1 Getting to There from Here: Evolving to ACOs Through Clinical Integration Programs Including the Advocate Health Care Example as Presented by Lee B. Sacks, M.D. James J. Pizzo and Mark E. Grube Kaufman, Hall & Associates, Inc. kaufmanhall.com
2 Old Orchard Road, Suite N700 Skokie, IL Phone: All rights reserved. Reproduction or reuse in whole or in part is prohibited except by permission.
3 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 3 Introduction Accountable care organizations (ACOs) have captured industry attention nationwide. Many hospitals and health systems are assessing their current state of readiness for ACOs and their wherewithal for moving from an activity-based payment model to the bundled or risk- and outcomes-based model. No one really has a full understanding of what ACOs will involve at this point, but some organizations are taking early steps toward meeting the Centers for Medicare and Medicaid Services s (CMS s) requirements for participating in the Medicare ACO Shared Savings Program, beginning in January The CMS program remains a work in progress, but what is known is that its basic objectives are consistent with the new business model that is emerging independent of healthcare reform legislation. The model s goals are to improve care quality and reduce costs through a value-based payment system that encourages information technology (IT)-enabled care coordination across the continuum of care. Our work with hospitals and health systems nationwide indicates that few organizations, as described fully later, are ready to function as ACOs. In fact, only a handful of organizations have operational ACO-like programs, and a few dozen more are in the early stages of developing such programs. Early results from a number of emerging programs show that progress is being made in improving quality and outcomes, but that the cost curve is not yet flattening or bending downward, as hoped and expected. Geared to the majority of the organizations that are concerned about whether and how to prepare and achieve ACO readiness, our central thesis in this white paper is that becoming an ACO should be approached as an evolutionary process, best accomplished through incremental steps built on a clinical integration platform. Definitions would be helpful at this point. Definitions Like other industry participants, we have witnessed the varied uses of and confusion surrounding the terms clinical integration and accountable care organizations, particularly during the months since healthcare legislation was enacted and regulations started to take shape. Based on review of the professional literature and our understanding of what s occurring in the industry, here s our best shot at bringing some clarity to the terms and their interrelationships. Clinical Integration Clinical integration, in its briefest definition, is the purposeful fostering of collaboration among independent doctors and hospitals in a way that increases both the quality and efficiency of patient care. 1 This concept has obviously been around for many decades, if not since the beginning of organized medical practice. A more complete definition, reflecting recent advances in healthcare delivery, was provided in the mid 1990s by Stephen M. Shortell, Ph.D., MPH, a health policy expert at the University of California-Berkeley. He wrote: Clinical integration is defined as the extent to which patient care services are coordinated across people, functions, activities, processes, and operating units so as to maximize the value of services delivered. Clinical integration includes both horizontal integration (the coordination of activities at the same stage of delivery of care) as well as vertical integration (the coordination of services at different stages). 2 Because collaboration and coordination between providers participating in clinical integration initiatives often involve joint ventures with contractual agreements, clinical integration has been subject to definition by the Federal Trade Commission and the U.S. Department of Justice and to their scrutiny related to possible anticompetitive practices under antitrust law. The legal definition of clinical integration provided by these two agencies in 1996 is as follows: Clinical integration is an active and ongoing program to evaluate and modify practice patterns by the network s physician participants and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality. This program may include: 1) establishing mechanisms to monitor and control utilization of healthcare services that are designed to control costs and assure quality of care; 2) selectively choosing network physicians who are likely to further these
4 4 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Key Components of Clinical Integration 1. Collaboration between hospitals and physicians (both independent and hospital-employed) 2. Purposeful agreement to improve quality and efficiency of care, including enhanced patient health status, care outcomes, utilization, and other defined factors 3. Use of evidence-based practices and data-driven performance improvement, informed by IT tools to accomplish #2 4. A written arrangement with a payor which aligns financial incentives of the hospital and physicians to accomplish #1 through #3. Source: Kaufman, Hall & Associates, Inc. efficiency objectives; and 3) the significant investment of capital, both monetary and human, in the necessary infrastructure and capability to realize the claimed efficiencies. 3 Clinical integration has the components outlined in the sidebar above. Accountable Care Organizations The definitions are numerous and often vague, but the American Hospital Association s synthesis report on ACOs, published in June 2010, provided needed light. 4 The basics are as follows: An accountable care organization is a legally structured arrangement between hospitals, primary care and/or specialty physicians, and perhaps other providers (such as post-acute care facilities, inpatient rehab facilities, skilled nursing facility care, home health care, and more) to coordinate and deliver efficient and effective care for a defined patient population for a specified period of time. An ACO assumes accountability for improving healthcare quality and slowing the growth of healthcare costs. Assuming accountability may or may not involve the assumption of financial risk for organizational participants. There are different types of ACO structures and different types of ACO payment models. For example, the Medicare ACO Shared Savings Program, which is to be applied within the current fee-for-service environment, as discussed later, will provide incentives to improve quality and reduce costs through a shared savings program. But, there will be no payment penalties if ACOs do not achieve their savings targets. In contrast, ACOs that have a fixed price (per covered life, for example) are responsible for financial gain or loss, thus assuming risk for financial gains or losses of providing health management and care to a defined population. 4 Critical to ACO success, as cited by numerous sources, are linkages that facilitate coordination of care delivery across different settings and IT infrastructure to enable the collection and analysis of data on costs and outcomes. Additionally, ACOs will need to have the organizational capacity to establish an administrative body to manage patient care, ensure high-quality care, receive and distribute payments to the entity, and manage financial risks incurred by the entity, notes the AHA report. 4 The Interrelationship of the Terms Yes, these two concepts sound similar and yes, ACOs have the same components as those outlined for clinical integration in the sidebar. But there are two differences: ACOs currently are envisioned to meet their quality, health outcomes, and efficiency goals across a larger number of individual care silos than clinical integration programs, which generally are geared to integrate the acute care, specialty care, and primary care silos. The CMS program notwithstanding, ACOs generally are envisioned to assume financial risk for the health management and care of the populations they serve; this is not the case, again the word generally, with clinical integration programs, which generally use non-risk-based shared-savings incentives. In this white paper, we hope to help hospital and health system executives understand three facts about the relationship between clinical integration and ACOs: 1. Clinical integration is required for future success in health services delivery, whether or not a hospital participates in an ACO. Independent of what occurs with healthcare reform legislation, the new value-driven business model is here to stay, as defined with quality and cost indicators. The
5 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 5 fee-for-service activity-based (volume-based) business model has proven a failure at containing costs and, in many cases, at improving outcomes. Close collaboration between hospitals and physicians through clinical integration programs will be critical in a value-based payment system. Ultimately, hospitals physician strategy must embrace clinical integration to drive both improved quality/outcomes and cost reductions. 2. Clinical integration is the important first step toward ACO participation for hospitals and health systems. It will provide vital physician-partnering experience and market, clinical, and financial knowledge needed for success under the new business model and in ACO participation. 3. ACOs require clinical integration. There is no way to achieve improved quality and reduced costs without collaboration between hospitals and physicians. At this time, we advise hospitals and health systems to focus their activities on preparing and planning for ACO readiness through development or enhancement of clinical integration program(s). Having a clear understanding of current capabilities and known ACO end goals will drive this incremental approach, so we return to a fuller description of ACOs. ACOs: More on the Concept of There As currently defined within the context of the Medicare ACO Shared Savings Program, an ACO is a set of providers, including primary care physicians, specialists, and/or hospitals, who bear responsibility for the cost and quality of care delivered to a subset of traditional Medicare program beneficiaries, who are enrolled in the traditional fee-for-service program. This entity controls traditional Medicare spending by providing financial rewards for good performance based on comprehensive monitoring of quality and spending. 5 The goals are what CMS Administrator Donald Berwick, M.D., has named the Triple Aim better care for individuals, better health for populations, and lower per capita costs of care without any harm whatsoever to patients. 6 In the Medicare ACO Shared Savings Program, an ACO will be responsible for: Managing clinical care for a defined population base (a minimum of 5,000 patients) across the care continuum Having defined processes to promote evidencebased medicine Having the data and systems necessary to monitor and evaluate quality and cost measures Being able to receive and distribute payments for provision of patient care 7 Ultimately, we believe that CMS will likely need to define high-cost, high-acuity carve outs, representing specific conditions that ACOs will not be accountable for, such as transplants. However, even with carve outs, it is clear that organizations will need scale in order to manage the financial risk involved in managing the health of patient populations in full risk-bearing ACO models. Some healthcare executives believe that a minimum of 50,000 patients represents the threshold for an ACO s financial viability. Eligible Organizations According to CMS, 7 numerous forms of organizations can become an ACO, including: Physicians and other professionals in group practices Physicians and other professionals in networks of practices Partnerships or joint venture arrangements between hospitals and physicians and other professionals Hospitals employing physicians and other professionals Other forms that the Secretary of Health and Human Services may determine appropriate As noted by Dr. Berwick, there is no one-size-fits-all for an ACO. 6 There s considerable current debate about which stakeholder group will take the lead in organizing ACOs hospitals, physicians, insurers, or independent practice associations (IPAs). Current arguments for one group or the other include the following:
