Health for life

The great Wayne Gretzky once famously observed that he achieved ice hockey prowess because he made a habit of skating to where the puck was going, not where it is.  That important lesson may have been lost on countless health care executives who, now that the Department of Health and Human Services has told us what an "Accountable Care Organization" (ACO) is, are furiously skating to fill out this application.

The Disease Management Care Blog suggests they also think about where this ACO puck could go.  Listen to the ACO zealots and its easy to believe that the triple aim will become manifest and providers will rolling in shared savings moolah in less than 18 months.

Regular DMCB readers know better.  They know that Medicares ACOs have no track record and that the ACO-like models have had a checkered experience.  As data on the Medicares ACOs come in, it is quite possible that we may discover a penalty box where a) shared risk translates to shared losses, b) the Feds are fickle partners, c) the correlation between cost inflation and quality is implacably positive and d) only a few hospital-physician alliances have the kind of non-generalizable culture necessary to make ACOs financially viable.

In other words, this is not going to be a preordained power play. By the time they get there, ACOs could find the puck went somewhere else. 

The DMCB humbly suggests that that somewhere else could be a post-ACO world.  That’s why the DMCB suggests that no organization’s long-term ACO strategic planning is complete without serious contemplation of why they should not follow the herd and plan on a 3rd quarter where:

The Bubble Bursts?  The hangover of lost millions in misallocated capital and human resource investments could preoccupy key partners and hobble lead competitors for years to come.  This has important implications for future business relationships, mergers and acquisitions and growing market share.

The Ascendancy of Physician Groups.  As hospital-physician arrangements unravel, the larger  independent physician-owned practices left behind could fill the vacuum with an array of contained, discreet and non-global commercial insurer payment arrangements that are based on 1) a level playing field and 2) what both sides value.  That is, of course, assuming these practices dont run afoul of any market dominance scrutiny by the FTC.

Federal Retrenchment:  Despite any prior deals on the SGR, a perfect storm of entitlement non-orm, rebounding cost inflation and the lack of any new innovative ideas forces CM to cut rates. The impact on physician participation in Medicare is anyone’s guess, but the new urgency to control costs means physicians will 1) have one more business reason to seek the efficiencies of larger groups and 2) be even less willing to take on additional practice costs that ranges from hiring to technology.

Should provider organizations skate toward this post-ACO world?  The DMCB suggests its not unreasonable.  Time will tell if they win this game.

ACOs and insurers discuss terms

The Disease Management Care Blog likes to think of itself as having achieved "critical mass." Now that its readership has climbed into the thousands (and Twitter is now well beyond 600), medical meeting organizers want to issue press credentials, medical journals are sending it embargoed previews and spammers are working particularly hard at getting maliciously-linked comments posted. The best upside for the DMCB, however, is its email correspondence with smart professionals who have insights that run contrary to the mainstreams confirmation bias.

Heres a gently edited email from one astute observer that the DMCB wanted to share:
 
While policymakers extoll the clinical integration virtues of ACOs and the PCMH, what goes unmentioned is that these vehicles often involve provider consolidation. While coordination of care and wasteful utilization might improve, does this mean that those entities could also amass considerable market leverage or become quasi-monopolies? Could that drive up costs?

I was at an specialty provider conference in early March where it was cited (in an admittedly unscientific member poll) that 25% of institutions surveyed had themselves been part of a consolidation or site of service change, mostly from community private practice to hospital-based setting. If physicians are not being employed outright, theyre entering into professional services agreements (PSAs).  Since this has to increase negotiating clout with insurers, the other locally competing providers are responding with an in-kind physician arms race.

Given this dynamic, what will happen when a system has a become a very efficient ACO and controls primary care with a locally dominant medical home network? Even if they fail to show any cost savings, will their ability to command favorable contracts be the key to economically surviving? Darwin would be proud of these long-beaked birds.

