ello Integrated/Coordinated Care Archives | Page 2 of 2 | CAPP
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Good, Affordable Health Care for All: How Long Will It Take?

By Eric Larson, MD MPH, vice president for Research, Group Health
Executive Director, Group Health Research Institute

With the recent Supreme Court ruling on health reform, many at Group Health Research Institute (GHRI) felt relieved.  The decision to uphold most of the Affordable Care Act (ACA) should put our country on a straighter path toward improving access, affordability, and quality for all—imperatives in our Institute’s mission.

Still, we live with great uncertainty.  How will the ACA affect the business of health care?  What will the fall elections mean for health care policy?  What’s the future of research funding, given shaky economies here and abroad?  How will the federal budget impact jobs at GHRI and elsewhere?

Answers will emerge over time, but not knowing can be unsettling.  In times of hardship and uncertainty, it’s natural to wonder: How will this all turn out?

Taking the long view can help.  My friend Dr. Steven Schroeder of the University of California, San Francisco reminded me of this with his speech to the Society of General Internal Medicine (SGIM) in May.  He reflected on several recent assaults to scientific integrity, care for the disadvantaged and other values most doctors hold dear.  Despite grim evidence, he insisted, “Hope is still alive.”  He’s seen it in many places: Advances in public health; civil rights; treatment for AIDs; his medical students’ idealism.  To them, he quotes Dr. Martin Luther King: “I know you are asking today, ‘How long will it take?’  …Not long, because the arc of the moral universe is long, but it bends toward justice.”

So how long will it take to achieve our mission (and the mission of many in our industry) “to improve health and health care for all”?  You could say, “not long,” because improvement is incremental and we work at it every day.  Looking back at Group Health, we see the arc clearly: in 1947 our organization was established by labor unions, Grange farmers, and local activists “to serve the greatest number.”  During 1950s’ McCarthyism, Group Health won a legal battle with the King County Medical Society, over claims the Cooperative was un-American.  And through the 1960s, we overcame racism to integrate our medical staff.

Amidst challenges, Group Health has grown in numbers and influence.  With GHRI’s founding in 1983, it began to rigorously study its population’s health, sharing discoveries globally.  As this chart shows, the Institute’s work on prevention, cancer screening, vaccines, chronic illness care, primary care design, and more has been translated into better care for Group Health members and others nationwide.

Now, with the ACA upheld, our work and the work of many health care systems in this country who view themselves as learning institutions could not be more relevant.  A recent example: The University of Chicago’s study in the Journal of the American Medical Association (JAMA) last week linked the patient-centered medical home (PCMH) model to higher costs at 669 federally funded community health centers.  This is an important contrast to GHRI’s 2010 evaluation of Group Health’s PCMH pilot.  With colleagues, Dr. Rob Reid, Group Health’s associate medical director for research translation, found that Group Health recouped its PCMH investment through savings in emergency and hospital care.  In an invited JAMA editorial, Rob and I explained that practices in the University of Chicago study could not claim such savings because, unlike organizations like Group Health, their medical homes aren’t integrated with emergency and inpatient care.  And we stressed that primary care practices cannot achieve the promise of the PCMH—improved care, lower costs, and higher patient and provider satisfaction—without strong financial support.

Translating such knowledge into better care won’t come easy.  In his speech to SGIM, Steve Schroeder offered six suggestions for making a lasting difference in the dynamic times ahead:

  1. Work on things that are important to you.
  2. Be reliable.
  3. Model your values.
  4. Avoid the false dichotomy of having to choose between professional and personal satisfaction.
  5. Be resilient.
  6. And believe that the arc of history can be bent toward justice.

By following his advice, perhaps we can join the force that makes it so.

ACA, ACOs and the Impact on Hospitals: Thoughts from California

By Don Crane, president and CEO
California Association of Physician Groups

The Supreme Court just upheld the Affordable Care Act, which contains provisions that support the formation of accountable care organizations and other delivery system models that have promise for improving value in health care delivery.  The California Association of Physician Groups applauds this decision.  We have long believed that care coordination and payment reforms are the building blocks for creating a healthcare delivery system that is efficient and achieves quality. With a small sigh of relief that the law stands in our favor, our groups will proceed with implementing delivery system reforms and will continue to work to ensure the success of their Pioneer and Shared Savings ACOS, as well as other delivery system projects already underway.

