The number of patient-centered medical homes recognized by the National Commission on quality Assurance is rising

The number of patient-centered medical homes is growing. They are being recognized by the National Commission on Quality Assurance and are just one part of the innovation of the American healthcare system.

What are Accountable Care Organizations (ACOs)?

Hello again!

Since our last blog post, the leaves have turned green, the summer months have passed, and we have just begun to enjoy the crisp autumn air.

Lately there has been much debate surrounding the launch of Accountable Care Organizations (ACOs) under President Obama’s Patient Protection and Affordable Care Act. ACOs are one of the key provisions in the 2010 health reform law designed to help reduce the cost of medical care. There is so much talk about this concept, but what exactly are ACOs?

An ACO is a network of providers and hospitals that share responsibility for delivering healthcare to a minimum of 5,000 Medicare beneficiaries for at least three years. It is based on the idea that hospitals, doctors, and other health care providers should work together to coordinate care for their patients. By coordinating care, the ACO will reduce costs by avoiding unnecessary tests and procedures. Those organizations that produce better outcomes will be rewarded, and for those that don’t, financial penalties will be incurred. In a recent study of ours, we found that with the development of ACOs, providers will take on responsibility for not only delivering actual medical care, but also providing some level of medical management between appointments.

Sounds like a great idea however, a lot skepticism has surrounded the development and launching of ACOs. First, there are very few providers that truly understand the ACO concept. In a recent survey conducted by Beacon Partners, only 15% of 200 provider organizations are “very familiar” with ACOs. Of those 200 surveyed, 92% are in the development stages for an ACO, and nearly all respondents’ budgets are not yet established.

Second, the Centers for Medicare and Medicaid (CMS) have yet to issue the final rules, which will affect the application process that prospective participants have to go through. Prospective participants will need to review the final rules before entering the application process in order to demonstrate their ability to comply with the eligibility requirements. Then, CMS will need to review all applications and offer contracts before the January 2012 launch deadline.

Lastly, the systems that were considered to be the models for a new health care delivery system, namely the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare, have all declined to apply for the ACO program. Hospital and physician groups complained that the program created more financial risks than rewards and imposed burdensome reporting requirements.

Given the series of events surrounding the development of ACOs, it is no wonder that there is skepticism and doubt. Too much confusion and too many barriers surround the development of ACOs, including high start-up costs and regulatory issues. Add to that the refusal by health system role models to apply to the ACO program and you have a complicated situation.

Referring to our last post, this is one way to reduce the cost of care, a much needed move in our unstable economy. As prices for healthcare keep increasing over the year (health insurance is expected to rise 5.4% in 2012), patients deserve access to affordable healthcare. We urge ACO development leaders to address the barriers that health systems are encountering in order to aid in launching a successful ACO program.

Author:  Nicole Victoria

Editors:  Ken Chiang and Robert Kaminksy

 

Advertisement

Electronic Health Records — A Key to Progress

Electronic health records are a key to the advancement of the healthcare system.  Having medical records that follow patients across the continuum of care will enhance outcomes as all providers share a complete set of data.  Also, fully shared data will help reduce costs by eliminating redundant diagnostic evaluations and unnecessary prescribing of medications.  Electronic health records will facilitate the development of new models of care, such as the patient centered medical home.

However, only 20 percent of doctors and 10 percent of hospitals use even basic electronic health records according to Kathleen Sebelius, secretary of health and human services.

As reported by the New York Times yesterday (http://www.nytimes.com/2010/07/14/health/policy/14health.html?_r=1&hpw), the federal government issued new rules Tuesday that will reward doctors and hospitals for the “meaningful use” of electronic health records, a top goal of President Obama.  The rules significantly scale back proposed requirements that the health care industry had denounced as unrealistic.

The main criticism of the rules proposed by the Obama administration in January was that they took an “all or nothing” approach. Doctors could not have received any federal bonus payments unless they met 25 criteria, or objectives, and hospitals would have been required to meet 23.

Standards in the new rules are less demanding and more flexible. Doctors will have to meet 15 specific requirements, plus 5 chosen from a list of 10 objectives. Hospitals will have to meet 14 requirements, plus 5 chosen from a menu of 10 goals.

Doctors, for example, will have to use electronic systems to record patients’ demographic data (sex, race, date of birth); their height, weight and blood pressure; their medications; and their smoking behavior.

To meet the new standards, doctors will have to transmit 40 percent of prescriptions electronically. Under the proposal, 75 percent of prescriptions had to be sent electronically.

The Department of Health and Human Services said doctors and hospitals could receive as much as $27 billion over the next 10 years to buy equipment to computerize patients’ medical records. A doctor can receive up to $44,000 under Medicare and $63,750 under Medicaid, while a hospital can receive millions of dollars, depending on its size.

Sometimes, small steps are better than no steps at all.  Moving physicians and other providers to communicate with each other at all sometimes seems a big enough challenge to patients.  Anything that helps a patient not have to repeat the same story to each physician is a significant accomplishment.  Therefore, not only will the system reduce costs and improve the quality of care, patients will have fewer headaches just from accessing the system.

A few years ago, I was speaking with a leading researcher at the Commonwealth Fund.  He suggested that it might take 20 years to implement a fully-functioning electronic health record.  With the current administration’s financial support and guidelines for the initiative, we might achieve that goal in that timeframe.  However, a great deal can be accomplished through the “baby steps” proposed under the relaxed guidelines. 

