The Everett Clinic has done outstanding lean work over the years showing reductions in cost of care and improved quality.  Why aren’t they pursuing the ACO model?

This according to Politico a Washington D.C. based electronic policy publication:

The Everett Clinic, which has been participating in Medicare’s accountable care organization demonstration project since 2005, doesn’t plan to pursue certification as a full-blown ACO

Officials at the clinic explain that their strategy is to move patients out of traditional Medicare and into the Medicare Advantage managed care program.

“I think it’s fair to say we’re very disappointed with the ACO rule,” Mark Mantei, CEO of the Everett, Wash.-based clinic said.

The rule doesn’t do enough for “high-performing” clinics like Everett. In particular, there isn’t enough “financial reward” for attaining higher quality care, similar to what CMS created in the 5-star quality bonus program in Medicare Advantage. In short, the clinic has put lots of effort into improving care for its patients, but has seen “little potential return.”

— Retrospective attribution of patients and retrospective setting of cost targets are problematic. An ACO needs to be able to nimbly act when it knows what patients are in the system, to quickly employ care coordination treatment. The proposal doesn’t account for this, Mantei said.

— Poor “coding” for treatment that didn’t reflect how sick Everett’s patients are continues to penalize the clinic. The analysts at Everett explained that the limitations in the rule on “risk adjustment” methodology are too great.

So, as I blogged yesterday high performing systems like ThedaCare and the Everett Clinic are finding little reason to participate in ACOs but many reasons to participate where better value is rewarded such as the Medicare Advantage bonus pool. I would also add to that the Physician Quality Reporting Initiative(PQRI), the Electronic health record bonuses through the Office of the National Coordinator and hopefully a new avenue related to CMS’s safety initiative reported on this blog a couple weeks ago with more information to come next week.

Last week the NEJM published Don Berwick’s perspective on the ACO proposed rules just released two weeks ago.  There are concerns with these proposed rules some of which are documented below.

 The following is a quote from the NEJM article:

“A critical foundation of the proposed rule is its unwavering focus on patients. We envision that successful ACOs will honor individual preferences and will engage patients in shared decision making about diagnostic and therapeutic options. Information  management — making sure patients and all health care providers have the right information at the point of care — will be a core competency of ACOs”.

We are concerned that the rules as proposed are too focused on Medicare saving money and not enough focused on improving patient care. While this is understandable as the Medicare program is in trouble financially and Congress is eyeing major cuts which could be a serious threat to delivering care that many seniors rely on, we encourage more experimentation with how ACO’s can improve quality of care and simultaneously reduce cost.  At this point, the ACO is only a theory which is based on little evidence. Making hospitals and doctors come together in a formal structure when they don’t necessarily want to may or may not garner better patient care. We need to experiment with this new idea before etching into the fabric of CMS. The notion of running experiments to test the ACO hypothesis is specifically allowed by federal law.  The Affordable Care Act created the Center for Medicare and Medicaid Innovation , which is designed to allow for such rapid tests of change to determine what works and what doesn’t  with pdsa cycles allowing for improvement quickly.

We are concerned about CMS first pursuing broad ACO regulations that are 428 pages long despite their length can’t possibly address all the issues that will come up in testing a radically new way to to pay hospitals and physicians.  It may be difficult to get organizations to take the leap to try a new way when there is not much incentive to do so.

On this site we have argued vigorously that Medicare and other payors should pay based on value created for the patient. Value defined as Quality/Cost. This value is created at the level of the patient condition not in structures far removed from what the patient experiences. In a value based world bigger is not better. Accepting risk is not important but delivering higher quality lower cost care to patients is rewarded by insurers and government payors.

The following are just 5 of many questions we will need to get answers to for ACOs to be successful.

1.        Since there is no risk adjustment for the performance period how do participants know they have been fairly compensated for the types of patients they are caring for?

2.        There are no waivers for fraud and abuse so how closely can doctors and hospitals actually work together without getting into legal trouble?

3.        There is no prospective analysis of performance so how do organizations that participate know if the new process they put in place to reduce cost and improve quality actually worked for the Medicare enrollees.

4.        There is no clear definition of what quality performance needs to be until after the participants sign up and no data sharing until that happens either. How does the ACO know whether the targets are even achievable.

5.        In the shared savings approach the upside potential in the “two sided” model is tiny so why would any organization opt for this model?

