Implementing ACO’s

One strategy for implementing Accountable Care Organizations is detailed in the case study of Advocate Physician Partners.

This case report describes Advocate Physician Partners (APP) in Illinois, a physician-hospital Accountable Care Organization (ACO) model which seeks to integrate independent physician practices into ACOs.  APP is an organization representing 3,500 physicians working in a joint venture with Advocate Health Care, a not-for-profit health system in northern Illinois consisting of ten hospitals and employing 800 physicians in large multidisciplinary groups.  Member physicians provide care for nearly one million northern Illinois patients in commercial health insurance programs.

This article details the challenges to this type of physician-hospital integration including adjusting to the dominance of small, independent practices, the traditionally voluntary nature of hospital medical staff, the dominance of fee-for-service payments, and the need to move beyond public programs.

While current fee-for-service plans do not include provisions for beneficial activities such as chronic disease management, prevention counseling, and care coordination, APP implemented performance payments to primary care and specialty physicians based on technology use, efficiency, quality, safety, and patient experience.  These performance payments are intended to promote individual accountability by focusing physicians on individual and population health as well as inspiring group performance through peer pressure, group collaboration across specialties, and increased physician alignment with hospital goals.

The United States health system is dominated by independent small and group practices not directly associated with hospitals.  The allowance of joint contracting on the basis of clinical integration allowed by the Federal Trade Commission (FTC) allowed APP to negotiate fee-for-service contracts with nine major managed care organizations (MCOs) and two Health Maintenance Organizations (HMO’s) in an effort to promote care integration.  Integration into a this larger partnership streamlines administrative processes such as contract negotiations and credentialing with multiple MCOs; drives performance improvement by providing quality improvement expertise and infrastructure that may otherwise go beyond the capital resources of small practices; and focuses the quality improvement and cost effectiveness efforts of physicians and hospitals through development of a single set of performance measures with standard definitions.

Problems with traditional voluntary medical staff include lower capability to rapidly improve quality and safety and the inability to remove under-performing physicians or to reward physicians for improved performance.  Hospitals see the ACO model as a way to meet important clinical, efficacy, and patient satisfaction goals.   The APP allows the coordination of physician and hospital incentive programs so that some goals, including CMS performance measures and patient safety goals, are shared.

The Patient Protection and Affordable Care Act (ACA) looks to implement the ACO model into Medicare and Medicaid even though roughly half of the U.S. health system consists of the private commercial market.  Adaptation by the private sector is essential for the widespread success of ACOs.  The APP is seen by private payers as a way to reduce medical costs and improve care by reducing the resources used across episodes of care, standardizing performance measures, and adapting quality measures in response to market needs.

Commentary

In the United States, we have what is often referred to as a healthcare “system” when in fact it tends to boil down to a large mix of payers and providers operating relatively independent from one another.  The end result is that quality and cost effectiveness suffer.  The APP provides a solid starting point for the progression toward a system of care that focuses on improving patient health in a cost effective manner, but policy makers should be aware of additional challenges that will need to be addressed in a more comprehensive manner.  What awaits any organization looking to duplicate this ACO model are infrastructural and administrative issues faced by the US healthcare system as a whole.  These include measurement and payment based on performance measures, selection of performance measures, demonstration of ACO savings, and adaptation of necessary infrastructure (electronic medical records and additional staff) by smaller practices.  Additionally, there potential for conflict of interest in a system run primarily by physicians who dictate performance measures and cost effectiveness methods that will ultimately determine a portion of their pay.  Transparency in the selection of performance based criteria, as well as aligning measures with measures of quality already established (HEDIS, CMS) will minimize this concern.  Finally, policy makers should be aware of a “searching under the lamp post” effect when uniform performance measures are used.  There is an inherent danger of over-focusing on measured behaviors to the neglect of others.

Shields MC, et al. “A model for integrating independent physicians into accountable care organizations.” Health Affairs. 2011; 30 (1): 161-72.

by

Patrick Fitzgerald, MPH