ACOs are taking shape all over the country in a variety of formations.  The nation might want to make note that of the California organizations participating in Pioneer ACOs, all are physician groups, with one exception, Sharp, which has a nice interwoven arrangement between its two groups and multiple hospitals. At present none of the other Pioneer ACOs have a conspicuous hospital partner in their structure.  In order for these groups to be successful as an ACO they will have to enter into contracts and work closely in a collaborative fashion with a strong hospital partner, which, at the outset, is not an equity holders in the ACO. This may be challenging.

Currently, all of the players in health care are trying to figure out where they fit in an evolving world – this new world of accountable care. Everyone wants to be relevant and do good work. That’s a common feature among hospitals, medical groups, individual physicians, health plans, and every other stakeholder.

But hospitals have a unique set of challenges.  Generally (acknowledging that all generalizations are partially true and partially inaccurate), hospitals do not get paid via a pre-paid capitated methodology. Most of them are accepting DRGs for original Medicare and per diems for their commercial work. So hospitals by virtue of their business model are not well aligned with capitated physician groups.

The whole concept of the ACO movement is to reward providers for living within a budget. There are no longer unlimited dollars to pay for healthcare services.  What is being tested today in the various Medicare and commercial accountable care programs is which payment methodology works best?  Is the best payment method through shared savings, or partial capitation, or a movement to global capitation?  How does a healthcare provider live and make a profit under shared savings or under capitation?  Entrenched in a fee-for-service business model (where filled beds means more profit), hospitals will need to make a paradigm shift—and that’s probably doubly true outside of California.

Hospitals are reacting  to this movement with different kinds of physician integration strategies. One of them is to hire physicians, which is permissible outside of California. Another strategy is to acquire physician groups, which under California law is the more utilized strategy here. We are seeing that reaction occur at a pretty brisk pace.

A concern of many proponents of coordinated accountable care is that we don’t want to see the movement somehow stymied by hospitals whose strategy is to acquire all the physicians in the community and lock them into the old fee-for-service model through market power.  However, I personally don’t believe that will happen for a number of reasons—the foremost of which is that the value lies in the coordination of physician care. Primary care and the ability to manage chronic diseases is almost predominantly the domain of physicians in physician groups and organized systems of physician groups.

In the end, that’s where the value of the Affordable Care Act and healthcare reform lies—in managing costly disease and preventing further disease—so that’s where the dollars will flow.  We may be watching health plans and hospitals purchase physician groups, but in the end, to be successful,  the value will float to the top, therefore physician groups will float to the top. As go the physician groups, so will go the whole industry, in my opinion.

The accountable care movement and how providers will be paid within it will be an iterative process that will unfold over time.  You will not see many instances where people will leap into full tilt capitation on day one. This will be a gradual evolutionary approach.

Clearly, models have developed over time that aren’t supportive of the Triple Aim of accountable care, that is, to improve population health, enhance the patient experience, and control the cost of care.  Many of those old models are entrenched.  The Supreme Court and the ACA have given us the reins create new models of care that address our national health care crisis and that also are good solutions for physicians, hospitals and others providers of care.

The country is asking a lot of providers to change the way they do business.  Change is difficult. It’s costly. It’s inconvenient. It’s scary. There probably will be some winners and some losers.  But at the end of the day, the reformed will produce better care and higher value. And there’s plenty of room for everybody to participate in it—individual physicians, health plans, and hospitals.  There are roles for us all moving forward, and while it won’t be pain free or easy, over time, I believe, people will accept and adapt to the new model simply because it’s a better one.

Health System Reform: Why Now?

By Robert Nesse, MD, chief executive officer, Mayo Clinic Health System

In my previous writing for this Accountable Care column, I stated that to embrace our current healthcare challenges and move toward solutions, we must address three questions:

  • What can we do to solve the problems of health care in America?
  • What are fundamental attributes that medical groups must have to succeed in the future?
  • Why should we do it now?

You can read the answer to that first question here, and the answer to the second here.  In this column, let me address the third question:  Why should we in the healthcare industry tackle delivery system reform now?

If—as you listen to the debates and watch your peers make moves—your take-away could be as narrow as that we have to change because we are scared of the implications of the Affordable Care Act, or that we must do this to preserve our contracts. If this is your view then you don’t understand our opportunity.