These are only a few of the problems identified by our team. The Center will be commenting on the proposed rules. My hope is CMS and Dr. Berwick will carefully review the many issues and make good decisions that will improve value delivery to patients.

The following is his NEJM article – http://www.nejm.org/doi/full/10.1056/NEJMp1103602

CMS announces “Partnership for patients to improve care and lower costs for Americans”

CMS announced this initiative yesterday which is funded by CMS and the Center for Medicare and Medicaid Innovation. The announcement follows these comments. It’s very clear to me there are a few hospitals really doing this work across the nation many of them work with the Healthcare Value leaders Network  and many of them have been referred to or highlighted on this web site. Quite frankly, this idea isn’t new and I hope that CMS takes advantage of the wealth of knowledge already created around delivering highly reliable care by using system transformation techniques that are well documented on this site and within existing organizations who we have identified by close observation as the  pioneers.

“New partnership between Administration, the private sector, hospitals and doctors to make care safer, potentially save up to $50 billion.”

Health and Human Services Secretary Kathleen Sebelius, joined by leaders of major hospitals, employers, health plans, physicians, nurses, and patient advocates, today announced the Partnership for Patients, a new national partnership that will help save 60,000 lives by stopping millions of preventable injuries and complications in patient care over the next three years.  The Partnership for Patients also has the potential to save up to $35 billion in health care costs, including up to $10 billion for Medicare.  Over the next ten years, the Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings.  Already, more than 500 hospitals, as well as physicians and nurses groups, consumer groups, and employers have pledged their commitment to the new initiative.

“Americans go the hospital to get well, but millions of patients are injured because of preventable complications and accidents,” said Secretary Sebelius.  “Working closely with hospitals, doctors, nurses, patients, families and employers, we will support efforts to help keep patients safe, improve care, and reduce costs. Working together, we can help eliminate preventable harm to patients.”

Leaders from across the nation pledged their commitment to this new initiative.  To launch this initiative, HHS announced it would invest up to $1 billion in federal funding, made available under the Affordable Care Act.  On Tuesday, $500 million of that funding was made available through the Community-based Care Transitions Program.  Up to $500 million more will be dedicated from the Centers for Medicare & Medicaid Services (CMS) Innovation Center to support new demonstrations related to reducing hospital-acquired conditions.  The funding will be invested in reforms that help achieve two shared goals:

• Keep hospital patients from getting injured or sicker. By the end of 2013, preventable hospital-acquired conditions would decrease by 40-percent compared to 2010.  Achieving this goal would mean approximately 1.8 million fewer injuries to patients, with more than 60,000 lives saved over the next three years.

•  Help patients heal without complication. By the end of 2013, preventable complications during a transition from one care setting to another would be decreased so that all hospital readmissions would be reduced by 20-percent compared to 2010.  Achieving this goal would mean more than 1.6 million patients will recover from illness without suffering a preventable complication requiring re-hospitalization within 30 days of discharge.

The Partnership will target all forms of harm to patients but will start by asking hospitals to focus on nine types of medical errors and complications where the potential for dramatic reductions in harm rates has been demonstrated by pioneering hospitals and systems across the country.  Examples include preventing adverse drug reactions, pressure ulcers, childbirth complications and surgical site infections. The CMS Innovation Center will help hospitals adapt effective, evidence-based care improvements to target preventable patient injuries on a local level, developing innovative approaches to spreading and sharing strategies among public and private partners in all states.  Members of the partnership will identify specific steps they will take to reduce preventable injuries and complications in patient care.

“With new tools provided by the Affordable Care Act, we can aggressively implement programs that will help hospitals reduce preventable errors,” said CMS Administrator Donald Berwick, M.D.  “We will provide hospitals with incentives to improve the quality of health care, and provide real assistance to medical professionals and hospitals to support their efforts to reduce harm.”

HHS has committed $500 million to community-based organizations partnering with eligible hospitals to help patients safely transition between settings of care.  Today, community-based organizations and acute care hospitals that partner with community-based organizations can begin submitting applications for this funding.  Applications are being accepted on a rolling basis.  Awards will be made on an ongoing basis as funding permits.

In coordination with stakeholders from across the health care system, the CMS Innovation Center is planning to use up to $500 million in additional funding to test different models of improving patient care and patient engagement and collaboration in order to reduce hospital-acquired conditions and improve care transitions nationwide.   These collaborative models will help hospitals adopt effective interventions for improving patient safety in their facilities.”