6 6 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Hospitals have the organizational infrastructure, systems, people, capital, facilities, and provider networks needed to lead ACOs. Physicians have the intellectual capital related to medicine. Because they deliver or order the bulk of care, physicians are healthcare s economic engine and are most able to drive quality improvements and cost savings. Physicians don t have capital or organizational expertise and systems, but as noted by one expert, At the end of the day, clinicians make 80 to 90 percent of the decisions that drive where dollars go. 8 With access to patient and claims information, insurers have the data and the IT infrastructure required to manage costs, but not the medical or organizational know-how. Insurers also have significant capital resources. With the advantage of having large numbers of covered lives, primary care-driven IPAs could essentially use specialists and hospitals as needed, forcing them into a passive rate-taker role. Currently, there are only a handful of large, well-established IPAs, most of which are located in southern California. Success Requirements Whether ACOs in various regions and communities are physician-centric, hospital-centric, insurer-centric, or IPA-centric, two points are clear at this time: 1. ACO success will be dependent on the involvement of physicians 2. In order to lead or participate in an ACO, new competencies and significant resources will be required of hospitals and health systems Overall, ACOs will be expected to integrate current silos of care that a patient moves through especially patients with a severe disease or chronic condition from primary care to specialty care to inpatient hospitalization to skilled nursing and to home healthcare, sometimes with numerous other points along the way (Figure 1). Payment bundling will occur across multiple pieces of the continuum, with acute care bundling the focus of the CMS Medicare ACO Shared Savings Program. Figure 1. Accountable Care Organizations and Payment Bundling Source: American Hospital Association Primary Care Physicians Specialty Care Physicians Medical Home Accountable Care Organizations Outpatient Hospital Care and Ambulatory Surgery Centers Inpatient Hospital Acute Care Post Acute Care Episode Bundling Acute Care Episode with Post Acute Care Bundling Acute Care Bundling Long-Term Acute Hospital Care Inpatient Rehab Hospital Care Skilled Nursing Facility Care Home Health Care Required organizational competencies for ACOs overall, as indicated by a consensus of current thinking, 4 include: executive and physician leadership; a culture of teamwork; strong relationships with physicians and other providers; an IT infrastructure for population management and care coordination; an organizational infrastructure for monitoring, managing, and reporting quality, cost, and outcomes; resources for patient education and support; the ability to manage financial risk involved in the care of a defined population; and the ability to receive and distribute payments or savings. Management Expertise and Infrastructure Requirements for ACOs Integrated electronic medical records (acute and ambulatory) Coordinated utilization management and review systems Effective membership services functionality Proven care management programs High-quality management reporting systems Efficient incentive payment systems Payor contracting expertise Financial and capital planning/management expertise Source: Kaufman, Hall & Associates, Inc.
7 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 7 Technology will assume a more important role than ever in healthcare. Historically, the healthcare industry has undercapitalized technology, spending only one-fourth of what other industries spend, on average. This will need to change rapidly in order to meet the requirements of the new business model. The sidebar highlights specific management expertise and IT-driven or enabled infrastructure requirements. programs that involve bundled payments and risk. Significant investment is required, particularly for physician alignment, technology infrastructure, care management protocols, and advanced contracting. For many organizations, the gap between current capabilities and future requirements is significant; it would take many years for such organizations to fund and achieve the requirements for success. Hospital and Health System ACO Readiness In working with not-for-profit hospitals and health systems around the country, four levels of organizational readiness related to these competencies are apparent at this point in time: 1. Organizations in a high state of preparedness: Few in number, these organizations are now finetuning formal arrangements with specialty and primary care physicians, have the needed IT infrastructure and insurance linkages, and are currently improving the delivery of care through a clinical integration program or similar quality-driven initiatives. 2. Hospitals and health systems that are somewhat prepared: This bigger, but still proportionately small, group of organizations is hard at work building or strengthening the programs and infrastructure needed to qualify for the CMS program. 3. Organizations at the lower end of the readiness continuum: This group, representing the majority of hospitals, is identifying what their first steps should be and has minimal infrastructure in place. 4. Organizations in the least-prepared state: This sizeable group, consisting primarily of very small community hospitals, is taking a watchful waiting or denial strategy. Their leaders hope that the ACO model will evolve to be applicable to their organizations, that their paths forward will emerge, or that health-reform-accelerated programs like ACOs will not be the model for care delivery and payment going forward. As evident from the discussion above, many hospitals and health systems do not currently have the required competencies for ACO participation or for other Clinical Integration as the Foundation An organization without such expertise or infrastructure should take an evolutionary approach that can demonstrate early successes with incremental improvements. An appropriate and recommended approach is to start with the development of a clinical integration program in the current fee-for-service payment environment. As mentioned earlier, clinical integration will provide experience in structuring collaboration among the hospital, physicians, and other providers and in building programs that improve the quality and efficiency of care. This will enable hospitals to develop competencies before assuming full risk for a defined patient population. If an organization starts with a limited number of contractual arrangements to reward participating physicians for their quality improvement/cost reduction efforts, large capital investments are typically not needed. Then, when bundled payment or some other form of fixed payment becomes a reality, strong and working contractual relationships centered on effective care management will already be in place clinically and operationally. Clinical integration works with various payment mechanisms and is crucial in aligning behavior to drive costs down. Basic Requirements Clinical integration programs require the participation and support of a significant portion of an organization s medical staff. These programs also require the creation of a joint contracting entity that can negotiate fees, set quality targets, and distribute incentive payments. In a discounted-fee-for-service environment, these entities will typically take the form of one of the approved clinical integration programs currently in place.
8 8 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Clinical Integration Planning: Assessing Existing Capabilities and Opportunities Current market and service coverage Geographic coverage, specialty/service line coverage for physicians and hospitals, ambulatory coverage, including imaging, ambulatory surgery centers, dialysis, and others Current contracting capabilities IPAs, physician organizations (POs), physicianhospital organizations (PHOs), and physician participation levels within each Clinical integration capabilities Collective contracting with physicians, financial incentive program, and a results measurement system Structured clinical management capabilities Care management, care coordinators, and mid-level providers, and their role(s) Current technology capabilities Hospital electronic medical record (EMR), ambulatory EMR, health information exchange (HIE), physician/patient portals Cultural readiness and barriers Physician alignment across the medical staff, physician/hospital alignment, payor alignment Current quality programs and results Compared to local competitors, national benchmarks Source: Kaufman, Hall & Associates, Inc. Although there are many variations, the overall structure and intent of clinical integration programs are fairly consistent: A joint contracting entity is established to negotiate fees and set quality thresholds for improvement Based on the attainment of these goals, incentives are distributed to participating physicians Establishing a Clinical Integration Program To create a formal clinical integration program, organizations must have a clear understanding of their market and a financial understanding of the clinical areas that warrant focus. The goal is to identify a set of clinical areas that could achieve the largest improvement in quality without yet having all of the required infrastructure and expertise in place. Organizations can identify these clinical areas by assessing current market and service capabilities, strategic priorities, and up-to-date utilization and financial forecasts (see Sidebar). This planning process also enables organizations to identify critical expertise and infrastructure gaps that can be filled over time. In the early stages of clinical integration programs, many organizations currently rely upon manual or simple automated data collection efforts. However, to be successful the organization must be committed over the longer term to provide the capital that will support technology and other infrastructure needs across all areas. Alignment of physician, hospital, and payor economic incentives is critical to achieving and sustaining higher quality and reduced costs. Physicians should be involved throughout the process, particularly during the early development design of the program. Physician collaboration is required to establish the baseline used for current quality measures, utilization statistics, and strategic and financial forecasts of projected future performance. Again, improved quality and efficiency of patient care cannot be achieved without physician leadership and buy-in. As a model of clinical integration in the current feefor-service environment, we take a close look now at the Clinical Integration Program established by Advocate Health Care through its joint venture care management and managed care contracting organization, Advocate Physician Partners (APP). Sidebars describe Advocate Health Care (or Advocate ) and APP more fully. A special thanks to Lee B. Sacks, M.D., Chief Executive Officer of Advocate Physician Partners and Executive Vice President and Chief Medical Officer of Advocate Health Care, whose keynote presentation at the 2010 Kaufman Hall Financial Leadership Conference provided the content for this example. Dr. Sacks was the leading architect of Advocate s programs that have aligned hospitals and physicians to create value for patients, physicians, hospitals, and payors.
