Framing the issue:

Despite disappointing early results for hospitals’ participating in ACOs, accountable care is here to stay.

CMS says ACOs saved $372 million last year.

ACOs also improved on 30 of 33 quality measures and exceeded fee-for-service results on most quality measures.

Providers use ACOs as a learning tool as they move further into population health management.

Lessons include: Carefully assess market opportunities and your own capabilities, choose the right partners, and cultivate leaders who can make it happen.

Creating organizations capable of population health management and value-based contracting is complex and challenging. Just how challenging is evident in early results from Medicare’s accountable care organization programs.

In their first year, fewer than one in four Medicare Shared Savings Program ACOs earned bonuses, according to the Centers for Medicare & Medicaid Services. That means only 53 out of the 220 ACOs held Medicare expenses more than 2 percent below target while meeting quality standards. Another 52 held costs below target, but not far enough below to earn bonuses. Pioneer ACOs did better, with 11 of 23 earning bonuses totaling $68 million for their second year, although 10 of the original 32 have dropped out or converted to MSSP ACOs.

That averages about $6 million in ACO bonuses for those that earned them — which doesn’t sound bad until you consider that an investment of $2 million to $5 million in information and care management systems was required. “The lion’s share did not do well,” says Dennis Butts Jr., director in the strategic health care transformation practice at Navigant Consulting, which counts a half dozen Pioneer and more than two dozen MSSP ACOs among its clients.

Nonetheless, accountable care is here to stay, Butts says. Medicare sees it as a win not just for the savings — $372 million for ACOs last year — but also for improved quality. In 2013, shared savings ACOs improved on 30 of 33 quality measures, and exceeded fee-for-service providers in 17 of 22 measures reported through the group practice Web interface option. Pioneer ACOs logged mean scores of 85.2 percent, up 19 percent from 2012. Private payers and businesses also are convinced it’s the way to go.

Providers are also far from abandoning the concept. Many view ACOs as a learning tool and are embracing Medicare bundled payments, Medicare advantage plans, Medicaid ACOs and capitated plans, and commercial contracts ranging from quality bonuses to shared savings, episodes of care and capitation. Quite a few have even launched commercial health plans.

“We are seeing multiple plays,” Butts says. Among the most promising is combining primary care-focused ACOs with specialty-driven bundled care arrangements in what he refers to as ACO 2.0.

The concepts are synergistic in that population management capabilities help to identify high-risk patients, whose costliest episodes can be managed through integrated specialty services, including cardiac and orthopedics that make better use of post-acute care and community-based, follow-up. “Even in a chronically ill population, what drives high costs are acute episodes,” says Rich Bajner Jr., director in the provider and payer practice at Navigant.

Bajner believes integrating acute and accountable care could reduce costs as much as 50 percent in high-risk groups. It also may help acute care-centered organizations make the transition to value-based population health management.

And there is much to learn from early ACO experience, Bajner says. Among the most important lessons are the need to carefully assess market opportunities and your own capabilities, build your organization and choose partners to develop the capabilities needed to achieve specific goals, and cultivate leaders — especially physician leaders — who can execute your strategy [see Executive Corner, Page 34].

Many health systems also find they’ve learned valuable lessons in accountable care in the first year or two. Among them are how porous their networks are — and the importance of engaging patients in a variety of ways to keep them in network. Supporting physicians and making the most of imperfect data reporting are other key learnings. Below, four systems discuss their early experience and the challenges ahead. 

I called my doctor, but …

Controlling out-of-network costs starts with what patients hear on the phone

If this is an emergency, hang up and call 9-1-1 or go to the emergency room.”

Call a physician after hours, or even during lunch or busy periods, and there’s a good chance you’ll hear these words. They sound reasonable enough. But they can also drive out-of-network utilization and costs — bad news for systems with risk contracts.

You’re basically telling patients to go somewhere else when they might need you the most, says Alan Murray, president and CEO of CareConnect, the insurance arm of North Shore-LIJ Health System, which operates 16 hospitals and nearly 400 physician practice locations throughout New York, including Long Island, Manhattan, Queens and Staten Island.

