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

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“Real ACOs haven’t been tried yet!”

ON ACCOUNTABLE CARE ORGANIZATIONS

[By Staff Reporters]

What happens when you’re a healthcare policy wonk and the pilot study for your pet program has failed miserably?  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, colleague Mike Accad MD and Anish Koka are vigilant and explain the blatant obfuscations and manipulations that the central planners engage in to have their way.

LINK: “Real ACOs haven’t been tried yet!”

YOUTUBE: https://www.youtube.com/watch?v=_b6GPBUoCuo

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Value Based Insurance Design?

VBID – Epic Fail

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VBC via CMS

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A Medicare Shared-Savings Program Snapshot

CIRCA: ACOs 2020

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Alternative Medical Payment Models

ADOPTION RATES: FYI – 2018

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The Future of Accountable Care [A Podcast]

Collaborative ACOs

By Caravan Health

More than 80 percent of all accountable care organizations are too small to succeed. Because of their size, ACOs experience savings and losses of 10 – 20 percent, simply due to statistical variation in health care spending.

During this presentation a panel of industry leaders explore the groundbreaking model of Collaborative ACOs. They discuss the future of ACOs, and how health care organizations – through a collaborative ACO – can avoid taking unnecessary risk, increase shared savings, and sustainably manage their population health.

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http://www.healthsharetv.com/content/collaborative-acos-future-accountable-care

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Letters to Trump – Continue Focus on Value-Based Payment

Two Letters to Trump from Healthcare Leaders – Continue Focus on Value-Based Payment

By Robert James Cimasi MHA CMP™

Health Capital Consultants, Inc

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In December 2016 and January 2017, over 100 leading healthcare organizations sent two letters to President Donald Trump and Vice President Michael Pence lobbying the Trump Administration to continue the shift in healthcare reimbursement from volume-based to value-based payment models.
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The expansion of the number and scope of value-based reimbursement programs following the 2010 passage of the Patient Protection and Affordable Care Act (ACA) is in keeping with the national strategy regarding healthcare reimbursement in the landmark legislation; most notably the fourth priority established by the ACA, i.e., to “…improve Federal payment policy to emphasize quality and efficiency…
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However, in light of the criticism of many in the Trump Administration regarding value-based reimbursement models, most notably Tom Price, M.D., the Secretary of the U.S. Department of Health and Human Services (HHS), many healthcare delivery organizations felt compelled to advocate for continued implementation of such payment systems, and acted by sending the above referred letters to the new administration.
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Assessment
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This Health Capital Topics article summarizes the contents of those two letters received by the Trump Administration, and discusses how this advocacy fits into the current uncertainty surrounding healthcare reform. (Read more…) 

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Value Based Care [VBC] and Physician Performance?

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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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ME-P News Stories Wrap-Up for August 2015

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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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Thoughts on an Emerging Hybrid [Two-Tiered] Medical Payment Model

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The Changing Reimbursement Paradigm Shift

[By Dr. David Edward Marcinko MBA CMP™]

[By Prof. Hope Rachel Hetico RN MHA CPHQ CMP™]

David and HopeCurrent medical payment and reimbursement structures involve the submission and payment of medical CPT® coded claims.

So, some doctors feel they need to “up-code” to maximize revenue; or “down-code” for fear of having a claim denied.

Moreover, this pay-for-quantity model is slowly being relegated to the past in light of current P4P, ACO, and values based reimbursement models that favor modern payment-for-quality initiatives.

Tug-of-War System

Obviously, contradictory business goals bastardize the system into a payer versus provider tug-of-war, with patient care as a potential bargaining chip.

Instituting quality metrics should be included in this equation, and, a hybrid reimbursement model may be a viable option while integrating quality care metrics and reducing costs for all stakeholders.

A Two Tied System

This hybrid reimbursement system might use a two-tiered payment structure something like this:

  1. For the first payment, claims would be paid at hypothetical rate of 60% within one week of submission; partially decreasing office ARs, and favoring the time-value of money [TVM] equation.
  2. The second payment, consisting of the remaining zero to 40% of some total maximum allowable fee, is then paid quarterly. It would be based on scores like patient satisfaction, quality metrics, and stewardship of healthcare resources by analyzing a statistically valid sample of patient encounters taken from the electronic health record [EHR].

Green Dollars

Assessment

Such a hybrid payment system would remove unnecessary steps, like re-submitting claims and would lower the operational and administrative costs of healthcare claims processing.

