PODCAST: Healthcare Stocks, Investing & IPOs?

By Eric Bricker MD

Healthcare Stock and IPO Investing Can Be Confusing. The Story of Privia Health is a Good Case Study in Understanding the Underlying Economics in Healthcare Investing:

CITE: https://www.r2library.com/Resource/Title/0826102549

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CASH FLOW ANALYSIS: Real Life ACO Accounting Example

ACCOUNTABLE CARE ORGANIZATION EXAMPLE

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BY DR. DAVID EDWARD MARCINKO MBA CMP®

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What is an ACO?

ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.

When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves for the Medicare program.

Citation: https://www.r2library.com/Resource/Title/0826102549

Case Model

Now, suppose that in a new Accountable Care Organization [ACO] contract, a certain medical practice was awarded a new global payment or capitation styled contract that increased revenues by $100,000 for the next fiscal year. The practice had a gross margin of 35% that was not expected to change because of the new business. However, $10,000 was added to medical overhead expenses for another assistant and all Account’s Receivable (AR) are paid at the end of the year, upon completion of the contract.

Cost of Medical Services Provided (COMSP):

The Costs of Medical Services Provided (COMSP) for the ACO business contract represents the amount of money needed to service the patients provided by the contract.  Since gross margin is 35% of revenues, the COMSP is 65% or $65,000.  Adding the extra overhead results in $75,000 of new spending money (cash flow) needed to treat the patients. Therefore, divide the $75,000 total by the number of days the contract extends (one year) and realize the new contract requires about $ 205.50 per day of free cash flows.

Assumptions

Financial cash flow forecasting from operating activities allows a reasonable projection of future cash needs and enables the doctor to err on the side of fiscal prudence. It is an inexact science, by definition, and entails the following assumptions:

  • All income tax, salaries and Accounts Payable (AP) are paid at once.
  • Durable medical equipment inventory and pre-paid advertising remain constant.
  • Gains/losses on sale of equipment and depreciation expenses remain stable.
  • Gross margins remain constant.
  • The office is efficient so major new marginal costs will not be incurred.

Physician Reactions:

Since many physicians are still not entirely comfortable with global reimbursement, fixed payments, capitation or ACO reimbursement contracts; practices may be loath to turn away short-term business in the ACA era.  Physician-executives must then determine other methods to generate the additional cash, which include the following general suggestions:

1. Extend Account’s Payable

Discuss your cash flow difficulties with vendors and emphasize their short-term nature. A doctor and her practice still has considerable cache’ value, especially in local communities, and many vendors are willing to work them to retain their business

2. Reduce Accounts Receivable

According to most cost surveys, about 30% of multi-specialty group’s accounts receivable (ARs) are unpaid at 120 days. In addition, multi-specialty groups are able to collect on only about 69% of charges. The rest was written off as bad debt expenses or as a result of discounted payments from Medicare and other managed care companies. In a study by Wisconsin based Zimmerman and Associates, the percentages of ARs unpaid at more than 90 days is now at an all time high of more than 40%. Therefore, multi-specialty groups should aim to keep the percentage of ARs unpaid for more than 120 days, down to less than 20% of the total practice. The safest place to be for a single specialty physician is probably in the 30-35% range as anything over that is just not affordable.

The slowest paid specialties (ARs greater than 120 days) are: multi-specialty group practices; family practices; cardiology groups; anesthesiology groups; and gastroenterologists, respectively. So work hard to get your money, faster. Factoring, or selling the ARs to a third party for an immediate discounted amount is not usually recommended.

3. Borrow with Short-Term Bridge Loans

Obtain a line of credit from your local bank, credit union or other private sources, if possible in an economically constrained environment. Beware the time value of money, personal loan guarantees, and onerous usury rates. Also, beware that lenders can reduce or eliminate credit lines to a medical practice, often at the most inopportune time.

4. Cut Expenses

While this is often possible, it has to be done without demoralizing the practice’s staff.

5.  Reduce Supply Inventories

If prudently possible; remember things like minimal shipping fees, loss of revenue if you run short, etc.

6. Taxes

Do not stop paying withholding taxes in favor of cash flow because it is illegal.