Are our federal and state governments prepared to reconcile the twin needs of integration and competition? I can’t help but think that regulators will be outmaneuvered by these increasingly powerful health care entities and that an unintended consequence of orm will be the increasing price points and the return of sticker-shock health care inflation.

Need an example of what is going on at the local level? Check out St. Lukes in Idaho and their ongoing battle with Trinity. St. Luke’s is a CMS designated ACO (on page 33) and is buying up assets left and right, employing physicians, and doing so in almost a direct anticompetitive way. I think that currently St. Lukes is doing a lot of forward thinking things, but if St. Luke prevails and Trinity does indeed go out of business as they state they will, it will leave a monopoly in that mostly rural state. When that happens, St. Lukes can set the price point.  Will they use that power to coordinate care or maximize revenue?

Believers in ACOs and the PCMH would do well to take a look at the Trinity perspective.

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 wasnt  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 isnt 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, Bostons Partners Healthcare reduced Medicare claims expense by $14 million.  They will be rewarded with a shared savings check of $7 million. Wisconsins 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. 

Thats 19 losers or almost 60% of the participating organizations.

In addition, its possible that for some of the 13 "winners" that the shared savings awards wont  match their up-front multi-million dollar investment either.  Assuming thats true, its 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 DMCBs 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.  

Let the debate begin!

If the Disease Management Care Blog cant personally debate former CMS Administrator Don Berwick on the merits of Medicare-style ACOs, itll just have to have settle for letting others do the heavy lifting.  In this Wall Street Journal article, skeptics Jeff Goldsmith and Thomas Scully ably take on Dr. Berwicks cherished assumptions in a well edited point-counterpoint exchange.

Your ever helpful DMCB provides a short summary of the highlights for its busy readers.   

Donald Berwick:   What the Affordable Care Act seeks is reasonable: high quality, low cost and open access that strikes a balance between unfettered fee for service and onerous managed care.  ACOs take the best features of health maintenance organizations, such as coordinated care and provider incentives to save money, but without the worst, such as restricted networks that hamper patient choice.  Many provider organizations seem to agree.  Thats why interest in participating as ACOs is high. Smart providers will figure out how to do ACOs profitably.  Whats more, private insurers have adopted the model, so there must be some merit to the notion of ACOs.  Last but not least, if ACOs work out, the savings will accumulate into billions in the years to come. Thats when we can think about next steps, such as partially capitated arrangements.

In addition, thanks to the lessons of managed care and the Physician Group Practice Demo, ACOs will be transparent and high quality with closely monitored gain sharing, governance and information systems. Whats more, thanks to its Innovations Center - Medicare will find ways to be flexible over the start-up costs of ACOs with advanced payments.

Hey, this is one experiment among the many innovations of the Affordable Care Act.  The negative murmurings of the malcontents below may be right, but we dont know that and ACOs are still worth a try.

Jeff Goldsmith: Berwicks vision looks good but its an unreal mirage.  Thats because provider organizations a) will have to spend more money than they can possibly recoup in shared savings and b) are fundamentally configured to admit to expensive hospitals and rely on pricey high-end specialists.  While CBO projects mucho savings, its really a lot of inside-the-beltway "budget dust." We know that because in CMSs Physician Group Practice Demo that formed the basis of ACO blueprint, eight out of ten participants lost money. Thats because they were unable to scale the resources necessary to care for their sickest patients.  The two participants that made money probably did so because of creative coding.   Last but not least, remember that Medicare beneficiaries in ACOs - because theyre completely protected from any economic downside - have little incentive to moderate their consumption of health care. 

Thomas Scully:  Nice try Dr. Berwick, but there are credible data that say that ACOs cost as much as $30 million to start up.  The start up price tag is not only putting hospitals in the drivers seat, theres a good chance that theyll turn into market dominant oligopolies. Its that luster of control, not saving money, that has driven provider interest in ACOs  If you want to save money, drop Medicares dysfunctional price fixing, forget about ACOs and give the docs control of all the money in fully capitated arrangements based out of a private insurance system that fosters competition, like TriCare and the Federal Employees Health Plan.

