Pathways To Success: A New Start For Medicare’s Accountable Care Organizations

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For many years we have heard health care policymakers from both political parties opine about the need to move to a health care system that pays for the value of care delivered to patients, rather than the mere volume of services.  While disagreements may arise on how we get to value, the need for this transformation is not in dispute.

This need is born from the reality that our health care spending is growing at an unsustainable rate.  If we continue on our present path, by 2026 we will be spending one in every five dollars on health care.  This will crowd out other public funding priorities like public safety, infrastructure, national defense, and education. It will also strain small businesses, preventing them from investing in growth or creating new jobs.  And finally it will lead to higher premiums, copays, and deductibles that will hit every American’s household budget.

From the moment I became Administrator of the Centers for Medicare & Medicaid Services (CMS), I have been committed to using every tool at my disposal to move our health care system towards value-based care.  This is not only a priority for CMS, but under the leadership of Secretary Azar and President Trump, the entire administration is aligned towards achieving this goal.

To this end, over the past year CMS has been evaluating all existing value-based payment models in order to assess performance and identify opportunities for improvement.

One set of value-based payment models that CMS has been closely reviewing are initiatives involving Accountable Care Organizations (ACOs).  ACOs can provide a path away from fee-for-service medicine and represent one of the first and most widespread efforts to make value-based care a reality.  Many providers view participating in an ACO as an opportunity to deliver better care in a coordinated fashion, while focusing on patient outcomes instead of processes.

ACOs are made up of groups of health care providers that are accountable for the quality of care and total health care spending for their assigned patients.  This is typically understood to mean that an ACO shares in savings if it keeps total health care spending for its patients below its given target, but the ACO has to repay CMS if spending for its patients exceeds its target.

Despite their laudable aspirations, however, the reality is that most Medicare ACOs do not actually operate this way.  In this post I will unpack key features of Medicare’s ACO initiatives and provide an overview of CMS’s new proposal for the Medicare Shared Savings Program, called “Pathways to Success.”

History Of Medicare ACOs

The majority of Medicare’s ACOs (561 of all 649 Medicare ACOs in 2018) are in the Medicare Shared Savings Program (Shared Savings Program or “MSSP”), which was launched in 2012.  10.5 million beneficiaries in Fee-for-Service Medicare (of the 38 million total Fee-for-Service beneficiaries) are in a Shared Savings Program ACO.  The Shared Savings Program and requirements around it were established by law in the Affordable Care Act.  Multiple tracks currently exist in the program, with ACOs taking on varying amounts of risk based on their track.

In addition to the Shared Savings Program, the Center for Medicare and Medicaid Innovation (Innovation Center) has developed other ACO initiatives, including the Next Generation ACO Model and the Comprehensive ESRD Care Model, in which the remaining 88 of the 649 Medicare ACOs are participating in 2018.  ACOs in the Innovation Center’s models generally take on greater levels of risk than ACOs in the Shared Savings Program.

Within both the Shared Savings Program and the Innovation Center’s ACO models, ACOs can be composed of hospitals, physician practices, and/or other types of health care providers.   Medicare beneficiaries are generally assigned to an ACO based on whether they obtain primary care services from the ACO’s health care providers.  Beneficiaries are assigned if they get the plurality of their primary care services from health care providers that are in the ACO, or beneficiaries can voluntarily align with an ACO by designating a physician or other practitioner in the ACO as their primary clinician.  Beneficiaries may not always know whether they are assigned to an ACO, or how participating in an ACO may change their health care providers’ incentives.

Assignment to an ACO does not limit a fee-for-service beneficiary’s choice of health care providers – beneficiaries can still obtain care from any health care provider they choose.  Thus, an ACO’s health care providers typically do not provide all health care services for their assigned beneficiaries, but they are responsible for these beneficiaries’ total Medicare Part A (inpatient) and Part B (outpatient) spending and for quality outcomes.

In addition to Medicare ACOs, ACO arrangements also exist among private payers.

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Upside-Only Versus Two-Sided ACOs

At the end of each year, the total Medicare Part A and Part B spending for an ACO’s assigned beneficiaries is summed and compared to the benchmark level of spending that was calculated for the ACO.  The ACO’s benchmark is an estimate of what the total Medicare Part A and Part B spending is expected to be for the ACO’s assigned beneficiaries.

A growth rate is applied to an ACO’s benchmark to calculate its target for the next performance year.  In some cases, the benchmark growth rate is based on the rate of spending growth in the ACO’s local market.  Therefore, if the ACO reduces the rate of spending growth for its market, the ACO can be penalized as the growth rate for its benchmark would also decrease.  That is, the ACO would be held to a lower target in the next year than it would have been held to if it had not decreased spending in its local market.

