Accountable Care Organizations: Focus on Technology for Successful Results August 2013
Table of Contents Executive Summary............................................................................................................................3 Overview – Accountable Care Organizations Driving High-quality and Low-cost Healthcare Solutions ..4 Technology Drives Success of ACOs ....................................................................................................6 Challenges – Technology Implementation for ACOs.............................................................................8 Focus on Right Technology – A Critical Step for ACO Participants.........................................................8 References....................................................................................................................................... 10
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Executive Summary Accountable Care Organization (ACO) is an evolving business model in the US, which enables low-cost and high-quality healthcare services. Healthcare providers are coming together to form accountable care organizations, thereby becoming more accountable for the care they provide to patients by adopting evidence-based care with the use of information technology. ACOs formed by the Advocate Healthcare and Blue Cross Blue Shield of Illinois and Norton Healthcare and Humana have produced early successful results in the form of reduced hospital readmissions, decreased emergency room visits and improved chronic disease management among other improvements. Information technology is the backbone for operating the ACO healthcare business model. ACOs require highly-efficient information sharing to provide quality healthcare solutions. Information technology has facilitated the evolution of electronic health records (EHR) and health information exchanges (HIEs) to create and exchange information across the ACO structure. Technology will also be a key contributor for patient engagement, involving patients to seamlessly communicate with care providers, and for care coordination, driving seamless actions between ACO stakeholders to gain efficiency in operational activities. Data analytics will help create insights from the information generated by the ACOs. Although providers are primarily concerned with providing patient care; with the evolution of ACO and high requirement of technology, ACOs face challenges building the information technology infrastructure. Among the stakeholders, payors are currently leading in overall investments in ACOs; however providers also have a greater role to play in offering quality point-of-care solutions, which can be achieved through a correct mix of information technology solutions.
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Overview – Accountable Care Organizations Driving High-quality and Low-cost Healthcare Solutions The US healthcare industry is moving toward high quality and low cost solutions – thereby creating a strong platform for ACOs to operate in the industry. An Accountable Care Organization (ACO) is a group of healthcare providers that have agreed upon to carry out a shared responsibility for the care of a defined population of patients while assuring active management of both the quality and cost of healthcare provided. ACOs have a concept of shared savings, i.e. a group of providers can deliver care of equal or better quality while reducing the cost to below current projections. There should be some savings to be shared between the payor — the government or the employer — and the providers. Generally, an ACO would coordinate among various unrelated healthcare entities such as primary care practices, hospitals, specialty practices, ambulatory surgical units, home care providers, pharmacies and diagnostic centers to provide care for a defined population of patients. ACOs promote evidence-based care practices and use of information technology. Successful ACO Partnerships: Some Examples
In 2009, Catholic Healthcare West, Blue Shield of California and Hill Physicians Medical Group (CalPERS) launched an integrated care delivery model (ACO) In September 2011, the ACO declared: •
44,000 of CalPERS members’ premium payments were kept flat
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22% reduction in hospital readmissions
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USD20 million in costs savings
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In 2010, Illinois-based Advocate Health Care and Blue Cross and Blue Shield entered into an agreement to essentially operate as an ACO. The agreement was a three-year deal, under which 10-hospital Advocates would limit rate increases to the insurer in return for sharing in the savings created by meeting performance targets tied to the quality, safety and efficiency of care provided to Illinois Blue Cross HMO and PPO members. The contract was effective January 1, 2011. Till August 2012, the ACO declared success in the form of: •
10.6% drop in hospital admissions per member
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5.4% decrease in emergency department visits
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26% drop in readmission rates for chronic conditions
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13.6% readmission rate during the first year of operation for ACO patients sent to nursing facilities (falling below 20%, the national average)
In 2010, Norton Healthcare and Humana came together and formed a pilot ACO. The ACO had a patient population in the Louisville, Kentucky-area of 7,000 individuals who are employees of Norton and Humana. Till May 2012, the ACO witnessed some improved quality, utilization and physician visits following hospitalization, including: •
9% decrease in unnecessary antibiotic treatment for adults with bronchitis
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6% improvement for diabetic testing
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8% improvement for cholesterol management in diabetics
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13% improvement in appropriate emergency room visits
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36% improvement in physician visits within seven days of discharge
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Technology Drives Success of ACOs The above examples showcase the ability of ACOs to reduce costs while increasing quality of healthcare. However, for successful implementation of ACOs, there is a critical requirement of technology infrastructure development.
Electronic Health Records Two of the most popular data sharing sources used by hospitals are electronic health records (EHR) and patient registries. An EHR is a medical record for a patient in a physician’s office, hospital, ancillary care facility or ambulatory care facility. The EHR is developed to replace paper-based patient records for recording encounter-based information on each patient who receives care from the provider entity and includes electronic operations: data entry, order entry, prescribing and transcription. A fully-integrated (EHR) system is required to facilitate care coordination across care settings and geographic locations. EHRs act like an engine behind the shift in healthcare towards more collaborative, patient-centric care, allowing better data analytics, alerts for high-risk patients, and tracking of quality and patient outcomes, which is a major challenge for providers embracing risk-based reimbursements. Health Information Exchanges Health Information Exchanges (HIEs) are becoming more popular and could eventually become the major data sharing source in the future to support clinically-integrated initiatives.