Instead, North Shore-LIJ provides its at-risk network with a central phone bank linked to physician offices, care managers, on-call triage nurses and physicians 24/7, Murray says. In addition to making appointments and handling things like routine prescription requests, the service can answer clinical questions and direct patients to network physician offices or urgent care when needed.

“We pick up the phone in less than six seconds. You speak to a person, not a machine, and 88 percent of calls are resolved by the person picking up the phone,” Murray says. Providing instant access directly reduces out-of-network utilization and avoidable ED and inpatient admissions. Providing it consistently reduces future leakage even more as patients come to trust the call center, and call it first when they need help, he adds.

Effective outreach

The phone service handles calls from North Shore-LIJ’s 5,000-patient cohort in the Montefiore Medicare Pioneer ACO, 12,000 patients in its new individual health plan, 50,000 patients in its self-funded employee benefit plan, and several ACO and pay-for-performance contracts with commercial insurers. It also will serve the system’s Medicare bundled payment service set to launch next year. Overall, about 7 percent of the system’s revenues came from at-risk contracts in 2014, projected to rise to 10 percent or more in 2015, says Richard Miller, senior vice president, payer relations and contracting. The individual plan offered on New York’s health insurance exchange did exceptionally well, capturing 7 percent of the market in Nassau County, and just under 3 percent each in Suffolk and Queens counties — well beyond the 1 percent goal.

The call center itself is just one aspect of a comprehensive patient engagement strategy that touches every level of the organization. Indeed, North Shore-LIJ has restructured itself around patient engagement, including setting up the CareConnect insurance arm and Care Solutions, which provides care management services to all the system’s value-based programs. Care management and physician office scheduling must be integrated with the call center for it to accomplish its service-right-now mission, Murray explains.

Integrating outreach into patient care models is also critical, says Kristofer Smith, M.D., medical director of advanced illness management. North Shore-LIJ considered telephone outreach to get high-risk patients into care management, but few patients responded. Embedded care managers who can engage patients in the physician office when they seek care are much more effective. Care managers are trained to develop trusting relationships, including how body language and word choices influence perceived trust.

The 24/7 phone service is crucial to reinforce that trust, Smith says. “Patient engagement is the most important thing you have to get good at quickly. Even if you have a good clinical program, if patients don’t agree to partner with you, you can’t improve their care.”

Data collection and analytics are also essential to track patients and their care, and to find those in need of aggressive care management, says Joseph Schulman, executive director of North Shore-LIJ Care Solutions. The lag in reporting of claims information from the Centers for Medicare & Medicaid Services remains an issue, but it still has been very enlightening, he adds.

“As a large integrated health system, you have the perception a large percentage of care is delivered within the system, but that is not necessarily the case. It was pretty eye-opening to see the use of ancillaries and skilled nursing facilities that we don’t necessarily have,” Schulman says.

As the system takes on bundled payment for chronic obstructive pulmonary disease, staying on top of care use will be critical because patients will be attributed to the system as of their first diagnosis or visit.

Involving physicians

Developing care models for accountable care and bundled payment has required a lot of work with physicians, Smith says. Keeping them informed of what changes need to be made and why, and providing evidence for adopting new protocols helps to allay suspicions that quality will be sacrificed for profit. Directly involving physicians at all levels in protocol development also helps. “If we can put on paper what physicians agree is the right thing to do, we can manage the threat of underutilization.”

Different services are needed for different care models, Smith says. Where pay for performance involves broad contact with patients across the system for things like diabetes monitoring, ACOs and full-risk plans require identification and aggressive case management of high-risk patients, and bundled payments require integration of acute and post-acute care.

Framing new care approaches in positive terms also can help. For example, for joint replacement bundles, North Shore-LIJ has adopted “patient days at home” during the postoperative period as an outcome measure. That pushes providers to think in terms of preparing the patient for re-entry into a home environment instead of looking for ways to cut inpatient rehab or nursing home discharges, Smith says.

“It is a measure everyone can get behind — doctors, nurses, administrators, patients,” Smith says. “Everyone wants the patient to be at home, but to be at home comfortably and safely. That’s the goal and, if patients need inpatient rehab or a nursing home, that’s what we do.” 

