Perspective Roundtable: Creating Accountable Care Organizations. 1. Introduction to ACOs

Transcription

1 Perspective Roundtable: Creating Accountable Care Organizations 1. Introduction to ACOs DR. THOMAS LEE: Welcome to a video roundtable of the New England Journal of Medicine on accountable care organizations. I m Tom Lee, an associate editor of the Journal and network president of Partners Healthcare. In a time of incredible transition in health care, we re all hoping that where we are headed is a delivery system that delivers higher-quality care more efficiently. Are accountable care organizations, or ACOs, the vehicle? What everyone says is the devil is in the details. To talk about that today, we ve got three experts with complementary perspectives. We have Gail Wilensky, an economist and senior fellow at Project Hope, who served in a variety of roles with relevance to this topic, including administrator of the Health Care Financing Administration and chair of MedPAC. We have Elliott Fisher, who is the director of the Center for Health Policy Research and a professor of medicine at Dartmouth Medical School. And we have Larry Casalino, who is the chief of the Division of Outcomes and Effectiveness Research and a professor at Weill Cornell Medical College. Elliott, why don t we start with you, because you are the person, for better or worse, who is credited with coining the phrase accountable care organizations. What are they, and what is happening right now to actually bring the concept to life? DR. ELLIOTT FISHER: The idea of accountable care organizations are sort of three key attributes: organized care, performance measurement, and payment reform, all aligned, if possible, to support physicians in their efforts to improve care. So the notion of organized care: let s encourage physicians and hospitals to come together to become more organized entities that are capable of managing and being responsible for the care of an entire population of patients. The second thing is performance measurement. Let s make sure that they report regularly on performance measures that will reassure the public and payers that the quality of care is actually improving. Because if you re going to change the payment incentives, you don t want to reward the stinting on care that we saw in the 1990s. So performance measurement is the second attribute. Page 1 of 9

2 And then the third key element is getting the payment system aligned with what we want to see, better care and lower costs. So there the notion is continue under fee-for-service payment, at least initially. But then offer substantial bonuses to the provider organizations, to the ACOs, that are able to improve quality and then a share of the savings if they re able to reduce costs below where they were projected to be. Well, there ve already been a number of pilots that were run by Medicare over the last 5 years, the Physician Group Practice Demonstration, which was fundamentally this model, with a slightly different benchmarking approach. The Brookings Dartmouth collaborative that Mark McClellan and I are running, we have five pilots around the country that are already embarking on forming these payment arrangements with their private payers. And most of the private payers are involved in trying to work on this as well. And so where are they in the process? Well, one of them, Norton Healthcare and Humana have signed an ACO contract for their under-65 population. The physicians at Norton are working hard with the hospital to pull themselves together, reorganize care, figure out how to work with Humana to get really useful, timely data, that helps them understand how their patients are doing and how to improve their care. So there it is actually quite an elegant partnership between the payer and the provider. Instead of dickering over prices, they are trying to work together to say, How can we jointly improve care? 2. Hurdles to Overcome DR. LEE: Now, Gail, you have looked at the health care system from a variety of angles, and I know you re following this very carefully. How skeptical are you of this? Is this the magic bullet? Will this solve our problem? DR. GAIL WILENSKY: I m a little concerned or dubious. And the reason is precisely because of what I saw happening with the Physician Group Practice Demo that Elliott just mentioned. These were 10 set-up cases, in the sense that if anybody should be able to produce savings with quality, it ought to have been the 10 groups that came into this demo. And what to me was the most impressive is that while all of them were able to meet the quality goals, in the initial year only two of them were able to produce savings at a level that would allow them to share some savings. And even after 3 years, only five of them have been able to do that. I say that s important because if these groups couldn t pull it off, it s hard to see how likely it is for small groups of physicians, who are going to be loosely affiliated, to be able to organize themselves enough to do this. But maybe. And that in no way should be interpreted to say I don t want to see this go forward. We ve got to get away from where we are, which is a reimbursement system that rewards for more and more complex, that s fragmented, that s stovepipe. And right now, most physicians are in small single-specialty practices. So we will see Page 2 of 9