9 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 9 Advocate Health Care at a Glance A faith-based not-for-profit healthcare system based in Oak Brook, Illinois The largest integrated healthcare system in Illinois Ten acute care hospitals, 2 integrated children s hospitals, and more than 250 outpatient sites of care Approximately 5,700 physicians on staff, approximately 3,800 of whom are in Advocate Physician Partners Serves almost a million patients in the Chicago area through PPO (700,000 lives) and capitated arrangements (230,000 lives) The state s largest physician network of primary care physicians, specialists, and subspecialists Three major teaching hospitals with more than 600 residents and fellows Source: Advocate Health Care, Oak Brook, IL. Used with permission. Advocate Physician Partners in Brief Advocate Physician Partners, which commenced in 1995, was conceived as an umbrella organization, loosely affiliating the individual physician hospital organizations and medical groups within the system s hospitals, mostly for the purpose of capitated HMO contracting. By 2000, APP had standardized and centralized HMO contracting, combining risk pools across the system. During the early part of this decade, in response to pricing and cost pressures with their HMO product, APP began extensive efforts to increase efficiency and effectiveness of in-network care provision and minimize duplicative, unnecessary care. Through the creation of protocols, the implementation of guidelines, and the capturing and sharing of performance data (particularly with ancillary services), APP was able to significantly reduce per-member-per-month expenses while improving care benchmarks. Source: Advocate Health Care, Oak Brook, IL. Used with permission. Clinical Integration in Practice: Advocate Health Care/Advocate Physician Partners APP s Clinical Integration Program was conceived in 2003 as a program to achieve clinically integrated services provided by hospital-based and communitybased physicians. These physicians would be rewarded under pay-for-performance contracts with fee-for-service health plans for improving care quality and reducing care costs. A high-stakes antitrust arbitration with a large insurer clouded things until late 2005 when APP won the arbitration. A Federal Trade Commission investigation resulted in a consent decree in early 2007, allowing the program to proceed. Antitrust laws generally prohibit doctors and hospitals from negotiating jointly with health insurers. 1 APP s clinically integrated model has withstood regulatory scrutiny, however, and established the way forward for other organizations to develop similar programs in the fee-for-service arena. Consistent with ACO goals, the overall objectives of the APP Clinical Integration Program are to improve the quality and efficiency of healthcare through alignment of physician and hospital objectives. Advocate s 2010 Value Report describes the program as follows: It joins together what would otherwise be a fragmented group of independently practicing physicians into a comprehensive care management program, comprised of a common set of quality goals and measures across all insurance carriers, with a focus on improved health care outcomes and reducing the long-term cost of care. Unlike other disease management or preventive health programs, the Clinical Integration Program provides extensive infrastructure and support to physicians participating in the program, as well as a pay-forperformance incentive system, to drive outstanding levels of performance. Advocate Physician Partners financial incentive system links hospitals and physicians to increase the level of collaboration and degree of coordination of care. These linkages help overcome the sometimes conflicting incentives that exist in the traditional fee-for-service model of healthcare provider reimbursement. 9
10 10 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Figure 2. Advocate Health Care s Strategic Framework for 2020 Source: Advocate Health Care, Oak Brook, IL. Used with permission. Mission, Values, Philosophy Figure 3. Advocate Health Care s Physician Platform Source: Advocate Health Care, Oak Brook, IL. Used with permission. Total physicians on medical staffs = ~ 5,700 A faith-based system providing the best health outcomes and building lifelong relationships with those we serve Operational Excellence Health Outcomes Advocate Experience Funding our Future Growth Partnerships Loyal Patients Brand Development Strong Physician Engagement Coordinated Care Access Smooth Transitions Innovative Care Models APP physicians = ~ 3,800 Independent non-app ~ =1,900 Independent APP = 2,900 Advocate Medical Group = 700 Employed / affiliated = 900 Affiliated (Dreyer) = 200 Dr. Sacks notes that the challenges of organizing independent physicians, accustomed to practicing in solo or small practices, for a collaborative initiative are significant. We ve learned through our experience with APP over the years that infrastructure is the secret sauce that allows clinicians to be a team that can improve care, says Sacks. Infrastructure is required to drive the quality outcomes demonstrated more historically only by multispecialty groups. Clinical integration programs require significant physician participation in governance and a major investment in IT infrastructure. Details on how APP built and implemented such infrastructure follow. Building the Physician Platform It starts with strategy, comments Sacks. Advocate Health Care s leaders recognized early that its strategic framework must be built on a strong physician platform (Figure 2). To develop that platform, Advocate Health Care has a wide range of affiliation options for physicians: 1. Independent practice as a solo practitioner or member of a small group practice, while being on Advocate Health Care s medical staff and referring patients to one or more Advocate hospitals 2. #1 and participation in APP 3. Employment in Advocate Medical Group, which operates with a straight employment model, with participation in APP 4. Employment in the Dreyer Clinic, which requires APP participation. The Clinic is owned and managed by Advocate Health Care; clinic physicians are organized as a separate corporation and are partnered with Advocate through a long-term agreement Approximately 3,800 of Advocate Health Care s 5,700 physicians participate in APP. Of the 3,800 APP physicians, approximately 1,100 are primary care physicians and 2,700 are specialists. We cover every specialty, so it s possible for patients to receive all of their care within the Advocate system, comments Sacks. The majority of APP-affiliated physicians (approximately 2,900) are independent practitioners in one-doctor to three-doctor practices across 900 separate practice sites (Figure 3). The APP board and committee structure reflects its dual, joint-ventured leadership. Two types of directors are on the board: System members, who are appointed by the system board of directors; these include senior system executives and a hospital president, who typically rotates every two years PHO president members, who are mostly primary care physicians An outside director also sits on the board. All board members have term limits and formal job descriptions with performance reviews. Physician board members are compensated using a simple formula a reasonable number of dollars per hour multiplied by the number of hours per meeting, doubled for meeting preparation,
11 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 11 adding another factor for post-meeting communication, and making the assumption that they will attend all of the meetings. We have virtually 100 percent attendance and everyone comes prepared and engaged, says Sacks. A supermajority is required for decision making, and almost everything has been done by unanimous consent, says Sacks. When you present good data, reasonable people have a discussion and come to similar conclusions. Figure 4 shows the committee structure. The Contract Finance Committee oversees the performance of the HMO product, both full-risk and contracted. With accountability for the performance of individual PHO entities within APP, this committee reviews and approves the budgets of each entity and monitors each one s performance on a regular basis. Corrective action plans are required if an individual PHO is over budget, and ultimately the committee can impose changes, such as altering the physician fee schedule, if required. Physicians do a really good job of minding the Ps and Qs of dollars and cents, especially when some of such funds are theirs through incentive programs, says Sacks. The Utilization Management Committee, chaired by the senior medical director, creates guidelines and protocols. The Quality and Clinical Integration Committee oversees both areas of its name and has a subcommittee on measurement. The Credentials Committee develops and manages the APP credentialing process, which is separate from the Advocate Health Care medical staff credentialing process. The APP process requires a higher standard; recredentialing every two years is definitely not a given. This is a business; physicians are our partners. If they are not doing their job, we ensure the needed conversation to address their performance. If their performance doesn t change, we have to have the discipline to terminate our partnership or else our organization is going down with the partner, describes Sacks. Design of the Incentive Fund A pay-for-performance incentive plan provides the financial foundation for APP s Clinical Integration Program (Figure 5). Each PHO and medical group has its own incentive fund. Healthcare is local, so Figure 4. The APP Board and