Hyper-Growth Model:

Now, let us again suppose that the practice has attracted nine more similar medical contracts. If we multiple the above example tenfold, the serious nature of potential cash flow problem becomes apparent. In other words, the practice has increased revenues to one million dollars, with the same 35% margin, 65% COMSP and $100,000 increase in operating overhead expenses.  Using identical mathematical calculations, we determine that $750,000 / 365days equals $2,055.00 per day of needed new free cash flows!  Hence, indiscriminate growth without careful contract evaluation and cash flow analysis is a prescription for potential financial disaster.

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Bundled Payment Model Success Unaffected by Type of Participation

BY HEALTH CAPITAL CONSULTANTS, LLC

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Bundled Payment Model Success Unaffected by Type of Participation


Historically, Medicare has offered value-based payment models to healthcare organizations on both a voluntary and a mandatory participation basis. Because voluntary participants could self-select into programs to reduce spending, it was assumed that they achieved greater savings than mandated participants, but until recently, no data had tested this.

However, a June 2021 study in the Journal of the American Medical Association (JAMA) found no difference in risk-adjusted episodic spending between voluntary and mandatory payment model participants. (Read more…) 

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Organizational Economics and Physician Practices

N.B.E.R.

By James B. Rebitzer & Mark E. Votruba

Economists seeking to improve the efficiency of health care delivery frequently emphasize two issues: the fragmented structure of physician practices and poorly designed physician incentives. This decade old paper analyzes these issues from the perspective of organizational economics.

We begin with a brief overview of the structure of physician practices and observe that the long anticipated triumph of integrated care delivery has largely gone unrealized. We then analyze the special problems that fragmentation poses for the design of physician incentives. Organizational economics suggests some promising incentive strategies for this setting, but implementing these strategies is complicated by norms of autonomy in the medical profession and by other factors that inhibit effective integration between hospitals and physicians. Compounding these problems are patterns of medical specialization that complicate coordination among physicians.

We conclude by considering the policy implications of our analysis – paying particular attention to proposed Accountable Care Organizations.

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READ HERE: https://www.nber.org/papers/w17535

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Next-Generation ACO Model to End in 2021

Next Generation ACO Model to End in 2021

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Many accountable care organizations (ACOs) received disappointing news on May 21, 2021, when the Centers for Medicare & Medicare Services (CMS) announced that it would not be extending the Next Generation ACO (NGACO) model for 2022.

After five years and a dwindling number of participating ACOs, experts were split on whether or not CMS should keep the model in place for another year. On one hand, stakeholders have argued for the NGACO model’s extension until it can be replaced with or integrated into another program; howowever, others asserted that resources could not be properly invested with only one more year left in the program. (Read more…)

Citation: https://www.r2library.com/Resource/Title/0826102549

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PODCAST: “Real ACOs Haven’t Been Tried Yet!”

What is an Accountable Care Organization?

DEFINITION: ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings.

Citation: https://www.r2library.com/Resource/Title/0826102549

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QUESTION: What happens when you’re a healthcare policy wonk and the pilot study for your pet program has failed miserably? 

ANSWER: You declare “Success!” in the editorial pages of the New England Journal of Medicine and demand that the program become nationwide and mandatory. I kid you not.  This is exactly what happens.

Thankfully, Anish Koka is vigilant and explains the blatant obfuscations and manipulations that the central planners engage in to have their way.

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And so, In this video, Anish and colleague Michel Accad, MD, will reveal the machinations, take the culprits to task, and discuss pertinent questions regarding health care organization: 

  • Does “capitation” reduce costs? 
  • Do employed physicians necessarily utilize fewer resources? 
  • What happens when a HMO and a traditional fee-for-service health system operate side-by-side in a community?
BMC and Accountable Care - Boston Medical Center

Enjoy!

PODCAST: http://alertandoriented.com/real-acos-havent-been-tried-yet/

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A Brief History of Accountable Care Organizations

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ACOs to the Rescue – Not!