These changes would decrease operational office costs and drive quality stewardship of the diminishing healthcare dollar.

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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].

Conclusion

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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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What’s Next for Healthcare Information Technology Innovation?

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A Video Panel Discussion

By Shahid N. Shah MS

Dr. David Edward Marcinko MBA

http://www.healthcareguy.com/

Shahid N. Shah MSIn Nashville a few weeks ago, at the Vanderbilt Healthcare Conference, I gave a short talk on a panel focused on the question “What’s next for healthcare information technology innovation?”

The Key Questions

The talk focused on answering a couple of key questions:

  • What does innovation in healthcare mean?
  • Where are the major areas in healthcare where innovation is required?

The Take-Aways

And it had a few key takeaways:

  • Understand health tech buyer fallacies
  • Understand PBU: Payer vs. Benefiter vs. User
  • Understand why healthcare businesses buy stuff so you can build the right thing

Assessment

My speaker deck is found below (if you’re reading this through a feed reader you should click into the blog so that it is visible). You can download the PDF here. After you’ve flipped through it, let me know what you think by dropping some comments below.

Editor’s Note: Mr. Shah is a ME-P thought-leader and an internationally recognized enterprise software analyst that specializes in healthcare IT with an emphasis on e-health, EHR/EMR, Meaningful Use, data integration, medical device connectivity, health informatics, and legacy modernization. He contributed CH 13 to: www.BusinessofMedicalPractice.com and Chapter 13: IT, eMRs & GroupWare

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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

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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

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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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Barriers to Performance Based Healthcare Networks and Medical Cost Savings

 Understanding the need to align care models, payment, products and networks

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[Number 4 in a series of 6]

By Sam Mupalla – Vice President, McKesson Health Solutions, Network Performance Management (NPM)

I wanted to follow up on last month’s ME-P discussion about Performance-based Networks and Medical Cost Savings. I wrote about the need to align care models, payment, products and networks, and then promised to address some of the barriers standing in the way of achieving alignment. Well, that’s what I’m writing about today.

Strategic Difficulties

Health plan operations responsible for supporting the intent of the provider network designs will find it increasingly difficult to maintain strategies that provide affordable care by applying existing methods and systems.

Currently, the systems and processes that enable these operations are frequently based on systems that are neither integrated nor automated, rather relying on various manual interventions to achieve some scale of efficiency. Creating and maintaining innovative value-based offerings in this environment requires process excellence coupled with tight coordination executed across multiple departments. As the complexity and frequency of demand for these offerings increase, this approach becomes more challenging to sustain, thus risking long term success of the affordable care promise.

Figure 1: Today’s operational engine interactions are not optimized for enabling innovation.

The traditional systems and processes that health plans have used to respond to specific client demands appear in Figure 1.

For example, product demands from consumers may come in through the sales team, which manually interacts with the product management, care management, network development, and health economic teams to design a product to meet the market need. This first set of interactions, in effect, becomes the innovation engine for value-based product designs. Additionally, it becomes the starting point for a myriad of manual and highly paper-based interactions that ripple throughout the enterprise.

The interactions within this innovation engine then set forth a series of parallel and independent sequences with three different operational engines: the provider contracting department, the provider management department and the claims operations department. Each of these areas relies heavily upon their own set of manual and paper-based processes and interactions. The inefficiency of this current approach suggests the potential for an annual administrative cost savings opportunity of $5-25 million, depending on the health plan’s size and current system architecture.

In addition to administrative costs, this approach creates inefficiency and waste in IT costs and medical costs that could be between $40-100 million.

Assessment

So, how can you unlock these savings and eliminate this waste? We’ll discuss that next week. I’ll say only three words here: Integrated Building Blocks. I’m not going to say a word more — but if you can’t wait for next week you can read the entire Unlocking Affordable Care by Aligning Products white paper; it’s available on our website now.

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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.

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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.

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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

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Has the HIT Bubble Already Popped?

Long Before Reaching … Dentistry

[By Darrell K. Pruitt DDS]

HCPlexus recently partnered with Thompson Reuters to conduct a nationwide survey of almost 3,000 physicians about their opinions of the quality of health care in the near future considering the Patient Protection and Affordable Care Act (PPACA), Electronic Medical Records, and their effects on physicians and their patients. (See “5-page Executive Summary”)

http://www.hcplexus.com/PDFs/Summary—2011-Thomson-Reuters-HCPlexus-National-P

Results:

“Sixty-five percent of respondents believe that the quality of health care in the country will deteriorate in the near term. Many cited political reasons, anger directed at insurance companies, and critiques of the reform act – some articulating the strong feelings they have regarding the negative effects they expect from the PPACA.”