Committee Structure Source: Advocate Health Care, Oak Brook, IL. Used with permission. Contract Finance Committee APP Board of Directors Utilization Management Committee Quality and CI Committee Credentials Committee it s important for the PHOs to be able to shape their own destiny, says Sacks. Each fund has two branches: Individual incentives, which comprise 70 percent of the total fund. In small primary care practices, the individual incentives are generally defined to cover the group Group/PHO incentives, which comprise 30 percent of the total fund It takes a team to care for patients, particularly patients with chronic diseases, so practitioners have to be incented as a team, comments Sacks. Sacks describes the power of team incentives to change care outcomes, as evidenced during one of the monthly dinners he conducted with rank-and-file PHO doctors who are not in governance or on committees: I asked the usual question, What don t you like about APP or what would you change? The ophthalmologist who was sitting on my left said, I don t understand why I have to be measured on smoking cessation counseling to diabetic patients. Before I could say anything, the internist on my right says, Joe, when you tell my patient that she s going to go blind if she keeps smoking, you have a bigger impact than I ve had for the last 10 years in controlling her diabetes. I didn t have to say a word. Case made. For the group incentive, everyone who sees a diabetic patient is accountable to all of the diabetes metrics. APP s incentive fund distributions to physicians for clinical improvement have been significant, growing from $25 million in 2007 to $38 million in It s real money, which has involved having all of the major payors in our market contribute relatively the same portion of dollars to the program, describes Sacks. However, money may have been the original
12 12 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Figure 5. APP Incentive Fund Design Note: Residual funds are rolled over into a general clinical integration fund (not tied to individual physician or originating PHO) to be distributed in the following year. Source: Advocate Health Care, Oak Brook, IL. Used with permission. Group/PHO incentives (30%) Group/PHO distribution Tier 1 (50%) Tier 2 (33%) Residual funds PHO 1-8 Tier 3 (17%) Group/PHO criteria Individual tiering based on physician s individual score Individual incentives (70%) Individual distribution Residual funds catalyst, but improving care quality and safety are the response. Great clinical outcomes and good business are going hand-in-hand. Performance Improvement and Measurement Individual criteria APP s Clinical Integration Program focuses on five broad improvement categories, measuring and monitoring success in each: 1) enhancing clinical outcomes, 2) improving patient safety, 3) adopting clinical technology, 4) improving patient satisfaction, and 5) increasing efficiency. Managing chronic conditions, including asthma, depression, diabetes, coronary artery disease, and congestive heart failure, is core to the program, as are such improvement objectives as increased generic prescribing. APP provides its physician members with solid protocols and guidelines for wellness and preventive care, as well as disease management. Adoption of evidence-based protocols supports the required implementation of best practices by participating physicians. The program is data-driven with performance targets established for each of the program s initiatives. The targets are based on national benchmarks and best practices, research findings, and other credible sources. In 2006, there were 52 measures related to medical and technical infrastructure, clinical effectiveness, efficiency, patient safety, and patient experience for the Clinical Integration Program; by 2010, this had more than doubled to 116 measures. The process used to develop new clinical improvement measures is thorough, taking a full year (and sometimes more) to complete. The process starts in January to collect suggestions regarding new measures through discussions with physicians, PHO boards, specialty committees, managed care organizations, major businesses in the community, benefits consultants, and others. Early in the year, a work group assesses the new measure s adequacy, and by year end, measure documentation, administrative processes, and educational plans are in place for approved measures. For some measures, we might need more than a year to ensure that we can integrate the measure into the electronic health record in time to go live in January, comments Sacks. Technology Driven Performance measurement requires technology. Technology also drives the computerized physician order entry systems, electronic medical record systems, and the online disease management registries that allow physicians to more effectively track the care patients with chronic conditions receive and their compliance along the continuum of care. Advocate Health Care was and is committed to providing the information technology infrastructure required to meet the goals of the Clinical Integration Program. For participation in the program, physicians are required and incented to adopt new technologies that will help enhance communication of critical information, drive performance, and improve patient outcomes. Figure 6 indicates the new technologies Advocate introduced between 2004 and 2010 technologies that are now required as APP membership criteria. High-speed internet access in physician offices was the starting point in By the end of the year, only 100 of the 3,450 APP physicians had not complied, in spite of help being offered to make the installation arrangements, install the line(s), and train the staff. The board had gone on record saying that high-speed internet access was a membership requirement, so
13 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 13 Figure 6. Advancing Technology Requirements Source: Advocate Health Care, Oak Brook, IL. Used with permission. Year 2004 High-speed Internet access in physician offices Centralized longitudinal registries Access to hospital, lab, and diagnostic test information through a centralized clinical data repository (CareNet and Care Connection) 2005 Electronic Data Interchange (EDI) 2006 Computerized Physician Order Entry (CPOE) Electronic medical record roll out in employed groups 2007 Electronic Intensive Care Unit (eicu ) use 2008 e-prescribing 2009 Web-based Point of Care Integrated Registries (CIRRIS) 2010 e-learning Physician Continuing Education Electronic medical record roll out in independent practices those 100 physicians were not recredentialed. This was a powerful message, says Sacks. Sacks cites patient registries for managing chronic conditions as a very important tool that can have a dramatic impact on care outcomes and cost efficiencies. APP s registries started as pen-and-paper systems, moved to an Excel spreadsheet version, and are now a web-based system called Clinical Integration Registry and Reporting Information System (CIRRIS). CIRRIS integrates all registries, pharmacy, labs, claims, and performance-reporting data. It also is integrated with the electronic medical record. Among other means to enhance physician compliance with use of CIRRIS, electronic prescribing, the EMR, and other IT tools, APP provides quarterly training for physicians office staff. Sessions aim to help staff with office technology-enabled workflow and processes, especially as related to physician guideline and protocol use. Staff training has had a big impact on supporting the desired physician protocol use. The professional educational development of staff in the 900 small independent practices has been very well received and probably has helped to stabilize the office workforce, notes Sacks. Physician performance is monitored using IT-enabled systems throughout the year and reported formally to each physician on a quarterly basis. Physician report cards actually are now available online in real time, so physicians can check where they stand daily and what they need to do to improve performance, describes Sacks. There are no surprises at the end of the year when financial incentive rewards are distributed to physicians based on their performance. Next year, we plan to start distributing checks quarterly to improve the connection between the achieved behavior and the financial reward, says Sacks. A group of peer physicians reviews physician appeals at the end of the year; Sacks notes that the performance measure/result is upheld in about 75 percent of appeals. The Sidebar outlines 2010 APP membership criteria, most of which is technology related Advocate Physician Partnership Membership Criteria CareNet access/office usage High-speed internet access Electronic data interchange (EDI) submission to APP Use of EDI for all PPO contracts Each physician required to have a portal account (i.e., access to patient registries and APP Web site) Compliance with access and availability requirements Use of approved referral management process for all HMO risk referrals Actively used address for physician Actively used address for office manager Hardware/software compatibility with APP operations Cooperation with providing PPO claims information to APP At least level 3 eicu Active participation in APP Clinical Integration (CI) program criteria, most of which are technology related. Minimum CI score Signed current membership agreement Increased minimum panel size for primary care physicians in risk programs Participation in all contracts Membership in any APP PHO if on hospital medical staff Complete APP orientation within 90 days of joining Source: Advocate Health Care, Oak Brook, IL. Used with permission.