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By Dr. David E. Marcinko MBA CMP®

http://www.CertifiedMedicalPlanner.org

According to the Health Dictionary Series of administrative terms; valuation expert and colleague Robert James Cimasi MHA, ASA, AVA CMP of www.HealthCapital.com; an ACO is a healthcare organization in which a set of providers, usually large physician groups and hospitals, are held accountable for the cost and quality of care delivered to a specific local population. ACOs aim to affect provider’s patient expenditures and outcomes by integrating clinical and administrative departments to coordinate care and share financial risk [personal communication]

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Enter the PP-ACA

Since their four-page introduction in the PP-ACA of 2010, ACOs have been implemented in both the Federal and commercial healthcare markets, with 32 Pioneer ACOs selected (on December 19, 2011), 116 Federal applications accepted (on April 10, 2012 and July 9, 2012), and at least 160 or more Commercial ACOs in existence today.

Federal Contracts

More recently, Donna Marbury writing in Medical Economics, revealed that Federal ACO contracts are established between an ACO and CMS, and are regulated under the CMS Medicare Shared Savings Program (MSSP) Final Rule, published November 2, 2011.  ACOs participating in the MSSP are accountable for the health outcomes, represented by 33 quality metrics, and Medicare beneficiary expenditures of a prospectively assigned population of Medicare beneficiaries. If a Federal ACO achieves Medicare beneficiary expenditures below a CMS established benchmark (and meets quality targets), they are eligible to receive a portion of the achieved Medicare beneficiary expenditure savings, in the form of a shared savings payment.

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Commercial Contracts

Commercial ACO contracts are not limited by any specific legislation, only by the contract between the ACO and a commercial payer. In addition to shared savings models which may not be in effect for another 3-5 years, Commercial ACOs may incentivize lower costs and improved patient outcomes through reimbursement models that share risk between the payer and the providers, i.e., pay for performance compensation arrangements and/or partial to full capitation.

Although commercial ACOs experience a greater degree of flexibility in their structure and reimbursement, the principals for success for both Federal ACOs and Commercial ACOs are similar. And, nearly any healthcare enterprise can integrate and become an ACO, larger enterprises, may be best suited for ACO status.

Medicare Contracts

Assessment

Larger organizations are more able to accommodate the significant capital requirements of ACO development, implementation, and operation (e.g., healthcare information technology), and sustain the sufficient number of beneficiaries to have a significant impact on quality and cost metrics.

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How Using a ‘Scorecard’ Can Smooth Your Hospital’s Transition to a Population Health-Based Reimbursement Model

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Transforming Business and Operating Models

[By Russ Richmond MD]

Russ Richmond MDDr. Marcinko and ME-P,

The US healthcare system’s myriad of problems again seized the headlines recently with the release of an Institute of Medicine report, which found that 30 percent of healthcare spending in 2009 – around $750 billion – was wasted. Citing the “urgent need for a system-wide transformation,” the report blamed the lack of coordination at every point in the system for the massive amount of money wasted in healthcare each year.

One critical area in particular need of transformation is the business and operating model that drives healthcare in the US. There is broad-based agreement across the healthcare industry that the current fee-for-service model does not work, and needs to be changed. The sweeping health reform law enacted in 2010 included a range of more holistic, value-based payment structures that are now being referred to as “populatiobn health.”

Population health is an integrated care model that incentivizes the healthcare system to keep patients healthy, thus lowering costs and increasing quality. In this value-based healthcare approach, patient care is better coordinated and shared between different providers. Key population health models include:

  • Bundled/Episodic Payments – This is where provider groups are reimbursed based on an expected cost for a clinically defined episode of care.
  • Accountable Care Organizations (ACOs) – This new model ties provider reimbursement to quality and reduction in the total cost of care for a population of patients.

Both of these care approaches aim to reduce care utilization through prevention programs, case/disease management and integrated care coordination, including better information transfer across different providers. Equally important, they are focused on reducing the cost of treatment by managing physician misuse and overuse and driving volumes to lower cost settings of care.

The shift to coordinated care is rapidly picking up steam across the country. According to a recent American Hospital Association survey of hospital chief executives, some 98 percent of respondents agree that hospitals should investigate and implement population health management strategies. Anecdotally, the hospital leaders participating in the survey indicated that it is not “if” they will have to pursue these risk sharing strategies, but “when.”