Data is in there somewhere!

Remember the Physician Group Practice Demonstration?  Its results were used by CMS to justify Accountable Care Organizations (ACOs) with the luster of millions of dollars in shared savings and the thrill of being a "partner" with the worlds largest health insurance behemoth, intent on "achiev[ing] a transformed and modernized health care system."

The Disease Management Care Blog has never been all that impressed by CMS bluster.  It became less so when it checked out this short video by a physician leader from one of the Group Practice Demo participating organizations.

Its an interesting story. After being confronted by suboptimal quality scores in the first year of the Demo, the provider organization naturally responded with corrective programs.  However, there was also an 18 month delay in CMS ongoing provision of the quality measures.  Since too much money was riding on meeting the CMS performance threshold, they had to develop their own internal reporting systems. Without them, they would have been flying blind and unable to gauge whether they were making any progress.
 
Another lesion from the Group Practice Demo?  If youre going to be an ACO, dont count on the Feds and mistake CMS size or promises for nimbleness or action.  And make sure you have your own data resources and dashboards to manage the quality "real time."

Image from the Lawrence Livermore National Laboratory

Let thousands bloom

After reading this Huffington Post (HuffPo) article by National Physicians Alliance board member Ricky Choi, the Disease Management Care Blog is worried.

According to Dr. Choi, sometime last week, the White House hosted a meeting of national physician leaders to talk about the Affordable Care Act.  HHS Secretary Sebelius was there along with other CMS administrators.  The conversation focused on electronic health records (EHRs), the patient centered medical home (PCMH) and accountable care organizations (ACOs). 

The DMCB is not worried about another Cabinet member blurring the line between policy and election-year political grandstanding.  It is not concerned that naive ACA supporters are unwittingly being used to promote the Administrations health orm nostrums.  It is not surprised that this flattering article seemed only fit for liberal HuffPo and is destined to reinforce the biases of an already committed base. It is not wondering about a curious commitment to care approaches that still are not conclusively backed up by a critical mass of peer-reviewed evidence. Finally, the DMCB isnt shocked that it was not invited to the White House.

Rather, says the DMCB, its worried that this is all the White House has.  A precious day of CMS leadership attention spent in recycling stale EHR, PCMH and ACO acronyms and jargon with a fawning circle of fellow ideologues? What gives?

While the CMS EHRs meaningful use program continues, health care technology is evolving away from fixed desktops and mainframes toward mobile smart devices, apps, the cloud and social media. The transition is bound to shift doctors and patients highly personalized management of information in ways that we havent thought of. 

CMS "PCMH Ver. 1" entails a wholly contained primary care provider team reimbursed with a monthly fee.  In the meantime, other health systems and insurers are already figuring out how to simultaneously out and insource team members depending on local resources and patient risk. 

CMS is just getting its ACO pilots and programs off the ground. In contrast, commercial insurers launched a host of "accountability" initiatives years ago. Many are focused on a single clinical domain (such as avoidable emergency use, patients who are high risk, or post-discharge readmissions) and are highly flexible and expandable.

The distinctly modular approach to health IT, medical homes and provider-insurer risk transfer certainly contrasts with CMS plodding one-size-fits-all and top-down planning.  While a thousand commercial sector flowers bloom, CMS risks presiding over demos and pilots that could become obsolete before the the data collection has been completed.  Why arent they meeting about that?

Last but not least, the Administration seems to be putting all of the ACAs eggs in the EHR, PCMH and ACO baskets. If they dont work out, it would further undermine the brand of the star-crossed Affordable Care Act.

Image from Wikipedia

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 youve 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 dont understand it either!

The DMCB to your rescue with a generic press release.  Its 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 organizations 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, 2012 – 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.

"Were pleased to be part of the Behemoth family of nation-states," noted Dr. Ego. "By relabeling the services weve been providing all along, we can minimize disruption for both our patients and physicians." he said.  "They wont 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.