14 14 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Impact on Care Quality and Cost APP s accomplishments with care quality and cost improvement initiatives through the Clinical Integration Program have been extensive. The 2010 Value Report highlights the significant accomplishments in 2009 Significant Accomplishments of APP s Clinical Integration Program The comprehensive Asthma Outcomes initiative provided additional direct and indirect medical cost savings of $16 million above national averages annually. The initiative resulted in an estimated additional 37,920 days saved annually from absenteeism and lost productivity. The Generic Prescribing initiative resulted in prescribing rates 4.6 to 6.4 percentage points higher than two large Chicago-area insurers. The effort resulted in a savings of $14.8 million annually to Chicago-area payors, employers, and patients above community performance. Depression screening and subsequent treatment in patients with diabetes or those who had heart failure or a cardiac event resulted in more than an additional $10.8 million in direct and indirect savings above the standard practice per year. In addition, employers saved more than 8,672 lost work days per year. The Diabetic Care Outcomes initiative resulted in an additional 12,350 years of life saved, 19,760 years of eyesight preserved, and 14,820 years free from kidney disease. In addition, just one measure, improving poor Hemoglobin A1c levels, resulted in nearly an additional $2 million in savings per year above national averages. The cardiac initiative resulted in improvements ranging from 7 to 10 percentage points higher than state and national benchmarks in all three areas of inpatient medication treatment. In addition, calculating for just a single measure for outpatient medication management, savings resulted in an additional $688,000 annually above community averages. APP physicians achieved an 82 percent vaccination rate in administering Combination 3 immunizations to children by their second birthday, comparing favorably to the national performance of 58 percent. Source: Advocate Health Care, Oak Brook, IL: The 2010 Value Report. (see Sidebar). Dr. Sacks describes a few specific initiatives that warrant further mention. eicu. The eicu program is, according to Dr. Sacks, an example of a clinical integration best practice. A thorough literature review indicated that ICUs staffed 24/7 exclusively by intensivists (specialists in adult critical care) are associated with a 40 percent reduction in ICU mortality. APP identified use of an electronic ICU as a performance-improvement opportunity, created an incentive for physicians to adopt its use, and then, with its continued success, made its use a condition of APP membership. The eicu program connects the 18 adult intensive care units across 8 of Advocate s hospitals to a central command center, staffed by board-certified intensivists who provide clinical oversight to patients around the clock. From the eicu command center, intensivists can instantly modify the patient s care plan as the need arises and implement key protocols that improve patient outcomes and reduce complications. Since 2004, APP physician use of the eicu at the highest levels (3 or 4) increased to nearly 100 percent. In level 3, the intensivist manages according to a treatment plan. At level 4, the intensivist comanages the patient s care. Turnaround Time for Radiology Reports. Rapid turnaround of reports is critical to patient satisfaction and, in some cases, to improved patient outcomes. Additionally, bed management, resource utilization, and patient flow each are affected by radiology turnaround times. Advocate Health Care committed to improved turnaround times and achieved a 49 percent decrease in time from 49 hours to 25 hours over a two-year period ( ). APP physicians thought turnaround times required further improvement because 25 hours still slowed throughput on diagnoses and other processes, comments Sacks. In 2008, APP added the radiology report turnaroundtime measure to the Clinical Integration Program, bringing attention to the issue and engaging physicians in the goal. From the first quarter of 2008 through the fourth quarter of 2009, the average turnaround time plummeted from 23 hours to 8 hours, a decrease of an additional 65 percent.
15 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 15 Generic Prescribing. Generic prescribing represents a big opportunity for value creation, says Sacks. Everybody except the physician saves money on generics, including the health plan, the prescription benefit management firm, the patient, the employer, and typically, the retail pharmacy (because the margin on generics is higher). But it takes more time for physicians to convince patients to switch to generics, often having to counter the commercials for brand-name drugs, comments Sacks. APP hired two managed care pharmacists to do counter detailing with physicians and improvements started to be made slowly. Then, an idea emerged from looking at what pharmaceutical firms do to hook physicians and patients on high-cost branded drugs. They provide samples. I asked our physicians, How many of you sample generics? A pregnant pause and chuckles followed because everyone knew that the generic manufacturers don t use the free-sample strategy, describes Sacks. APP decided to fund coupon vouchers for a 30-day supply of a generic drug that people are likely to use for the rest of their lives, such as cholesterol-lowering medicines, anti-hypertensives, and others. APP did a control trial, providing one group of physicians with vouchers and leaving another group without vouchers. The results from the voucher-enabled group showed a statistically significant improvement in generic prescribing. Now we give vouchers to all of our primary care physicians and cardiologists, notes Sacks. APP physicians prescribe generics 71 percent of the time, while prescribing rates for physicians affiliated with the two major insurance plans in the Chicago area are a lower 64 to 66 percent. Increasing the use of generics represents an opportunity to create value that doesn t impact hospital or physician finances. Sacks comments that the patents for many expensive drugs are expiring in the next year or two, so more generic drugs could be available to genericprescribing programs. Creating Value through Specific Factors The Clinical Integration Program creates value for Advocate s hospitals, for the physician partners, and for the marketplace (payors and patients), notes Sacks. For the hospitals, the business partnership with key physicians focuses physicians on hospital goals, including patient safety and costs, strengthens their loyalty, and positions the health system for health reform-related initiatives, such as ACOs, bundled payments, and readmission avoidance. Our liability costs are less than half of what they were five years ago, and certainly the focus on patient safety has been an important part of this, says Sacks. The value proposition for physicians is better alignment with the hospital, marketplace recognition ( under the halo of the Advocate brand name, says Sacks), focus on outcomes, incentives that compensate them for additional work, and the ability to interface with multiple managed care organizations. For the marketplace, the value proposition includes focus on clinical outcomes, demonstration of efficiencies, ongoing improvement of care delivery, a stable/cohesive network, and leadership from and by physicians. Factors cited by Sacks as critical to the success of APP s Clinical Integration Program start with its physician-driven leadership: The program gets lots of support from Advocate in IT, data, finance, legal, and analytic areas, but the big decisions are all clinical; what s in our patients best interest must come from physicians. Ensuring the same metrics across all payors is also a critical success factor. If metrics are not the same in your market, I urge you to come together under the umbrella of the hospital association or a managed care group to develop standard metrics. Without such, no one has enough data to draw any conclusions, says Sacks. Data are critical. It took five years before APP starting receiving its claims data reliably from managed care plans. APP required its physicians to submit their PPO claims electronically for all payors and then worked with the two clearinghouses to obtain a shadow copy that goes into the APP database. We now have more than two years of claims data and that s a powerful database, says Sacks. Other success factors include minimizing additional administrative costs, using additional funds to recognize extra work by physicians and staff, and building and maintaining the infrastructure necessary to support improvement and physician/hospital alignment.
16 16 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Key Challenges for ACOs Sacks describes what he sees as the key challenges for ACOs. The dominance of small physician practices in many communities may be a significant stumbling block, he notes. Hospitals will need to organize and support physicians, and such organization is not likely to be successful through the traditional voluntary medical staff. The dominance of fee-for-service payment will also be challenging. Fee for service is probably not going to go away, so hospitals have to figure out how to create alignment with physicians under both volume-based and value-based systems. A critical mass will be required. I believe that organizations that are just a Medicare ACO are not going to be able to make it unless Medicare comprises more than 60 percent of their business. This level of mass or scale will be required to invest in the needed infrastructure and care delivery redesign, says Sacks. Next Steps for Advocate Health Care Up to this time, APP has participated in HMO products, which typically have involved capitation arrangements for professional services (physicians and ancillary testing) and per-diem arrangements for hospital care. Even with increased HMO products with Blue Cross Blue Shield and other insurers, hospital incentives would not be aligned to increase efficiency, says Sacks. Additionally, HMO products represented only 20 percent of Blue Cross Blue Shield s business with Advocate and even a smaller amount of Advocate s overall business (less than 10 percent). We want to be redesigning the way we do things into the future for a much larger proportion of our business, comments Sacks. To be fully successful in creating healthcare value, an organization needs to get to a point of having a critical mass so that infrastructure and programs can be leveraged across a significant proportion of patients. Advocate thus started pursuing innovative arrangements to align incentives related to Blue Cross Blue Shield s PPO business, which represents 80 percent of the insurer s business and a $1 billion spend with Advocate and its physicians. The challenge is that PPOs offer patients the choice of hospitals and physicians and traditionally have achieved little in the way of effective control over utilization because the interests of patients, providers, and the payor are not aligned. This is one of the reasons that U.S. healthcare costs are so high and growing rapidly, says Sacks. Advocate s management team is directly addressing this challenge, starting with Blue Cross Blue Shield, which covers two-thirds of Advocate s commercial business and about one quarter of the organization s overall business. Effective January 1, 2011, APP established its first commercial ACO-like contract to be accountable for both inpatient and outpatient care. APP will be accountable for population health management for the Blue Cross Blue Shield PPO patients that are attributable to Advocate and for the trend in the overall risk-adjusted global cost of care arrangement. This adds approximately 200,000 PPO individuals to the 150,000 HMO patients under Advocate s care management arrangements. We re still finalizing the definition of attributable to Advocate, but similar to definitions with Medicare demonstration projects, attributable patients will be those who have had repeat visits to one of our primary care physicians during a specified time period or who are seeing a specialist for a chronic condition like heart failure or diabetes, explains Sacks. Because a fair amount of primary care is episodic and a patient might not meet the ongoing definition of attributable to Advocate, one of Advocate s goals will be to create more patient loyalty in order to increase the percentage of attributable individuals, while doing a better job of managing their care. We have to earn patient loyalty both through performance and creating enough value that patients wouldn t want to receive care anywhere else than through Advocate physicians and hospitals, says Sacks. We are deliberately establishing this arrangement through APP because the physician-hospital alignment achieved with APP through the years is critical to the arrangement s success, says Sacks. We can build on our solid history and culture, tweaking incentives for more focus on the efficiency that will drive performance under the contract. Sacks notes that the metric-based incentives tied to readmissions and length of stay, started last year, are moving in the right direction. At the same time, we will be fully accountable for meeting patient safety, outcomes, and service metrics, he comments.