Even with healthcare providers now realizing that migrating to a population health approach is inevitable, there is still significant confusion about the crucial details of implementing these models. Hospital managements are worried about being left behind in the headlong rush toward adoption of ACOs and other value-based reimbursement models. Against this backdrop, healthcare providers now confront a growing list of urgent questions:

  • Which of the emerging population health-based care models is right for our hospital?
  • How much risk is prudent for our hospital with these new reimbursement models?
  • Should we move to an ACO, or is that too big of a jump for our hospital?
  • How does our management team even start to plan effectively to make the shift to a prevention-focused care and reimbursement model? Where do we begin?
  • What is the optimal time-frame for making these changes?

Using a “Scorecard” to Assess Your Population Health Readiness

So, how do hospital leaders break through the confusion and uncertainty to put their institutions on a clear path toward a successful population health-based future?

An effective way for hospitals to manage this process is by using a “scorecard” based on industry benchmarks to assess their relative readiness for – or current performance in – adopting a value-based reimbursement model.

The scorecard contains metrics that quantify the financial and volume impact on a hospital when it transitions to a population health-based reimbursement model. These metrics can be grouped into a range of key categories – i.e., top 5% high-cost patients, non- urgent emergency department visits, avoidable admissions, readmissions, physician overuse, outpatient procedures performed in lower cost settings, and proportion of one-day inpatient procedures done as outpatient. Hospital managements can address each of these categories in order to reduce per-member, per-month costs of care.

For example, new risk-sharing models have created more impetus for physicians and health systems to work together to prevent avoidable admissions. In 2011 alone, potentially avoidable admissions accounted for 10-14 percent of total inpatient admissions for most hospitals. With the growing push to reduce avoidable admissions, an average 300-bed hospital could potentially lose $9.5 million in annual contribution, as they would no longer obtain volume/revenue from these avoidable hospitalizations. On the flip side, if a hospital doesn’t prevent avoidable hospitalizations, they would be penalized for these unnecessary visits.

The emerging population health landscape has also resulted in hospitals experiencing growing competition from lower cost settings such as Ambulatory Surgery Centers (ASCs). Over the past decade, the number of ASC operating rooms has doubled. Historically, ASCs and hospitals shared in the growth of common procedures such as shoulder arthroscopy. But, with 60 percent of hospitals now within a 5 minutes drive from an ASC, and given the industry’s accelerating shift to population health models, ASC’s price advantage puts hospitals at a competitive disadvantage.

The scorecard gives hospital executives the ability to accurately assess the financial and volume impacts of population health-based reimbursement models to their institution. This is critical in identifying opportunities for improvement, setting priorities, and making key strategic and operational decisions that will help guide a hospital through periods of great change and uncertainty.

Population-Health

Key Principles for Implementing Population Health

Through our work helping hospitals to prepare for a coordinated care future through strategic assessment tools like scorecards, we have identified three key principles that help to drive a successful transition:

1. First, the entire organization needs to embrace change – To engineer a successful shift to one of the new risk sharing business models, your hospital’s management team – indeed the entire organization – will need to embrace change. The fact is, much of that change is already happening right now, so it makes sense to manage it in a way that works best for your hospital’s specific needs and culture. The scorecard process will help your senior management team to clarify goals, assumptions and priorities around where the hospital needs to go, and how best to get there, in the population health future.

2. Plan for “evolutionary” change – Moving to a new value-based health system need not involve a wrenching “revolution” for your hospital. Indeed, jumping headfirst into the unknown is a recipe for disaster for most providers. Taking well planned, incremental steps is usually the best and least disruptive way to evolve to a fundamentally different reimbursement and care model like population health. For example, some hospitals are starting with their own employee populations to experiment with ACO-like care models.

3. Learn to love data – It’s an article of faith in management that you can’t improve it if you can’t measure it. At the core of the population health scorecard assessment approach is the imperative to collect the right data, analyze them, and then continually measure your actions and results as your hospital travels along the population health journey. Data are essential for effective decision making, and also for implementing a new risk sharing reimbursement model at your institution.

Implementing the fundamental changes necessary to meet the historic challenges now confronting healthcare providers has been compared to swapping out the engines in a jet plane – while it is still airborne! As daunting as that metaphor sounds, hospitals can successfully evolve to the population health-based future if they take the right steps to plan for the changes and implement them in a methodical, data-driven fashion.

