CMS released a long-awaited checkpoint status on its Pioneer ACO program. Of the 32 entities enrolled in the program, according to CMS:
- 2 (6%) will leave the CMS ACO program altogether
- 7 (22%) will eliminate the down-side risk component by reapplying under the MSSP program
- 32 (100%) improved quality of patient care & rated highly on patient satisfaction scores
- 18 (56%) achieved some cost savings, 13 (41%) saved enough to share savings with Medicare
- 2 (6%) cost Medicare more and will owe $4M back
- 12 (38%) did not achieve significant savings
- $140M in total savings, $52.4M in total losses, $76M in shared shavings to be returned to 13 (41%) Pioneers
- $33M in net savings for the Medicare Trust Funds.
Were we surprised with the readout status? Both the Monday morning quarterbacking easy answer and the comparison to what we have experienced in the field over the past decade would be a ‘no’. This stuff is hard and complex. Below are our initial comments to the announced status checkpoint:
- Value-based care is a transformational journey, not a backend contract driven program that you overlay onto your existing delivery system organization’s people, processes and technologies and expect different results. It will take time for those organizations that are truly driving systemic changes affecting both utilization and performance to reap the benefits of significant investment and associated work.
- At one year, it is early in the journey. As a result, we suspect that these initial, very modest cost savings were generated by low hanging fruit from the delta to each organization’s baseline vs. truly fundamental changes in how care is delivered. Year two will be much more revealing in terms of how the various remaining 23 pioneer entities are able to generate real savings and to what degree. With the Institute of Medicine projecting as much as 30 percent of waste can be taken out of the system, and provider groups in the field we work with having realized savings from 10-30 percent, the potential exists, and CMS expects, much higher shared savings in years two and three.
- Despite the quality measurement challenges under the program, fee-for-service Medicare is classically quality and cost unmanaged. One could actually argue that fee-for-service Medicare is skillfully managed by many in the industry to be exploited because it is unmanaged by CMS – that any focused attention driven by financial gain is going to improve the portfolio of quality measures. If we didn’t see the across the board 100 percent improvement in quality measures, especially given the process focused ones in place, then that would have been a surprise. All of the provider organizations we have worked with over the years have also improved their quality metrics across the board from the baseline as well. Sustaining continuous improvement in years two, three and beyond of any accountable care program is very difficult work and requires incredible diligence.
As Mark McClellan, MD alluded to at the Brookings/Dartmouth ACO Summit in June, we also believe there will be changes made to the CMS programs based on the first year’s experience that should make them more attractive to participate in, streamline their operations and provide an increase in the magnitude of cost savings.
The Accountable Delivery System Institute (ADSI) previously posted two blogs leading up to this anticipated announcement that outlined the fundamental issues with accountable care as it is currently being implemented and practiced under both CMS and commercial ACO contracts across the country today:
- In response to Clayton Christensen’s widely circulated condemnation of ACOs as widely defined, we posted Accountable care 2.0 offers promise of success beyond today’s accountable care 1.0 maturity level approach, outlining why nearly all of the current accountable care programs and contracts are operating at what we call Accountable Care Maturity Level 1.0.
- When the Pioneer program readout rumbling was building, we posted The Key to Getting Real Results from Accountable Care Initiatives: Do it Right or Don’t Do it at All that outlined the 22 core competencies of accountable care derived from working with physicians in the field over the past decade as they developed the behavior change, process transformation and supporting technology to execute successful accountable care before it was even labeled as such.
Accountable Care Maturity Level 2.0
If Accountable Care 1.0 is destined to deliver underwhelming, if not failing, results to a country desperate for health and health care transformation, what does a successful Accountable Care Maturity Level 2.0 look like? Here at the ADSI, after nearly a decade of experience learning from accountable care physicians in the field, we’ve defined Accountable Care Maturity Level 2.0 by the following key major elements (in the context of the 22 core competencies of accountable care referenced above):
- Contracting includes (or supports a glide path for) both significant upside and downside risk. These supporting contracts must generate the required incentives to support behavior changes among physicians, care teams and provider entities. In the future consumer/patients will be added to this list. The percentage of savings, and how the organization-level incentives earned are shared with the physicians, will greatly determine the intensity and staying power of the behavior change. The most productive accountable care entities actively encourage the physicians to help create/update the measures by which the bonus pools are allocated. Lumeris has added a Plus One, Physician Satisfaction, to the Triple Aim because we have seen how important it is for physicians to embrace change and the top ranked component of this in most related surveys is compensation.
