ACOs from a Primary Care Perspective

1. ACOs from a Primary Care Perspective Robert A. Kent, D.O. President, Unity Health Network

2. About Me • President, Unity Health Network • President/CEO, Summa Western Reserve Hospital • President, Western Reserve Health System (PHO) • President, Premiere Medical Resources (MSO)

3. Objectives • Understand the ACO model. • Understand the implications from a primary care physician (PCP) perspective. • Consider the resources involved in transformation of PCP practices. • Understand incentives and consider structure of successful models.

4. ACOs: Introduction • ACOs have been compared to the unicorn: we all know what they are and read about them in story books, but no one has actually seen one. • This new trend in delivering services offers healthcare providers financial incentives to provide improved quality care to Medicare beneficiaries while minimizing healthcare costs.

5. ACOs: Background • An ACO is a network of healthcare providers that share responsibility for providing care to patients. In the new law, an ACO would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years. • The government began receiving its initial round of applications for the ACO Shared Savings Program in January 2012.

6. ACOs: Formation • Existing large multispecialty physician groups can become an ACO on their own by networking with neighboring hospitals. • Hospital systems are scrambling to buy up physician practices with the goal of becoming ACOs that directly employ the majority of their providers. • Because hospitals usually have access to capital, they may have an easier time than doctors in financing the initial investment required by an ACO.

7. ACOs: Consolidation • Many health care economists fear that the race to form ACOs could have a significant downside: hospital mergers and provider consolidation. • As hospitals position themselves to become integrated systems, many are joining forces and purchasing physician practices, leaving fewer independent hospitals and doctors.

8. ACOs: Antitrust • Greater market share could give these health systems more leverage in negotiations with insurers, which could drive up health costs. • No clear direction from FTC on antitrust issues surrounding ACOs.

9. ACOs: Headlines

10. ACOs: Primary Care • A lot of focus on primary care physicians– all ACOs are required to have primary care doctors (membership attribution). • Primary Care Physician Shortage: Overall, the PPACA coverage expansions are predicted to increase the shortage of primary care physicians from approximately 25,000 to 45,000 by 2020.

11. Primary Care Incentives Source: Carrier, E., Yee, T. and Stark, L. (2012) Matching Supply to Demand: Addressing the U.S. Primary Care Workforce Shortage. The National Institute for Healthcare Reform

12. Primary Care

13. ACOs: Participation • The first 27 Shared Savings Program ACOs were announced in early April. • This brings the total number of organizations participating in Medicare shared savings initiatives as of April 1 to 65 • Includes the 32 Pioneer Model ACOs and six Physician Group Practice Transition Demonstration organizations.

14. ACOs: Shared Savings • Under the proposed rule for the shared savings program, a very small amount of ACO savings was passed onto the ACO. Most was proposed to be retained by CMS. • Many large healthcare systems spoke out and opted not to participate in the Medicare ACO program. • The final rule included an increase in the amount of savings passed onto the ACO, but is it enough incentive to make providers participate?

15. HealthCare Spending Together, Hospital and Physician services represent 51% of total Healthcare Spending

16. ACOs: Where will Savings Come From? • Economic theory would say that the majority of savings can be attained from hospital services, i.e. by keeping patients healthier and out of the hospital. • 31% of total spending is on hospital services, which represents more of the healthcare dollar than any other service. • PCPs should be primary driver of transforming care and working toward savings– remember, patients are attributed based on their PCP.

17. ACOs: PCP Responsibilities • Become the driver and “coordinator” of patients’ healthcare. • Transform to models such as Patient Centered Medical Home (PCMH) in order to better manage population healthcare. • Requires infrastructure to improve quality such as • Reminders for preventive services • Follow-up when tests not completed • Data sharing and conferencing with specialists • Improved management of chronic illnesses

18. ACOs: PCP Responsibilities • Evolve from “fee-for-service” payment to “payment for value” or “payment for quality”. • PCPs transition from “manufacturing medicine” to leading and directing the healthcare team. • Likely increased usage of physician extenders, team conferences, shared visits.

19. How do PCPs Succeed under these Models? • We know that “ACOs” will share in savings, but how are those revenues shared with PCPs and other providers? • ACO determines how those savings will be allocated. • Structure and make-up of ACO will determine how PCPs are impacted. • Close collaboration across healthcare providers is necessary.

20. ACOs: Structure/Shared Savings Models Hospital Directed Model Physician Directed Model

21. ACOs: Structure/Shared Savings Models • PCPs should strongly consider the type of ACO model that they enter into. • Hospitals need PCPs and should work to align incentives to engage PCPs. • PCPs can only belong to one ACO.

22. ACOs: Structure/Shared Savings Models • PCPs have the most responsibility in transforming healthcare delivery into a more accountable model where savings can be realized. • Hospitals will likely lose volume as a result of transition (if the goal of keeping patients out of the hospital is met). • Finding a balance where both parties can “win” will be a challenge, but key to success.

23. Practice Transformation • In order to realize savings, PCPs will need to transform their practice. • Patient Centered Medical Home (PCMH) is the “name” that has been given to this idea of transformation. • Four core components to transformation. Source: AAFP, 2012

24. Practice Organization • An organized practice is one that exercises disciplined financial management, creates strong and rewarding relationships between practice staff and relies on clinical systems that support the delivery of  high-quality care essential to the PCMH.

25. Practice Organization • Rigorous financial management is essential. Practices need to: • Budget for forecasting and management decisions. • Contract with health plans from a selective and informed position. • Manage the practice’s cash flow. • Stay on top of accounts receivable. • Many physician practices do not have the resources or expertise to perform these functions. Hospitals, MSOs and other entities can serve as a resource.

26. Practice Organization • PCPs will need to rely on data to transform their practice. • Recent rise in implementation of electronic systems should help with data availability. • PCPs are accustomed to insurance companies providing them data based on claims information and attempting to direct care. • This is the opportunity for PCPs to work collectively to improve quality and efficiency with their own data.

27. Health Information Technology • EHR and e-Rx systems are a challenge to implement but are integral to successful practice transformation. • Physicians must be open to change. • Clinical quality measures should be physician designed.

28. Health Information Technology • EHRs contains tools, if used, that can help improve healthcare quality and efficiency: • Medication interaction checking • Allergy checking • Templates to guide evidenced-based treatment • Condition-specific templates to collect clinical data • Alerts when parameters are out of goal range • Registries • Referral tracking • Lab result tracking

29. Quality Measures • Information systems are only the first step to adequate data management. • The data captured from clinical information systems must be used to: • Establish core performance measures • Collect data for better clinical management • Analyze the data for quality improvement • Map processes to identify efficiencies • Discuss best practices

30. Patient Experience • Primary care culture will need redesigned. • Patients demand healthcare delivered in a different manner from today’s structure. • PCPs need to embrace: • Same day appointments • Email • Web portal for Rx, appointments, or information • Non-visit based care and support

31. Conclusions • PCPs need to drive healthcare transformation. • Significant practice and cultural changes involved in the transition from “manufacturing medicine” to “leading the healthcare team”. • PCPs will need resources and education on how to make this transition.

32. Conclusions • PCPs will continue to be in high demand. • PCPs are in the best position to generate healthcare savings, however, they must be very careful about the ACO relationship that they choose. • Understand the structure and how savings are shared. • Make educated, well thought out decisions. • Ask questions. • Hospitals need to understand how to engage PCPs and create “win-win” incentives in order to successfully manage healthcare together.

34. Questions