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HIE allow ACO partners to share information across the organization. Smooth sharing of information can help ACOs further coordinate care, mitigate risks and, ideally, improve outcomes. ACOs can develop HIEs by themselves or they can avail the services from outside vendors. Some of the benefits of using HIEs include providing a basic level of interoperability among EHRs maintained by individual physicians and organizations, creating a potential loop for feedback between health-related research and actual practice, facilitating efficient deployment of emerging technology and health care services, and providing the backbone of technical infrastructure for leverage by national and state-level initiatives. However, HIE implementation has a number of challenges such as creation of a standardized interoperable model that is patient-centric, trusted, longitudinal, scalable, sustainable, and reliable. Patient Engagement Technology that can engage patients so they can contribute to their own care will be crucial to the success of ACOs. Proper coordination and patient monitoring should prevent duplication and errors, make chronic disease management more efficient, reduce hospital stays and readmissions and boost patient satisfaction. Successful patient engagement includes indentifying and tracking to ensure correct mapping of patients with information, providers and settings; facilitating patient interaction and participation by promoting patient and provider integration and communication; increasing patient participation in areas of appointment scheduling, patient accounting and health plan billing. Meaningful patient engagement is a critical component in a data-driven healthcare management process. Such practices also help ACOs intelligently measure and evaluate return on investment.
Care Coordination Care coordination makes sure all healthcare stakeholders receive all the necessary instructions when they are discharged, keeping their primary care physicians in the loop and helping patients during the transition from hospital to community life through a variety of social services. Comprehensive documentation, and meaningful information storage, in the form of EHRs is done so that all members of the team – past, present and future can access them. Care coordination tools reduce the likelihood that patients will slip through the cracks in the healthcare system. According to Gartner, successful care coordination requires a platform that conveys “near real-time status and alert information from the analytics system back to operational users of EHRs and other transactional systems”. The technology support for ACOs must facilitate information sharing among applications such as inter-provider communications, disease and treatment information, payor-provider communications to bring greater efficiency in some of the major areas like billing process and revenue cycle management.
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Data Analytics ACOs need to continuously collect, aggregate and normalize structured as well as unstructured data from multiple applications as also from across and beyond the organization. Advanced analytics can help ACOs build such data handling capabilities. For example, ACOs are required to drill down into the data to find patients with gaps in their care. If an ACO includes 300 patients with diabetes, it might reach out to those patients to encourage them to seek appropriate care, rather than waiting for them to make appointments, which might make the chronic condition acute and more costly. Analytics would also help ACOs to predict which patients will require the most costly interventions and then target the more advanced care management tools, monitoring and post discharge follow up to those patients. Additionally, with the use of analytics ACOs can segment the patients into care management groups for better utilization of physician skills and notification services like communication alerts between providers and patients.
Challenges – Technology Implementation for ACOs Participants of an ACO have competency in taking care of patients and not developing software packages. Some of the major challenges in implementing IT solutions for ACOs are: 1. Handling a multitude of EHR systems, over and above the inpatient and outpatient records, as outside entities join an ACO 2. Lack of adoption of EHRs by physicians and the lack of EHR’s inter-operability, throughout the healthcare industry 3. ACOs will acquire large volumes of patient data as they develop, requiring comprehensive ACO data repositories and associated analytical tools 4. No easy solutions in the market to develop scalable systems for providers to manage their patient populations’ health necessary for the complex risk arrangements 5. Cultural change required for providers in ACOs involving team-based care and treating the whole patient, rather than the individual condition 6. Creating a model to identify the high-risk and most costly members, predict who those patients are in the future, and identify what the care gaps are to manage those members
Focus on Right Technology – A Critical Step for ACO Participants According to CMS estimates, ACO implementation is estimated to lead to a median savings of USD470 million from 2012-2015. Highest spending organizations in ACO creation, currently, are payors. ACO arrangements like Aetna’s hospital-centric efforts and Cigna’s physician-driven collaborative are claims-based, rather than clinical data driven. Focus should not only be on reducing unnecessary medical tests, but mostly on managing population health and preventing readmissions. Providers would need to play a major role along with payors to combine claims information along with clinical information to build a comprehensive information and communication system. To build a successful ACO there needs to be a robust IT infrastructure in place for information sharing. ACOs are investing heavily in IT infrastructure for
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connecting the dots with regard to patient information. There needs to be an adequate amount of payoff for such huge investments by ACOs to meet the objective of high-quality and low-cost healthcare services in the US. Healthy lifestyle and early diagnosis are two major areas that can help ACOs get to that pay-off. IT infrastructure will provide ACOs with the information to make better decisions for managing population health, whereby the cost of infrastructure is far exceeded by savings from low-cost high-quality healthcare. Information technology and data maintenance are important not only for an individual ACO but also for the future of accountable care organizations as a whole. This requires each ACO to focus on and implement robust, sweeping IT solutions with the objective to effectively measure quality of care, which can then be used by physicians, hospitals, payors and policy makers to make an assessment. This in turn allows a provision for evaluating what is and what is not saving money and what is and what is not improving the health of patient who is supposed to be at the center of accountable care.
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References •
Hospitals & Health Networks
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Transformed
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Becker’s Hospital Review
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Fierce Healthcare
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Fierce Health IT
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Fierce Health Payer
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Healthcare Finance News
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www.blueshieldca.com
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Health Management Technology
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www.healthit.gov
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Healthcare Informatics
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Search Health IT
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EHR Intelligence
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The American Journal of Accountable Care
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CI NOW
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Clinical Innovation+Technology
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