17 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 17 Communication and education will be major focuses at the practice level in order to help clinicians and office staffs understand the importance of making changes that may seem awkward at first. If we effectively build relationships and meet patient care needs in the primary care space, patients shouldn t need to be hospitalized as often, says Sacks. Although this will reduce hospital revenue, because we re an integrated system, at the end of the day, we will figure out how to make that work for the organization as a whole. It s the right thing to do, regardless of what happens in Washington and how reform plays out in the marketplace. The current system just isn t affordable or sustainable, concludes Sacks. Take-Home Messages Many organizations are not as large or sophisticated as Advocate Health Care and their executives may be wondering how to learn from the Advocate experience and how to address the different challenges their organizations will face. We offer the following take-home points. Physician leadership is required for clinical integration programs and ACOs. This is non-negotiable. Some communities simply do not have the physician bench strength that is needed. In these communities, hospitals will need to be proactive in developing physician leadership. Strategies to do so will include compensating physicians for their leadership time and ensuring their meaningful participation in organizational forums for strategic direction-setting and financial/ organizational performance goal-setting and measurement. Advocate has more than 100 physicians involved in various roles of governance at the hospital and system level and is working hard to ensure a next generation of physician leaders. Incremental change over a period of time through a clinical integration program is achievable, independent of organization size. Most of the implementation of Advocate s clinical integration program occurred since 2006, but much of the groundwork commenced as early as Organizations should not be looking to pull the ACO trigger at this time. Rather, they should be gaining market, clinical, and financial knowledge and physician-partnering experience through clinical integration initiatives. Clinical integration is instrumental in aligning behavior to improve outcomes and drive costs down. It can be achieved over time in all organizations. Technology represents the largest area of required investment to pursue a clinical integration program or to establish an ACO. However, as demonstrated by Advocate s experience, this can be deployed over an extended period of time, such as 5 to 10 years, so as to not disrupt current operations or create massive capital requirements in a single year. Significant thought should be given to the issue of how to effectively sequence and deploy future investments in technology. A participating physician network can and should be developed over time and clinical and other measures can be implemented gradually. Advocate Physician Partners continually manages the physicians who participate in the program, treating them as business partners, and carefully decredentialing those who don t perform to the agreed-upon required standards. There are 5,700 physicians on the collective Advocate hospital medical staffs, but only 3,800 physicians are members of APP. Incentive funds can and should be continually modified and updated to reflect market and pricing changes. Advocate started in 2004 with 36 measures of clinical effectiveness, adding to this base each year, and growing to more than 100 by The approach was to have a group of peers identify the measures so that physician-to-physician agreement could more rapidly be reached on the measures validity. Planning is critical to future success. During the past decade or more, Advocate did the required clinical integration program planning to meet market needs in a way that would improve quality and lower costs. To achieve such success, careful competitive/market analysis is required as the first step of all organizations. An organization s market must be defined and, going forward, it may be different from the current definition. The definition should be based on the market share required to achieve desired care outcomes and to keep delivery costs in line. Starting with a more limited geography makes sense at this point; numerous organizations are discovering that the cost of care for a defined patient population increases as population density decreases.
18 18 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS Planning Required to Pursue Clinical Integration and an ACO 1. Market planning to define and align markets and covered services 2. Tactical planning to design and build the delivery network and infrastructure 3. High-level implementation planning to determine timing and resource requirements Source: Kaufman, Hall & Associates, Inc. Many hospitals may find it less expensive to partner with competing or independent entities to provide services that they can t offer cost-effectively. As markets change, patient referral patterns for tertiary and quaternary services and in-migration and out-migration patterns will change too, so frequent review of and updates to strategic financial plans will be important. The Sidebar outlines the three stages of planning required to achieve the right clinical and technological infrastructure for clinical integration and ACO pursuit. Antitrust issues should be considered as organizations move from clinical integration programs to ACOs. Management teams and trustees must be asking the questions, How big is too big? When might market-wide alliances that offer organizations large market shares be viewed by the government as anticompetitive? The answers to these questions will be moving targets and hospitals must be ready to defend their positions and/or adjust their strategies, as needed. A focus on achieving value rather than volume as partnerships are forged will be important. Scale makes clinical integration programs easier to implement and will be critical with ACOs, but smaller organizations can play a role. Organizational size and scale will be required to manage the total health of a population in many markets. However, smaller organizations can create clinical integration programs with the end target of being part of ACOs. Their ACO participation may involve service offerings where they have a distinct competitive advantage in a particular market, rather than a breadth of offerings that would duplicate available services in the market. Partnerships will be mandatory for many hospitals. Concluding Comments To assume full financial responsibility for the provision of patient care to a defined group of patients, as will be required of ACOs, hospitals and health systems must have effective clinical integration programs. But, whether or not ACOs become the means of payment in the future healthcare delivery system, effective clinical integration will be required to achieve higher-quality care and better outcomes at lower costs. This value equation is not dependent on any particular payment system or mechanism, but rather is the core economic principle of the emerging new business model for healthcare delivery. The functional and new capability requirements for hospitals are significant better care management, payor contracting expertise, financial and capital planning capabilities, integrated electronic medical records, and coordinated utilization management and review systems, among others. Rigorous fact-based planning and other proven corporate finance-based approaches should guide organizations as they undertake the commitment to build these capabilities for clinical integration programs and ACOs. Both strategic and tactical plans, which have been thoroughly tested under numerous alternate scenarios, will be needed. The point is that getting ready to compete under different payment mechanisms will be an evolutionary process, not an event. Organizations that are wellprepared at this point may need only another year or two to put in place the infrastructure for population health management; other organizations will need two or three years to develop and implement an effective clinical integration program within the current fee-for-service environment. Defining and then taking incremental steps to position the organization for success under a value-based care/payment system are critical for all organizations.
19 GETTING TO THERE FROM HERE: EVOLVING TO ACOS THROUGH CLINICAL INTEGRATION PROGRAMS 19 Hospitals that sit back and wait for more clarity about federal legislation or government regulations will be left on the sidelines as clinical integration or ACO partnerships are formed with physicians and competitive organizations in their communities. Proactive positioning through the development of clinical integration programs must start now. James J. Pizzo is Executive Vice President of Kaufman, Hall & Associates Inc., and director of the firm s Physician Advisory Practice Mark E. Grube, Managing Director of Kaufman, Hall & Associates, Inc., leads the firm s Integrated Strategic Advisory Practice Both can be reached at References 1 Babbo, T.J., Marren, J.P., Deady, P.E.: Clinical Integration: A Physician and Hospital Strategy for Better Quality, Enhanced Competition, and Collective Contracting. ForHealthProfessionals/CME/CIWhitePaper-v2.pdf (accessed Jan. 6, 2011). 5 Berenson, R., Zuckerman, S.: How Will Hospitals Be Affected by Health Care Reform? Robert Wood Johnson Foundation and the Urban Institute. Affected-by-Reform.pdf (accessed Nov. 23, 2010). 6 Berwick, D.M.: Workshop on Issues Related to Accountable Care Organizations. Baltimore, MD, Oct. 5, wp-content/uploads/he _berwick.pdf (accessed Nov. 23, 2010). 7 CMS Office of Legislation: Medicare Accountable Care Organizations Shared Savings Program. blecareorganization.pdf (accessed Dec. 10, 2010). 8 Gawande, A.: The Real Reform of Healthcare. Keynote address presented at the 2010 Kaufman Hall Financial Leadership Conference, Oct. 21, 2010, Chicago, Illinois. 9 Advocate Health Care: The 2010 Value Report. (accessed Nov. 29, 2010). 2 Shortell, S.M.: Remaking Health Care in America: Building Organized Delivery Systems, First Edition. Jossey-Bass Publishers, Federal Trade Commission and the U.S. Department of Justice: Statements of Antitrust Enforcement Policy in Health Care. industryguide/policy/statement8.htm (accessed Jan. 6, 2011). 4 American Hospital Association: Accountable Care Organizations: AHA Research Synthesis Report. June Res-Synth-Rep.pdf (accessed Dec. 10, 2010).
