longer be questioned. After finding one of its teeth embedded in the healed spine of a Hadrosaurus, paleontologists now believe T rex was a fearsome hunter, not an carrion munching opportunist. 

But, asks the Disease Management Care Blog, how do we really know that that Hadrosaurus wasn't  pretending to be dead when the T rex took its bite?  Alternatively, the Hadrosaurus could have been sleeping and only looked dead to a slow-witted and lazy T rex. 

Dino doubts, says the DMCB, remain.

Such is the level of skepticism that the DMCB is bringing to its reading of the recent CMS press release describing the initial results of the Pioneer ACO program.  CMS says "positive" and "promising." The DMCB says "problematic" wonders if, like the T rex dilemma, there isn't an alternative interpretation.

The DMCB explains.

Recall that the Pioneer ACO program is designed to test whether large integrated organizations can be successfully rewarded for reducing health care costs through a program of "shared savings."  Under the program, if the savings exceed a minimum threshold, CMS will remit a portion of the upside savings back to the participating organizations.

According to the press release, the health care costs for the 669,000 Medicare beneficiaries cared for by the 32 Pioneer ACO program providers grew only .3% versus .8% for a parallel group of "similar beneficiaries." 13 organizations exceeded the savings threshold, which will lead to Uncle Sam writing checks for $76 million in shared savings.

This front page article in The Wall Street Journal has more detail. It says 18 of the 32 reduced health care costs, which leads the DMCB to conclude that five otherwise "successful" participants did not cross the required savings threshold. Two participants lost money. That, in turn, suggests the remainder, or twelve, broke even.

Details on how each individual institution fared are not readily available.  According to WSJ, Boston's Partners Healthcare reduced Medicare claims expense by $14 million.  They will be rewarded with a shared savings check of $7 million. Wisconsin's Bellin-ThedaCare will get "several million."

Good "win-win" news for the Pioneer organizations, CMS, Uncle Sam and U.S. taxpayers, right? A critical mass (40%) achieved millions in shared savings, which means proof of concept met and that a key part of Obamacare is successful, right?

"Not exactly," says the DMCB.

It figures 100% of the participating organizations had to each invest millions for personnel and other infrastructure to pursue the Medicare savings in the first place.  In other words, they were in the red before Pioneer even began.  That means that, in addition to the two participating organizations that lost money, the 12 that "broke even" as well as the 5 that did not make threshold also lost millions. 

That's 19 losers or almost 60% of the participating organizations.

In addition, it's possible that for some of the 13 "winners" that the shared savings awards won't  match their up-front multi-million dollar investment either.  Assuming that's true, it's possible that as many as two thirds of the Pioneer organizations lost money. No wonder 9 of the participants have signaled a desire to exit the program.

The DMCB's dinosaur analogy may be apt.  Given a two out of three likelihood of losing millions in the first year of operations, ACOs may just be too big and complicated to survive in the current health care environment.  Nonetheless, the Pioneer program will continue and the DMCB will stay tuned for the Year 2 results.

In the meantime, the DMCB wishes CMS good luck in using these "positive" and "promising" results to expand the program anytime in the near - or distant - future.  

Just Because You Build It They Won't Come: What ACOs, PCMHs and Population Health Advocates Need to Know About Poverty and Emergency Room Use

Thinking about an ER visit.....

As part of a research requirement that it had to fulfill prior to medical school graduation, the young Disease Management Care Blog conducted a patient satisfaction survey. To its surprise, the DMCB discovered patients cared less about high touch primary care and more about access to high tech specialists.

It naturally ignored the income implications and became a general internist.

Fast forward to its job as a Medical Director in a not-for-profit physician-led managed care insurance plan.  No matter how much we "polished" the primary care network, emergency room utilization remained persistently high.

The CEO naturally ignored the DMCB's conclusion that there was little that could be done and assigned another medical director to the task.

Fast forward to Uncle Sam's Healthcare Fantasy Land, where ACOs and medical homes caring for patients with universal insurance will, thanks to the enlightened efficiencies of primary care, save gazillions of dollars by steering patients away from emergency rooms and hospitals.

All three scenarios came together when the DMCB read some research by group of Philadelphia docs who wanted to better understand why patients with low socioeconomic status kept ending up in emergency rooms and hospitals.

Best of all, to do this, they used a novel methodology: they found some patients and.... asked!

Their report appears in the latest issue of Health Affairs.

