Seeing the Potential in Physician-Led ACOs, Dr. Mostashari Makes a Shift

Sept. 26, 2014
Farzad Mostashari, M.D., the former National Coordinator for Health IT, after a brief stopoff at the Brookings Institution, launches a new company to facilitate physician-governed ACOs—and shares his perspectives on physician development of accountable care vehicles

When he left his position as National Coordinator for Health Information Technology in October 2013, after two years and seven months in the federal healthcare IT czar position, no one doubted that he would continue to make his presence known in some way in the U.S. healthcare world.

First. Dr. Mostashari left the Office of the National Coordinator for Health IT (ONC) to join the Washington, D.C.-based think tank The Brookings Institution, as a Visiting Fellow “focused on healthcare payment reform and helping independent practices with care transformation,” according to his LinkedIn profile. But he was only at Brookings nine months before he announced that he had become founder and CEO of a new consulting and technology services firm, Aledade, Inc. (Bethesda, Md.). According to its website, under its “What We Do” tab, it says that “Aledade makes it easy and inexpensive for Primary Care Physicians to form Accountable Care Organizations. We offer primary care doctors a complete package of resources, services, and technology needed to establish the ACO with no upfront costs.”

Meanwhile, on Sept. 23, Dr. Mostashari collaborated with a colleague, Bob Kocher, M.D., who had served as special assistant to President Obama for healthcare and economic policy on the National Economic Council from 2009 to 2010 (Dr. Kocher is now a partner at the Palo Alto, Calif.-based Venrock, the venture capital firm helping to fund Aledade’s launch), to pen an op-ed article for The New York Times regarding lessons learned in the creation of the Rio Grande Valley Accountable Care Organization Health Providers in McAllen, Texas, a participant in the Medicare Shared Savings Program (MSSP) for ACOs. Drs. Kocher and Mostashari noted that, in a famous June 1, 2009 New Yorker article entitled “The Cost Conundrum,” Atul Gawande, M.D. had cited the small Texas border city of McAllen, Texas, as the most expensive place for healthcare charges in the United States at the time. Yet with the creation of the Rio Grande Valley ACO, Mostashari and Kocher noted, physicians who saw the future were able to come together to successfully move forward to reduce costs and improve clinical outcomes.

The key point that Drs. Kocher and Mostashari made in their Sep. 23 Times op-ed was that when physicians create and lead ACOs, they prove the success of the model. And now, in co-creating Aledade with a several other colleagues, Dr. Mostashari is betting that facilitating ACO creation and development will help move the industry forward to significantly expand the comment. Dr. Mostashari spoke with HCI Editor-in-Chief Mark Hagland on Sep. 25 regarding all these subjects. Below are excerpts from that interview.

After just nine months after joining The Brookings Institution, what made you decide to change jobs again, so shortly after your departure from ONC?

While I was at Brookings, studying ACOs, I was getting so excited not only about ACOs, which Brookings helped put on the map, I got excited especially about physician-led ACOs. And I found, much to the surprise of many people, though it was not surprising to me, was that it was the independent, physician-led groups doing so well. 18 PCPs in Rio Grande Valley, 80 physicians in South Florida. They were really doing a great job, knocking it out of the park. And I thought to myself, gosh, I wish there were more groups out there—the physicians who have been under-resourced, they’re doing things that are good for their patients, their communities, and themselves, and I thought to myself, gee, I want to help crank that window open more! And I’ve been wanting to get to population health through technology and other things—but it’s just awesome where there’s a clear business case for ACOs and for leveraging technology not just for its own sake, but for something important like this.

Farzad Mostashari, M.D.

What does the company’s name mean?

Remember [as National Coordinator], we used to talk about keeping our eye on the prize, the North Star, feet on the ground? So I took that and said, when we’re navigating, and it’s like a very turbulent time, like being in a ship in a storm, and it turns out that an aledade [more commonly spelled alidade ] is the instrument that helps you locate true north.

What are you seeing happening out in the industry in terms of physician-led ACOs like the Rio Grande Valley ACO? What’s making them successful?

Number one, they go through the practice, they don’t go around the practice. So how are we going to care better for our sickest patients who need the help? We’re going to go through the primary care doctors, not around them. A lot of people think it’s too hard to go through the doctors, that the doctors are too busy, that they can only understand fee-for-service medicine. So they’re trying to keep paying the doctors fee-for-service, while trying at the same time to capture the value of population health by putting in nurse case managers, and social workers, and technology, and whatever, instead of leveraging the power of physician engagement in the concept.

Implicitly, you’re saying that doctors can adapt to profound change in healthcare?