Careful planning and practical assessment tools like the scorecard help hospital leaders make smarter strategic decisions around value-based healthcare.

About the Author

Dr. Russ Richmond is the CEO of Objective Health, part of the global McKinsey healthcare practice, which serves hundreds of public- and private-sector organizations worldwide. He is passionate about the use of data to manage health and to improve healthcare performance. Dr. Richmond holds an MD from the University of Cincinnati and a BS in Biology from the University of Michigan.

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ACOs Defined

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What it is – How it works?

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On ACO Business Model Savings?

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Case Report From Wellmark’s Blue Cross Blue Shield ACO Model

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ACOs

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On Healthcare Provider’s Use of Technology

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Most Important Tool for Effective Communications in ACO

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MD Technology

 

Assessment

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Take the Accountable Care Organization 2013 e-Poll

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TAKE THE POLL

www.MCOL.com and Accountable Care News are conducting the 2013 Accountable Care e-Poll. Please respond by 5 PM Pacific, Friday December 13th, 2013. Results will be emailed to participating respondents upon request.

e-Poll

You can take the e-poll by going to: http://aco2013.questionpro.com/
The e-poll asks the following questions:

  1.  Please indicate your perspective:
  2. Is your organization involved with ACOs- including development, operation, or contracting arrangements?
  3. When would you estimate ACOs would have a material impact in your marketplace:
  4. If ACO Medicare pilots are not ultimately successful, will that cause commercial and Medicaid ACO arrangements to generally fail as well?
  5. What will be the impact of the newly enrolled individuals coming into the system as a result of Medicaid expansion and the health insurance exchanges?
  6. How confident are you that ACOs will actually generate the necessary savings?
  7. Will bundled payments prove to be a more effective delivery and payment reform model than ACOs?

Advocacy

Assessment

Again, to take the e-poll now, go to: http://aco2013.questionpro.com/

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Hospital Information Systems and the PP-ACA

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Extension of Hospital Information Systems Beyond the Hospital

By Brent A. Metfessel MD

Dr. MetfesselThe Patient Protection and Affordable Care Act (ACA), affirmed after the November 7th 2012 presidential election, includes a number of policies and potential projects with the aim of improving quality of care while reducing costs – or at least greatly slowing increases in health care costs from year to year.

Included in this effort are CMS payment incentives for providers that can show care patterns that meet the goals of high quality, cost-efficient care.

HHS and ACOs 

On March 31, 2011, the Department of Health and Human Services (HHS) released a set of proposed new rules to aid clinicians, hospitals, and other health facilities and providers to improve coordination of care for Medicare patients using a model known as Accountable Care Organizations (ACOs). ACOs that are shown to lower health care cost growth while meeting CMS quality benchmarks, including measures of patient/caregiver experience of care, care coordination, patient safety, preventive health, and health of high-risk populations, will receive incentive payments as part of the Medicare Shared Savings Program.

But, in some proposed models ACOs may also be held accountable for shared losses.

Care Co-ordination

Coordination of care means that hospitals, physician offices, and other providers have a complete record of patients’ episodes of care, including diagnostic tests, procedures, and medication information.  This potentially would decrease extra costs from unnecessary duplication of services as well as reducing medical errors from incomplete understanding of the patients’ illness histories and medical care provided.

It is also believed that better coordination of care may prevent 30-day hospital readmissions (which occur for nearly one in five Medicare discharges), since needed post-discharge care would be more readily obtainable with more aggressive care coordination.

Medicare patients in ACOs, however, would still be allowed to see providers outside of the ACO, and proposals exist to prevent physicians in ACOs from being penalized for patients with a greater illness severity or complexity.

According to a CMS analysis, ACOs may result in Medicare savings of up to $960 million over three years.  Although the Affordable Care Act’s ACO provisions primarily target Medicare beneficiaries, private insurers are also beginning to create care models based on the accountable care paradigm.  Insurers could offer similar incentives to the ACO model described above, and which might include features such as performance based contracting or tiered benefit models that favor physicians who score highly on care quality and cost-efficiency measures.