64 hospitalized patients with low socioeconomic status were approached to participate in a "qualitative" research interview (here's one example of how it's done). The patients were selected because they had been hospitalized via the ER multiple times, were between the ages of 18-64 years, were uninsured or on Medicaid, lived in a poor ZIP-code region of the city. 24 said no, leaving 40 subjects who agreed to have their interviews recorded. A rigorous analysis followed, with two "coders" who listened to the recordings and independently developed themes or ideas. They then circled back to the patients for confirmation.

Two themes emerged:

1) Convenience/Access: Even if they have access to primary care, the emergency room and inpatient setting remains the more convenient option.  That's because walk-in is available 24/7 and all testing as well as specialty care is available during a one-time visit.  Zero dollar primary care co-pays don't make up for the hassle, time and expense of calling ahead for appointments, arranging transportation (even if vouchers through Medicaid are available) or being referred for separate testing as well as specialty consultation.

2) Technology: Based on personal experience with their primary care docs, the emergency rooms and hospitals were perceived to have more technically proficient providers who were better able to achieve the correct diagnosis and render the correct treatment in a timely fashion.

A subset of patients seemed to come from chaotic life circumstances. Those patients found hospitals offered what the researchers described as "respite" and social "support."

The presence of Medicaid insurance had little to do with the attitudes described above.

The DMCB's take:

While subjective qualitative research is viewed with disdain by researchers, policymakers and journal editors, occasionally, good studies like this comes along.  This article sheds important light on a potential Achilles heel of accountable care organizations (ACOs) as well as the patient centered medical home (PCMH).

That Achilles heel? Just because you build it, these 40 patients - and millions who live in poverty like them - won't come.

What's more, they are making rational decisions.

The authors point out that system solutions include co-locating multiple services (primary care, labs, x-rays and specialists), improving the quality of primary care and, when possible, mitigating any social challenges. The DMCB agrees, but is unaware of any ACOs or medical home initiatives that, outside of the usual process measures, specifically address these patients' special concerns.

The DMCB's suggestions:

Advocates for ACOs and the PCMH need to get real, lower expectations and recognize that a key solution to the problem of health care overutilization by persons in poverty is to stop politicians and health care leaders from medicalizing poverty. 

That being said, one possible solution for ACOs and PCMHs serving fragile patients with poverty is high intensity biopsychosocial intervention.  It sounds expensive but full time community-based care management with low case loads and lots of physician support may help ameliorate some of the dysfunction.  It's probably less expensive than all those hospitalizations.

Finally, this may be an opportunity for nimble population health management service providers.  If any are already out there serving this population, the DMCB would like to know about it.

Image from Wikipedia

What Can World War Z Tell Us About Accountable Care Organizations?

Unable to resist the allure of another zombie movie, the Disease Management Care Blog saw World War Z.  While the gruesome scenes of chomping and stampeding hoards of infected undead were cinematic eye candy, the DMCB was undeterred.

It was naturally thinking about accountable care organizations and how they compare to zombies.


                                     Zombies                           ACOs

Premise:                      Undead                           Unproven

Spread via:                   Bites                                 Hype

The Hero:                 Brad Pitt                         Donald Berwick, MD

Why Worry:         The U.N is in charge             C.M.S. is in charge

Initial Response:      Offshore boats                  Offhand hope

Best managed
by..........                  Fleeing                            Fleeing

DMCB spouse
perspective........          Gore                             Bore

Confronted by
hoards of attacking                                   Refer to PCPs, wait
undead you.....        Toss grenades           years for shared savings

Diet:                         Bared brains                    Shared gains      


Image from Wikipedia 

Sure, Accountable Care Organizations ACOs Can Save Money, But Can They MAKE Money?

ACOs at work.

According to this Bloomberg news release, some of Medicare's Accountable Care Organizations (ACOs) are already achieving cost savings. Mt. Sinai and Coastal Carolina are reducing emergency room visits while Hackensack is reducing costs.

All three institutions are using two key ingredients:

1) information technology-based risk stratification to identify the persons at greatest risk and

 2) dedicated full-time nurses who perform telephonic and in-person outreach, coordinate care and provide patient coaching that, in turn, is tailored to that risk.

To the DMCB, the good news is that ACOs are using the two approaches that define modern-day disease and population health management. That industry's success will be Mt Sinai's, Coastal Carolina's and Hackensack's success.

