OCTOBER 31, 2012

Welcome to the Accountable Care Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the ACO Congress

Family Physicians Grapple with Accountable Care Model
Mark T. Loafman, MD, MPH, assistant professor of family medicine at the Northwestern Feinberg School of Medicine and chief clinical integration officer at the Norwegian American Hospital in Chicago, Illinois, is interviewed in this article regarding his presentation and its response at the American Academy of Family Physicians (AAFP) 2012 Scientific Assembly in Philadelphia, Pennsylvania. "We had quite a few folks in the audience at both sessions who really want [ACOs] to go away; they just don't want to have to deal with this. We knew that the sentiment was out there, but the panel made it clear that ignoring this issue is not an option. Ignoring it would be a dangerous strategy," he said. Loafman believes that the Patient-Centered Medical Home is the core of an ACO because prevention is central to producing system savings. Loafman noted that an estimated "...75% of the money spent on healthcare goes to treat conditions that could have been prevented. Most of the patients on dialysis should not have gotten there. Many people with heart failure should not have gotten there." (Medscape, October 24, 2012)

The Role and Future of Accountable Care Organizations (ACOs)
This video is of an October 4, 2012 panel discussion on the future of ACOs and includes former CMS Administrator Don Berwick, America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni, Bruce Fried of SNR Denton, Premier VP Joseph Damore, and Robert Laszewski of Health Policy and Strategy Associates. (HITECHAnswers, October 10, 2012)

ACO Start-ups in IT-buying Mode
According to a recent Black Book Rankings survey 96 percent of start-up ACO executives are acquiring new information technology. Start-up ACOs anticipate spending $500 million in the first year. The Black Book IT Yearbook also provides guidance on over 100 functionalities needed to automate a successful ACO operation and provides an evaluation of potential vendors. (HealthcareIT News, September 24, 2012)

Survey: Lack of SGR Fix Slows ACO Growth
According to an MGMA-ACMPE study only 18% of more than 1,000 physician group practices surveyed are currently participating in a new Medicare payment delivery model or demonstration. The survey also found that 82% of the practices would be likely to explore new payment models but only if some stability is brought to the current payment system. "Our research shows that physician practices are willing to engage in new Medicare payment and delivery models that reward high-quality, cost-effective patient care outside of fee-for-service. Now Congress must do its part, repeal the SGR, and provide stability in Medicare payments so physicians can explore and test new patient centered approaches," said Susan Turney, MD, MS, FACP, FACMPE, MGMA-ACMPE president and CEO. (Medpage Today, October 26, 2012)

A Pioneer ACO One Year Later: Q & A with Presbyterian Pioneer ACO's Tracy Brewer
Tracy Brewer is the lead project manager of Albuquerque, New Mexico's Presbyterian Healthcare Services' ACO, one of the 32 organizations that were chosen by the CMS Center for Medicare and Medicaid Innovation to participate in the Pioneer accountable care organization program in December 2011. She was interviewed on Presbyterian's experience during its first year of operation. Brewer cites IT infrastructure as a critical aspect of the implementation process. She says with respect to quality indicator reporting that CMS "...has been working hard and diligently to get ACOs the information that they need in order to be successful, but much of the information won't be available until the fourth quarter. As we must prepare to report on the quality metrics at the end of the year, we continue to work as rapidly as possible as information is released to ensure our readiness." (Becker's Hospital Review, October 9, 2012)

Cigna Expands Its 'CAC Initiative'
CIGNA has announced the launch November 1, 2012 of an accountable care organization with Banner Health Network. The ACO, which CIGNA calls a Collaborative Accountable Care organization (CAC), will serve more than 20,000 beneficiaries receiving care from approximately 2,600 Banner-affiliated physicians in Arizona. (NASDAQ, October 22, 2012)

California Blue Partners to Create ACO Data Portal
Blue Shield of California will partner with NantHealth to co-develop a clinic-based "continuous learning center" (CLC) to provide personalized, molecular-based medicine for Blue Shield's ACO partners. A supercomputing, high-speed, secure-fiber network supported by fact-based genomic data systems will anchor the development. The system will be launched as part of a new accountable care organization formed between Blue Shield, Access Health and Saint John's Health Center in Santa Monica, CA, with a goal of providing better, more precise information to provide more coordinated and timely care. "This is a transformative first step towards a new model, and that model being proactively sustaining health rather than reactively treating acute and chronic illnesses," said Patrick Soon-Shiong, MD, founding chairman and CEO of NantHealth. "Chronic illness has become epidemic, and that is the biggest problem facing our healthcare system, both in terms of health outcomes and costs. Rather than waiting until people fall ill and have to be hospitalized, the NantHealth approach is to monitor patients with chronic conditions, in their homes or wherever they may be, and intervene as necessary before they become seriously ill." (Healthcare Finance News, October 3, 2012)

Quality Gains Alone Won't Generate ACO Bonuses
A simulation of the shared savings model developed by Archimedes, a data modeling company, and reported in the October issue of Health Affairs, found that ACO providers should not expect large returns on their investments if all they accomplish is meeting quality targets. In fact, in some cases achieving quality benchmarks could increase net costs. "Health policymakers didn't think savings would be achieved solely through the mechanism of improving quality," said Robert Berenson, MD, a senior fellow at the Urban Institute, a think tank in Washington. The Medicare Shared Savings Program requires a total net savings of 2.0% or more to qualify for bonuses, and CMS has estimated that ACOs would save Medicare $800 million in the first three years with each participating ACO earning an average of $2.5 million per year. The study suggests that those savings could not come from improving quality alone. The authors said, "Our analysis indicates that the savings needed to generate these payments will have to come from activities other than improvements in the clinical quality measures." (amednews.com, October 22, 2012)

Time Needed to Create the ACO

- click chart for larger version and full resource -

Source: HIN Accountable Care Organizations Survey - May 2012

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.

Early Experiences in Medicare: Pioneer ACOs and the Medicare Shared Savings Program

Elliott Fisher, MD, MPH
The Dartmouth Institute for Health Policy and Clinical Practice, Lebanon, NH

Jonathan Blum, MPP
US Department of Health and Human Services, Washington, DC

Caroline Blaum, MD, MS
University of Michigan Faculty Group Practice, Ann Arbor, MI

Richard Merkin, MD
Heritage California ACO, Northridge, CA

Judy Rich, RN
Tucson Medical Center, Tucson, AZ