0
Topics In Practice Management |

Preparing for Accountable Care OrganizationsPreparing for Accountable Care Organizations: A Physician Primer FREE TO VIEW

Randall T. Curnow, Jr, MD, MBA; Jesse T. Doers, MD, FCCP
Author and Funding Information

From Summit Medical Group, PLLC (Dr Curnow); and Statcare Pulmonary Consults (Dr Doers), a subsidiary of Summit Medical Group, PLLC, Knoxville, TN.

Correspondence to: Randall T. Curnow Jr, MD, MBA, Summit Medical Group, PLLC, 1225 E Weisgarber Rd, Ste 200, Knoxville, TN 37909; e-mail: rcurnow@summithealthcare.com


Reproduction of this article is prohibited without written permission from the American College of Chest Physicians. See online for more details.


Chest. 2013;143(4):1140-1144. doi:10.1378/chest.12-2299
Text Size: A A A
Published online

The concept of the accountable care organization (ACO) offers the opportunity to better integrate the health system into a value proposition aligned toward improved care, more efficient delivery, and higher patient satisfaction. As a significant component of health reform, the ACO has many implications for physicians. Physicians interested in joining ACOs have a variety of options, including forming their own, integrating (virtual or otherwise) with larger health systems, or joining multiple, existing ACOs. To succeed, fundamental changes away from the past fee-for-service model will be necessary. Clinical and financial data will become of paramount importance. The data will need to be more accessible, more accurate, and more appropriately used to align with the greater ACO value proposition. Physicians will also need to embrace the “era of persuasion” with its underlying assumption that engaging patients and other physicians are as necessary as a proper diagnosis and treatment plan. As there is a wide array of options in the marketplace, providers must have a clear understanding of patient attribution, financial incentives, and quality metrics within any ACO agreement. Finally, the health-care system must acknowledge the difficulties associated with the pace of change itself and invest in resources to aid in the adaptive reserve of all components of the health-care system.

In response to the presence of serious gaps in clinical quality, widespread waste, and escalating health-care costs, the formal concept of an accountable care organization (ACO) was first introduced in 2007.1 Broadly, an ACO can be defined as “a group of physicians, other healthcare professionals, hospitals, and other healthcare providers that accept a shared responsibility to deliver a broad set of medical services to a defined set of patients across the age spectrum and who are held accountable for the quality and cost of care provided through alignment of incentives.”2 As the definition implies, the ACO requires alignment and a multitude of elements to reach its goal of accountability across the care spectrum. This discussion focuses on the implications of accountable care for practicing physicians.

Accountability across the spectrum of care begs the question of which of the various participants in the health-care arena should create an ACO. Literature has focused on the capacities of physicians, hospitals, and health plans to effectively form and manage ACOs.3,4 Given their subject expertise and role as the primary deliverers of care, physician groups would seem well positioned to provide leadership in health-care quality and efficiency. However, there are extensive hurdles to realizing this opportunity.

The greatest challenges involve insufficient infrastructure, cultural alignment, and structural impediments to collaboration. Regarding infrastructure, most physician organizations, except for the largest and most sophisticated multispecialty groups, do not have the information, administration, and financial systems in place to support accountable care across the entire care continuum. As evidence of such limitations, the Centers for Medicare & Medicaid Services (CMS) acknowledge that small group practices would have difficulties meeting requirements for participation in the Medicare Shared Savings Program (MSSP) ACO.5

If physicians themselves had such resources, the need for new terms like “ACO” might be rendered unnecessary. This should not be seen as a condemnation of the independent physician-group community. The fact is that physicians did not need such infrastructure to participate and thrive in the fee-for-service environment of the past decades. There may be limits to what physician groups can accomplish. Influencing the internal efficiencies of hospitals, durable medical equipment facilities, and other health-care entities are beyond the direct scope of even the most sophisticated, nonintegrated medical groups.

The cultural challenges physician groups encounter in pursuit of accountable care are also daunting. Physicians are generally drawn to medicine in no small part because of the cultural pillars of autonomy and professionalism. These tend to run counter to ACO objectives such as team-based care, standardization, and accountability for outcomes.4,6 Even among large physician groups that have risen to the infrastructure and cultural challenges, divisive issues such as revenue allocations to specialists and primary care physicians remain. Such problems will likely become more prominent in the era of allocating shared savings.