Balance

Only the Beginning

ACOs and other implementations of the accountable care paradigm, however, are in their beginning stages, with a number of pilots around the country currently being conducted to more fully evaluate the concept, and there still is some controversy over the best way to achieve these goals. It is a continuing balancing act.

The critical point here is that in all likelihood, with the advent of the ACA and other initiatives, stemming the upward tide of medical cost increases becomes an even higher priority, and no matter what the final models will look like, the success of any of the models requires a high level of care coordination – requiring information systems that are fully compatible and allow seamless and errorless transmission of information between sites of service and the various providers that can be involved in patient care.

More:

  1. Ground Breaking Book Explains Why Accountable Care Organizations May Be the Answer the Health Care Industry Has Been Seeking!
  2. Evaluating ACOs at Mid-Launch
  3. How Using a ‘Scorecard’ Can Smooth Your Hospital’s Transition to a Population Health-Based Reimbursement Model
  4. Doubting the Accountable Care Organization B-Model

Assessment

Thus, wherever a patient goes for care, all the information needed to provide high-quality and cost-efficient care is immediately available.

References

Feds Take Critical Look at Meaningful Use Payments”, InformationWeek Healthcare, October 24, 2012.  http://www.informationweek.com/healthcare/policy/feds-take-critical-look-at-meaningful-us/240009661 [Accessed on November 2, 2012].

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Ground Breaking Book Explains Why Accountable Care Organizations May Be the Answer the Health Care Industry Has Been Seeking!

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Book Reviews, with Testimonial, by ME-P Founding Publisher Dr. David Edward Marcinko MBA CMP®

PRESS RELEASE!

August 23, 2013CRC Press / Productivity Press is pleased to announce the publication of  Accountable Care Organizations: Value Metrics and Capital Formation authored by nationally recognized healthcare expert, Robert James Cimasi. This dynamic book explores the historical background and evolution of the highly anticipated ACO model which is rapidly expanding since its adoption as part of the Affordable Care Act, commonly referred to as Obama Care. The book describes the basis for the development of value metrics and capital formation analyses that are foundational to assessing capacity for change in healthcare organizations considering the development of an ACO, as well as, the current efficacy of the model.

Book Reviews

“Bob Cimasi has done it again. As a thought leader in contemporary healthcare matters, his new book, Accountable Care Organizations: Value Metrics and Capital Formation, establishes and explains, in plain terms, the operational and financial DNA and genomic construct and understanding for any organization considering the development and operations of an ACO…a must read and resource for any healthcare industry executive.”

-Roger W. Logan, MS, CPA/ABV, ASA, Senior Vice President of Phoenix Children’s Hospital

“Accountable Care Organizations is the first comprehensive text on capital formation and value metrics for this new healthcare business model… I can think of no one more qualified to write it than Bob Cimasi at Health Capital Consultants … it is destined to become a classic work … read, review, refer, and profit by this valuable resource.”

-Dr. David Edward Marcinko MBA CMP® of the Institute of Medical Business Advisors, Inc Atlanta, GA

“As both a healthcare management educator and as a consultant who has worked on health and professional services transactional advisory work for many years, I applaud the ambitious undertaking of Bob Cimasi’s latest book, Accountable Care Organizations: Value Metrics and Capital Formation. Cimasi’s description of the complex history and evolution of the US health system provides a useful framework for students and professionals who may lack a detailed background in the field. This should help them better understand both how we have arrived at the ACO approach, and how it might work. This addressing capital and valuation information is also uncommon in the literature on ACOs. It should provide a valuable contribution to the field, especially given that a some surveys of healthcare leaders have pointed to access to capital and to a lesser but still important degree, agreement on valuation, as concerns as they consider acquisitions, mergers, and other affiliations towards forming/joining ACOs or similar organizations to help deal with the changing reimbursement and competitive environment.”