3 whether this accountable care organization is enough to induce physicians to change their behavior, to reward the kind of behavior we d like to see in terms of producing accountable care. My biggest concern right now, my single biggest concern is the only entities that will step up to the plate are hospitals. Understandable, hospitals are going to be entities receiving the payment some of the time. They re more organized. They re better able to do this. My concern is that over the last decade we ve seen a large shift in power toward the hospitals as they ve merged and consolidated. And if they are the only entities receiving the payment, it will have a bad imbalance between groups of physicians and the hospitals. So when I ve been out speaking around the country, I am pleading with physician groups to be willing to be the entity receiving money, with or without a hospital. Pair up with a payer if you want, but don t only be the recipient in a hospital-led ACO, or you will rue the day. DR. LEE: Well, I think Larry is probably the right guy to comment on how high a hurdle that is. Larry, besides doing a lot of great health services research on the kind of systems and improved care, you we asked you to come in part because you did spend a couple of decades actually leading a primary care practice in California. So you really do have a boots-on-the-ground perspective on what this challenge entails. So can we make these changes? DR. LAWRENCE CASALINO: I think that first of all, I don t think that accountable care organizations will succeed if they don t make life better for patients and also for physicians. They just won t. I don t think you can have a major delivery system reform in this country with physicians actively opposed to it. And I think we found that out in the 90s. I think that in terms of the barriers, I think, you know, performance I see as a function of incentives plus capabilities. So if ACOs are going to become prevalent and do what we d like them to do, the right incentives have to be in place, and the provider organizations have to have capabilities to change the way care is provided. And I think that it s going to be very difficult to get both correct. I think it can be done. I hope it will be done. But I think it will be difficult. I wouldn t bet a lot on it, and I don t think it will be quick. But I do share Gail s concern about potential hospital domination. I think that I think one of the most significant and least publicly noted things that s happened in the health care system in the last 9 years or so is very rapid increase in hospital employment of physicians, not just primary care physicians but specialists, and not just physicians at the end of their career or the beginning of their career but physicians at all stages of their career. It s changing the demographics of physician practice very quickly. I mean, hospitals have capital. They have skilled managers whose job is to make things happen. They re not practicing medicine. And so they have a lot of advantages in trying to form ACOs. And ideally the capital could be Page 3 of 9

4 used to make functional ACOs. But I think we all know that there have been problems in the past, and I could easily talk about problems I would anticipate in the future if we have a system in which we have almost only hospitaldominated ACOs and most physicians are employed by hospitals. DR. FISHER: I m actually less worried about who s running them than I am about what business model they re operating under. If the business model is generating revenue, I m not sure it is aligned with what we want to achieve. I believe that the strength, the success of this model will depend not on which business model it is I hope physician groups succeed, I hope hospitals succeed. It will be on whether we have performance measures that make sure they re paying attention to what patients really want. And that will require making physicians lives happier. If you look at the places where it s starting to work, the initial anecdotes, and certainly here in Massachusetts where the alternative quality contract strongly emphasizes primary care performance, in terms of the kinds of measures they re being held accountable for you start to see investments in primary care practice. 3. Vision of Care Delivery DR. LEE: You know, Larry, like for clinicians, not just physicians but for other clinicians as well, who are actually delivering that care, what should it feel like? DR. CASALINO: So I think in a high-functioning ACO, there d be a couple of major advantages for physicians. First of all, you wouldn t be making money by churning volume as fast as you could. You could get off that assembly line. Secondly, you would feel because of the organized processes to improve the care of a population of patients that the ACO is responsible for you wouldn t go home every night feeling that you know that there s a lot you hadn t done for your patients that you could have done. Third, instead of trying to do all of those things yourself, in a well-organized ACO, physicians would actually be able to spend their day doing things that really would be high-value for patients, with a lot of help from the rest of the staff and use of various kinds of organized processes, to improve quality for the population of patients of the ACO not just the people who happen to come into the office, but everybody. And not just during face-to-face visits but in between visits as well. I think there are many potential advantages for physicians in that. Page 4 of 9