Alignment of Such External Resources Is Going To Be a Key Success Driver in Future ACOs

ACOs will likely play an increasing role in health-care delivery in the future; therefore, independent medical groups will need to decide how, not if, to engage them. There are three basic ACO engagement options available to medical groups: build independently, build in partnership with others, or work across multiple ACOs.

Groups with sufficient infrastructure and a large primary care base will have the most success independently creating ACOs. Primary care is going to be critical to any ACO’s success, given its role with the patient in self management, coordination, referrals, utilization, and education. The benefits of building ACOs independently are more autonomy and control of revenue allocation, and fewer cultural conflicts with external organizations. The challenges for an independent medical group (not integrated into a hospital or commercial insurance plan) are the high capital requirements, limited access to financial/claims data, and the creation of improved alignment with external health-care entities (other groups, hospitals, payers, and so forth).

For many medical groups, partnering with others, such as hospitals or payers, may be an attractive alternative. This would minimize the capital burdens and allow the group to focus on providing and enhancing their current core functionalities. Such virtual integration would also provide an alternative to medical groups besides hospital employment. However, these partnership arrangements would come at some cost—primarily less control over revenue allocation as the other partner(s) with larger equity stakes would understandably expect larger shares of revenue/profits. Different normative value systems between virtually aligned organizations can also cause significant cultural conflicts that might impair the success of an ACO.

Another alternative for medical groups is to work with multiple ACOs. This option might be particularly advantageous for small specialty groups that want the option of having a larger referral base than a single ACO in their region. The resulting “participate in multiple ACOs” model would seem to be superficially identical to the average specialty-group operation. However, in the era of integration, alignment, and value differentiation, such groups will have to be increasingly responsive to the specific needs of their various ACOs to be successful.

For many physicians, the ACO environment will be a dramatic departure from their current practice style. Physicians will find reimbursement increasingly linked to nonproduction metrics, the ability to engage in complex data resources, and the ability to influence others’ behavior (ie, patients and other physicians).

Any discussion of revenue from savings and efficiency reminds many physicians of the managed care organizations (MCOs) of the 1990s. While there are significant similarities between MCOs and ACOs, their differences7,8 are critical to creating a more sustainable, equitable solution for the country as a whole than that realized by MCOs. Experience over the last 20 years and delivery-model changes give ACOs the potential to differentiate themselves from MCOs, given more knowledge of health-care costs, more access to impactful data, more extensive and enhanced clinical guidelines and metrics, and more collaboration and physician engagement/control.7 In addition, for many ACOs, including the MSSP, benchmarks for quality metrics and patient satisfaction must be achieved to share in generated savings.9

When looking into the ACO, value-based future, physicians should expect deep changes in the practice of medicine. In fact, such changes are already occurring with the broad-based adoption of electronic medical records across the United States.

Fundamentally, there are four types of changes likely to have the strongest impact on future delivery and payment processes. First are changes to the foundation of reimbursement. There is little doubt that there is room for improvement. The current “hamster wheel” processes generated by the volume-based payment are a great source of difficulty and frustration for patients and physicians, while also deterring medical-school students from entering the field.10,11 It is little surprise that in a survey of health-care organizations, 57% are using quality metrics and another 50% are pursuing patient satisfaction scores as physician-incentive programs.12 But all change is hard, even when such change may be for the better. As such, the challenges of reimbursement changes should not be underestimated. One of the potential advantages to physicians playing a prominent role in the evolution of ACOs is the opportunity to shape such changes toward value for patients and providers.

Second, physicians, particularly primary care physicians, will need to deal with increasingly numerous sources of clinical and claims data. To identify opportunities to improve coordination and collaboration between health-care organizations, engage patients during precarious transition episodes, and identify quality and efficiency opportunities, ACOs will need access to timely and accurate information. Models like the MSSP will provide shared savings to ACOs based on improvements compared with benchmark historical costs; therefore, physicians will need to understand the ACO’s patient attribution methodologies and recent claims data and historical cost trends. Given the impact of such data on an ACO’s success, the data must be timely. We would recommend that “accountable” providers take steps to ensure, whenever possible, that the ACO is contractually obligated to provide such data at least quarterly and, ideally, monthly.