-R. Brooke Hollis, MBA/HHSA, Executive Director, Sloan Program in Health Administration, Cornell University and Managing Member, Hollis Associates Acquisition Advisors, LLC

The book examines the Four Pillars of Value in the Healthcare Industry: regulatory, reimbursement, competition and technology in addressing the value metrics of ACOs, including requirements for capital formation, financial feasibility, and economic returns. It focuses the discussion of non-monetary value on a review of aspects of population health within the context of such objectives as improved quality outcomes and access to care. It also examines the positive externalities of the ACO model, including results for third parties outside the basic construct of the ACO contracts shared savings payments. The potential role and opportunities for consultants in assisting their provider clients in the consideration, development, implementation, and operation of an ACO are also discussed.

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Accountable Care Organizations

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About the Author:

Robert James Cimasi, MHA, ASA, FRICS, MCBA, AVA, CM&AA, CMP® is CEO of Health Capital Consultants (HCC), a nationally recognized healthcare financial and economic consulting firm headquartered in St. Louis, Missouri, since 1993. Cimasi has more than 30 years of experience in serving clients in over 45 states, with a professional focus on the financial and economic aspects of healthcare service sector entities including feasibility analysis and forecasting; valuation consulting and capital formation services; healthcare industry transactions including joint ventures, mergers, acquisitions, and divestitures; certificate-of-need and other regulatory and policy planning consulting; and, litigation support and expert testimony.

Mr. Cimasi has served for many years as faculty in both an academic and professional basis for continuing education courses, and he has provided testimony before federal and state legislative committees and has served as an expert witness in numerous court cases. He is a nationally known speaker on healthcare industry topics, the author of several books, including A Guide to Consulting Services for Emerging Healthcare Organizations (John Wiley & Sons, 1999), The U.S. Healthcare Certificate of Need Sourcebook (Beard Books, 2005), The Adviser’s Guide to Healthcare (AICPA, 2010), and Healthcare Valuation: The Financial Appraisal of Enterprises, Assets, and Services (John Wiley & Sons, 2013), as well as numerous chapters, published articles, research papers and case studies, and is often quoted by healthcare industry press.

 

UPDATE:
Top Five Videos Trending in The Last Month On HealthShareTV
  1. Accountable Care Directory 2014
  2. Achieving Quality in Accountable Care Organizations
  3. High-Performing Care Coordination in a Patient/Family-Centered Medical Home
  4. ‘Aetna’s Medicare Advantage Collaborative Initiatives’
  5. Aligning High Performance in Medication Safety to Improve Patient Outcomes and Reduce Readmissions

Source: HealthShareTV

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More on Patient Centered Medical Homes

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A Road to Patient Satisfaction?

The rise in the medical home concept started over the last six years has been driven by the growing shortage of primary care clinicians and the increase prevalence of chronic diseases.

And, medical home adoption has risen from 49 percent in 2006 to 79 percent in 2009 to 86 percent in 2012, according to 95 healthcare companies who completed the sixth annual Healthcare Intelligence Network survey on Patient Centered Medical Homes (PCMH).

The Survey

When asked in 2006, only 33 percent of respondents were trying to establish a medical home.

However, by 2012, 52 percent have established medical homes for their populations including 59 percent of existing medical homes are now or soon will be part of an accountable care organization (ACO). With the rise of patient centered medical homes, ACOs and other emerging healthcare delivery models, healthcare organizations will need to engage patients in ways that increase quality, reduce cost and improve their overall healthcare experience.

Assessment

Healthcare Intelligence Network also created the infographic shown below to accompany the survey highlighting following key areas in medical home adoption from 2006 to 2012:

  • Top three ways to educate and engage patients in the medical home
  • Barriers to patient centered medical home adoption
  • Time for medical home conversion
  • Climbing of patient satisfaction rates
  • Top health IT tools adoption

Conclusion

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The Increased Competition of Ambulatory Surgery Centers (ASCs) to US Hospitals

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The Competition Heats Up!

By Dr. David Edward Marcinko MBA CMP™

www.CertifiedMedicalPlanner.org

[Editor-in-Chief]

Over the last 10 years, Ambulatory Surgery Centers’ (ASCs) footprints have increased dramatically.

As hospitals and health systems accelerate towards population health/ global payment models, such as Accountable Care Organizations (ACOs), lower priced ASCs will become more critical competitors to hospitals.

Assessment

I acquired the Certificate-of-Need [CON], co-founded and operated an ASC for 15 years before sale in 2000 to a public company. My local hospital fought me tooth and nail. I likely would not do so, again, today!