Yes, especially if you change the incentives, and you give them an “easy button.” That’s the second thing I learned—these groups are almost like exceptions that prove the rule, you know? Extraordinary leadership happened to be in place at the Palm Beach ACO and at the Rio Grande Valley ACO in McAllen, Texas, and these extraordinary leaders who managed to convince the doctors to take money from their own pockets to invest in the model; that’s so great. But studying these physician-led ACOs also convinced me that that model isn’t currently scalable. It was really difficult for them, and we need to make it easier. And to me, finding the capital, choosing and selecting and implementing the IT and analytics systems, hiring and managing people who can go in and do change management and practice coaching, understanding the regulations and risks, and the gotchas, and the Easter eggs in the practice, those things are difficult for your average doctor. That’s not hard for me. Taking care of primary care patients, that’s very hard for me. So why don’t I do what I’m good doing, which is helping them to become good at this? It just really made sense to me, in terms of what we’re doing now with Aledade.

Still, in the absence of extraordinary leadership, as demonstrated by the doctors in McAllen and Palm Beach, how do you get change healthcare system-wide?

You need systems. Systems are what ordinary people use to do extraordinary things. We aim to create systems—processes, data, protocols, a business architecture—that will help people do the right things.

And for them to spend the money on the overhead again and again—well, there is a cost for this. So the physician leader says, great, I got a check for $2 million, and my cost to create the infrastructure to get that check was $2 million. And we’re saying that that entire infrastructure should be spread out over a larger number of ACOs.

So you’re trying to create a template?

We’re trying to create a playbook; the word “template” sounds too rigid, too cookie-cutterish.

What kind of scalability is possible in all this?

It’s kind of like a pod or a village unit. There’s the theory that human beings in whatever organization, when the organization gets beyond 100 or 150 people, kind of breaks apart somewhat. So maybe the ideal size is to have these docs in units of 100 or so. So you can have medical directors and field staff and have a level of accountability that’s more immediate. If you’re at 100 or fewer, you have that sense of mutual community accountability to each other. And you want more? Let’s stamp out another pod, all of the different pods supported by the same data, technology, regulatory support etc., team. So we would like to try to keep each ACO at no more than 100 physicians; so you scale the units.

What were the hardest few things for the Rio Grande Valley folks, and how did they overcome them?

Honestly, if you talk to them, one of the hardest things for them was the IT piece of it—working with multiple electronic health records, because we don’t have a monoculture anywhere. So you get docs together, and you’ll have multiple EHRs—so getting the data out of the EHRs, for predictive modeling quality reporting. But also, getting intelligence back into the EHR workflow is really hard. As hard as it is to get intelligence out of the EHR, getting it back into the EHR is even harder. So that certainly was on the roadmap for meaningful use stage 3 and the Healthy Decisions standards and interoperability initiative. That was something that the [federal] Standards and Interoperability Committee [within ONC] had foreseen.

And here’s what I mean by that. You can get data out of your EHR and you could combine it with claims data, and admission discharge transfer notification, and then you could identify not just care gaps, but what actions to take for your high-risk patients. And you really want to push that into the system so they see the opportunity to shift the referral to a high-cost cardiologist of ophthalmologist, to a less-expensive, high-value one, or make sure they picked up their meds last time. It’s hard to take that intelligence and combine it into the electronic health record. It can be very hard, but it is the operating system for the practice, and you don’t want to treat it just as a dumb data slave harvesting intelligence, but how do you make the workflows smart with it? Whoever solves that problem will do very well.

What the vendors have available commercially for patient care organizations is not able to accomplish that, correct?

I have not seen it yet, no. There are vendors who I believe are working on their own population health analytics modules, with the idea that their own modules could write into and read from their own EHR. But I don’t think that’s what the market wants, to put it gently. What the ACO and population health market wants is the ability to use whatever analytic or population health software I want to use, and to be able to write those, using common methods, into a number of different EHRs.

What should healthcare IT leaders be thinking about this, and doing?

I would like to bring a little bit of a message of hope, that a lot of the things that we’ve been working on and grinding on, that the purpose for them is about to be made clear to you and to your providers and to your leadership. And that is going to be great, when finally you find a use for that problem list, for those risk factors that are now electronically captured, when the patient portal means something more than a compliance measure, when your ability to send and receive notifications of events, of admission discharge transfer events, and with the ability to push summary information—that is what you need. It’s not by itself sufficient, but it’s a core, and all that work that you’ve going to be fit for purpose, as long as you did it not as a compliance exercise. If you do the minimum to check the box and the get the check, and you’ve wasted the taxpayers’ money.

Finally, we’ve just learned that three more ACOs have just today left the Pioneer ACO Program. None were physician-led but I’m wondering if you have any thoughts on this latest development.

In this case, two of the three organizations went into the regular Medicare Shared Savings Program (MSSP).  So really, their decisions were a function of better alternatives—shifting from the Pioneer to the regular MSSP program. They didn’t leave altogether, just one branch of the broader federal program. Also, it’s interesting that some of the most successful ACOs have not been large integrated delivery systems with extensive managed care contracting experience, but actually smaller, physician-led groups. It goes back to what we’ve been discussing here.

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