Hospital Strategies to Support Accountable Care
Source: AMN Healthcare, Inc. – March 2, 2011
By: Debra Wood, RN, Contributor
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Aiming to improve Medicare patient outcomes while reducing unnecessary costs, the Affordable Care Act, passed in 2010, includes incentives, such as encouraging creation of accountable care organizations (ACOs), to enhance quality and increase value.
“ACO is the acronym of the decade,” said Eric Mueller, president of the healthcare consulting firm WPC Services in Brentwood, Tenn. “It’s an evolution of the HMO. The industry was happy with the cost containment aspects of an HMO, but patients were very unhappy.”
The government is addressing that, allowing Medicare beneficiaries to chose their providers, whether or not the physician, hospital or agency are members of the ACO to which they are assigned.
“That raises questions about how the ACO will be accountable,” said Mueller, adding that ACOs will have to gain patients’ trust that they are getting better care at a reduced cost, something he calls “a tough sell.”
Each ACO will assume responsibility for the quality, cost and overall care of about 5,000 people. Participating ACOs, meeting specified quality performance standards, will be eligible to receive a share of any savings if the cost of care expended on those beneficiaries is less than a predetermined benchmark amount.
To make that work, hospitals and physicians will need to start thinking of each other as partners, said Ron Wince, CEO and president of Guidon Performance Solutions in Phoenix. He said hospitals have voiced concern about how they create the processes and tactical solutions necessary to succeed with ACOs.
“Hospitals will have to focus on connecting with physicians, either hiring them or affiliating with independent practices,” said Walt Zywiak, principle researcher at CSC in Waltham, Mass. “They will be sharing risks and rewards. They also will have to come up with really good ways of sharing patient data and coordinating clinical workflows.”
The Centers for Medicare & Medicaid Services (CMS) plans to establish the program by January 1, 2012. The agency will hold a listening session to hear from stakeholders this summer and will provide details about the shared savings program this fall.
Many hospital officials and other providers are turning their thoughts to how they will overcome the financial, quality, technology and cultural barriers to successful implementation of ACOs.
“There is a tremendous amount of interest, but it’s a matter of preparing for an uncertain future,” said Mueller, adding that hospitals are proceeding with caution. He recommended that whatever changes occur, hospitals proceed in a way that allows flexibility.
“I don’t think there is a healthcare organization in the country that is not talking about getting ready for accountable care organizations,” added Rod Fralicx, vice president of leadership practices for healthcare at Hay Group in Chicago.
Quality concerns
“Hospitals will need to focus on promoting high-quality, coordinated, patient-centered care, which will improve the patient experience and allow for a reduction in avoidable readmissions,” said Scott A. Berkowitz, MD, MBA, a fellow in cardiology and geriatrics at the Johns Hopkins University School of Medicine in Baltimore.
In February, Berkowitz and Johns Hopkins Medicine Dean and CEO Edward D. Miller, M.D., published a paper in the New England Journal of Medicine, outlining lessons learned about ACOs at the academic medical center.
Quality will need to flow across the continuum, with a greater focus on transitions in care, such as home care seamlessly integrating with other providers. That will require robust electronic medical records accessible in different settings. Fralicx said most hospitals do not have that capability now and are looking for the capital to invest in such systems.
“There are competing priorities for the IT (information technology) resources to become more integrated,” Wince said.
Technology upgrades
Technology systems also will have to be able to measure and understand the outcomes and what interventions affect someone’s health, Mueller said.
In addition to electronic medical records (EMRs), hospitals will need to integrate case management and disease management applications and clinical decision support tools, Zywiak said.
“Keeping people well will be really important,” Zywiak said. “Telemedicine will play a bigger part, and hospitals will have to start linking it with other systems.”
Personal health records will become tools that allow patients to track their own self-care and monitor changing vital signs or lab results, while business intelligence systems will allow ACOs to pick up on people who are starting to run into trouble before they need inpatient care.
Financial aspects
Rather than volume, Zywiak explained, organizations will be evaluated and paid based on outcomes.
The legislation allows for various payment models, including partial capitation, in which the ACO would be at risk for some Medicare-covered services, Berkowitz said. Hospitals will need to reach out with prevention efforts, not waiting for covered beneficiaries to need an admission.
“With patients and consumers in better positions about where they get their care, we need to start making them happy,” said Zywiak, who anticipates competition will increase.
Cultural challenges
“Culture is one of the biggest challenges,” said Fralicx. “One of the keys to making this work is involving the physicians. Make no mistake: unless physicians are involved in leading these efforts, it’s not going to happen.”
Hospitals will have to assign roles and change policies, Fralicx added. They will hire more physician leaders who other doctors respect, and hospitals will need to provide leadership development programs.
Since physicians are not generally trained to work in teams, they must learn how to bring people along and coach others on the team. To change their behavior, Fralicx said, someone will have to prove that ACOs will produce desired goals.
“Physicians really care about the patient and quality of care they deliver and tend to go along with change that will get better outcomes, but you have to be able to prove it,” Fralicx said.
“It’s a culture shock,” said Zywiak, agreeing that ACOs will function much differently than the current system. He anticipates even hospitals and physicians not planning to start an ACO will be swept up by changes in the health delivery environment.
Wince indicated the cultural changes will take a long time, and if not successful, can doom the ACO.
“It’s overwhelming, the entire idea of trying to take what was traditionally a siloed, functional mindset to take care of my four walls and now broaden that and be concerned about upstream and downstream relationships,” Wince said. “People are concerned about the process side, the technology side, and how they change their organizational mindset to be more collaborative.”
All contents © 2011 AMN Healthcare, Inc. All Rights Reserved.
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