Conclusion

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Evaluating ACOs at Mid-Launch

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Moving Forward but Challenges Ahead

[By ME-P Staff]

Accountable Care Organizations [ACOs] are generating considerable attention for their potential to improve the value of our health care spending through better coordination of care and new payment incentives that focus on quality and efficiency of care.

The Challenges

Yet, even as ACOs develop at a fairly rapid clip across the nation, they face substantial challenges.

For example, In this essay, Steven Lieberman reviews the ACO landscape in both the public and private sectors and examines the major obstacles confronting these emerging organizations, including limited tools for influencing patient choice, the need for immediate and sustained cost savings, and system-wide concerns about rising costs due to enhanced market power.

Assessment

Link: http://nihcm.org/images/stories/EV_Lieberman_FINAL.pdf

Conclusion

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ACO Opinion and Voting Poll

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Are Accountable Care Organizations Another Form of Medical Capitation Reimbursement?

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More Evidence of the Association between Hospital Market Concentration and Higher Prices and Profits

NIHCM Expert Voices in Health Care Policy

By James C. Robinson, PhD

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In this essay, Dr. James Robinson presents results from his latest work showing that the prices hospitals charge to private insurers for 6 common procedures are 30 to 50 percent higher when the hospital is located in a market where it faces less competition from other hospitals.

These findings add to the already substantial body of research showing that consolidation in hospital markets confers market power that enables hospitals to secure higher prices.

When seen in the context of current policies encouraging additional provider consolidation through accountable care organizations [ACOs], this work serves as an important reminder that ongoing vigilance of the potential anti-competitive effects of these new delivery systems is needed along with other measures to counteract growing market power of providers.

About the Author:

James C. Robinson, PhD is the Leonard D. Schaeffer Professor of Health Economics and Director, Berkeley Centerfor Health Technology, University of California, at Berkeley.

Conclusion

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Accountable Care Organizations are Here

The Final Federal Guidelines

By Garfunkel Wild PC

http://www.garfunkelwild.com

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The much anticipated final federal regulations on accountable care organizations (ACOs) were published on October 20th, 2011. The Affordable Care Act created ACOs to deliver seamless, high quality care to traditional fee-for-service Medicare beneficiaries while reducing the cost of care to those beneficiaries. If successful, ACOs will receive a portion of the shared savings they achieve for the Medicare program.

ACO Workgroup 

The Garfunkel Wild ACO Workgroup is in the process of analyzing these final regulations, and we will be hosting a webinar in the near future to discuss ACO participation and other ways providers can move towards collaborative care.

Final Regulations

In reviewing the final regulations, it is clear CMS took public comments to their proposed regulations seriously and made significant changes that should strengthen the ACO program. Some of these changes include:

  • Allowing ACOs to participate in an upside shared savings track (without being subject to downside losses) for the first three years of participation
  • Expanding the definition of participants eligible to form ACOs to include federally qualified health centers (“FQHCs”)
  • Reducing by about half the number of quality measures ACOs have to report
  • Permitting ACOs to share in first dollar saved once a minimum savings rate is achieved
  • Creating more flexibility for start dates for ACOs beginning in 2012
  • Removing EHR readiness as a condition of participation
  • Revising the process of assigning beneficiaries to ACOs from a pure retrospective process to a prospective process that includes retroactive adjustments

Assessment

Also published with the CMS final regulations were interim final regulations published by the Office of Inspector General addressing the waiver of the application of federal fraud and abuse laws; a final policy statement issued by the Federal Trade Commission and Department of Justice outlining the agencies’ antitrust enforcement policies for ACOs, and an IRS Fact Sheet regarding tax exempt organizations participating in the Medicare Shared Savings program.

Conclusion                

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The ACO Prescription?

Cure or Disease?

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Accountable Care Organizations are the ACA’s [Obamacare] answer to skyrocketing Medicare costs, but who wins besides the government? Doctors take on the financial risk, and patients could suffer as a result.

Here’s a look at how Accountable Care Organizations could affect the quality of healthcare in the near future. Brought to you by gplus.com

Conclusion

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