One hundred and four years ago, the founder of my group, Dr. William Mayo addressed the graduating class of a medical school in Chicago. On that day he said the following: “The best interest of the patient is the only interest to be considered. . .”  I and many physicians and physician practices have embraced some version of that comment as our primary value ever since that time.  However, that was not his entire sentence. The full sentence goes as follows: “The best interest of the patient is the only interest to be considered and in order that the sick can have the benefit of advancing knowledge, a union of forces is necessary.”

The “union of forces” that Dr. Mayo was talking about then was the integrated group practice of Mayo Clinic.  Since then, many physician groups have evolved and have become successful innovators of the group practice model—such as those represented by the Council of Accountable Physician Practices and others on this website.  Now it’s our turn to take it to the next level.

Why must we change now?  Because we have known for decades that system reform is necessary because our health care costs are unsustainable, but haven’t had the national will or motivation to learn from the best, move forward, and continue innovating.

We must change because we care about our patients, and they are telling us that they have had it with the cost increases and the fragmentation of their care, which they confront daily as they interact with typical medical practices in this country.

We must change now or risk losing more control of our practices.  Physicians and physician groups are the best arbiters of healthcare for our patients, not the insurance industry, the government, or employers. If physician groups don’t claim this space and engage creatively with others, we will lose ground.

We must change because we can change.  Group practice is the prototype for an accountable health care system and, with appropriate innovation, is the best model for the future of care for America.  Many of us already know how to do effective care coordination. Some of us were the early adopters of the electronic health system, providing information to IT companies as they worked to develop user-friendly clinical information systems.  Some of our models include hospitals, and have experience in reducing readmissions. All over this country, physician groups have amassed a wealth of knowledge and experience that our nation can leverage now.

Finally, we must change because there is no choice.  Regardless of whether you want to participate in a government-approved accountable care organization or a commercial health plan project, as a physician that is part of a medical group, you WILL participate in accountable care.

System transformation and new models of care for Americans will require a union of forces. I am a staunch believer that true healthcare reform will emerge from the work of medical group practices. We are the union of forces of which Dr. Mayo spoke.

This is an historic opportunity.  Our patients are counting on us. Let’s get to work.


California and the Accountable Care Movement

The list of 32 medical groups and health systems that were chosen by the Centers for Medicare and Medicaid to participate in the Pioneer ACO project included eight groups whose headquarters are based in California.  This means that more groups participating in this program are from our state than from any other in the country.

This comes to no surprise for many who have followed national healthcare trends over the years.  California has long been in the forefront of what is currently known as “accountable care,” starting 37 years ago, in 1975, when the California Knox-Keene Act was enacted into law and signed by then (and now) Governor Jerry Brown. While not all of our current groups have been in operation the full 37 years, most of them have been in business at least two decades, during which time they’ve acquired a lot of experience in receiving capitation (that is, managing the care of a patient within a set budget) and delivering coordinated services under different payment constructs.  In other words, they have learned a great deal about the accountable care business.

Across the 2400 pages of the Affordable Care Act, we see insurance reforms and efforts to provide coverage for all people. But the single most significant intention reflected in the Act is a clear movement away from fee-for-service payment—away from payment for the volume of healthcare services delivered toward payment for the value of these services in terms of quality and cost-efficiencies.  We see this intention manifested in multiple ways in the Act: through bundled payments and the infusion of quality considerations and adjustments in how hospitals will be paid going forward. We see the same considerations being made with regard to the Medicare fee schedule for physicians.  But perhaps we see this most clearly in the portion of the law relating to Accountable Care Organizations where at the outset payment will be on a shared-savings basis, which is very capitation-like in many ways.  There is clearly a directional movement towards population-based payment methodologies.

California healthcare physician groups and systems are very experienced in delivering quality care accountably.  We have long known that we’ve got a good model.  We’ve seen it in the statistics many times over.  To have our delivery system model effectively adopted by the US Congress as the most promising one for healthcare reform is very gratifying.  It has been breathtaking to watch the movement that we have long supported taking hold across the country, and it is powerful testimony to the level of sophistication in health care delivery across California.

This is not to say that demonstrating our capabilities will not be challenging.  The differences are big.  In the Pioneer ACO program, there is a direct contract between CMS and the medical group or health system.  There is no intermediary.  There is no health plan, and that is novel.  Plus the population that the Pioneers must serve is fee-for-service Medicare, a population that has not, up until now, been in a coordinated care model.  These patients may be difficult to identify and track, since –as fee-for-service patients—they retain the right to get care anywhere they want outside of the Pioneer ACO network of physicians.  Likewise, in the commercial ACO work our groups are undertaking with plans like Aetna and Anthem, providing care coordination and value for PPO fee-for-service members is also the goal.  Managing care and delivering quality in a fee-for-service environment is a big challenge for our groups.