Empowering physicians

Surrounding doctors with population management tools supports culture shift

Heartland Regional Medical Center in St. Joseph, Mo., sponsored one of just four MSSP ACOs to accept both downside and upside risk in its first year. On the upside, that meant the 352-bed hospital could earn up to 60 percent instead of 50 percent of savings. It paid off — the ACO held expenses approximately 5 percent below target for about 13,000 attributed beneficiaries, saving $8.53 million and earning itself $5.01 million.

The downside risk was real — another two-sided ACO ended up repaying Medicare $10 million — but Heartland executives didn’t hesitate, says Linda Bahrke, R.N., who administers Heartland’s community health improvement program as well as the system’s ACO. “We were confident because we had focused as a system on population health prior to reimbursement changes. We felt we were able to do this.”

Heartland, which is changing its name to Mosaic Life Care as it expands into Kansas, has long served a substantial uninsured population. Since Missouri declined Medicaid expansion under the Affordable Care Act, self-pay remains high, making up about 6 percent of system revenues, with charity and uncompensated care costs topping $53 million, or about 5 percent, in fiscal 2014.

“Self-pay is an important component of our ACO model. Even though the number of self-pay patients has gone up, our costs have not,” Bahrke says. The system partnered with a federally qualified health center, placing care managers in its clinics. The care manager helped to direct patients to a primary care physician instead of the hospital emergency department for primary care. Care managers also worked with center physicians to identify and manage high-risk patients, reducing both ED visits and inpatient admissions.

Assessing patient risk

For the Medicare program, Heartland leaders thought they could reduce costs by 5 percent, and came very close to its estimate, Barhke says. This was mostly accomplished by identifying high-risk patients — those with one or more chronic conditions not under control — and providing comprehensive care management. Electronic health records identified patients who were taking six or more medications and who had visited the ED twice in a month or three times in six months, or had a hospital admission. Analytics also assigned a risk score. These patients represented about 5 percent of the Medicare population. Services included regular follow-up on such care indicators as weight gain for heart failure, social assessments and support for nutrition and medication compliance, assessment of fall risks, and home visits by nurse practitioners to keep frail patients out of the hospital.

All told, including investments in extra staff and IT infrastructure, averting loss of income from inpatient admissions, and the $5 million bonus, Heartland broke even on the Medicare program, Bahrke says. “We didn’t expect to be better off financially; we expected to learn how to provide care in a better way. There is a move to value-based reimbursement and we wanted to prove we could do it.”

Bahrke expects next year to be more challenging as the requirements for managing patients tighten. This will require Heartland to focus on patients in the much larger rising risk category, which includes all patients with at least one chronic condition that is well-controlled. The goal is to reduce the Medicare spend another 4 percent. Bundled payments are also in the works, with total knee and hip replacement to launch Jan.1 and respiratory and heart failure programs on April 1.

Extending the medical home

Heartland also is piloting an extended team-based care model in which each physician works with three nurse practitioners who provide more services to patients in the office. The system frees physicians to see the most complex cases and spend more time with each patient. The target is to cut the number of visits per day to about 15 from as high as 40 in conventional practice.

So far, the program seems to be succeeding. “We are seeing fewer ED visits and fewer urgent care visits,” Barhke says. “We have a goal of closing urgent care and having offices open longer so you can go to your medical home even in the evening. We feel strongly that even though we have a robust EHR that supports services anywhere in the system, the patient should be seen as often as possible in the medical home.”

Physician engagement has been critical to the transformation, Barhke says. One way the system has involved doctors is through a dyad management structure, in which each unit is headed by both an administrator and a physician. She stresses constant communication to shift the culture from looking at cost per case to the total cost of care. Measuring and improving processes is also a key, as are real-time data to support timely caregiving.

Placing care managers in physician offices is also critical. That way they can see patients at the same time as physicians, and physicians can refer patients to extended services in real time. “Surrounding physicians with the tools and resources is one of the best ways to achieve success with culture change,” Barhke says. “Provide the tools and they will use them.” 

Supporting change

Hands-on facilitator teams extend pediatric network from inner city to rural towns

For Andrew Hertz, M.D., transitioning to accountable care comes down to one thing: changing the way physicians and patients relate to each other. “You can create any kind of structure and support services, but until you change physician and patient practices, you can’t succeed.”

