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Accountable Care Organizations
in the Rural Setting
Renaissance Hotel Austin
November 10, 2010
Thomas R. Miller, PhD, MBA
Topics to be Covered
• What is an ACO?
– i.e., as of November 10, 2010 at 11:30 a.m.
• ACO Requirements and Challenges
• Stakeholder Perspectives
• ACOs in the Rural Setting
– Challenges
– Potential Solutions
• Final Thoughts and Q&A
1
Multiple Entities are Exploring ACOs
Goal: To engage stakeholders in piloting the ACO model and produce a successful and
replicable model than can be implemented nationwide
Health policy researchers Elliott S. Fisher, PhD, Stephen
Shortell, PhD, and Lawrence Casalino, MD, MPH, PhD
Massachusetts
Health Care Quality
& Cost Council
2
What is an ACO?
3
Déjà vu: The Health Security Act of 1993
An AHP* is an entity that delivers or
arranges to deliver a continuum of
services to a defined population.
Accountability standards will be needed
to measure accessibility of services,
cost-containment, and quality.
1. Primary care providers should be locally based and essential community
providers should be included in the network.
2.Local boards of health should participate in AHP planning and approve
annual reports documenting performance in regards to access, cost
containment, and quality assurance from a population perspective.
*Accountable Health Plan
Source: Rohrer, J. E. (1995). Regulation of accountable health plans in rural areas. Journal of Public Health Policy, 16(2), 198-211.
4
What is an ACO?
May Include a Variety of Players…
…Under a Variety of Structures
Integrated Delivery
Systems
Hospitals
PHOs
Hospital plus
Multispecialty Groups
Payers
ACO
PCPs
Hospital and
independent practices
Physicians Only:
Primary Care and
Specialists
Physicians Only:
Primary Care Only
Other
Providers
Home Health
Mental Health
Rehab Providers
Specialists
… with mandatory or voluntary provider
participation
… with passive or active patient enrollment
5
ACOs and the Shared Savings Program
• Medicare’s Shared Savings Program (SSP) will be open to
ACOs that meting the following criteria.
– Be accountable for quality, cost, and care of a population of
Medicare beneficiaries (at least 5,000)
– Participate for not less than three years.
– Belong to a legal structure that can receive and distribute bundled
shared savings payments.
– Include sufficient primary care physicians.
– Have leadership and management and clinical and administrative
management systems in place.
– Promote evidence-based medicine, report quality and costs
measures, and coordinate care including the use of technological
systems.
Source: The Patient Protection and Affordable Care Act (PPACA; Public Law 111-148).
6
ACOs and the SSP - continued
• Criteria – continued
– and… Demonstrate patient-centeredness.
• Is this a patient-centered medical home (PCMH)
“on steroids”?
– Initiatives abound.
Source: The Patient Protection and Affordable Care Act (PPACA; Public Law 111-148).
7
Texas Patient-Centered Medical Home
Demonstration Project
Source: Retrieved October 30, 2010 from http://www.dshs.state.tx.us/cshcn/medicalhome/docs/2009mh/pcmh-mission01.pdf
8
The Draft NCQA Criteria
Guiding Principles
1. Strong foundation of primary care
2. Report measures to improve
quality and reduce cost
3. Committed to improving quality,
improving patient experience, and
reducing per capita costs
4. Work with stakeholders in
community or region
5. Create and support a sustainable
workforce
Source: NCQA. Accountable Care Organizations (ACO) Draft 2011 Criteria, Overview. Retrieved October 30, 2010, from
http://www.ncqa.org/tabid/1266/Default.aspx. Confidential; obsolete after 11/19/2010.
9
The Draft NCQA Criteria
Category
Summary of Criteria (Standard/Element)
1. Program Structure
Operations
• Clearly defined structure and leadership
• Capability to manage resources effectively
• Arranges for health care services and determines payment & contracting
2. Access and
Availability
• Ensures sufficient numbers and types of practitioners who provide primary and
specialty care
3. Primary Care
• Primary care practices provide patient-centered care
4. Care Management
• Collects and integrates data from various sources, including electronic
• Identifies population health needs and implements appropriate programs
• “Uses” patient registries, electronic prescribing, and patient self-management
5. Care Coordination
and Transitions
• Can facilitate timely information exchange among primary care, specialty care,
and hospitals for care coordination and transitions
6. Patient Rights and
Responsibilities
• Has policy stating commitment to treating patients with respect, expectations of
patient responsibilities, and privacy. Provides method to handle complaints
7. Performance
Reporting
• Measures and reports clinical quality, patient experience, and cost
• Based on analysis, takes action to improve effectiveness
Source: NCQA. Accountable Care Organizations (ACO) Draft 2011 Criteria, Overview. Retrieved October 30, 2010, from
http://www.ncqa.org/tabid/1266/Default.aspx. Confidential; obsolete after 11/19/2010.
