Arcadia Insights from the NAACOS 2016 Fall Conference

Leaders of Medicare Accountable Care Organizations (ACOs) gathered in Washington, D.C. last week for the NAACOS 2016 Fall Conference: Advancing the Future of ACOs.  Our takeaway: The growing momentum of ACOs nationally is a good sign for healthcare, but there is work to be done on budget and utilization management challenges.

Budget issues remain at the forefront

Several talks focused on the budget issues endemic to all ACOs.  Many participants spoke of their financial successes with global payment, and some other participants referenced their financial challenges.  Our takeaways:

  • For MSSP, (Medicare Shared Savings Programs), we anticipate a change from the current rebasing budget model to one measuring ACOs against regional cost trends. The goal is to make budgets more “fair”. There will still be winners and losers with this new methodology.
  • 2017 will be a more “low-risk” year for transition into MIPS. This reflects the large amount of pressure Medicare got from physician groups who felt MACRA was moving too fast.
  • “Low benchmark” ACOs – meaning those with low utilization and costs – remain financially disadvantaged, with no solution on the horizon. This reflects the structural problem for groups who have had historically low utilization.  In a sense, they are “punished” with their baseline starting at a lower level making it harder to go down even further.

 Reducing unnecessary utilization is a core concern

Other speakers focused on reducing unnecessary utilization.  Our takeaways:

  • Massachusetts Blue Cross Blue Shield’s Alternative Quality Contract has been successful in bending the cost curve. In this program, PCPs take on upside and downside risk.
  • CareFirst Blue Cross HMO in Maryland has been successful with high risk patients. Their model gives extra resources to PCPs, and does not put them at downside risk. Discussion ensued regarding whether or not downside risk is necessary for PCPs to rein in unnecessary utilization.  (I personally believe downside risk is a good motivator.)
  • Controlling specialist utilization remains a vexing problem.  No one has solved this.
  • Small rural practices benefit from joining an IPA to take advantage of IT and contracting efficiency.
  • In 2015, only 31% (120) Medicare ACOs generated savings.  Sources of savings were mostly from reducing in-patient admissions and skilled nursing facility days, and to a lesser extent controlling the utilization of the emergency department as well as CT and MRI scans. Arcadia Analytics specifically helps customers understand and address these issues.

Engaging patients – especially high risk patients – is key to success

Patient engagement and the identification of high risk patients was another discussion topic.  Our takeaways:

  • Nothing new is anticipated in the area of patient engagement.
  • Just 5% of patients take up 50% of costs.  This highlights the need to identify and care for this cohort.
  • NAACOS will soon be publishing a white paper on the best-in-class methods for stratifying risk.
  • Compared to other Western nation healthcare systems, the United States has the highest percentage of GDP spent on healthcare, and the lowest percentage spent on social services to aid vulnerable patients. I see this as a challenge to those of us in the healthcare analytics space – what tools can we provide in the future to better support organizations providing social support to patients?

Conclusion: growth will continue

Federal, state Medicaid, and commercial ACOs are here to stay.  ACOs will continue to grow and gain popularity as a mechanism to improve quality, reduce unnecessary utilization and ensure financial success.

Strong analytics capabilities will remain the backbone for success in ACO program areas.  And especially in areas with multiple payors and multiple EMRs, data aggregation remains a necessary tool to accomplish an ACO’s goals!

Dr. Rich Parker - Arcadia's Chief Medical Officer

Dr. Richard Parker

Dr. Parker serves as chief medical officer for Arcadia with overall responsibility for the design and implementation of clinical strategies, input into the roadmap and development of Arcadia’s technology and service programs, thought leadership in support of providers transitioning to value-based care, and strategic advisory work for physician leaders at Arcadia’s clients.

Previously, Dr. Parker was an internist with a 30-year history at Beth Israel Deaconess Medical Center. From 2001 until 2015, Dr. Parker served as the medical director and chief medical officer for the 2,200 doctor Beth Israel Deaconess Care Organization. He oversaw the physician network evolve from a fee-for-service payment system to a nationally recognized global payment pioneer Accountable Care Organization. Dr. Parker’s other areas of expertise include end of life care, medical malpractice, care of the mentally ill, electronic medical records, and population health management. Dr. Parker served as assistant professor of medicine at Harvard Medical School. Dr. Parker graduated from Harvard College in 1978, and the Dartmouth-Brown Program in Medicine in 1985.

Dr. Parker is an in-demand speaker to associations, companies, and academic institutions on the topics of population health management, electronic health records, value-based care, and evolutionary, medical and business impacts of stress.

October 4, 2016