As vice president and medical director of the UH Rainbow Care Network, Hertz uses several strategies to engage physicians. These include a physician advisory council that develops quality metrics and new care strategies and continuing medical education presentations on the goals and methods of health care reform.

Perhaps most important, though, are skilled practice facilitators, who visit each location every week. Though not physicians, facilitators work directly with physicians and staff to redesign practice processes and educate them on national quality standards. The teams also monitor practice performance and engage staff in rapid-cycle quality improvement, giving feedback and tweaking performance on a weekly basis. “It’s not a cookie-cutter approach. Every practice is different, and this allows us to tailor our support. We tell them, ‘This is the goal. How can we work with you to get there?’ ” Hertz says.

This is especially important given the diversity of UH Rainbow Care’s membership, which stretches from inner-city Cleveland to small rural communities. The pediatric ACO encompasses 166 practitioners serving 70,000 Medicaid enrollees at 51 locations in eight Ohio counties.

The program has improved care greatly for some of the most common and costliest childhood conditions, including asthma and attention deficit hyperactivity disorder. The program also provides oral health services, which are a big cost-driver, Hertz says. Organized under a $12.7 million grant from the CMS Innovation Center, the network has not yet released its first-year results. But Hertz says the network qualified for Medicare Shared Savings Program payments in its first three quarters.

Targeting complex cases

Like most programs, a small group of patients with complex chronic conditions generate a disproportionate share of UH Rainbow Care’s costs. They receive a multidisciplinary assessment including primary care, specialty care, social work, dietitians and a plan with follow-up. “We try to increase the functionality of the whole family and this decreases hospital admissions and the length of stay in hospitals,” Hertz says.

The network provides 24/7 access to a multidisciplinary team via telephone and telemedicine. Some of the sickest patients are given iPad Minis, which are used to provide telemedicine consultations. Nurses also make house calls. “Some of these patients are very fragile and difficult to transport,” Hertz notes.

These strategies help to reduce ED visits both directly and indirectly by helping to identify barriers to care in the home and community.

The network also has an ED alternative program which features 24/7 access to nurse triage. Nurses provide advice, or may call in prescriptions following protocols developed with network physicians. A physician is available to talk with patients before an emergency visit.

An emergency telemedicine kiosk is available in inner-city Cleveland every day until 11 p.m. An attendant sees patients and consults with an on-call physician for minor medical problems. The doctor can see the patient and remotely examine patients with stethoscope, otoscope and blood pressure. “You can’t touch the patient, but you can do everything else,” Hertz says. About 180 patients have been treated this way, avoiding many ED visits. An after-hours clinic at the hospital is also in the works.

Behavioral health is another big cost in both money and its impact on children. UH Rainbow Care stations social workers in hospital EDs to intercept children brought in for suicidal thoughts or other mental health crises. The social workers evaluate patients and make referrals to community mental health services. This avoids many hospital admissions, which are expensive and can be traumatic for children who don’t need them, Hertz says. “The five social workers are paying for themselves.”

Data challenge

Still, the network struggles with issues of slow and incomplete data from Medicaid, Hertz says. This makes it hard to find out how much patients are going out of network. But engaging patients more actively through coordinated care plans creates opportunities to keep them in network by referring them to preferred providers.

At the end of its first year, the network is both a financial and popular success, Hertz says. Patients like the access and better care, giving UH Rainbow Care satisfaction ratings in the upper 90s percentile. Physicians are polled every six months and satisfaction runs around 80 percent. “For physicians, that’s pretty good,” Hertz says. “It’s really a grassroots effort. We engage physicians at every peer level from the individual to the group to the whole ACO.” 

Data is insight

Even incomplete and retrospective data help to assess and improve performance

When it comes to data collection, systems operating in Connecticut are disadvantaged, says Michael Hunt, D.O., chief medical information officer and chief medical officer at St. Vincent’s Health Partners in Bridgeport. Connecticut ranks 49th out of 50 in physician adoption of electronic health records.

Nevertheless, St. Vincent’s has built a physician-hospital organization that successfully participates in shared savings plans with Medicare and several commercial payers, Hunt says. Within three years, he hopes to take full-risk contracts through the network, which includes about 400 primary care and specialist physicians in 50 practices, along with three skilled nursing facilities, four home health agencies and 473-bed St. Vincent’s Medical Center in Bridgeport. The network is also the first to be certified as clinically integrated by the URAC, formerly known as the Utilization Review Accreditation Commission, Hunt says.

