Value-Based Care

Healthcare Delivery

Lecture b – Accountable Care Organizations

This material (Comp23 Unit3) was developed by the University of Alabama at Birmingham, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information

Technology under Award Number 90WT0007. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

License. To view a copy of this license, visit http://creativecommons.org.

Learning Objectives• Describe Accountable Care Organizations

(ACOs)• Identify types of public and private sector ACOs• Describe the concept of “shared savings” • Discuss needs for ACO success

Accountable Care Organizations• Provides high quality care to patients• Shares care delivery and financial responsibility

for a defined patient group• Quality versus quantity• In 2015, 400 ACOs served 7.2 million

beneficiaries

Source: (Abrams et al., 2015)

Key Features of ACOs• Local accountability for quality and costs

– Aware of needs– Ability to organize care

• Establish budget and resource needs– Doctor visits, hospital stays, lab tests

• Reliably and accurately measure performance– Use results to drive improvement– Improved technology needed for future

Key Features of ACOs 2• Plan and coordinate patient care

– Follow-up care– Multiple chronic conditions

• Incentives– Quality & care coordination

• Provider, payer and consumer transparency– Care improvement– New technology opportunities

Types of ACOs• Public Sector ACOs

– Created through federal legislation– Serve Medicare and some Medicaid patients

• Private Sector ACOs– Known as “Commercial ACOs”– Serve patients with private health insurance

Public Sector ACOs• Medicare Shared Savings Program (MSSP)

– 434 ACOs in MSSP in 2016 – Two different financial risk approaches

• Medicare Pioneer ACOs– More advanced payment models– 32 ACOs– Six different incentive designs

Sources: (HHS Press Release, 2016; Fisher et al 2002; Commonwealth Fund Brief 2015)

Public Sector ACOs 2• Medicare Advance Payment ACO Program• Medicare Next Generation ACOs

o Prospectively set benchmarkso Patient choice whether to participateo Patient, telehealth, and care incentiveso 21 Next Generation ACOs in early 2016

• Medicaid ACO Programs

Sources: (HHS Press Release, 2016; Fisher et al 2002; Commonwealth Fund Brief 2015)

Private Sector ACOs• Public programs that also contract with private

payers• Private sector-only ACOs developed by insurers• Varied, difficult to evaluate

Sources: (Fischer et al 2002, Petersen & Muhlstein 2014)

Who Can Form an ACO?• Integrated Delivery Systems• Multispecialty Physician Practices• Physician-hospital Organizations (PHOs)• Independent Practice Associations (IPAs)• Virtual Physician Organizations

Integrated Delivery Systems• Characteristics

– Own hospitals, practices, and insurance plans– Aligned financial incentives– EHRs, other health IT, team-based care

• Example– Kaiser Permanente

Multispecialty Group Practices• Characteristics

– Own or have affiliation with hospital(s)– History of physician leadership– Mechanisms for coordinated clinical care

• Example– Cleveland Clinic

Source: (Health Affairs, 2010)

Physician-Hospital Organizations• Characteristics• Non-employee medical staff• Re-organize care for cost-effectiveness• Example

– Advocate Health

Source: (Health Affairs, 2010)

Independent Practice Associations• Characteristics

– Physician practices contract with health plans– Active practice re-design, quality improvement

• Example– Atrius Health

Source: (Health Affairs, 2010)

Virtual Physician Organizations• Characteristics

– Small practices, often in rural areas– Led by individual physicians, local medical

foundation, or state Medicaid agency – Structure that provides leadership,

infrastructure, resources.• Example

– Community Care of North Carolina

Source: (Health Affairs, 2010)

How do ACOs Work?

Source: (Adapted from The Commonwealth Fund, 2015)

Paying for Accountability

Chart 1.1: Paying for Accountability. Lemak, CH. 2015.

