Vendors say there are ways to have ACOs working right

It is the kind of grade that students are afraid to show their parents – the dreaded D-minus. Barely a notch above flunking, the grade is emblematic of poor performance.

In this case, the “teacher” issuing the low grade is Scott Weingarten, MD, president and CEO of Los Angeles-based Zynx Health and the “students” are approximately 100 provider groups striving to become Accountable Care Organizations.

As part of an evaluation process designed to test their ACO readiness, Zynx audited selected provider groups on their use of key clinical processes when treating pneumonia and heart failure. The clinical processes are standardized clinical best practices accessed at the point of care via an electronic health record and are proven to reduce mortality, hospital readmissions and costs.

In demonstrating how the $36 billion in federal funds for EHR implementation have been utilized to date, the groups were given a collective grade of D-minus. Weingarten said he wasn’t surprised by the low grade and offers a simple explanation of why the providers didn’t do better:

“A lot of health systems focused on going live and mistakenly considered it to be the ultimate outcome,” Weingarten said. “When some hospitals think about whether they have all the necessary clinical decision support built in, they acknowledge they may not, but they think they can go back and correct it. And they don’t get back to it as quickly as they like. They focus on ‘going live’ as the end point and it takes a while to go back and focus on achieving the best results.”

From September 2011 through February 2012, participating hospitals were rated by five EHR vendors and their scores fell squarely into what would commonly be recognized as D territory, ranging from a low of 55 percent for heart failure to a high of 73 percent for pneumonia.

The good news for those low-grade earners is that it’s “a mid-term grade, not the final exam,” Weingarten said. “There are concrete things they can do. We have given them feedback on how to improve things and the response has been positive.”

‘The smart middle’

Greenwood, Colo.-based TriZetto has coined a term called “the smart middle” to describe the processes necessary to making an ACO function properly. Payment model changes are key, says Jeff Rideout, MD, senior vice president of cost and care management and chief medical officer for TriZetto, meaning that providers and their partners must coordinate and enable the workflow, care redesign, payment and revenue cycle process throughout the system across the healthcare continuum.

“The most important smart middle place to start is with analytics, which will tell you how to work together,” he said. “Once those mechanisms are established, analytics, care management and broader population health management capabilities will allow ACOs to consider taking on clinical and financial risk in the future.”

Though a sound IT infrastructure is needed to facilitate an ACO, Rideout says it is “the change in mindset” that has proven to be the major obstruction so far.

“Technology is not the primary challenge right now – the technology is there,” he said. “The bigger challenge is the business decisions and the governance in how you want to run your organization.”

Hospitals outsiders?

Rideout estimates there are nearly 60 CMS pilot projects under way that cover a broad range of models, including ACOs, medical homes, shared savings and bundled payments. The ACO initiative is more congruent with the physician sector and less favorable for hospitals, he said.

“The positive impact people are looking for is better care outside the hospital, but you also have to know your own community and understand how care is primarily delivered in that environment,” he said. “If the hospital is the dominant player, you have to look at the advantages and disadvantages of the hospital-centric approach. It is an efficiency argument that may have some negative impact on the hospital-centric model.”

Ed Ladley, director of Chadds Ford, Pa.-based IMA Consulting, agrees that ACOs are designed more with physicians in mind, but maintains that hospitals are an integral part of the equation.

“It is mainly about physicians managing their patients, but hospitals are also needed,” he said. “The goal is to have people out of the hospital as quickly as possible, but physicians will refer patients to the hospital when warranted, so hospitals must become a partner. ACOs are about building relationships to manage the business that comes along with it.”

To cement a place in the ACO relationship, more hospitals are acquiring physician practices, says Mark Segal, vice president of government and industry affairs for Barrington, Ill.-based GE Healthcare IT.

“There has been a lot of acquisition activity recently in response to preparing for an ACO model and not knowing how the revenue will flow,” he said. “While it is important for physicians to have a good relationship with a hospital, the quality measures in shared savings are done through claims data, which doesn’t require hospital approval.”