Accountable care organizations are moving on to a new level of risk and reward, and to succeed, they'll need to rely heavily on information technology, particularly the use of analytics.

The Centers for Medicare and Medicaid Services recently announced participants in the new program, naming 21 organizations that will be testing the waters of the Next Generation Accountable Care Organization (NGACO) model.

Those organizations have already gained experience with ACO initiatives, either through the Medicare Shared Savings Program or the Pioneer ACO model. It's clear that the models are challenging and that providers have had mixed results with ACO initiatives; for example, about half of the 32 accountable care organizations that were in the original Pioneer ACO program have dropped out, primarily because of financial challenges.

Through the next generation ACO program, CMS will partner with ACOs that have experience in coordinating care for populations and whose provider groups are ready to assume higher levels of financial risk and reward. CMS says it wants to use the program to offer beneficiaries benefit enhancements, while offering ACOs better financial support, in hopes of building a model that will be sustainable over the long term.

Participation in Pioneer ACO programs falling

ACOs are intended to better coordinate care for patients, while improving the partnership between patients and doctors in making healthcare decisions. For providers, ACOs hold the promise of realigning the practice of medicine with the ideals of the profession—keeping the focus on patient health and the most appropriate care.

The challenges of ACO models, and particularly the new model, will place a greater emphasis on the use of information technology to aggregate and coordinate patients' care delivery, and analytics to effectively segment populations for care.

The stakes are high with ACO approaches. For example, Beacon Health, the ACO of Eastern Maine Healthcare Systems, participated in the Pioneer ACO program for three years. Beacon Health made money in Year 1, lost money in Years 2 and 3, and opted out of Year 4, says Jeff Sanford, CEO at Beacon Health. "You can be successful in lowering costs and raising quality, and still not win in that financial model," he says.

Even so, Beacon Health now will participate in the Next Generation ACO Model. Better prospects of doing well financially are a big part of that move. But to succeed in the Next Generation ACO model, Beacon Health is raising its technology game, particularly by increasing its use of data analytics.

The Next Generation ACO program includes provisions for increased shared savings, but also more risk for the ACOs. The organizations can share in 80 percent of the savings or losses, compared with 60 percent to 75 percent previously under the Pioneer ACO program. However, Sanford believes the program offers a better chance at being rewarded than it did under the Pioneer ACO program. Because Beacon Health already has cut costs and improved quality, the organization believes it can succeed as a Next Generation ACO.

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The Next Generation ACO program includes provisions for increased shared savings, but also more risk for the ACOs.

Under the Next Generation ACO model, making sure patient risk scores are appropriate will play a larger role than it did for Pioneer ACOs, and that's now a focus for analytics work at Beacon Health. If a patient had a high risk score in 2013 and 2014, the organization can assume it's still high in 2015 and 2016, Sanford says. As a result, Beacon Health will make heavy use of analytics and other population health IT to identify these patients and ensure they still are receiving continuity of care, Sanford adds.

It's also critical to educate primary care physicians and staff on the importance of making sure that all diagnoses and other health issues in the population are being addressed on an annual basis, he adds. That will fall to administrators and care management staff in order for Beacon Health to reach financial goals under the ACO.

Beacon Health initially outsourced analytics, believing that the company with which they contracted had the appropriate levels of expertise, knowledge and economies of scale. The partner, it turns out, could provide only high-level summary information when the organization needed detailed actionable data, Sanford says. Beacon Health was not satisfied with results, so it brought analytics in-house in June 2015.

Beacon Health is continuing to build up its IT resources. Among other issues, analytics can identify where emergency department utilization is high, and whether the same patients and providers contribute to overutilization. It also now knows how many patients are treated in the emergency department, treated in the hospital or sent home, and it compares its partner hospitals to determine why some are admitting more patients than others.

Beacon Health also is doing some remote monitoring of chronically ill patients in their homes, but would like to do more, Sanford says. "It's simple technology and a good way of keeping track of patients." The organization is testing remote monitoring with cardiac patients and soon will expand the program to patients who have diabetes and respiratory diseases.

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