In these arrangements, physicians were pre-paid for treating patients, but often lacked the resources to closely monitor their patients' health status and treatments provided outside their practice. Now, payers are attempting to play a bigger role in providing data to providers to help them hold down costs, by identifying at-risk patients, for example. "You can still run a fee-for-service practice within an ACO model," says Shields. "The ACO is attractive to physicians who are nervous about capitation. But the ACO is not for the faint of heart. Providers need to be serious. If you have not already done the work with quality, patient safety and cost effectiveness with a network of doctors, the ACO is not a good place to start."
Advocate began its march down the accountability path about a decade ago. "The ACO is something we have been trying to do all along, but we did not call it an ACO," Shields says. "We want to bring the physicians and hospital together to drive safety and cost effectiveness." Advocate measures nearly 160 performance metrics in broad categories, including clinical outcomes, cost effectiveness, patient experience and use of health I.T. In addition, it negotiates overarching insurance contracts, which offer bonuses for meeting various metrics. Money from the payers is pooled in a clinical integration fund, then redistributed to physician groups that form the PHO (2,900 are independent) based on how well they meet the criteria.
By building out its quality metrics, Advocate is in a better position to negotiate with payers, Shields adds. Rather than having to comply with multiple, and sometimes conflicting, metrics Advocate runs a single program with the same measures applying to all payers. But Shields emphasizes that quality improvement is a byproduct, not a starting point. "Don't start with measures, start with culture and then governance," he advises. Advocate distributes a quarterly report card to each practice, which injects an element of competition. Physicians pick the measures, bonus thresholds and credentialing standards.
Running the show
For some experts, putting physicians in control of the ACO effort like that represents the best stab at coordinating care. "There is opportunity in the ACO if physicians take the leadership role," says Paul Weygandt, M.D., vice president of physician services at J.A. Thomas, an Atlanta-based consultancy. "If you think the current regulatory environment is challenging, wait until you are regulated internally by a group of physicians at risk. They will not tolerate some of the behaviors in medicine today."
Weygandt says current financial incentives reward neither quality nor cost-effectiveness. "Right now there are so many silos of care," he says. "Hospitals are reimbursed by their case rate for Medicare so they want to get patients out as quickly as possible. Nursing homes are not paid to take care of sick patients, so they send patients to a hospital if someone sneezes. How many millions are spent transporting patients back and forth between nursing homes and hospitals? Most patients getting an orthopedic procedure get a new set of crutches. Why not ask if they could re-use an old pair?
"The reason is we're spending someone else's money. If the ACO recognizes every unnecessary procedure, that attitude might change."
The need for new standards in communication across care settings sets the stage for information exchange, which isn't as extraordinarily complicated as some believe, Weygandt adds. For example, a physician in a patient-centered medical home might give their cell phone number to a patient, instructing them to call if they are going to another physician for care, or to the ED. In fee-for-service models, physicians are reluctant to give out their phone numbers because they can't bill for the service, he contends.
To most observers, true care coordination entails at least three major types of health I.T.-the health information exchange, the electronic health record, and the personal health record or patient portal. "You need I.T. beyond the revenue cycle," says Jim Adams, managing director at The Advisory Board Company, a Washington, D.C.-based research and consulting firm. "You need unified messaging, direct communication between provider to provider, manager to provider."
Data exchange role
As the industry moves toward accountable care, health information exchanges will become a prerequisite to success, says Doug Dietzman, executive director at Michigan Health Connect, a commercial HIE funded by dues from 49 participating hospitals in the state's Lower Peninsula. Spanning some 750 physician practices (who pay no dues), Michigan Health Connect transmits some 830,000 lab results each month across its network and also enables specialty referrals. Using data exchange software from Medicity, it serves as an information hub, connecting nearly two dozen EHR systems via nearly 50 interfaces, Dietzman says. "Michigan Health Connect won't be an ACO, but our technology foundation and infrastructure will be a required underpinning of many ACOs that will spring up. We can all be leveraging common infrastructure to lower costs."
Michigan Health Connect has seen steady growth in transactions since its formation in March 2010, Dietzman adds. "Rather than going after the loftier ideas of HIEs, we started in the trenches," with such pragmatic services as lab results delivery, he says. "We wanted to build the tracks first."
The exchange's referral management capability, for example, helps streamline a cumbersome, labor intensive process. It was launched last May. In the ACO world, providers would need to keep track of patients they send to other specialists, monitor outcomes, and receive results. "We can help the referral coordinator who is in a sea of paper and phone calls," Dietzman says.
Using the data exchange, providers can log onto a central site and establish connectivity with the 200-plus physician offices (representing 140 specialties) who have signed up for the referral service. Referring physicians search by specialty for the office they want to send their patient to. They then click through to the office, where they find a list of all the referral documents required. They can append those files electronically, either as Word files, scanned documents, or directly from their EHR. The system also provides verification of receipt and notice of follow-up after the visit is completed.