10
Many Guides for ACO Development
11
AHA Report: ACOs Won’t Be Easy
Conclusions
“Hospitals and health systems considering ACO participation
should assess their capabilities in several key core
competencies that will likely be necessary for successful ACO
implementation, including IT infrastructure, resources for
patient education, team-building capabilities, strong
relationships with physicians and other providers, and the
ability to monitor and report quality data. Providers should be
prepared to make major investments in these areas where
necessary (Shortell and Casalino, 2010). ACOs whose members
already possess many of these characteristics are expected to
be most successful at implementation in the short run
(Deloitte, 2010). However, even providers who already possess
key organizational, technical and clinical competencies may
find that adjusting to an ACO will still require the sustained
development and strengthening of those capacities in order to
be successful (Devers and Berenson, 2010).”
Source: AHA (June 2010). Accountable Care Organizations, AHA Research Synthesis Report.
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AHA Report: ACOs Won’t Be Easy
Key Questions to Consider
The following are key questions to
consider in the development and
implementation of ACOs.
1. What are the key competencies
required of ACOs?
2. How will ACOs address physician
barriers to integration?
3. What are the legal and regulatory
barriers to effective ACO
implementation?
4. How can ACOs maintain patient
satisfaction and engagement?
5. How will quality benchmarks be
established?
6. How will savings be shared among
ACOs?
Source: AHA (June 2010). Accountable Care Organizations, AHA Research Synthesis Report.
13
Predictions Abound Despite Uncertainty
Source: Health Care Advisory Board (2010). Playbook for Accountable Care, Road Map for the Transition to Total Cost
Accountability. The Health Care Advisory Board: Washington, D.C.
14
ACOs = Organizational Transformation
Without “help,” the
challenges for rural
providers are even
more substantial.
Source: Health Care Advisory Board (2010). Playbook for Accountable Care, Road Map for the Transition to Total Cost
Accountability. The Health Care Advisory Board: Washington, D.C.
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The Key Role of Phyisicians
16
Uncertainty Abounds
17
Perspectives: Hospitals See ACOs as End Game
“The goal for each hospital is
to develop, at last, a truly
integrated delivery system
capable of serving as an
accountable care organization
(ACO).”
18
Perspectives:
Letter to CMS
Source: Letter to Donald M. Berwick, MD, Administrator of CMS, from Michael D. Maves, MD MBA Executive VP and CEO of
AMA, Dated August 12, 2010. Retrieved October 30, 2010, from http://www.ama-assn.org/ama1/pub/upload/mm/399/amaletter-cms-aca.pdf.
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Perspectives: Texas Medical Association
20
What Do America’s Health Insurance Plans
Think about ACOs?
“Actually, kind of the holy grail at the end of all this would be where an ACO is large
enough and competent enough so payers would basically say, ‘Here's the money. You take
care of patients. You do it the best way that you know how. There's no utilization
management. There's no prior authorization. There's no denying of fee-for-service
claims. You just do it the best you can. And we'll be measuring quality and patient
experience, to make sure you are not stinting on care.’ ”
-- Lawrence Casalino, PhD
In a letter to CMS from America's Health Insurance Plans (AHIP), the association
expressed its concern that ACOs could potentially be developed with the sole purpose of
amassing market power.
It appears the group has some unlikely allies in smaller physician groups who could be
left out of the ACO mix as well as consumer advocates who fear that powerful ACOs could
limit choices and raise costs.
Source: Elliott, J. (October 27, 2010). Could health plans derail ACOs? HealthLeaders Media. Retrieved October 30, 2010 from
http://www.healthleadersmedia.com/print/HEP-258288/Could-Health-Plans-Derail-ACOs.
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More than Patient-Centeredness
• Patient-centeredness is necessary, but not sufficient;
ACOs must be (healthy) person-centered as well.
• Role of insurers in ACO development mostly silent
and/or an afterthought – a potential mistake.
“If providers think it is so easy to
manage population health and
population-based payments without
a middleman, I challenge them to
order their next cheeseburger
directly from the cow.”
-- Health plan executive
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Implications for the Rural Setting
• The general discussion of ACOs, their requirements, and
challenges sheds light on potential problematic areas for
rural providers.
• There are examples of rural-based ACOs and ACO-like
organizations (e.g., PCMHs as a springboard for ACO
development)
• But there are challenges and opportunities unique to the
rural setting.
23
Vermont ACO Pilot
• Manage full continuum of care settings and services,
beginning with a patient-centered medical home.
• Be financially integrated with both commercial and
public payers.
• Have IT platform that connects providers in the ACO and
allows for proactive patient management.
• Demand physician leadership, as well as commitment of
hospital CEO.
• Use process improvement capabilities to change clinical
and administrative processes.
Source: Hester, Lewis, & McKethan (2010). The Vermont accountable care organization pilot: A community health system to control
total medical costs and improve population health. The Commonwealth Fund. Retrieved October 30, 2010 from
http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2010/May/The-Vermont-Accountable-Care-Organization-Pilot-ACommunity-Health-System-to-Control.aspx.
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ACO Challenges in the Rural Setting
• Limited population base
– Implications for assuming
population or insurance risk
– Why not just risk-adjust?
2010 Population1
Ages 65 years +
< 5,000
# and % of
Texas Counties
163
64.2%
5,000 – 10,000
41
16.1%
10,000 – 20,000
29
11.4%
20,000 +
21
8.3%
“You will never convince providers who are
scored badly that you have adjusted enough.”