What’s more, one in four physicians think eHRs will cause more harm than help. So what’s the accepted threshold for the Hippocratic Oath to come into play?

Do you also find excitement in healthcare reform’s surprises? Experiencing the sudden, last minute turns healthcare reform has taken lately is like riding shotgun with Mayhem behind the wheel, texting. Here’s other discouraging news from the same HCPlexus-Thompston Reuters survey: “A surprising 45% of all respondents indicated they did not know what an ACO is, exposing a much lower awareness of ACOs versus the broader implications of PPACA. It appears there has been a lack of physician education in this area.”

ACOs Defined 

Since I also had no idea what an ACO is, I searched the term and came across a timely article that was posted on NPR only days ago titled, “Accountable Care Organizations, Explained.”

http://www.npr.org/2011/01/18/132937232/accountable-care-organizations-explained

Author Jenny Gold writes: “ACOs are a new model for delivering health services that offers doctors and hospitals financial incentives to provide good quality care to Medicare beneficiaries while keeping down costs.” Does that remind anyone of insurance HMO promises just before the bad idea collided with surprisingly intelligent consumers in the early 1990s? Kelly Devers, a senior fellow at the nonprofit Urban Institute, is quoted: “Some people say ACOs are HMOs in drag,” There’s a sharp turn nobody warned us about.

HMO Differentiation 

Further blurring the difference between ACOs and HMOs, Gold adds “An ACO is a network of doctors and hospitals that shares responsibility for providing care to patients. Under the new law, ACOs would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.” I wonder if we’ll see a resurrection of HMO gag orders preventing physicians from discussing effective but expensive treatment alternatives not offered by the ACO.

As expected, not only are hospitals and doctors competing for the opportunity to run ACOs, but so are former HMO insurance agents. Devers explains, “Insurers say they can play an important role in ACOs because they track and collect data on patients, which is critical for coordinating care and reporting on the results.” As a provider, do you trust UnitedHealth’s Ingenix data mining tendencies? A few years ago, NY State Attorney General Andrew Cuomo spanked the company for selling insurers pseudo-scientific excuses to cheat out-of-network physicians.

Just like Health Maintenance Organizations don’t maintain health, insurer-based Accountable Care Organizations will not bring accountability to care any more than the Patient Protection and Affordable Care Act provides patient protection and affordable care. And since I’m exposing blatant bi-partisan deceptions, there is no privacy or accountability in the Health Insurance Portability and Accountability Act, and the “HIPAA Administrative Simplification Statute and Rules Act” doesn’t.

HITECH Funding

Gold suggests that because HITECH rules were written intentionally vague in order to push the envelope of stakeholders’ imaginations, similar to HIPAA’s ineffective security rules I suppose, the doctors’ predictable ignorance of ACOs is understandable.

But then again, all this may not even matter in a few months. According to Howard Anderson, Executive Editor of HealthcareInfoSecurity.com, HITECH funding itself is threatened. He recently posted “GOP Bill Would Gut HITECH Funding – Unobligated HITECH Act Funds Would be Eliminated.”

http://www.govinfosecurity.com/articles.php?art_id=3306

Assessment

While Obama’s healthcare reform teeters between two houses, I encourage consumers to plead with their lawmakers to stop being suckered in by cheap, meaningless buzzwords sprinkled in the titles of bills. I’m hoping we can at least get them to read a little deeper. Be on your toes. Mayhem is “recalculating.”

Conclusion

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Another New Idea?

[By Staff Writers]

According to Mark Fendrick MD and Michael E. Chernew PhD, instead of the one size fits all approach of traditional health insurance, a “clinically-sensitive” cost-sharing system that supports co-payments related to evidence-based value for targeted patients seems plausible.  

The Model

In this model, out-of-pocket costs are based on price and a cost/quality tradeoff in clinical circumstances: low co-payments for interventions of highest value, and higher co-payments for interventions with little proven health benefit.  

Benefit Product Packages

Smarter benefit products and packages are then designed to combine disease management with cost sharing to address spending growth. 

product sales

Assessment

What do you think of this new health insurance business model; is it revolutionary or evolutionary?

Conclusion

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