The bad news is that the news release only addresses half the question: did any savings exceed the institutions' cost of the risk stratification and the nurse-FTEs? If the early answer is no, then avoided ER visits and reduced costs could turn out to be much like Governor Christie's lap band: so far so good but it's still risky and could ultimately be all for naught.

And on an unrelated note, this just-published New England Journal article makes note of "not made in America" health care innovations from overseas that could hold important lessons for the United States. In particular, the authors point out that Germany's DRG hospital payment system includes 30-days of post-discharge care and includes the physician payment. Readmissions within that 30 day window are, with a few exceptions, not covered and physician payment is possible because docs are often employees of the hospitals.

"Interesting!" says the DMCB, but is reminded that Germany is hardly a model for reducing inflationary cost trends.   It also specifically recalls hearing Germany's Minister of Health, Daniel Bahr, express impatience with his country's DRG system just last week. He criticized it for not advancing enough quality in his keynote address at the HauptKongress in Berlin.

Health Insurers: The Success Factor for Accountable Care Organizations?

Insurers chatting about ACOs

What a weird week it's been.  Mrs. Obama didn't mean it when she said she supported a NYC soda ban, President Clinton didn't mean it when he said he admires venture capitalists and Wisconsin voters didn't mean it when they said they wanted to recall Gov. Walker. While the Disease Management Care Blog ponders the possible causes, it takes comfort in knowing that the "dean of American health economists" Victor Fuchs always means what he says, and says what he means.

To wit:

"...the operational infrastructure required to create and manage ACO is found in large health plans, both not for profit and for profit."

Academician Dr. Fuchs knows of what he speaks, especially when he's writing in the Journal of the American Medical Association (JAMA).  In a viewpoint article titled "If Accountable Care Organizations Are the Answer, Who Should Create Them?", he describes the several things ACOs have going for them:

1) providers will be under less pressure to pursue top line revenue through overutilization of care resources,

2) pharmacy use will be tilted in favor of lower cost generics,

3) there'll be better primary and specialty care coordination, and

4) administrative savings will increase thanks to capitatation and not having to bill for individual services.

And which constituency, he asks, is in the best position to pull this off?   According to Dr. Fuchs:

Not employers. They don't have the skills.

Not physicians. While they understand cost-effective medicine, they've underinvested in systems, administration, customer service and financial functions.

Not Hospitals. They might have the capital and the professional expertise, but it's been focused on filling beds.  What's more, they could also come to anti-competitively dominate their local markets.

That leaves the insurers as the most "feasible" candidate.  Dr. Fuchs points out that they have capital, understand risk, possess the financial expertise and can manage disparate data sources.  They are also seeking provider ACO partnerships.  Examples of this, he notes, include UnitedHealth, Humana, Aetna, WellPoint and Highmark.

The DMCB couldn't have said it better but it did raise this a lot sooner.  It and colleague Vince Kuraitis argued that insurer-provider ACO alliances would emerge as a viable market alternative almost a year ago.

In addition to claiming some credit for helping DMCB readers scoop JAMA by almost a year, the DMCB also points out that it thinks some hospital or physician-led ACOs will ultimately prevail.

One key success ingredient for ACOs will be population health and care management resources.  It's no accident, says the DMCB, that commerical insurers like Humana and Aetna stand poised to succeed in the ACO biz.  In addition to their capital resources, awareness of the economics of risk, financial expertise and data skills, they've also been doing cost-effective PHM for years. 

The physician and hospital groups that catch up to the insurers on this will be the ones that prove Dr. Fuchs wrong.

ACO Ver.2.0

Accountable care organization (ACO) enthusiasts may want to check out this article, "'New' Health Organizations Will Truly Manage Care" appearing in the latest issue of Managed Care Magazine. Based on a large provider survey and his own personal insights, author Richard Stefanacci points out that the current generation of Accountable Care Organizations(ACOs) is destined to fall short.

This is how the Disease Management Care Blog pieces together Dr. Stafanacci's narrative:

Hospitals and physicians will continue to pursue merged arrangements characterized by a) shared risk, b) less physician autonomy and c) greater efficiency. Yet, it's still too easy for these first generation ACOs to underestimate the downsides of risk contracting and it's even easier for them to under-invest in care management programs. Add to this the a) "dismal" track record of past physician-hospital collaborations, b) disappointing Physician Group Practice Demo results and c) disconnect between inferred savings and hard dollars, and there is every reason to be skeptical about the ACOs' future.

