Mar 4 2013 | Thought Leadership | By

ADSI Blog: Accountable care 2.0 offers promise of success beyond today’s accountable care 1.0 maturity level approach

The ominous declaration of “The Coming Failure of Accountable Care” is creating quite the buzz in accountable care and health policy circles, particularly given that the declaration was made by the highly respected Harvard Business School professor and innovation researcher Clayton Christensen and colleagues in an article that was posted recently in The Wall Street Journal.

The Accountable Delivery System Institute (ADSI) agrees with the following assessments by Mr. Christensen and colleagues:

  • Failure will occur for currently configured incremental ACOs. As is the case in all other disruptive and new market activity in this country, absent effective planning and successful execution, a certain level of failure should be expected.
  • Many accountable care entities today implicitly accept the three flawed assumptions by demonstrating their lack of aggressiveness to move beyond an ACO 1.0 maturity level (see below) and make the true systemic changes required for ultimate success. We will address each of the flawed assumptions after first providing some context on how our perspective was formed.

Nearly a decade of real-world quantified accountable care experience

Our point of view above comes from being active practitioners of accountable care for nearly a decade, before it was called accountable care and before regulatory ACOs were in existence. Our genesis was a group of change-oriented physicians in the St. Louis area, who believed there had to be a better way to practice medicine, which both supported the then-emerging Triple Aim approach and professional satisfaction. Over this time period, we have been able to quantify significant year-over-year cost savings in the Medicare Advantage plan, as well as patient and population level health status improvements. The ADSI was founded as a way to share the unique findings of this plan — and the findings of customers who have adopted our approach and technology — with others hungry for actual results and best practices.

Along this journey, new population management tools were created and continually improved based on physician and care team field feedback. The Medicare Advantage plan evolved to a collaborative payer model to explore operating under full risk, and has continually improved (now 4.5-star rated) based on iterative internal and field feedback. There have of course been “learning moments” along the way on both the care delivery and payer sides. Through what the Institute of Medicine refers to a “Learning Health Care System” approach, the root cause of any setbacks have been quickly addressed and the demonstrated successes are amplified across the stakeholders — outputs are continuously turned into impactful inputs within the dynamic stakeholder ecosystem.

Accountable care 1.0

We believe that most of today’s accountable care organizations are operating at an accountable care 1.0 maturity level — an inadequate level to generate disruptive change. From our experience, Accountable Care 1.0 can be generally be defined by the following elements in various degrees:

  1. Viewing the breadth and potential of accountable care through the limited prism of the regulatory defined ACO constructs
  2. Contracting that does not include (either now or a defined glide path to) both significant upside and downside risk to generate the required incentives to support behavior change among physicians, care teams, and provider entities
  3. Program does not include the existence of one or more collaborative payers in the market
  4. Lack of substantial trust-building, shared actionable cost, and quality transparency among stakeholders
  5. Lack of robust technology-enabled population management tools and techniques
  6. Lack of significant policy, procedure, and process reengineering to support accountable care
  7. Primary care physicians and practices possess conflicting goals and/or are not optimized
  8. Lack of strong leadership committed to continuous improvement and true systemic change

Assumptions associated with accountable care 1.0

Let’s revisit each of the ACO-related flawed assumptions stated in the article:

“Flawed assumption #1: ACOs can be successful without major changes in doctors’ behavior … such profound behavior shift would likely require reeducation and training, and even then the results would be uncertain.”

The correct incentives are necessary but not sufficient components — it is not enough to know what you need to do but how to do it. As Mr. Christensen and colleagues point out, retraining a physician and the rest of the care team from a fee-for-service to a population manager orientation is foundational for success. This comprehensive training includes a variety approaches, including computer-based continuing medical education, consultative instruction on the effective use of population tools, and peer mentoring/discussion. The growing transformation by primary care practices into the patient-centered medical home model is facilitating the lowering of this learning curve to some degree. Ongoing behavior change needs to be reinforced through the proactive use of, and continuous feedback from, data-driven tools, dashboards, and reports that combine both clinical and financial elements to paint the full picture of prioritized actions. Like the incentives, technology used in this manner is required but not sufficient for success.

The ADSI hears the same thing from physicians as the Center for Connected Health’s Dr. Kvedar stated in his excellent post in response to the WSJ article, “doctors … are tired of the mouse’s wheel of fee-for-service reimbursement and welcoming of the opportunities to rethink care delivery.”

“Flawed assumption #2: ACOs can succeed without changing patient behavior.”

Here at the ADSI, we have found that in the beginning of an entity’s journey, a significant amount of waste and inefficiency in the form of unnecessary, redundant, uncoordinated, unsupervised, and cost ineffective care can be reduced or even eliminated — all with minimal patient engagement if the other elements of accountable care 2.0 (see below) are in place. However, we strongly agree with Mr. Christensen and his colleagues that sustainable year-over-year cost and quality improvements will require the “patient (and/or family member) to be considered an active, valued member of the care team,” being both continuously informed and solicited for input/feedback, just like any other high-functioning team member outside of health care, in order to perform their assigned role.

We also believe that three key patient engagement catalysts are now finally in place to begin making substantial progress in this area:

  • The patient and family engagement policy and technical standards components of the HHS Meaningful Use Stage 2 program
  • The wellness/behavior incentive structure afforded by the Affordable Care Act
  • Value-based benefit design in combination with value-based outcomes

“Flawed assumption #3: ACOs will save money.”

We wholeheartedly agree with the statement that “no dent in costs is possible until the structure of health care is fundamentally changed.” This is the essence of Accountable Care 2.0: proven systemic changes made to rethink and disrupt the current delivery system and payment for care.

Accountable care 2.0

The continuous learning experience of the ADSI initially in St. Louis and now across the country has created a portfolio of Accountable Care 2.0 capabilities and best practices, including a set of 22 core competencies and The 9 C’s of Successful Accountable Primary Care Delivery, as outlined in a previous blog posting.

If entities are not embracing moving from ACO 1.0 to 2.0 and beyond voluntarily, what will compel them to do so? For this answer, we return to Christensen’s findings based on decades of intense research — you embrace disruptive innovation yourself or risk being disrupted by others, for which you have a great deal less control. The health and health care market is reaching a transformational tipping point where the purchasers (government, employers, and consumers) will drive and force change.

The constructive reform approaches suggested by Mr. Christensen and colleagues at the end of their piece are certainly a few of the many ACO 2.0 and ACO 3.0 maturity level required disruptive capabilities, which we will outline in future postings and papers.

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.

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