Total
254 100.0%
• High cost of infrastructure, especially EMRs, patient
education, patient navigators, and “insurance-like”
functions
• Culture: the pioneer/independent
nature of hospitals and physicians
1Source:
Texas Department of State Health Services, DSHS Center for Health Statistics.
Retrieved October 30, 2010 from http://www.dshs.state.tx.us/chs/popdat/detailX.shtm
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Lessons from Rural Managed Care
• A primary measure or managed care’s “worth” in
rural settings is its ability to coordinate care.
• Is there a “natural” reluctance on the part of
managed care organizations to enter or expand
into rural areas?
– Wysong et al. found socioeconomic and health system
characteristics did a much better job of explaining
differences in managed care availability and
enrollment than did geographic location, population
size, or density.
Sources: Gamm, L.D. (2000). Coordination of care: Stage one in assessing rural managed care. Managed Care Quarterly, 8(1), 1-17.
Wysong, Bliss, Osborne, Graham, & Pikuzinski (1999). Managed care in rural markets: Availability and enrollment. Journal
of Health Care for the Poor and Underserved, 10(1), 72-84.
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Rural Medicare Advantage (MA)
• Rural MA enrollment increased from 242 thousand to 1.45 million
from December 2005 to June 2009; total MA enrollment increased
from 5.1 million to 11.5 million.
• Less than 15% of Medicare beneficiaries are enrolled in a MA plan in
rural areas, compared to over 28% in urban areas.
• Between December 2009 and June 2010 enrollment in PFFS plans
fell by over 185,000 in rural areas and by over 550,000 in urban
areas. In contrast, PPO enrollment grew by 175,000 and 560,000
persons in rural and urban areas, respectively.
• Nine states have rural MA enrollment rates of 20% or greater:
Hawaii, Minnesota, New York, Ohio, Oregon, Pennsylvania, Utah,
Wisconsin, and West Virginia.
Source: Kemper, McBride, & Mueller (August 2010). Rural Medicare Advantage: modest enrollment growth in 2010. Rural Policy
Brief. RUPRI Center for Rural Health Policy Analysis.. Retrieved October 30, 2010, from
http://www.public-health.uiowa.edu/rupri/publications/policybriefs/2010/June%202010-5%20081710.pdf.
27
Medicaid Managed Care
• Primary care case management (PCCM) is the preferred
managed care plan type in rural communities, while
capitation dominates urban locations.
Source: Silberman, Poley, James, & Slifkin (2002). Tracking Medicaid managed care in rural communities: A fifty-state follow-up.
Health Affairs, 21(4), 255-263.
28
Medicaid Managed Care - continued
Source: Silberman, Poley, James, & Slifkin (2002). Tracking Medicaid managed care in rural communities: A fifty-state follow-up.
Health Affairs, 21(4), 255-263.
29
The Extended Medical Staff
Can the “extended medical staff” serve as a means to improve quality
and lower costs (i.e., an ACO) in areas where individuals receive most
of their care from relatively coherent local delivery systems?
Source: Fisher, Staiger, Bynum, & Gottlieb (2007). Creating accountable care organizations: The extended hospital medical staff.
Health Affairs, 26(1), 44-57.
30
“ACO” Steps Being Discussed
• Practice “ACO” principles on self (hospital
employees).
• Partner with insurers around shared savings
models (e.g., readmissions, proactive chronic
disease management).
• Sell ACO to employers.
• Get ready for Medicare demonstration.
Concerns over managing the transition:
feet in two payment systems with “mixed messages.”
31
Suggested ACO Action Steps
32
Actions for Rural Providers
•
Develop a plan that includes the organization’s philosophy on ACO
development and identifies strategic options.
– Consider affiliation potential. “They” are coming and they know you may not
have: the financial capability for infrastructure requirements, the
organizational capacity to change, and/or the population base to be manage
population health effectively at an acceptable level of risk.
Identify
•
Assess
Develop
Do what you can/should:
– Identify, collect, report, & monitor to improve quality and reduce costs
– Develop community partnerships for public health interventions
– Meet with physicians, local payers, and employers for focused discussions
on ACO-related issues
– Assess financial position and opportunities for improvement; designate ACO
development funds
33
Accountable Care
Organization
ACO
Final Thoughts
• Let’s start here with the
branding/semantics
campaign.
– How about “managed care”
and “reimbursement”?
American Association
of Retired Persons
• Don’t “Just do it!”
Just do what is right.
– For the person in the
community who may
use health care services.
Avoid “group think” and
lemming-like behavior.
http://www.youtube.com/watch?v=lF8bK7AJyL0&feature=youtube_gdata_player CenturaHealth | August 13, 2010.
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Questions and Thanks
• Thank you!
• Questions?
• I am grateful to the following individuals:
– Susanna Krentz, President of Krentz Consulting
– Larry Gamm, Director, Center for Health Organization
Transformation, Texas A&M Health Science Center
– Leadership at Scott & White Healthcare, Scott & White Health
Plan, and Lone Star Circle of Care
• For follow-up comments or questions:
– Tom Miller at [email protected]
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