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Delivery system reform, ACOs and physician-hospital integration

This book explores the rationale for delivery system reform in the post-health care reform environment in the U.S. It focuses on accountable care organizations (ACOs) and the integration of physicians and hospitals. The book discusses the definition and origins of ACOs, barriers to ACO formation, and key design elements. It also addresses the barriers to ACOs/integration and provides a schematic of ACO risk assumption. This book is essential for understanding the future of health care delivery in the U.S.

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Delivery system reform, ACOs and physician-hospital integration

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  1. Delivery system reform, ACOs and physician-hospital integration The post-health care reform environment in the U.S. The King’s Fund London March 31 2011 Francis J. Crosson, MD The Permanente Medical Group Kaiser Permanente Institute for Health Policy

  2. Rationale for delivery system reform • Control of escalating health care costs will be necessary for the sustainability of health care reform • How care is delivered has a major impact on health care costs • Changes to both the structure of and methods of payment to health care providers will be necessary to produce significant changes in health care delivery and the trajectory of health care costs

  3. Delivery system – structural and payment change

  4. Parallel tracks?

  5. Accountable Care Organisations (ACOs) • Definition • Origins and evolution of the concept • ACOs in health care reform legislation -The Affordable Care Act of 2010 (ACA) • Issues/barriers regarding ACO formation

  6. ACOs – one definition “ The defining characteristic of an ACO is that a set of physicians and hospitals accept joint responsibility for the quality of care and the cost of care received by the ACO’s panel of patients” MedPAC Report to the Congress, June, 2009

  7. The Council of Accountable Physician Practices (CAPP) • Evolved in 2002 from discussions within American Medical Group Association • Sponsored and published research about multispecialty group practice • Sponsored colloquia and individual presentations about the role of multi-specialty group practice

  8. CAPP groups • Austin Regional Clinic • Billings Clinic • The Cleveland Clinic • Dean Health System • Duluth Clinic • The Everett Clinic • Fallon Clinic • Geisinger Clinic • Group Health Permanente • Harvard Vanguard Medical Associates • HealthCare Partners Medical Group • HealthPartners Medical Group • Henry Ford Medical Group • Intermountain Health Care • The Jackson Clinic • Lahey Clinic • The Marshfield Clinic • Mayo Clinic • Mayo Health System • Nemours • Ochsner Clinic • Palo Alto Medical Foundation • The Permanente Federation (8 PMGs) • Scott & White • Sharp Rees-Stealy Medical Group • Virginia Mason Medical Center • Wenatchee Valley Medical Center

  9. Dr. Elliott Fisher ACO papers • “Creating Accountable Care Organizations: The Extended Medical Staff”, Health Affairs, 2007,26:w44-w57 • “Fostering Accountable Health Care; Moving Forward in Medicare, Health Affairs, 2009, 28:w219-w231 • “Higher Health Care Quality and Better Savings Found at Large Multispecialty Medical Groups”, Health Affairs, 2010, 29:5 991-997

  10. ACOs in the ACA and beyond • Medicare is asked to lead • ACA, Sec. 3022, Medicare Shared Savings Program • ACA, Sec. 3021, Medicare/Medicaid Innovation Center • Multiple private sector activities are underway as well

  11. Key ACO design elements • How is the population served established? • What payment/incentive designs are most likely to be successful in improving quality and mitigating unnecessary cost increases? • How to establish aligned incentives for physicians and hospitals? • Who will lead: physicians or hospitals?

  12. Barriers to ACOs/Integration • Knowledge and skills needed to be successful • Inadequacy of current payment incentives and up-front costs

  13. A Schematic of ACO Risk Assumption Full Risk Capitation California “Delegated Model” Corridor Capitation Permanente Medical Groups FFS +/- “Bonus” Bundled Payments “Depth” of Risk ACA Shared Savings Model FFS + “Bonus” Medicare Group Practice Demo PCMH FFS Only PrimaryCare Specialty Care Hospital Costs Referral Costs NonReferralCosts Admin. Rx (B) Prescription Rx (D) “Breadth” of Risk

  14. Barriers to ACOs/Integration • Knowledge and skills needed to be successful • Inadequacy of current payment incentives and up-front costs • Anti-trust laws and other regulations • Private payer concerns about ACO market power • Physician/hospital cultural and governance issues

  15. How did this book come about? • Delivery system reform was on the horizon • There was a need to collect and organise the best thinking about how DSR might change the relationships between physicians and hospitals • Meanwhile hospitals were acquiring physicians • There was/is a need to show the central role of physician leadership in reformed health care delivery systems

  16. Chapter 11:What needs to happen next?

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