Experience within our own organization with multiple, value-based contracts (including the CMS-MSSP ACO model) has shown that access, collection, aggregation, and staging of such to the providers and staff that can act on the data are often a challenge. It has also been noted that one of the problems facing the pioneer Medicare ACOs was the timeliness, accuracy, and completeness of data reporting.13

Third, physicians will have to actively participate in the coming era of persuasion. In the past, a physician’s expertise relied on taking an appropriate history, assessing the differential diagnosis options, and making clinical treatment recommendations. In the value-based ACO model, physicians will have an incentive to persuade patients to make lifestyle changes, improve compliance, and educate patients about efficiencies that can improve the patient experience. This is not to say physicians did not attempt to support patients with such goals in the past. But in the ACO future, there will actually be reimbursement tied to the physician’s success. Key to such success is the fact that patients will not likely be “locked in” to the physician’s recommendations. For instance, the MSSP model deviates substantially from the past ACO model of the 1990s by continuing to allow patients to pursue their individual care choices.5

Finally, physicians will need to embrace team-based care. An ACO’s success will be measured by its ability to create improved clinical outcomes (quality) and cost efficiency. Workflow redesign to incorporate electronic health records and having all staff work to the top of their licensure are among the core components of the patient-centered medical home (PCMH).14 Such principals will apply to primary care and specialist providers alike to ensure the right care is provided at the right time. Care management, particularly through patient engagement after hospital discharge, is another key aspect of team-based care in so much as it has been shown to lower readmissions and lower costs.15 An ACO will likely need to provide not only a backbone of care management but also clearly delineate the workflows and processes to all providers associated with specific episodes of patient care.

Physicians engaging with ACOs will need to better understand the fundamentals of value-based contractual obligations and relationships. The CMS-MSSP model ties the ability to access generated savings with meeting specific, clinical, performance metrics. Unfortunately, it is our experience that there is a myriad of such metrics in the marketplace, seemingly a different set for each payer. Suffice it to say that providers should be aware of the specific definitions, sources, and methodologies of all quality metrics for which they enter into a contractual relationship with an ACO. Specifics and source, as well as methodologies, for all quality metrics should be defined in the ACO/ACA agreement. As with any contract, providers should also pay careful attention to their financial responsibilities (particularly for the presence of bearing risk) and out clauses.

As is the case with quality metrics, there is a vast array of provider and hospital payment options within an ACO. While a survey of such options is beyond the scope of this primer, comprehensive discussions are available and include options such as bundled payments, case rate reimbursement, and “warranties” (in which hospitals and/or providers agree not to charge more for services to correct errors, infections, and other hospital-acquired complications).16 Pulmonary, critical care, and sleep physicians, along with other specialists, can likely expect their payments to be linked to their impact on shared savings and quality of care for specific patients in the ACO for whom the specialist has provided care. Such “linkage” may take the form of specialists being paid a certain percentage of the ACO’s total generated savings for the entire population of attributed patients to the ACO or a narrow band of savings generated only by the patients within the ACO assigned or attributed to a specialist. Again, it is critical that providers understand the specifics of such financial arrangements and patient-attribution methodologies.

With such dynamic changes approaching health care, perhaps the greatest challenge will be change management itself. The hurdles associated with continuous change were highlighted during the American Academy of Family Physicians’ National Demonstration Project, launched in 2006 by selecting a national sample of practices to test a comprehensive PCMH model.17 The Project demonstrated that while transforming practices into PCMHs is feasible, it requires a high level of effort, and sustaining such effort was often difficult. In particular, focus should be placed on enhancing a group’s adaptive reserve (capacity for organizational learning and development) so it could better evolve without burning out. The Project also noted that practices will need additional resources for this magnitude of transformation, including external support. Such lessons underscore the difficulty in change management itself. Medical groups ignore this reality at their own peril and must takes steps to address their adaptive reserve.