5 It will require, I think, a major cultural shift in the way physicians think about what s a good physician and what s quality. So quality isn t just what I do for an individual patient while they re in front of me. Quality is what my organization does for our population of patients all the time. 4. Specialists and AMCs DR. WILENSKY: In the short term, how are we going to staff these accountable care organizations? How are we going to manage when we have a world where most physicians, the vast majority of physicians, are specialists and the primary care pool is relatively small? I m worried about both sides. We can find ways to support primary care physicians through nurse practitioners, through PAs, through other ways that could help a little. I m as much concerned as an economist about what are all these specialists going to be doing? Not quietly fading into the sunset, for sure. And how do we get ourselves through the period of trying to right balance who is out there? We have all kinds of incentives in terms of loan forgiveness, targeting, changing reimbursement to try to shift the mix. But, you know, that is not a short-term solution. DR. LEE: And let me add on a nuance to that, which I know is probably in the minds of many of the viewers, which is, what happens with academic medical centers in this environment, where there is a lot of great special expertise, which I think the marketplace wants? DR. FISHER: Most specialists are working in the same fee-for-service environment that requires them to spend all of their time, or at least a conscious amount of their time, generating revenue. And if you look at some integrated delivery systems, much of specialists time, whether it s at Kaiser or Group Health, starts to be devoted to thinking about quality improvement and thinking about the health of the population they are serving. So I would frame, if we re starting to reorient the organizations toward improving the health of the population and improving care, specialists knowledge is absolutely critical. But specialists may contribute both through their practice and through their contribution to improving the systems of care. In terms of academic medical centers, I think there is a real challenge here. And I think there are some positive sides. That is, academic medicine should be leading the development of new models of care that can successfully meet the challenges we face. It s not been their traditional, most academic medical centers traditional focus of activity, the development of new models of care. But it certainly could be. And I think we will have to think carefully about how do we continue to support the real advances in science that we need to get from our academic medical centers. Page 5 of 9

6 A lot of the costs of innovation at academic medical centers are sort of built into the, hidden in the price structures of the way we pay for health care now. If we move to purely value-based payment, where an academic medical center has to sort of compete with the community hospital next door, it will be very hard for the academic medical centers to continue as innovators. So I think one of the policy challenges we all face is to figure out how to make sure that academic, that the costs of academic medicine are somehow kept separate. DR. CASALINO: One of the attractions of ACOs to me is rather than have the government set workforce policy and say, Well, we will have X% primary care physicians, in effect, if accountable care organizations became prevalent, accountable care organizations would be determining, as Gail said, what s the mix of specialists, primary care physicians, nurse practitioners, physician assistants that we want. And then that would drive, really, to some extent would drive physician incomes relative to each other and also to drive the number of people that would be trained in primary care. But in the short term there could be some dislocations. Just one other comment about that. I would say that I actually think that probably a good 50 or 60%, if not more, of visits to primary care physicians, face-to-face visits, don t need to be face-to-face. I think in terms of specialists, I think there will be grenade lobbing, and so I would be interested in hearing what you two think. 5. Entering the Arena DR. LEE: Let s pretend, for a moment that we are a highly paid consulting group. And we ve got two engagements, one with an academic medical center and one with Larry s old practice, small practice. What advice would we give them? You know, do we plunge in 2012, try to take advantage of whatever opportunities CMS and the Innovation Center create and try to be first in? DR. WILENSKY: First in is usually highly risky. First in has a strong correlation with losing money. Second and third in is a terrific place. So my advice would be, you may or may not want to be first in. It depends how clear the rules are and how quickly they come out. And then, when you know what you re facing how quickly you can respond. DR. FISHER: So advice to any provider you know, hospital, academic medical center, or primary care practice I think the days of unrestricted fee-for-service medicine where you can raise your prices as much as you want are gone. It may take a little while for them to really go away. In the new world that we ll have there ll be some relationship between value and payment. Even now you can begin to prepare by reducing unit costs. You win under Page 6 of 9