If spending for the ACO’s beneficiaries is below the benchmark by at least the applicable minimum savings rate, and if the ACO also meets certain quality thresholds, then the ACO receives a portion of the difference between actual spending and the benchmark as a shared savings payment.  Although ACOs have a financial incentive to keep spending down while meeting quality thresholds, a beneficiary who is assigned to an ACO does not share in those savings.

If spending for the ACO’s beneficiaries is above the benchmark, then what happens next differs between the two different categories of ACO tracks.  ACOs in “two-sided” tracks with spending that exceeds the applicable minimum loss rate have to pay CMS back some or all of the difference, but ACOs in “upside-only” tracks are not accountable for paying CMS back any of the difference.

The majority of Medicare’s ACOs – 460 of the 561 or 82% of Shared Savings Program ACOs in 2018 – are in the upside-only “Track 1” of the Shared Savings Program, meaning that they share in savings but do not share in losses.  Currently, ACOs are allowed to remain in the one-sided track for up to six years. 

All ACOs, including those in upside-only tracks, have access to waivers of certain federal requirements.  These include waivers of specific fraud and abuse laws, including the physician self-referral law and the Federal Anti-Kickback Statute.  The Next Generation ACO Model provides physicians and practitioners in participating ACOs with waivers from current statutory requirements to allow them to bill for certain telehealth services, as an opportunity to provide high-quality services at a low cost.  However, flexibility to bill for telehealth is limited in the Shared Savings Program.

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Survey: Two thirds of teens, young adults have used a health app | MobiHealthNews

Just under two-thirds of U.S. teens and young adults have used a health-related mobile health app, according to a new survey of more than 1,300 US teens and young adults aged 14 to 22 years.

The survey, sponsored by Hope Lab and Well Being Trust, was designed and analyzed in part by Susannah Fox, a former HHS chief technology officer who also conducted similar surveys in the past as a part of the Pew Research Center. Fox was joined by former director of the Kaiser Family Foundation’s Program for the Study of Media and Health Victoria Rideout. The research was conducted earlier this year by NORC at the University of Chicago (formerly the National Opinion Research Center).

A major focus of the report was to get a grounding of understanding on the relationship between depression and social media use in teens and young adults. It found that the relationship there is complicated: teens and young people who use social media extensively aren’t significantly more likely to have symptoms of depression, but those with depressive symptoms are more likely to report both negative and positive social media experiences.

But survey results also include some insights into how young people are using digital health tools in 2018.

“A total of 64 percent of teens and young adults say they have used a health-related mobile app, with fitness apps being the most commonly reported (45 percent),” the report's authors wrote. “One in four (26 percent) young people say they have used nutrition-related apps, while one in five report using apps related to sleep (20 percent) or menstrual cycles (20 percent). About one in 10 say they have used apps related to meditation or mindfulness (11 percent) and stress reduction (9 percent). Only 4 percent say they have used apps related to quitting smoking.”

Not all demographics used health apps at the same rate. Seventy-one percent of young women had tried a health app, compared to 57 percent of men. Thirty percent said they currently used a health app, compared to 20 percent of men.

Teens with moderate to mild depressive symptoms were also more likely to use a health app — 76 percent had done so, compared with 38 percent of those with no symptoms.

“There is not yet a strong evidence base for the effectiveness of health apps,” survey authors noted. “While this survey is not able to assess effectiveness, it did ask respondents how helpful they perceived health-related apps they’ve tried. We find that, of those who have tried health-related apps, a total of 76 percent find them at least ‘somewhat’ helpful: 27 percent say they were ‘very’ helpful and 49 percent say ‘somewhat.’ While 64 percent of young people say they have ‘ever’ used health apps, 25 percent say they ‘currently’ do. It appears that many young people are using health-related apps for just a short time — to reach a goal, for example.”

The vast majority of teens use health apps for fitness and much less for accessing online health information,  including access to their health portals.

Just shy of 40 percent of respondents had gone online to look for people with a health condition similar to their own. But when it came to going online to look for information about depression, that number was much higher for those with depression symptoms (53 percent).

Women and LGBTQ youth were also much more likely to search for information about depression or anxiety online (49 percent of women and 76 percent of LGBTQ respondents had looked for information about depression, 55 percent and 76 percent respectively for anxiety).

One thing teens and young adults still aren’t doing at a high rate is using online or mobile tools to communicate with their healthcare providers. Just one in five young people in the full sample had done so. That number went up to nearly one in three (32 percent) for those with depressive symptoms.

Those interested in learning more, especially about social media use and depression, can check out the full survey here.