For example, entering demographics and utilizing e-prescribing allows basic checks of appropriateness of the prescription.  It also reduces the opportunity for over-prescribing or duplicate prescribing of pain killers and other potentially abused medications.

The final rules do not guarantee that doctors and hospitals can electronically exchange clinical information on patients. The rules do require health care providers to work toward that goal, widely seen as a way to improve the coordination of care and avoid the duplication of tests. 

Of course, this is where the rubber meets the road.  Enhancing longitudinal and intra-practice communication is a significant step forward.  Using electronic health records to compare prescribing and treatment patterns to generally-accepted practice standards and algorithms will help improve the quality of care.  But a significantly increased return on investment will occur when the systems can communicate throughout the continuum of care.  The next step is for the healthcare and information technology communities to set data layout standards that will make this possible. 

Co-operation?!  What a novel concept!

More healthcare is better? You get what you pay for?

The journal Health Affairs just surveyed more than 1,500 patients with employer-provided insurance.   The majority of respondents believe that “more is better, newer is better, you get what you pay for, (and) guidelines limit my doctor’s ability to provide me with the care I need and deserve.”

Healthcare experts can come up with sophisticated ideas for containing healthcare costs.  Congress can simply mandate reductions in Medicare reimbursement.  However, without patient support, we won’t make progress with reducing the burden of the world’s costliest healthcare system.  Lack of patient support is what sunk the healthcare reform efforts of the 1990s.

The question is how to convince the majority of us that “you get what you pay for” but you don’t have to buy everything on the menu or pay more than we should for a therapy when all we have is a scratch or a cough.  When providing the best healthcare possible for our family shows our love and the best means the most costly, when Americans have an innate sense of entitlement for access to the best our healthcare system can provide, we are stuck with in “drive.”   Quick and direct efforts at cost reduction will meet nothing but resistance and failure.

Addressing this challenge will take time.  It took years to convince people to do something as simple and clearly beneficial as wear a seat belt or to not litter.  Healthcare is complex.  We need to develop simple and clear messages, supported with evidence, to change perceptions and the beliefs that are the cornerstone of our society. 

Physicians will play a key role in changing patient beliefs.  Patients will look to their doctor for guidance as to what treatment alternatives are appropriate and which are most beneficial. 

The physician-patient relationship also is complex.  Often, patients listen to their physician without question.  We follow our doctors’ directives solely relying on their judgement.  At other times, patients resist their physician’s guidance and physicians give in to their patient’s demands.  As we are our doctor’s customer, it is a case of “the customer is always right (as long as no harm is done).”  This interaction must be better managed to be more effective.

One approach is to allow doctors more time to educate patients.  This leads us to concepts such as the patient-centered medical home, which we have described in previous blog entries.  Reducing patient loads so primary care physicians can better address patient concerns, providing clinical pathways that guide physician decisions, using EHR to ensure physicians have all data available and redesignining physician and patient incentives to encourage short-and long-term implications of medical decisions will help make the patient-physician interaction more effective and focused on more cost-effective care.

Compensation and the Patient-Centered Medical Home

Compensation for a PCMH team must achieve the following outcomes: 1) Reward improvements in outcome, 2) Drive decreases in the utilization of healthcare resources; 3) Encourage cooperation among team members.  Compensation structure should be simple enough for everyone to easily understand, measure their performance and calculate their expected compensation.  In other words, compensation should be evidence- and value-based rather than based on piecemeal work.

Of course, this is easier said than done.  Compensation is the most difficult issue associated with the patient-centered medical home (PCMH).  Understandably, no one wants their income to decrease and everyone wants to be compensated for the work they do (or don’t do).  Primary care physicians want compensation for coordinating the PCMH provider team.  Specialists and institutional providers, such as hospitals, don’t want to see a drop in their current income levels, even if their workload decreases. 

Compensation systems should be based on improved outcomes, both in the short term and the long term.   In many instances, short-term markers will be substituted for more appropriate long-term outcomes.  For example, measuring improvements in HbA1c scores for diabetes patients is more practical than measuring reductions in cardiovascular events and other co-morbidities.

As well, the PCMH should share the cost savings that insurers realize, without double-counting the cost savings associated with improved outcomes.  If the PCMH can realize the same outcomes with a comparable level of risk but fewer diagnostic exams or specialist referrals, the PCMH team should share those savings.  Sharing the cost savings will encourage providers to reduce the services they provide as the impact on their income will be softened.

Measuring the risk associated with reduced levels of care is as important as measuring short-term improvements in outcomes.  For comparison, many US corporations focus on short-term results as that drives their bonuses.  However, the long-term risks rise.  For example, Wall Street executives recognized significant profitability from derivatives and other risky trading and money management strategies in the years leading up to 2008 and the Great Recession.  We must avoid similar behavior with our healthcare status.

Developing a value- and evidence-based system that provides compensation based on improved outcomes, cost savings and acceptable levels of risk is a complex, time-consuming and costly endeavor.  It is predicated on the widespread implementation of EHR, the funding of comparative effectiveness research, and gaining consensus on outcomes, risk and cost-savings metrics and their measurement.  Therefore, compensation systems that enhance the effectiveness of PCMH will be phased in over time and increase in scope, complexity and benefit to the healthcare system over time.

As hinted at above, effective compensation systems requires sharing of rewards among the PCMH team.  That argues for further integration of providers to facilitate such sharing.  We’ll explore that issue next week. 

Take care and have a fun holiday weekend.