The ACO offers the opportunity to better integrate the health system into a value proposition aligned toward improved care, more efficient delivery, and higher satisfaction. To succeed, fundamental changes away from the past fee-for-service model will be necessary. Clinical and financial data will become of paramount importance. The data will need to be more accessible, more accurate, and more appropriately used to align with the greater ACO value proposition. Just as important, providers must clearly understand patient attribution, financial incentives, and quality metrics that are defined within any ACO agreement. Physicians will also need to embrace the “era of persuasion” with its underlying assumption that engaging patients and other physicians are as necessary as a proper diagnosis and treatment plan. Finally, the health-care system must acknowledge the difficulties associated with the pace of change itself and invest in resources to aid in the adaptive reserve of all components of the health-care system.

Financial/nonfinancial disclosures: The authors have reported to CHEST that no potential conflicts of interest exist with any companies/organizations whose products or services may be discussed in this article.

ACO

accountable care organization

CMS

Centers for Medicare & Medicaid

MCO

managed care organization

MSSP

Medicare Shared Savings Program

PCMH

patient-centered medical home

Fisher ES, Staiger DO, Bynum JPW, Gottlieb DJ. Creating accountable care organizations: the extended hospital medical staff. Health Aff (Millwood). 2007;26(1):w44-w57. [CrossRef] [PubMed]
 
Joint principles for accountable care organizations. American College of Physicians website.http://www.acponline.org/advocacy/where_we_stand/other_issues/aco-principles-2010.pdf. Accessed August 12, 2012.
 
Kocher R, Sahni NR. Physicians versus hospitals as leaders of accountable care organizations. N Engl J Med. 2010;363(27):2579-2582. [CrossRef] [PubMed]
 
Fuchs VR, Schaeffer LD. If accountable care organizations are the answer, who should create them? JAMA. 2012;307(21):2261-2262. [CrossRef] [PubMed]
 
CMS FAQ for Medicare Shared Savings Program. Centers for Medicare & Medicaid Services website.http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/MSSP_FAQs.pdf. Accessed August 12, 2012.
 
Lee TH. Turning doctors into leaders. Harv Bus Rev. 2010;88(4):50-58. [PubMed]
 
Emanuel EJ. Why accountable care organizations are not 1990s managed care redux. JAMA. 2012;307(21):2263-2264. [CrossRef] [PubMed]
 
Mirabito AM, Berry LL. Lessons that patient-centered medical homes can learn from the mistakes of HMOs. Ann Intern Med. 2010;152(3):182-185. [PubMed]
 
Berwick DM. Making good on ACOs’ promise—the final rule for the Medicare shared savings program. N Engl J Med. 2011;365(19):1753-1756. [CrossRef] [PubMed]
 
Goroll AH, Schoenbaum SC. Payment reform for primary care within the accountable care organization: a critical issue for health system reform. JAMA. 2012;308(6):577-578. [CrossRef] [PubMed]
 
American College of PhysiciansAmerican College of Physicians. Reform of a dysfunctional healthcare payment and delivery system. American College of Physicians website.http://www.acponline.org/advocacy/where_we_stand/policy/dysfunctional_payment.pdf2006. Accessed August 19, 2012.
 
Minich-Pourshadi K. Physician compensation incentives shifting. HealthLeaders. 2011;;(10):28-32.
 
Lieberman S. Pioneer ACOs: promise and potential pitfalls. Health Affairs website.http://healthaffairs.org/blog/2011/12/29/pioneer-acos-promise-and-potential-pitfalls/. Accessed August 18, 2012.
 
American College of PhysiciansAmerican College of Physicians. Joint principles of a patient-centered medical home released by organizations representing more than 300,000 physicians. American College of Physicians website.http://www.acponline.org/pressroom/pcmh.htm. Accessed August 27, 2012.
 
Osei-Anto A, Joshi M, Audet AM, Berman A, Jencks S. Health care leader action guide to reduce avoidable readmissions. Chicago, IL: Health Research & Educational Trust, The Commonwealth Fund, and the John A. Hartford Foundation; 2010.
 
Miller HD. Transitioning to Accountable Care: Incremental Payment Reforms To Support Higher Quality, More Affordable Health Care.1st ed. Pittsburgh, PA: Center for Healthcare Quality and Payment Reform; 2011.
 