- Existence of one or more collaborative payers within a market. Effective accountable care requires that payers be optimized in all areas of operations to support a win-win relationship and have an associated contract with its value-based provider partners. For example, claims are processed at least weekly so that the data can be fed into the system to support more comprehensive and timely care decisions. The payer can also play an import role in facilitating best practice sharing between more experienced physicians and newcomers on the accountable care journey.
- Substantial trust-building, shared actionable cost and quality transparency among stakeholders. Within each unit that is tied to a specific portion of the shared savings, all bonus beneficiary members must have full visibility to frequently updated cost and quality information to facilitate all types of decision-making options: referrals, drugs, procedures, testing and others. The behavior modification alluded to under #1 is facilitated by provider-based medical director-to-physician or, even better, physician-to-physician mentoring to move them from the high cost/low quality quadrant to the low cost/high quality quadrant through best practice sharing and interactive conversation. Moving physicians toward the ideal quadrant is of course in the best interest of every physician in the same shared bonus pool. This element of accountable care maturity 2.0 in particular takes more than a year (sometimes 2-3 years) to be hitting on all cylinders given the head winds of data trust, paradigm shift from the FFS medicine hamster wheel to being a collection of effective population managers.
- Robust technology – enabling population management tools and techniques. EHRs were not designed as ‘population management excellence’ tools. Many in the industry have commented that modern EHRs were designed as ‘FFS billing excellence’ and not even ‘clinical excellence’ tools, which is why it is so difficult to generate population quality measures from them and why their usability has been rated fair at best to support clinician workflow. EHRs require a complementary integrated population platform which both aggregate multiple sources of data (including procedure and drug claims, extra-institutional clinical) and provides a patient-centric population prism that delivers powerful comprehensive gaps in care, plans and processes to address them, holistic care management, and quality and cost knowledge at the point of care.
- Transformed care and new population workflows are supported by deliberate policy, procedure and process reengineering. Institutional policies must be amended and added in order to maximize the environment for accountable care success. Front-line clinical teams apply LEAN and value-chain process improvement techniques to blow up and reinvent efficient workflow rather than stuffing population tasks into ones previously optimized for FFS. New procedures are then built around these new streamlined workflows.
- Primary care physicians and practices are aligned and optimized within the accountable care entity. The highest value relationship in health and health care is between the consumer/patients and their physician/care team. As the quarterback of the care provided to their patients, PCPs are in the best position to optimize care through joint decision making with other clinicians and patients on when, where and how care is delivered to support the Triple Aim. We have seen that primary care physicians practicing accountable care over many years have embraced workflows and behaviors that are enabling the practice of value-based care. Those learnings are shared in a separate blog post here: Nine C’sSM of Successful Accountable Primary Care Delivery. We have seen a significant reduction in quality improvements and costs savings if the PCPs are not optimized in this capacity and explicitly or implicitly restrained from operating in this manner.
- Strong leadership committed to continuous improvement and true systemic change. Anyone who has been part of a successful and/or even unsuccessful change initiative will tell you it all starts with leadership from the top. Before you nod your head yep and move on – we challenge you to consider this: the health care industry has been insulated from both deep and fast market oriented changes for decades, thus a large percentage of the health care executive/clinical leadership in this country has not honed the skills over their career now required (since many have not worked outside health care in more dynamic market-driven industries) to confidently undertake the amount of change that is necessary in moving to value-based care. Thus, we have a collective vacuum of transformational leadership ready to effectively answer the bell of significant required change.
The journey to accountable or value-based care is long, complex and hard. We have to challenge and blow up much of what has been developed, which was optimized to thrive in a well-oiled FFS health care world. In speaking with many physicians that have been on this journey for many years, they summarize their experience ‘coming out on the other side’ of being transformed into a population management physician in nearly the same way each time: “This is the way medicine was meant to be practiced.”
Accountable Delivery System Institute
The Accountable Delivery System Institute® (ADSI) is the premier resource for hospitals, health plans, large physician groups, and self-insured employers seeking proven solutions and practical guidance on establishing successful models of accountable care. The ADSI-experienced faculty offers exclusive sessions for C-level executives seeking reliable, actionable information on accountable care. Visit the institute.