Advocate Health Partners Clinical Integration Program A Core Strategy to Enhance Value for Patients, Providers, and Purchasers Lee Sacks, M.D., President Mark Shields, M.D., M.B.A., Senior Medical Director
Applying Lessons from Two Years of a Commercial ACO to a Medicare Shared Savings Program Lee B. Sacks, MD, CEO Mark Shields MD, MBA, FACP, Senior Medical Director AMGA 2013 Annual Conference Orlando, FL
The 4 Pillars of Clinical Integration: A Flexible Model for Hospital- Physician Collaboration Written by Daniel J. Marino, President & CEO, Health Directions November 14, 2012 Originally published by Becker
Proven Innovations in Primary Care Practice October 14, 2014 The opinions expressed are those of the presenter and do not necessarily state or reflect the views of SHSMD or the AHA. 2014 Society for Healthcare
The Cornerstones of Accountable Care Clinical Integration Care Coordination ACO Information Technology Financial Management The Accountable Care Organization is emerging as an important care delivery and
Solutions for Value-Based Care Accountable Care: Clinical Integration is the Foundation Clinical Integration Care CoordinatioN ACO Information Technology Financial Management The Accountable Care Organization
& The Banner Health Network, an AIP and Banner Health partnership, present the Banner Health Network Pioneer ACO - Physician Toolkit This BHN Pioneer ACO Physician Toolkit has been developed to provide
DRIVING VALUE IN HEALTHCARE: PERSPECTIVES FROM TWO ACO EXECUTIVES, PART I A firm understanding of the key components and drivers of healthcare reform is increasingly important within the pharmaceutical,
Accountable Care Organizations and You E. Christopher Ellison, MD, F.A.C.S Senior Associate Vice President for Health Sciences CEO, OSU Faculty Group Practice Chair, Department of Surgery Ohio State University
Making ACOs Work for You By Gregory A Culley, MD The continuing increase in medical costs has created a renewed interest in changing the payment method for healthcare providers. In some ways, everything
Population Health Management Primer A White Paper October 2014 Impact Advisors LLC 400 E. Diehl Road Suite 190 Naperville IL 60563 1-800- 680-7570 Impact- Advisors.com Table of Contents What Is Population
Integrated Leadership for Hospitals and Health Systems: Principles for Success In the current healthcare environment, there are many forces, both internal and external, that require some physicians and
MetroCare/HealthChoice Trilogy Clinically Integrated Network FAQs 1. What is clinical integration? Clinical integration is a new model for healthcare delivery that promotes collaboration among a community
Fact Sheet AARP Public Policy Institute How Health Reform Will Affect Health Care Quality and the Delivery of Services The recently enacted Affordable Care Act contains provisions to improve health care
UNDER THE MICROSCOPE NOVEMBER 5, 2013 THE ACCOUNTABLE CARE ORGANIZATION (ACO) TRAIN IS LEAVING THE STATION: ARE YOU ON BOARD? ISSUE. A 2006 Institute of Medicine report ( Performance measurement: Accelerating
The ABCs of Population Health Management Jennifer Houlihan, MSP Director of CIN Strategy, Integration and Population Health A view from the marketplace Employers seek Other health Systems for Clinically
Accountable Care Organizations Understanding What They Are and How to Structure Them Maria T. Currier HOLLAND & KNIGHT LLP Miami Chamber of Commerce Healthcare Subcommittee December 7, 2010 Copyright 2010
REPRINT AUGUST 2012 Daniel M. Grauman Carole J. Graham Molly Martha Johnson healthcare financial management association hfma.org 5 pillars of clinical integration A healthcare organization s ability to
Accountable Care Organization Workgroup Glossary Accountable care organization (ACO) a group of coordinated health care providers that care for all or some of the health care needs of a defined population.
FAQs: Clinical Integration and Accountable Care Organizations (ACOs): What Physician Leadership, CEOs and Trustees Need to Know Before They Get Started Lee B. Sacks, MD, Chief Executive Officer, Advocate
INTEGRATION STRATEGIES FOR A NEW HEALTH CARE ECONOMY Thomas William Baker Baker Donelson Bearman Caldwell & Berkowitz, P.C. Atlanta, Georgia (404) 221-6510 email@example.com Prepared for East Georgia
Build a Clinically Integrated Network Create a Sustainable Future For your PHO/IPA April 25, 2013 Our Speaker Lori Fox Ward, SVP Clinical Integration has worked with Valence Health since 1996. Lori oversees
ACCOUNTABLE CARE ANALYTICS: DEVELOPING A TRUSTED 360 DEGREE VIEW OF THE PATIENT Accountable Care Analytics: Developing a Trusted 360 Degree View of the Patient Introduction Recent federal regulations have
and FAQ s 2016 Medicare Shared Savings Program Year Who is the National Rural Accountable Care Consortium? The National Rural Accountable Care Consortium was formed in 2013 to pool knowledge, patients,
Master of Health Administration THE IMPACT OF CLINICAL INTEGRATION ON JOINT MANAGED CARE CONTRACTING AMONG INDEPENDENT PHYSICIANS MARC MERTZ Executive Master of Health Administration Candidate, 2011 University
Author: Mallory M. Johnson, MHA, Senior Consultant A push towards pay-for-performance The term pay-for-performance (P4P) has matured in healthcare over the last decade from concept to reality as healthcare
CLINICALLY INTEGRATED NETWORKS: BUSINESS AND LEGAL CONSIDERATIONS Claire Turcotte, Esquire, Bricker & Eckler LLP Jim Yanci, MS MT (ASCP), Dixon Hughes Goodman Agenda BUSINESS CONSIDERATIONS How Fast are
Nuts and Bolts of Accountable Care Organizations Frank G. Opelka, MD FACS American College of Surgeons ACS Advocacy & Health Policy, Vice Chancellor for Clinical Affairs Professor of Surgery LSU New Orleans
Frequently Asked Questions Note that WellStar Clinical Partners (WCP) is the name for WellStar s clinically integrated organization. General Questions Q. What are the WCP Vision and Mission statements?
Realizing ACO Success with ICW Solutions A Pathway to Collaborative Care Coordination and Care Management Decrease Healthcare Costs Improve Population Health Enhance Care for the Individual connect. manage.
and FAQ s 2016 Medicare Shared Savings Program Year Who is the National Rural ACO? The National Rural ACO was formed in 2013 to pool knowledge, patients, and resources so that independent community health
Post-care Networks and LTACs: Finding Your Place in an ACO Model Accountable Care Organizations (ACOs) are more than just a fad. Post-care providers and LTACS in particular, will need to give careful thought
Healthcare Reform Update Conference Call VI Sponsored by the Healthcare Reform Educational Task Force October 9, 2009 2:00-2:45 2:45 pm Eastern Healthcare Delivery System Reform Provisions in America s
Medicare Value Partners Medicare Shared Savings ACO Program Frequently Asked Questions (FAQ) Q: What exactly is a Medicare Shared Savings Program ACO? A: Medicare Shared Savings Program accountable care
Terry McGeeney, MD MBA, President, CEO of TransforMED Terry McGeeney, MD MBA, President, CEO of TransforMED According to the Future of Family Medicine Report: unless there are changes in the broader healthcare
Clinical Integration: A Road Map to Accountable Care Jacqueline Matthews, RN, MS Senior Healthcare Transformation Director IBM Watson Health May 12, 2016 Housekeeping 1. Using the control panel - Use the
Premier ACO Collaboratives Driving to a Patient-Centered Health System As a nation we all must work to rein in spiraling U.S. healthcare costs, expand access, promote wellness and improve the consistency
Healthcare Transformation Concepts and Definitions Our healthcare transformation process is invigorated by many stakeholders with differing backgrounds. To help them with new terms and all of us to use
Accountable Care Organizations: An old idea with new potential Stephen E. Whitney, MD, MBA Testimony to Senate State Affairs September 22, 2010 Impetus for ACO Formation Increased health care cost From
A L O O K A H E A D Systems in the Act, Trying Out ACOs BY MARK CRAWFORD Catholic health care leaders are experimenting with accountable care organizations (ACOs) as a method of delivering higher quality
Federal Health Care Reform: Implications for Hospital and Physician partnerships Walter Kopp Medical Management Services Outline Overview of federal health reform legislation Implications for Care delivery
Telemedicine as Part of Your Service Line Strategy Howard J. Gershon, FACHE Principal, New Heights Group March 2011 1 Session objectives Understand the concept of telemedicine/telemedicine and how it is
Enterprise Analytics Strategic Planning June 5, 2013 1 "The first question a data driven organization needs to ask itself is not "what do we think?" but rather "what do we know? Big Data: The Management
Clinical Integration and the Baptist Physician Alliance Physicians at Baptist Health System will soon have the opportunity to decide whether to participate in the development of a clinically integrated
Accountable Care Organizations 101 MultiCare Connected Care October 20 22, 2014 1 Objectives 1. Describe what an ACO is and why we believe developing an ACO is important 2. Describe examples of what integration
A Consumer Guide to Understanding Health Plan Networks Table of Contents steps you can take to understand your health plan s provider network pg 4 What a provider network is pg 8 Many people are now shopping
A Roadmap to Clinical Integration: How to Successfully Transition to Value, While Still Operating in the Fee-for-Service World In healthcare, transitions of care from one practice setting to another can
January 2011 STRATEGIC INNOVATIONS FOR AFFORDABLE, SUSTAINABLE HEALTH CARE: A Model for Health System Reform Environmental Scan Accountable Care Organizations Table of Contents ACCOUNTABLE CARE ORGANIZATIONS...
