4th National ACO Congress: Health Care Transformation is Really Hard, and Takes a Long Time

The fourth annual National Accountable Care Organization (ACO) Congress was held this week in Los Angeles, California. The inaugural conference, held eight months after the enactment of Patient Protection and Affordable Care Act (ACA), but before even proposed regulations for the Medicare Shared Savings Program ACOs were available, was filled with buzz and palpable excitement around what was about to happen in transforming the health care market place. There were high expectations, lots of theorizing, and a bit of looking around the room as what the competition was doing.

The second year was much more pragmatic as details of the both the Medicare Shared Savings ACOs and now the Pioneer ACOs were being finalized and organizations were now making their own decisions whether, and how, to participate. Questions were now about real decisions and choices, and the focus was on execution, not conceptualization. Many more critics and skeptics voiced their views that the realities might not match the theories and concepts, and that operationalization and scale might be much more challenging than anticipated. Nevertheless, many speakers gamely announced their intent to launch ACOs. And a new marketplace for consultants, health care lawyers, data analytics companies, and even the National Committee for Quality Assurance with its announcement of an ACO accreditation product, became visible, both in the exhibitor hall, and throughout the conference.

Last year, hundreds of ACOs had now been launched and there were urgent, lingering questions about technical issues of patient attribution, quality measurement, savings methodology. Despite all the questions, speaker after speaker asserted confidence that some type of accountable care, value-based payment, partial or global capitation would inevitably replace fee-for-service arrangements. And there was no doubt that ACOs were here, and were real.

This year at the conference, the atmosphere was sober and even somber. First year quality improvement and cost savings results from the 32 Pioneer ACOs had been released in June. While the quality improvements were solid across all the Pioneer ACOs, the savings were modest at best. At least 7 of the 32 Pioneer ACOs reported losses (increased rather than reduced costs), and 9 are leaving the program. The exit of so many of these more sophisticated organizations after just one year was disheartening (futurist Ian Morrison has described it as pioneers “turning back” from blazing trails in the unknown frontier of health care market transformation). The few Pioneer ACO speakers and Sean Cavanaugh from the Center for Medicare and Medicaid Innovation (CMMI) at this year’s conference bravely spun the first year results as “about what we expected”, although certainly no one “expected” nearly a third of the Pioneers to drop out so early.

The presentations from ACOs had many common themes and early lessons learned while emphasizing how different they were. There clearly are no “silver bullet” or one-size-fits-all solutions. xG Health Solutions’ Gordan Norman warned: “There are lots of tools out there, but what you need are competencies.”

While every ACO seemed to have achieved laudable results in reducing emergency department visits, readmissions, and even lengths of stay/overall hospital bed days, for the first time there was a lot of discussion about skilled nursing and rehabilitation, home health partners, ambulance and transportation services. These “partners” were hardly mentioned and not very visible at prior conferences. This ACO business is getting much more complex, and requires more collaboration and partnerships than anyone anticipated.

Pioneer ACO Atrius Health’s Emily Brower identified improved communication among all care partners, and incentivizing or sharing savings with patients to increase patient engagement as the coming challenges for her ACO. HealthCare Partners’ Don Rebhun described the next set of challenges that ACOs must face: self-management/health education, care/disease management, clinics and other services for the highest risk patients, palliative care/hospice. Meeting these challenges will require more intensive interventions and will keep pushing ACOs towards increased engagement and improved communication with patients, families, and caregivers as well as a broader network of health care and social service providers.

Other data and stories shared should give proponents of ACOs a lot to think – and worry about. Pioneer ACO Monarch HealthCare’s Colin LeClair noted that 1/8 of its attributed patients lived outside of its state of California, 77% saw at least one provider outside the ACO, and each had an average of 22 provider visits. As the Beacon Community of Inland Northwest Health evolves into a multi-state ACO, it is discovering that its patients with diabetes see an average of 7 providers, even within integrated health systems. ACOs may need to be much broader and bigger to align or “reign in” all these providers.

Almost every speaker talked about learning how difficult the process of organizational and practice transformation has been, and how much longer it has taken. xG Health Solutions’ Gordon Norman concluded: transformation is not a project, but a continuous process; it is a new mindset, culture change, a lifestyle commitment.

The most talked about presentation was from Gorman Health Group’s John Gorman, who showed graphically how any real shared savings would be “wiped out” every three years by the re-setting, or re-basing, of the cost benchmark. When CMMI’s Cavanugh was asked about this, he acknowledged the challenge of balancing what he called a sustainable business case for remaining an ACO and the goal of sustaining overall Medicare savings. Curiously, he also opined that CMMI expected the greatest savings to occur in the third year of the three year cycles, fueling the sentiment that there is a lot of downside risk to bear for a long time before ACOs will achieve the nirvana of significant shared savings.

So it felt like being in the middle, knowing that retreating back to fee-for-service is not viable but not knowing what the future looks like. And the uneasy, emerging consensus that at least the current Medicare Shared Savings Program and Pioneer ACO models may not prove to be the solutions we were all looking for.

