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Sizing Up the Metrics for Delivering Value-Based Care
As the healthcare industry moves toward performance-based care, more challenges emerge in efforts to measure the quality of accountable care organizations.
The Patient Protection and Affordable Care Act’s reform-oriented imperatives have brought healthcare accountability to the fore, leading hospitals, providers, and payers to grapple with ways to measure and deliver more cost-efficient, quality care. But challenges remain as the healthcare industry moves from a fee-based payments system to value-based care, note experts.
Accountable Care Organizations
Introduced in the Patient Protection and Affordable Care Act, Accountable Care Organizations (ACO) are networks of physicians, hospitals, and specialists that choose to share financial and medical responsibilities to provide coordinated care for patients.
The goal of coordinated care is to deliver the right care to patients at the right time, while reducing duplicate tests and procedures and other inefficiencies, which often occur when patients go to separate providers and caregivers. ACOs are jointly accountable for the health of their patients and those that save money while meeting quality benchmarks keep a portion of the savings.
About 520 ACOs were serving approximately 17 percent of the U.S. population in April, up from 370 ACOs in September 2013, according to consulting firm Oliver Wyman. The first group of ACOs were aimed at Medicare patients but have expanded to other patient groups. There are approximately 155 non-Medicare ACOs operating across the country, a 14 percent increase from 135 in July 2013. Participating in an ACO is voluntary and patients may see doctors of their choice outside the network without paying higher fees.
Banner Health, a nonprofit healthcare organization based in Phoenix, Arizona, is an example of a successful ACO. In 2011, the organization brought together Banner Health-affiliated physicians, 13 acute-care Banner hospitals and other Banner services in Arizona to provide acute care, home care, nursing registries and residential care under Banner Health Network using the ACO model.
In its first year, Banner Health Network saved $19 million in shared savings, according to a report by Hospitals in Pursuit of Excellence, a subsidiary of the American Hospital Association. In addition, Banner Health Network saw hospital admissions decrease by 8.9 percent; 6 percent fewer hospital readmissions, and a 14.4 percent reduction in average length of hospital stay. In addition, it achieved a 6.7 percent drop in use of X-rays, MRIs, and other imaging services.
But not all providers and hospitals realize financial benefits from adopting the ACO model, notes J.B. Silvers, a professor of healthcare finance at the Weatherhead School of Management at Case Western Reserve University.
“ACOs are basically geared towards taking populations that are not well managed, that are using excessive services, and improving them,” he says. “If you're already doing a good job, there’s not much to change and you’re probably not going to make more money.”
Additionally, ACOs have to seamlessly share information, which is a challenge for many organizations with various data systems. Although most accountable care organizations have the health information technology to improve the quality of clinical care, poor interoperability across systems and providers remains a barrier, according to a survey conducted by eHealth Initiative, a nonprofit research firm.
From a survey of 62 ACOs, 88 percent of the respondents indicated that they face significant obstacles in integrating data from disparate sources, and 83 percent report challenges integrating technology analytics into workflows.
“Integrating information systems is difficult especially when there are a variety of systems out there and everyone is in different paces of change so much of this will take time to fully deploy,” notes Dr. Ken Anderson, chief operating officer of The Health Research & Educational Trust, an affiliate of the American Hospital Association.
Regardless, even large hospital-based systems may decide to enroll in an ACO for “defensive reasons,” Silvers adds. “They know the world's changing…and if this is the way payment systems are going to go,” he notes, “they’ve got to learn how to manage at the population level, rather than at the individual service level, so I think most organizations are getting into it thinking it's a learning process that's going to help them for where the world is going to be.”
There are fears though, that by forming integrated health systems under ACOs, there will be fewer independent physicians and specialists, limiting patient choices and ultimately driving up health costs. As hospitals position themselves within integrated systems that could lead to “prices going up because they’ve formed monopolies,” notes Dr. Marc Berg, principal and head of healthcare strategy and transformation for KPMG US. “If that’s the case, ACOs may not be the best model.”
Another possible downside to ACOs is “if the ACO becomes the single provider for all those physicians,” Dr. Berg adds, “are we going to have different groups of providers that excel at what they're doing, such as hip replacements, knee replacements, diabetic care…or will they focus on total population care?”
Even as the debate continues about how to hold physicians and hospitals accountable for quality care, more attention needs to be paid to patient accountability, argues Jed Batchelder, an independent healthcare IT advisor. “There's definitely been lots of talk of how physicians are being held more accountable, but, at the same time, it's really a two-way street,” Batchelder says. To illustrate his point, Batchelder cited a report from The Robert Wood Johnson Foundation which claimed that only 20 percent of a patient’s health is impacted by clinical care. The rest is determined by behavior (30 percent), socio-economic factors (40 percent), and physical environment (10 percent).
“That was a pretty eye-opening statistic,” Batchelder remarks. “It really got me thinking about the difference between physician accountability and patient accountability and that both can be improved dramatically.”
Patient engagement tools and metrics can help patients take a more active role in their care. For example, some hospitals and physicians are urging patients to review information about their appointments and health-related information on online portals. Such tools are “still very much in early stages, but that's a great way to start by having the patients see the health information themselves,” Batchhelder notes.
And despite the challenges, the healthcare industry is on the right path, remarks Dr. Anderson. “As with any culture change we probably won't see the results for quite a while,” he notes. “Things in culture have a tendency to change over years rather than over weeks, but I do find that there's a tremendous amount of interest in hospitals and health systems looking for improvements.”