The full scope of the value of health IT will require point of service education, including videos and podcasts. The use of recorded videos and podcast can assist.  Direct healthprovider contact can encourage the use of a portal, as well as signage at the intake and discharge desk.

Tags: 

HopeLab, Well Being Trust, depression, anxiety, teens, young adults, research, Susannah Fox, health apps, mobile health

Survey: Two-thirds of teens, young adults have used a health app | MobiHealthNews:

What You need to know about High Value Health Care

Endless Forms Most Beautiful: Evolving Toward Higher-Value Care:

How Providence St Joseph Health devised a Value-Oriented Architecture to guide physician practice. Rather than blaming "good doctors" or "bad doctors" they have developed a method for simultaneously measuring cost and outcomes and "drilling down" into the specific practices that drive variation.

In health care, variation is the state of nature. Despite efforts to introduce protocols, care pathways, order sets, checklists, and standardized quality measures, providers vary in their practice to a remarkable degree. Differences in outcomes and cost of care are visible when comparing countries, geographical regions, hospitals within a single city, and providers in the same practice. Some of this variation is doubtless benign. In other cases, it contributes to poor outcomes. And sometimes, perhaps frequently, it results in waste — greater cost without better outcomes.

Selective Pressure On Practice

The situation that healthcare practitioners find ourselves in might be described with an evolutionary analogy. In nature, random mutations in DNA sequences create genotypic variation, which results in phenotypic variation (observable differences in species). In the presence of selective pressure, some phenotypes propagate their genes more successfully than others. In medical practice, “genotypes” are the many individual decisions that constitute a provider’s method of practice, such as the selection of a medication, a surgical approach, a communication style. “Phenotypes” are the cost and clinical outcomes of care. Controlling for patient differences, it is variation in these many elements of practice (genotype) that drives differences in cost and outcomes (phenotype). Contemporary health care is characterized by abundant variation in practice and very little selective pressure to weed out those that don’t add value. Over a century and a half of modern medicine, a great variety of practices have developed, largely in the absence of forces that reward practices leading to good outcomes and low cost.

Times are changing. Governments, consumer groups, and patient safety organizations are advocating for more transparency in the outcomes of care, though the metrics generally promoted by such groups encompass only a small fraction of the outcomes desired by patients when seeking care. Perhaps more importantly, health care has become increasingly unaffordable, resulting in downward pressure on reimbursement to providers. Hospitals are especially affected, experiencing negative margins on once-lucrative procedures. Health care administrators, having negotiated the best rates they can on supplies, and having cut labor costs as much as they feel possible, are left with an uncomfortable reality. If their hospitals are to succeed, they will need to address a much more challenging source of cost: physician practice. This may not be an accurate analogy to the variabilty in health care outcomes. Genotype and phenotype are only relative to the DNA coding in cells.

Administrators want physicians to lower cost. Physicians want to optimize patient outcomes. While these conversations can go badly, they also have the potential to result in something very good — the selective pressure that health care has long lacked.”

Good Doctors, Bad Doctors — A False Dichotomy

At Providence St. Joseph Health, the third-largest nonprofit health system in America, with 24,000 physicians in seven states, we have developed a method for simultaneously measuring cost and outcomes and “drilling down” into the specific practices that drive variation. We refer to this as a Value-Oriented Architecture (VOA). The ability to drill down is essential. Consider the example of cost and outcomes variation for total knee replacements. Figure 1a is a Value Plot, displaying what our evolutionary analogy would call phenotypic variation. Each circle represents the performance of one high-volume orthopedic surgeon for primary elective unilateral knee replacement. The y-axis represents average direct cost per case (plotted in reverse order so that lower costs are higher on the graph); the x-axis is a composite outcome score (better scores are further to the right). Circles in the right upper quadrant thus seem to represent “high-value” practitioners.

At this summary level of analysis, where in the past our conversation may have ended, there is a tendency to overinterpret the results. Misleadingly, the graphic makes us think of “good doctors” and “bad doctors,” and suggests that the best solution might be to pick out “bad doctors” for remediation or removal. While that might be possible, it would be a very incomplete solution to the problem of health care waste. A more productive activity is to dive deeper and identify the drivers of variation.

If, indeed, low- or high-value practice variations can exist within a single practitioner, then an approach of keeping the good surgeon and removing the bad surgeon would be ineffective. Rather, a discovery-driven approach was needed to uncover the higher-value practices that lay beneath each cost category and could be codified and spread.”