ACO Requirements• Set benchmarks for quality of care

– Patient safety, care coordination, preventive care, control of chronic conditions

• Exceed or meet benchmarks• Keep costs below target level

Sources: (The Commonwealth Fund, 2015, CMS, 2015)

Financial Risk in ACOs• One-sided risk

– ACOs share in the savings produced – If spending exceeds target, ACOs don’t suffer

• Two-sided (or full) risk– Share in the savings and losses incurred– “Write a check to Medicare”

What do ACOs Need to Succeed?• Leadership• Organizational culture of teamwork• Relationships with other providers

Source: (American Hospital Association, 2010)

What do ACOs Need to Succeed? 2 • Ability to manage financial risk• Ability to receive and distribute payments or

savings– Requires knowledge, technology, leadership

Source: (American Hospital Association, 2010)

What do ACOs Need to Succeed? 3• Patient education and support resources• Organization infrastructure

– Population management – Care coordination

• IT infrastructure – Quality metrics– Quality improvement

Source: (American Hospital Association, 2010)

ACOs Are...• Collectives of provider organizations banded

together into a single coordinated organization• A method of managing health needs of a

particular patient population• A way to monitor quality of their care• An opportunity for providers to share in savings

from efficiencies and improvements

ACOs Need…• To coordinate across organizations• Provide a continuum of care across different

institutional settings• The capacity to support performance

measurement• To prospectively plan budgets and resources

HIT Solutions• Health Information Exchange (HIE)• HIE Registries• EHRs Registries• Clinical Decision Support• Practice Management

ACO Information Technology• Data Warehouses

– Collect & centralize quality/cost data– Population Health Management tools– Identify, stratify and track complex patients

• EHR systems– Integrated across settings– Advanced clinical decision support

• Patient Portals– Communication with patients

ACO Care Management• Robust care management that is diverse enough

to address variety of patient needs• Care management staff includes nurses, social

workers, disease managers, patient navigators• Aggressive outreach to patients• Population management programs specific to

community needs

Accountable Care OrganizationsSummary

• Joint responsibility for population of patients• Different types of public and private ACOs

– MSSP– Pioneer– Next Generation

• Target levels for quality and spending• New care management programs and IT

Healthcare DeliveryReferences – Lecture b

ReferencesAbrams, M. K., Nuzum, R., Zezza, M. A., Ryan, J., Kisla, J., & Guterman, S. (2015). The Affordable

Care Act's Payment and Delivery System Reforms: A Progress Report at Five Years. Retrieved March 24, 2016, from http://www.commonwealthfund.org/

American Hospital Association. (2010). 2010 Committee on Research. AHA Research Synthesis Report: Accountable Care Organization. Chicago: American Hospital Association.

Fisher, E. S., Shortell, S. M., Kreindler, S. A., Van Citters, A. D., & Larson, B. K. (2012). Health Affairs. A Framework For Evaluating The Formation, Implementation, And Performance Of Accountable Care Organizations, 31(11), 2368-2378.

McClellan, M., Kocot, S. L., & White, R. (2015, April). Changes Needed To Fulfill The Potential Of Medicare's ACO Program. Retrieved March 24, 2016, from http://healthaffairs.org/

Medicare Shared Savings Program Quality Measure Benchmarks for the 2015 Reporting Year [PDF]. (2015, February). Centers for Medicare and Medicaid.

Peterson, M., & Muhlestein, D. (2014, May). ACO Results: What We Know So Far. Retrieved March 24, 2016, from http://healthaffairs.org/

The Affordable Care Act's Payment and Delivery System Reforms: A Progress Report at Five Years. (n.d.). Retrieved March 24, 2016, from http://www.commonwealthfund.org

30

Healthcare DeliveryReferences 2 – Lecture b

Charts1.1 Paying for Accountability. Lemak, CH. 2015.

ImagesSlide 16: How Do ACOs Work? Adapted from the Commonwealth Fund, 2015. UAB.

31

Value-Based Care, Healthcare Delivery

New Models of Care Delivery

This material was developed by The University of Alabama at Birmingham, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology, under Award Number 90WT0007.