OneCare Vermont’s Churchill Hindes said it best by quipping, “we now have ACOs, but we are going to have BCOs, CCOs, DCOs – other models – before we are done.” Indeed, some of the most interesting work presented at the conference is being done by an unlikely set of stakeholders: state Medicaid programs, that are using Medicaid dollars and program flexibility (including 1115 waivers, 90/10 federal matching dollars for Medicaid health IT expenditures, and CMMI State Innovation Model grants) to move providers and beneficiaries into accountable care models (and they in fact are called “CCOs” – coordinated care organizations – in Oregon). Importantly, some of these models are actually trying to bring together “whole person” health care, including medical, behavioral, and oral health providers. And with the focus on the Medicaid population, local health departments and social service providers also are more engaged in these state-level models.

Several speakers, notably John Gorman and Ian Morrison predicted that the new, future model will be what they are calling Medicare Advantage 2.0. While the current Medicare Advantage program is being squeezed for both quality (through the 5-Star quality rating system, with only 4- and 5-star plans able to financially survive after 2015) and savings (by cutting payments, not sharing savings through shared risk), and no one wants to call it “managed care” anymore, it will be full or global capitation per beneficiary/life covered, full risk-bearing rather than the experiment (and complication) of shared risk and shared savings. When asked how ACOs could be improved, several ACO leaders bluntly responded: trust us with all the risk and give us all the capital upfront so we can spend/invest it to achieve the results we know we can deliver.

The only “breakthrough” announcement (more of a milestone) was made by former Secretary of Health and Human Services Michael Leavitt, whose Leavitt Partners has just identified the 500th ACO, now covering 20 million Americans in every state. But Leavitt also showed data about the slowing of growth of the number of ACOs and concluded that no proven ACO model had yet to be identified. He suggested that a better descriptor might be “risk-bearing providers” rather than ACOs.

Former Health Affairs editor and now Robert Wood Johnson Foundation senior policy advisor Susan Denzler highlighted the self-described “bipartisan and bicameral” discussion draft released jointly on October 30 by the House Ways and Means Committee and Senate Finance Committee proposing a permanent replacement of the problematic Sustainable Growth Rate (SRG) fee-for-service payments in Medicare with “alternate payment models” that pay for value: quality, efficiency, and innovation. [The next short-term SRG “fix” is due January 1, 2014, which means that Medicare 2.0 may be shaped and implemented sooner rather than later. This latest proposal would freeze the Medicare payment rates for ten years, and offer performance-based incentive payments to replace any increases in those ten years. (It would also sunset other incentives and penalties after 2016, including the Value-Based Modifier, and penalties for failing to report under the Physician Quality Reporting System and for not achieving meaningful use of electronic health records.) Alternatively, health care providers could choose to assume two-sided risk (upside savings and downside losses) for enhanced payments above the frozen fee-for-service rates, or receive enhanced payments for being recognized as patient-centered medical homes.]

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Denzler also noted that Centers for Medicare & Medicaid Services (CMS) actuaries do not project any significant changes (reductions) in health care costs because of the Affordable Care Act, including the proliferation of ACOs. Denzler described her vision of ACOs 2.0 as health care organizations that incentivize lifelong health management.

Besides the best foot forward, almost spin talk by Sean Cavanaugh (via video), the only other speaker from the was Region IX CMS Regional Administrator David Sayen, who began by emphasizing his role as a federal government civil servant who did not make any predictions about the future, nor have any role in policy decisionmaking. No other HHS staff were on the agenda, perhaps a metaphor for the common experience of many ACOs that was there was not a lot of guidance or help coming, nor to be expected, from HHS.

Moreover, many of the leading national thought leaders and conceptual architects of the ACO model – the Elliot Fishers, Mark McClellans, Steve Shortells and Larry Casalinos – who have dominated the plenary sessions at prior conferences, were all noticeably absent this year (yes, of course there are now other competing ACO conferences, too). But it was another metaphor for seeking new directions when the leading thought leaders are missing from the conversation.

Yet the final take-away is that, despite Ian Morrison’s blunt pronouncement that “fee-for-service is like crack, it is so addictive”, there really is no turning back from the looming frontier of health care market reforms that will be driven by results, by meeting quality measurement performance improvement benchmarks, and by cost reductions, savings, and overall decreases in health care expenditures. With the attention on the troubled startup of the health insurance marketplaces dominating the health care news headlines, there might not be as much public spotlight on what new “alternate payment models” might be on the horizon. In her opening keynote talk, Susan Denzler previewed the sentiment of many speakers throughout the conference that we really are talking about “accountable care” rather than continuing to talk about “accountable care organizations.” Nonetheless, the presenting organizations for these National ACO Congresses, the Integrated Healthcare Association and California Association of Physician Groups, announced that the Fifth National ACO Congress would be held in November 2014. It will bear watching what remains of “ACOs” a year from now.

This entry was posted in Health Care Reform, Health Care Reform: Accountable Care Organizations, Health Care Reform: Payment Reform, Health Care Reform: Quality Improvement, The iBau Blog. Bookmark the permalink.

One Response to 4th National ACO Congress: Health Care Transformation is Really Hard, and Takes a Long Time

  1. Chen, Alice says:

    Fantastic post!

    Like

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