Implementation Timeline Reflecting the Affordable Care Act 2010 Access to Insurance for Uninsured Americans with a Pre-Existing Condition. Provides uninsured Americans with pre-existing conditions access
: ACC/ ACO s, beyond the hype hope Brian Seppi, MD, President, Washington State Medical Assn. Washington State Medical Association Health Care Financing Our vision Make Washington the best place to practice
PROVIDER ATTITUDES TOWARD VALUE-BASED PAYMENT MODELS An Availity Research Study April, 2014 TABLE OF CONTENTS 1 Introduction 2 Definitions 3 Key Findings 5 Survey Results 6 Revenue sources and experience
December 2010 Using Partial Capitation as an Alternative to Shared Savings to Support Accountable Care Organizations in Medicare CONTENTS Background... 2 Problems with the Shared Savings Model... 2 How
Accountable Care Organizations Rick Shinto, MD Aveta Health Inc. July 20, 2010 1 Health Care Reform- New Models of Care Patient Protection and Affordable care Act (PPACA 2010) controlling costs and improving
White Paper Post-Acute/Long- Term Care Planning for Accountable Care Organizations SCORE A Model for Using Incremental Strategic Positioning as a Planning Tool for Participation in Future Healthcare Integrated
Source: Health Law Reporter: News Archive > 2010 > 04/15/2010 > BNA Insights > Provider Participation in ACOs May Hinge on HHS Regulations Provider Participation in ACOs May Hinge on HHS Regulations 19
Integrated Leadership: Promoting Collaboration to Transform Health Care 2015 ABMS National Policy Forum The Future of Practice: Transformation to Patient Centered Systems. John R. Combes, MD Chief Medical
Introduction Transparency is a vital component of an efficient and effective health care system. As concerns about the cost and quality of health care in the United States continue to grow and large employers
Medweb Telemedicine 667 Folsom Street, San Francisco, CA 94107 Phone: 415.541.9980 Fax: 415.541.9984 www.medweb.com Meaningful Use On July 16 2009, the ONC Policy Committee unanimously approved a revised
Clinical Integration as an Effective Physician Alignment Strategy First Illinois Chapter HFMA Fall Summit 2013 Presented by: Ben Fisk, AVP Business Services, NorthShore University HealthSystem Jim Watson,
Clinical Integration Network (CIN) Frequently Asked Questions Q: What is clinical integration? A: Clinical integration is a structured collaboration between community and employed physicians and hospitals
Get Plugged in: Defining Your Connectivity Strategy CHIME College Live 17 April 2013 Topics Introductions Drivers Strategies Imperatives Discussion Page 2 Copyright Kurt Salmon 2013 All Rights Reserved
Quality and Performance Improvement Program Description 2016 Introduction and Purpose Contra Costa Health Plan (CCHP) is a federally qualified, state licensed, county sponsored Health Maintenance Organization
Thirteen Things Health Care Providers Should Know About Accountable Care Organizations and Health Reform Thomas E. Bartrum, 615.726.5641, firstname.lastname@example.org With passage of the Patient Protection
ACOs: Impacting the Past, Present and Future State of Healthcare Article By Alan Cudney, RN, CPHQ, PMP, FACHE, Executive Consultant October 2012 What are Accountable Care Organizations? Can they help us
CPR-PBGH Toolkit for Purchasers on Accountable Care Organizations June 26, 2014 Overview Introductions The Current ACO Landscape ACO Options Available to Employers Today Features of the Ideal ACO CPR-PBGH
Pediatric Alliance: A New Solution Built on Familiar Values Empowering physicians with an innovative pediatric Accountable Care Organization BEYOND THE TRADITIONAL MODEL OF CARE Children s Health SM Pediatric
Utilizing Clinical Integration to Align Physicians and Increase Market Share Timothy J. Quinn, MD & Daniel J. Marino DISCLAIMER: The views and opinions expressed in this presentation are those of the author
Accountable Care: Implications for Managing Health Information Quality Healthcare Through Quality Information Introduction Healthcare is currently experiencing a critical shift: away from the current the
Advisory Panel for Health Care Advancing the Academic Health System for the Future: Profiles in Academic Health System Leadership November, 2013 Project Focus and Methodology Project Focus This project
Benefit Design and ACOs: How Will Private Employers and Health Plans Proceed? Accountable Care Organizations: Implications for Consumers October 14, 2010 Washington, DC Sam Nussbaum, M.D. Executive Vice
ACCOUNTABLE CARE ORGANIZATION (ACO): SUPPLYING DATA AND ANALYTICS TO DRIVE CARE COORDINATION, ACCOUNTABILITY AND CONSUMER ENGAGEMENT MESC 2013 STEPHEN B. WALKER, M.D. CHIEF MEDICAL OFFICER METRICS-DRIVEN
Your Pharmacy Benefit: Make it Work for You! www.yourpharmacybenefit.org Table of Contents Choose Your Plan.............................................2 Steps in Choosing Your Pharmacy Benefits.........................
IAMSS 30 th Annual Education Conference Pearls of Wisdom The Impact of Accountable Care Organizations (ACOs) and Health Care Reform on Credentialing, Privileging and Peer Review April 28-29, 2011 Michael
Dual RFI Response Summary Improving Care through Integrated Medicare and Medi- Cal Delivery Models Stuart Levine, MD., MHA. Keith Wilson, MD Robert Margolis, MD. Stakeholder Meeting August 30, 2011 1 Organization
Building a Post Acute Network: Care Management and ACOs A high level summary of proposed rules for ACOs and the shared savings program most relevant to post acute providers. Prepared By: Kathleen M. Griffin,
Financial and Population Analytics for Accountable Care Organizations Valence Biographies Lori Fox Ward is Senior Vice President of Clinical Integration for Valence Health where her primary role involves
Healthcare Informatics June 2012 Accountable Care Organizations Early Lessons learned from strong revenue cycle performers Healthcare Informatics Accountable Care Organizations Early Lessons learned from
Managing and Coordinating Non-Acute Care in an ACO Environment By Glen Roebuck, Vice President of Business Development, Health Dimensions Group Hospital and health care systems across the country are engaging
The Accountable Care Organization Kim Harvey Looney kim.looney@ 615-850-8722 3968555 1 ACOs: Will I Know One When I See One? Relatively New Concept Derived from Various Demonstration Programs No Set Structure
CPAs & ADVISORS experience clarity // PHYSICIAN ALIGNMENT STRATEGIES Moving Forward in the Health Reform Era OVERVIEW Physician alignment is a key in achieving Triple Aim -type outcomes Alignment opportunities
Summary of the Final Medicaid Redesign Team (MRT) Report A Plan to Transform The Empire State s Medicaid Program May 2012 This document summarizes the key points contained in the MRT final report, A Plan
What is Healthcare Reform? Get a view of the future health care system in the US; learn about primary resources and tools for the healthcare administrator, and what are the success factors for healthcare
Accountable Care Organizations (ACO) Proposed Rule Summary March 31, 2011 On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) released the longawaited proposed rule on Accountable Care
Value-Based Programs Blue Plans Improving Healthcare Quality and Affordability through Innovative Partnerships with Clinicians Issue: U.S. healthcare spending exceeds $2.8 trillion annually. 1 With studies
Blueprint for Post-Acute Care Reform Post-acute care is a critical component within our nation s healthcare system and an essential aspect of care for many patients making a full recovery possible after