Crabtree BF, Nutting PA, Miller WL, Stange KC, Stewart EE, Jaén CR. Summary of the National Demonstration Project and recommendations for the patient-centered medical home. Ann Fam Med. 2010;8(suppl 1):S80-S90., S92. [CrossRef] [PubMed]
 

Figures

Tables

References

Fisher ES, Staiger DO, Bynum JPW, Gottlieb DJ. Creating accountable care organizations: the extended hospital medical staff. Health Aff (Millwood). 2007;26(1):w44-w57. [CrossRef] [PubMed]
 
Joint principles for accountable care organizations. American College of Physicians website.http://www.acponline.org/advocacy/where_we_stand/other_issues/aco-principles-2010.pdf. Accessed August 12, 2012.
 
Kocher R, Sahni NR. Physicians versus hospitals as leaders of accountable care organizations. N Engl J Med. 2010;363(27):2579-2582. [CrossRef] [PubMed]
 
Fuchs VR, Schaeffer LD. If accountable care organizations are the answer, who should create them? JAMA. 2012;307(21):2261-2262. [CrossRef] [PubMed]
 
CMS FAQ for Medicare Shared Savings Program. Centers for Medicare & Medicaid Services website.http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/MSSP_FAQs.pdf. Accessed August 12, 2012.
 
Lee TH. Turning doctors into leaders. Harv Bus Rev. 2010;88(4):50-58. [PubMed]
 
Emanuel EJ. Why accountable care organizations are not 1990s managed care redux. JAMA. 2012;307(21):2263-2264. [CrossRef] [PubMed]
 
Mirabito AM, Berry LL. Lessons that patient-centered medical homes can learn from the mistakes of HMOs. Ann Intern Med. 2010;152(3):182-185. [PubMed]
 
Berwick DM. Making good on ACOs’ promise—the final rule for the Medicare shared savings program. N Engl J Med. 2011;365(19):1753-1756. [CrossRef] [PubMed]
 
Goroll AH, Schoenbaum SC. Payment reform for primary care within the accountable care organization: a critical issue for health system reform. JAMA. 2012;308(6):577-578. [CrossRef] [PubMed]
 
American College of PhysiciansAmerican College of Physicians. Reform of a dysfunctional healthcare payment and delivery system. American College of Physicians website.http://www.acponline.org/advocacy/where_we_stand/policy/dysfunctional_payment.pdf2006. Accessed August 19, 2012.
 
Minich-Pourshadi K. Physician compensation incentives shifting. HealthLeaders. 2011;;(10):28-32.
 
Lieberman S. Pioneer ACOs: promise and potential pitfalls. Health Affairs website.http://healthaffairs.org/blog/2011/12/29/pioneer-acos-promise-and-potential-pitfalls/. Accessed August 18, 2012.
 
American College of PhysiciansAmerican College of Physicians. Joint principles of a patient-centered medical home released by organizations representing more than 300,000 physicians. American College of Physicians website.http://www.acponline.org/pressroom/pcmh.htm. Accessed August 27, 2012.
 
Osei-Anto A, Joshi M, Audet AM, Berman A, Jencks S. Health care leader action guide to reduce avoidable readmissions. Chicago, IL: Health Research & Educational Trust, The Commonwealth Fund, and the John A. Hartford Foundation; 2010.
 
Miller HD. Transitioning to Accountable Care: Incremental Payment Reforms To Support Higher Quality, More Affordable Health Care.1st ed. Pittsburgh, PA: Center for Healthcare Quality and Payment Reform; 2011.
 
Crabtree BF, Nutting PA, Miller WL, Stange KC, Stewart EE, Jaén CR. Summary of the National Demonstration Project and recommendations for the patient-centered medical home. Ann Fam Med. 2010;8(suppl 1):S80-S90., S92. [CrossRef] [PubMed]
 
NOTE:
Citing articles are presented as examples only. In non-demo SCM6 implementation, integration with CrossRef’s "Cited By" API will populate this tab (http://www.crossref.org/citedby.html).

Some tools below are only available to our subscribers or users with an online account.

Related Content

Customize your page view by dragging & repositioning the boxes below.

Find Similar Articles
CHEST Journal Articles
PubMed Articles
  • CHEST Journal
    Print ISSN: 0012-3692
    Online ISSN: 1931-3543