Additional ACO model expectations

Feb. 21, 2014

Patricia Birch, Senior Partner and Global Practice Leader, Healthcare Consulting, Cognizant

Healthcare is experiencing a significant transition from the traditional fee-for-service reimbursement model that encourages volume over outcomes and quality. Its successor is a value-based model (think Accountable Care Organization or ACO). The new model creates significant challenges and risks for healthcare organizations but enables significant opportunities. Already, both the average length of stay and readmissions at early adopters are being reduced leading to lower costs and improved quality. And this is only the beginning.

The key to success with the value-based model is deep competency in patient-centered analytics. This enables two crucial capabilities – the ability to measure outcomes and discover areas for improvement, and the ability to measure costs and identify and eliminate waste. Neither is easy. Both require deep analytic proficiencies that today are often lacking in the healthcare landscape. Many healthcare organizations currently have a collection of point solutions, disparate technologies and varying capabilities.

An additional challenge is that with the new model, no organization is an island – cooperation, integration, and trust among partners are essential. Even with these elements in place, there are significant obstacles, including differing levels of capabilities among organizations, the lack of data standards, interoperability barriers, and immature vendor products. Healthcare delivery partners – payers, providers and others – need to collaborate for common goals and shared benefits.

Winners will forge strong partnerships and leverage deep competency in patient-centered analytics. The foundation for this integrates technology and talent (already in short supply) with organizational changes that encourage true partnerships and develop and foster a culture of advanced analytics.

Jim Frankfort, M.D., Chief Medical Officer and Vice President, Clinical Informatics for Payer and Provider Solutions, IMS Health

In today’s world of growing ACOs and Patient-Centered Medical Homes, effective measurement is crucial for providers and health plans to closely track the quality and cost of care. But what does good or bad look like?

There are many challenges in making measurement both fair and useful. To be fair, organizations should be compared to their peers. Ensuring a large enough peer group is a problem for all but the largest health plans. This is where benchmarking plays a critical role. Data integrators can assist by providing benchmarks for measures that are specialty and region specific because they have ‘big’ data sets containing payer data from all geographies, specialties, payer types and age groups. Comparison to benchmarked metrics, such as patient satisfaction scores and readmission rates, can give providers valuable insight into not only areas where they excel but also areas for improvement.

Another challenge is combining the many cost and quality measures into a single composite result. Creating a composite measure typically involves both clinical and statistical weighting of the component measures. Clinical weights are based on each measure’s clinical importance while statistical weights are designed to maximize the spread of physician scores.

Organizations should consider the following factors for defensible measurement:

  • Use nationally recognized metrics in matters of payment and public transparency
  • Ensure appropriately sized peer groups
  • Composite results into a single ‘digestible’ result, using both clinical and statistical weighting
  • Risk adjust where appropriate: cost of care (always), outcomes (usually) and process of care (rarely).

Lou Keller, Director, Healthcare Systems Applications, FlexSim

There are few words in the English language that make us more uncomfortable than ‘accountable.’ Adding ‘affordable’ appeals to an even deeper aversion, born of the days when no child’s allowance was sufficient to meet their desires. Yet today, we’re encouraged to embrace both terms by a single act of legislation designed to achieve both accountability and affordability. Unfortunately (and despite countless recent papers addressing, generally in one breath, every aspect of the necessary ACO components of sharing, cooperation, and quality), few if any address just how that’s to be done. 

Perhaps the appropriate question is, ‘Can it be done?’ or, even better, ‘Given my specific circumstances, how do I know it can be done?’ 

In fact, there is an answer to both questions that (appropriately) involves Information Technology… but not technology alone. You see, simply acquiring and employing the latest means of accessing, analyzing, and distributing information isn’t, and has never been, sufficient to offset the cost of its benefit. If nothing else, history has taught us that the implementation of all-new technology requires a means of assessment, an analytical tool and process capable of determining not just the cost, but the wisdom of adoption. 

Really? Yes. Unfortunately, as complex and convoluted as the healthcare world is today, linear, spreadsheet, and other forms of complex statistical analysis generally aren’t enough. What’s needed is a tool that’s as advanced, all-encompassing, and representative as the systems it serves. We call it simulation.

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