St. Vincent’s addresses the EHR issue in part by connecting with its members’ practice management software, which provides encounter data and some clinical data in near real time. The network also draws as much data from payers as it can, although this, too, is fragmented and often delayed, Hunt says. Payer data are especially important for determining how patients are attributed in shared savings plans. Attributed populations can shift as much as 20 percent in a month, he adds. Data from referral laboratories are also gathered.

In all, the operation culls data from about 2,000 sources. Hunt uses it to construct profiles of each physician and practice in terms of where they stand on shared savings clinical quality indicators, ED use and hospital admissions, and their referral patterns. The goal is to identify and close gaps in care continuity. In conjunction with the network’s utilization oversight committee, plans are constructed to help practices keep patients in network and out of the hospital.

These plans are presented monthly by Hunt or a system care coordinator. “We tell them at these high-visibility times that we need to communicate and not lose momentum,” he says.

After two and a half years, the results are good, Hunt says. About 75 percent of patient encounters are kept in network and avoidable admissions are down. The network is generating savings on a Medicare ACO, although its results won’t be finalized until early 2015.

St. Vincent’s is moving toward an integrated EHR, which should simplify data capture and analysis. Until then, it will take whatever data it can. “We don’t waste any data,” Hunt says.

Closing care gaps

Early on, analysis of network referral patterns revealed higher levels of out-of-network utilization after hours and on weekends. Tracing the causes, Hunt realized that many practices did not have nurse triage after hours, and used telephone scripts that told people to call 9-1-1 or go to the nearest ED. These were reworked to direct patients to in-network urgent care.

Analysis also showed that many primary care offices had stopped communicating with urgent care. The network brought physicians from practices and urgent care together one-on-one to re-establish relationships. A system of reporting urgent care encounters immediately to primary care also was implemented.

Patient engagement was part of the strategy. Patients are educated on what kind of problem warrants an ED visit. For example, patients with diabetes are instructed to call their doctors if their sugar levels are out of control, rather than go to the ED. “We are engaging to manage ambulatory care-sensitive conditions,” Hunt says.

Similarly, data on hospital and ED visits are gathered and forwarded to primary care offices for follow-up within 14 days for ED and seven days for hospital. “We have been successful in managing that," Hunt says. "Overall compliance is around 80 percent, sometimes higher, sometimes lower.".

St. Vincent’s also negotiates with payers to get special data feeds on out-of-network ED and hospital visits, Hunt says. This helps primary care doctors to follow up with patients in accordance with value-based guidelines, and offer them referrals to in-network providers. “It requires us to be connected to a wide variety of data sources. Our care coordinators scour them and are as proactive as possible in managing against the claims.”

Redefining doctor productivity

Translating data into actionable items for physicians is critical, Hunt says. Care coordinators forward data as they come in, with instructions on what actions are needed to meet care and payer guidelines. “Physicians have struggled in the past because they have not known the rules of the game,” he says. “We tell them what condition and utilization they are accountable for.” Recognized national guidelines such as those from CMS and the Healthcare Effectiveness Data and Information Set ensure objectivity. The network also negotiates with payers to develop common quality measures among them to cut down on the number of measures used.

But as successful as the program has been, physicians still have questions. “To be honest, they are waiting for proof,” Hunt says. “They are waiting to see if they are able to get shared savings, and that the changes they make today will make a difference tomorrow.”

Care coordination requires investing in IT infrastructure and staff, which is difficult for independent physicians in any case, but even more so when they are asked to make a leap of faith that they will be paid for it.

In essence, the role of the physician is changing from caregiver to care manager, and the traditional relative value unit-based reimbursement models no longer apply, Hunt says. “We are asking physicians to use their skill sets in more sophisticated ways. As we move away from face-to-face physician encounters, we need the public and payers to recognize the value of using physician skills for care management and care coordination. These efforts need to be compensated so physicians can accept the transformation to a new care model.”

Howard Larkin is a contributing writer for H&HN.



Executive Corner

The next step in developing ACOs may be integrating bundled payment packages for specia