7 fee for service if you re thoughtful about how to take costs out of your current processes. And you certainly win under more global payment models, whether they re episode-based payment or full capitation, as some integrated systems are already receiving. So I think that s certainly being prepared for a shift to value-based payment to learn the skills of how do you manage costs within a system rather than ignore them. How do you think, then, about the next level, which is population management, which Larry was talking about, where you re actually able to, if you re a primary care practice, to think about how can we manage the care of a population of primary care patients with diabetes or heart failure? And there are payment models out there now the patient-centered home model, which is really pretty closely aligned with the ACO and many are seeing them as partners, with an ACO leading to a strengthening of the patient-centered medical home. They re all about trying to apply just the processes that Larry was describing of effective care management processes. And you can win under a PCMH model, you know, primary care patientcentered medical home model in the short term. DR. CASALINO: Actually, kind of the holy grail at the end of all this would be where an ACO is large enough and competent enough so payers would basically say, Here s the money. You take care of patients. You do it the best way that you know how. There s no utilization management. There s no prior authorization. There s no denying of fee-for-service claims. You just do it the best you can. And we ll be measuring quality and patient experience, to make sure you are not stinting on care. I think that the calculation is right now, first of all, in the short run, what would be the how is the cost of running this ACO, creating it and running it, if you add that to revenue, net revenue that you would lose by not supplying certain services, you have to compare that to any revenue that might come in to you for providing better care. And one thing that could make it worthwhile, and also would be, I think, desirable from a values point of view, is to have income come not only from shared savings, so not only if you save money from Medicare or a health plan do you get some money, but also for quality bonuses. 6. Legal Structures DR. LEE: Do you think doctors have to be employed to make this model work well? DR. CASALINO: Well, Gail referred earlier to the idea of more virtual organizations at the beginning of our discussion. Certainly the various articles that have come out about ACOs and the legislation all say, well, it could be an IPA. It could be a physician hospital organization. So there could be these virtual networks. And the concept is, physicians who want to be in small practices and patients who like to go see physicians in small practices and Page 7 of 9

8 there are real distinct advantages, I believe, to that setting for both the patients and physicians would have the option to remains so. And the all the infrastructure support, which would be so necessary to make a high functioning ACO would come from the IPA or the PHO [physician hospital organization] or whatever network there is to provide support. I think, I mean that is a very attractive concept to me. So I would like to see these virtual organization, network organizations succeed. As Gail said, I think it will be very, very difficult for them to succeed. I think that the incentives would have to be much stronger than they are now. It s not that easy to create these things. But I hope that things will be structured in such a way that there is at least the possibility to create them. But I think no ACO will work without strong leadership, without a strong culture, and without strong organized processes that are right in the DNA of the organization. And by definition, none of those things can be created overnight. So I think whether it s employed physicians and, even more so, if it s not employed physicians, it s going to be a, and even with the incentives right, it s going to be a hard slog to make these things work. DR. LEE: Now, Gail, you re on the board of United and you and I are both on the board of Geisinger. If providers can t get organized, do the health plans fill the gap? Do they effectively become the accountable care organizations? Is that what how are they looking at the future? DR. WILENSKY: I think that it is possible that one of the models that could be tried would be physician groups working with payers. As I ve indicated, I m very eager to have physicians step up however, but be take a bigger leadership role. And yes, of course, it could be the health plans as well. They have a lot of organizational structure. They ve got the data to help differentiate and do a lot of the performance systems and the information systems. Again, it hasn t been in their financial interest. When they tried in the 1990s, not very adroitly, but they did actually push down spending very significantly, there was huge pushback by the Congress and by the American population in part because individuals weren t choosing the health plans that they wanted to be in. So you know, we re really going to have to decide how serious we are about trying to slow down spending and improve quality. It may be like Massachusetts that if we are really successful in extending coverage to the vast majority of the population, we are absolutely going to have to do something to slow down spending and, oh, by the way, try to get better clinical outcomes. The system we ve got just is incapable of producing that outcome.. Page 8 of 9

9 Conclusion DR. EPSTEIN: I want to just pick up as we close where Henry started out, which is the notion that this is not all going to be over as we pass or don t pass legislation. And I think that s true. I head the Department of Health Policy and Management, and I will still be in business. Having said that, we haven t been here in at least 16 years, and we have the chance of doing something, whatever that is, that may substantially change our health care system. So I really want to thank our sponsors for fostering this opportunity to learn more about it, for our panelists, to help edify us about the opportunities and challenges, and I hope you ll all join me not only at the reception, but in wishing that we ll be pleasantly surprised with what happens. Page 9 of 9