Even worse, there's a government-generated health care bubble. The looming budget crisis will force Washington DC to retrench.  Many large provider organizations and ACOs, caring for tens of thousands of patients with thousands of full-time employees, will be deemed "too big to fail."  That "popping" noise will announced the start of a very destabilized market.

Coming in the wake of all this underfunded wreckage will be second generation provider-led accountable organizations. They'll use the 2015-2015 time period to build a patient-centered culture, learn about insurance risk, invest in care management and prepare for the lean times ahead. They will focus on a) the 20% of patients who are responsible for 80% of the costs, and b) understand bundled payment arrangements.  That's when having strong physician leadership, fully aligned care management-medical homes and enterprise-wide medical decision support will mean the difference between merely surviving and thriving.

Medicare, Accountable Care Organizations & Medical Homes: Experimental, Potential or "Essential?"

Time to measure some
new Medicare office drapes?

One major and longstanding criticism of CMS' numerous innovation and demonstration projects is that they seldom lead to any meaningful reform of the core Medicare program.  In response, the Affordable Care Act created an "Innovation Center."  Despite legions of lobbyists, a 'third rail' dread afflicting our political class and a powerful Medicare voting bloc, the intrepid folks in the Center promise to deliver insights that will advance quality, lower costs, increase access and spare all sacred cows.

Naturally, the thousands of health care experts who regularly read the Disease Management Care Blog have their doubts.  As a result, they're unlikely to be moved by Karen Davis and colleagues' "Medicare Essential" proposal appearing in the May issue of Health Affairs.

Assuming that the most wildly optimistic Accountable Care Organization (ACO) and medical home pilot programs projections are fulfilled, Dr. Davis et al propose the creation of a new "Medicare Essential" program that would co-exist with standard Medicare and Medicare Advantage.

"Essential's" essential purpose would be to finance ACOs and medical homes.  Given the authors' enthusiasm, the DMCB is surprised that their Health Affairs paper isn't also recommending measuring drapes for the program's new offices.
 
In "Medicare Essential," Parts A (hospital), B (providers) and D (drugs) would be combined. There would be a single overall deductible, followed by low co-pays for primary care and higher co-pays for specialty and emergency room care Preventive care would have first dollar coverage. Pharmaceuticals would be governed by a single national formulary with low co-pays for generics as well as for preferred brands and condition-specific/value-based drugs. Persons in the "Essential" program who are receiving care in ACOs or medical homes (financed with capitation, bonuses, gain sharing and monthly fees) would naturally have even lower co-pays.
 
Using "modeling by the Actuarial Research Corporation" and, as the DMCB understands it, transferring all savings back to the beneficiary, monthly out-of-pocket costs for the average Medicare enrollee could be reduced from the currently level of $427 to $354.  As an added bonus, if the patient used an ACO/Medical Home, the out of pocket would be further reduced to $254.

Case closed, right?

The DMCB isn't too sure.

Don't Measure Those "Essential" Medicare Program Office Drapes Quite Yet: While Davis et al should be commended for sending the savings back to the patient instead of Uncle Sam, their optimistic actuarial "research" projections can't be based on any consistent, statistically significant and real-world published proof.  That's because there is no consistent, statistically significant and real-world published proof that ACOs and medical homes save money.  Come back, says the DMCB, when you have an analysis based on some real numbers.

Behavioral Economics: Furthermore, we don't know if monthly beneficiary savings of $73 to $173 are enough to move market share away from Medicare and Medicare Advantage to "Essential."  That's doubly true if ACOs and medical homes, despite their quality, are viewed by patients as another way to impose a restricted network.

Disease Management Playbook: Advocates for the earliest versions of disease management likewise used official sounding projections to confidently project huge benefits for the Medicare program. When reality rudely intruded, the industry's fall was spectacular and almost fatal.  With friends like Dr. Davis similarly doubling down with huge ACO and medical home promises, who needs enemies?

Reinventing A 3rd Wheel? Many Advantage plans have similar co-pay arrangements and are already investing in ACO-like and medical home programs in their networks. They are likewise more than able to leverage out-of-pocket expenses to incent beneficiary behavior.

Suppose You Gave An ACO Party and Nobody Came? The last time the DMCB looked, many parts of the country lacked fully functional ACOs and medical homes. Dr. Davis says beneficiaries will respond by demanding local access to the Essential program and therefore turbocharge additional health reform. The DMCB is unaware of any published data that supports that notion and, furthermore, wonders if the local lack of these programs will translate into even more variation in the U.S. health care system.