JULY 17, 2012

Welcome to the Accountable Care Update eNewsletter
This issue is sponsored by the ACO Emerging Models Conference

Blum: Diversity, Number of ACOs Shows Program Is Spreading Fast
Jonathan Blum, CMS Principal Deputy Administrator, says that the face of healthcare is changing as the number of Accountable Care Organizations grows in number and diversity. Medicare Shared Savings Program participating ACOs now number 154 serving more than 2.4 million Medicare beneficiaries in 40 states and the District of Columbia. He says an additional 300 ACOs are operating in the commercial marketplace. He stresses that ACOs represent not only elite provider organizations but also small organizations including physician-led groups. Nearly half of the most recent 89 ACOs approved by CMS are physician-led organizations serving fewer than 10,000 beneficiaries. (Inside Health Policy, July 11, 2012)

Obamacare's Accountable Medicare Effort Surpasses Goals, Critics
Early critics of the accountable care organizational construct of the Affordable Care Act (ACA) doubted that the effort would reach 2 million beneficiaries in the first year. In fact Accountable Care Organizations participating in the Medicare's Shared Savings Program created by the ACA now exceed 2.4 million. In addition many private insurers are developing ACs to arrange care for many more patients. (Forbes, July 9, 2012)

ACO Growth Driven Fastest by Physicians
While the total number of ACOs increased by 35% between September 2011 and May 2012, the number of physician-led ACOs increased by 84% during the same time period, according to a report by Leavitt Partners. Commercial payers are driving much of the growth. As Chris Markley, Senior Vice President of PinnacleHealth System in Harrisburg, PA puts it: "The government has a very strict formula. Capital BlueCross is more flexible, and it was a very collaborative process to set up." (amednews.com, July 2, 2012)

The 'Alternative Quality Contract,' Based on a Global Budget, Lowered Medical Spending and Improved Quality
A total of eleven provider organizations entered into the Blue Cross Blue Shield Alternative Quality Contract (AQC) during 2009 and 2010. The AQC is based on a global budget and pay-for-performance quality measures. Savings in the first two years average 2.8% when compared to non-participating providers. Quality also improved. (Health Affairs, July 2012)

5 Steps to Building a Health Information Exchange in an ACO
Sharing patient information among providers is a key element in the success of an Accountable Care Organization's effort to enhance care, improve outcomes and reduce costs. Micky Tripathi, President and CEO of Massachusetts eHealth Collaborative, a non-profit organization that helped launch one of the first health information exchanges in Massachusetts in 2006, offers advice on preparing to develop a health information exchange. His advice includes 1) know what to share and with whom, 2) know that governance and organization will be an issue, 3) focus on security, 4) be able to identify and access records throughout the entity, and 5) create a query system that operates outside the episode of care. (Becker's Hospital Review, July 3, 2012)

Bumpy Start: While Medicare's ACO Program Is growing Rapidly, Technology Snags Threaten Success
Forming an Accountable Care Organization, particularly one eligible to participate in Medicare's Shared Savings Program, is neither simple nor inexpensive. The organizational, human and information technology resources are substantial. This story includes an example of FamilyCare Medical Group in Syracuse, NY that initially opted not to participate in the Shared Savings Program due to a lack of capital. After teaming up with a publicly-traded Medicare Advantage and supplemental insurance provider, they were able to form one of the ACOs included in the most recent announcement of 89 approved ACOs approved to participate in the Shared Savings Program. (ModernHealthcare.com, July 14, 2012)

ACOs' Real Test Will Come with Two-Sided Risk
Only five of the recently announced new ACOs approved to participate in Medicare's Shared Savings Program have agreed to accept two-sided risk (participating in savings and losses). According to a CMS letter, "Because the Shared Savings Program is part of the original Medicare fee-for-service program, beneficiaries served by these ACOs will continue to have free choice about the care they receive and from whom they seek care, without regard to whether a particular provider or supplier is participating in an ACO." Two-sided risk is unlikely to become an acceptable alternative as long as the patient attribution methodology allows patients to seek care form non-participating providers. Patients must become part of the solution. (HealthLeaders Media, July 13, 2012)

ACO Success Will Depend Upon the Patient-Centered Communication Skills of Providers
Concurring with the HealthLeaders conclusion above, this blogger stresses how important patient involvement is in both improving quality and reducing costs. He references a 2011 study of a public hospital cardiology clinic for patients diagnosed with heart conditions. "In the study, 55% of patients diagnosed with heart failure did not recognize (nor agree with their doctor) that they had heart failure. Even more disconcerting was the finding that 'only 15% of those with hypertension agreed with their doctor's diagnosis.'" (Mind the Gap, July 3, 2012)

Map of the 154 ACOs Participating in Medicare's Shared Savings Program

- click map for larger version -

To update or remove your address, please click the "Unsubscribe/Manage" link below or email your request to: listmgr@HealthcareeNewsletters.com.

Accountable Care Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as Medicaid, comparative effectiveness, readmissions, patient safety, and pay for performance. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

2012 Summit Closing Address

Mark Leavitt
Founder and Chairman, Leavitt Partners; Former Governor of Utah; Former US Secretary of Health and Human Services, Salt Lake City, Utah