For those who may be tempted to chalk up any success the Pioneer groups may see to their long-term expertise, I say, watch the rest of California closely.  There are many smaller and less sophisticated groups showing good results in pay-for-performance initiatives—nascent groups with low budgets showing how even they can do well in a P4P environment.

Despite the many difficulties associated with this work, I believe our California groups are up to the challenge and will see resounding success.  Accountable, coordinated care is what we do.  And rather than seeing this movement as problematic, we see opportunity and validation. We all believe that the nation as a whole needs to move into this direction, and we intend to be leaders in the process.

Excerpted from an interview with
Don Crane
President and CEO
California Association of Physician Groups

Report from the Front: Accountable Care Organizations & Patient-Centered Medical Homes

by Norman Chenven, MD, CEO and Founder, Austin Regional Clinic

Austin Regional Clinic (ARC) is a multispecialty medical group in central Texas with 18 locations and nearly 300 physicians. Over the past 30 years our business model has been driven by the payment models of employers, commercial health plans and government programs. There have been dramatic changes over that timeframe as payers have experimented hoping to encourage and reward hospitals and providers for providing increased value for the health care dollar.  Increased value, simply defined,  is higher quality at a lower cost. Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMHs) should be viewed and understood in the context of this long history of seeking increased value.

Even though ACOs and PCMHs represent worthy next steps in this search, they should not be viewed as panaceas but rather as incremental stepping stones in an evolutionary process. These two acronyms describe programmatic approaches to providing health care to individual patients but with the common thread that the medical delivery system engaged in these approaches takes responsibility for a defined population and reaches out to the patients in that population proactively to identify gaps in preventive and or chronic care. This can result in the prevention of problems and/or the delivery of more focused medical help and resources to patients in need thus hopefully avoiding expensive catastrophes.

This approach is conceptually quite different than the traditional medical model of only responding to individual patients as they present themselves to their doctors and the delivery system. The traditional approach is reactive by design. ACOs and PCMHs are conceptually proactive in their philosophical bias – they scan the entire patient population for which they are responsible with the intent to identify the neediest and then intervene. In order to accomplish this, substantially more infrastructure is required, such as the electronic medical record and software that analyzes patient information (such as emergency room use, hospitalizations, diagnoses, lab results, prescription use patterns) for the purpose of identifying those who are in need. In ACOs and PCMHs, those patients must be contacted in order for preventive care to be provided. This means that, in addition to the data analysis, additional staff is needed to provide the outreach calls, health coaching and education, and to fully staff  teams of doctors, nurses, behavioral health specialists and social workers.

Preventing problems proactively saves money and misery by avoiding future medical problems. Conceptually this is nothing more than ”preventive maintenance” that is made possible by care management fees that our group negotiates from the health plans for population management activities. The past 18 months have been very interesting as one payer after another has approached our medical group, ARC, and the hospital system, Seton Healthcare Family, that is our partner in caring for a large population of our patients.

The basic requirements for ACO/PCMH activities have been used in managed care programs in the past but they tended to emanate from the health plan headquarters rather than the provider’s office. And that is a major difference. When the health plan made decisions about patient care, they base those decisions on benefit criteria and global statistical medical necessity rather than by case-by-case evaluations with input from the primary care physician. As we continue along this evolutionary path and patient care decisions are made in the provider’s office, we see a lot of creativity in the field with extended physician visits, programs to provide continuity after discharge from the hospital, implantation of home monitoring devices, and more.

More and more of these changes are taking place across the continuum of care. Hospitals, physician groups, payers, and ancillary health entities are finding ways to communicate more about their patients, thereby expanding coordination of care between primary and specialty care physicians, between physicians and hospitals, between hospitals and post-hospital care, and between patients and physicians.

It is important to continue on this path of increased system integration, patient coordination, and physician accountability in health care.  Healthcare providers, payers and patients are slowly coming together around a common vision of what health care delivery should look like and how it should function.

We need to constantly find new and better ways to communicate this vision and this healthcare delivery model to more physicians, health care organizations, and most of all patients. This is why ARC supports this accountable care website project by the Council of Accountable Physician Practices.  By putting forth a vision of what accountable care should be, perhaps we are drawing a blueprint for a patient-centered foundation that will contribute to evermore ACO development.