Figure 1b simplifies the view by displaying only the cost dimension of total knee replacements. A different story emerges when cost is exploded into its primary component parts: implants, OR/anesthesia time, pharmacy room and board, and supplies. Figure 1c plots each individual as a ratio of his or her costs within each of those categories to the system average (marks above 1 indicate higher than average costs; marks below 1 indicate lower than average). A “good doctor” in this view would be someone with low costs in all categories. Figure 1d shows that while such physicians exist, they are rare. So are “bad doctors” — providers with high costs across the board. In fact, nearly all surgeons display “crossover” in this graph; that is, their cost is relatively high in some categories and relatively low in others.

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This phenomenon becomes even clearer as we move more deeply into the data. Figure 1d seems to indicate that within the category of pharmaceuticals, some physicians are high cost and other are low cost. However, even that distinction hides important variation. Figure 1e is a deeper view of pharmacy cost. Here, overall pharmacy costs are broken into subcategories that group similar agents together: in this case, analgesic and anesthetic agents and hematological agents (overall, the two largest pharmaceutical cost drivers in total knee replacement). The y-axis again expresses each surgeon’s cost as a ratio to the system average. Again, we see that some physicians cross over between categories — that is, they are low cost in some things and high cost in others. With respect to cost, “good practice” and “bad practice” often exist within the same doctors.

Everyone Has Something To Learn

Underneath the pharmaceutical agent categories lies the genotypic view. Figure 1f shows the breakdown of costs for one pharmaceutical subcategory, hematological agents. Here we discover that the use of Tisseel, a branded fibrin sealant, and tranexamic acid, an agent used to control blood loss, are the underlying practice variants. These practice differences are driving variation in hematological cost, which in turn contributes to variation in pharmaceutical cost and eventually to overall cost.

For each clinical area that we have explored using VOA, there are many small differences in practice like this one, which together have a large cumulative impact on cost. For example, Table 1 shows that for total knee replacements, the cost per case of a hypothetical surgeon whose practice consisted only of the most cost-effective practice variations is 35% lower than the system average. Today, Providence St. Joseph’s most cost-effective provider is 20% lower than the system average, meaning that even he has opportunity for improvement.

Table 1. Click To Enlarge.

The work of uncovering the specific elements of practice that drive cost differences has been illuminating and at times surprising. We have uncovered many examples of administrative quirks (“I have no idea how that got into my preference card”); cost ignorance (“This costs how much?”); misleading information (“The rep told me this was cheap”); and a (more......

Endless Forms Most Beautiful: Evolving Toward Higher-Value Care:

California settlement a big win for medical staff independence |

 In a ground breaking and precedent setting case, a July court settlement regarding California’s Tulare Regional Medical Center (TRMC) marks a resounding win for medical staff self-governance. The settlement reinstates—with all of its rights, privileges, and status—the organized medical staff that was fired and replaced, and the hospital has agreed to pay $300,000 for the TRMC medical staff’s legal expenses.

The case is a major legal milestone for the nation as a whole. Hospital administration and medical staff governance are often a loggerheads about many issues.  Ultimately the board of trustees approves or disapproves major issues when presented by either group, because they are the fiduciary representatives.

Some background information.

Medical staff organizations are typically free-standing organizations with their own bylaws and regulations.  This allows the physicians to act independently from hospitals and their owners allowing them to make independent decisions directing quality of care for patients.  This provides a direct route from physicians to patients when there are disputes with hospital management.

Such a conflict arose at Tulare Regional Medical Center, a Tulare County District Hospital, several years ago.

The suit was filed after the hospital’s board of directors voted Jan. 26, 2016, to terminate the medical staff organization, remove elected medical staff officers, install a slate of appointed officers and approve new medical staff bylaws and rules without staff input.

At the time, CMA legal counsel and litigation director Long Do said the case represented “an existential threat to independent hospital medical staffs.”

The hospital eventually filed for bankruptcy and closed its doors. None of the current members of the hospital’s board of directors were members of its board during the events that were in dispute.

In the settlement, TRMC has agreed to:

• Not recognize the replacement staff, its leaders or bylaws.
• Reinstate the original medical staff, its duly-elected officers, with all the privileges, rights and status that existed before the Jan. 26, 2016 termination.
• Reinstate the pre-existing medical staff bylaws, rules, and policies.
• Pay $300,000 for the TRMC medical staff’s attorneys’ fees and costs.
• Waive all rights to appeal or challenge the settlement’s validity.

Milestone Event:  HCCA out of Tulare Regional Medical Center

The hospital is now seeking a new operator and financing to reopen it's doors. The medical staff must now be reconstituted.

The effect on the community was devastating.  

The AMA and the Litigation Center provided significant legal and financial support for the medical staff lawsuit.



California settlement a big win for medical staff independence | AMA Wire: