Accountable Care Organizations: What They Are and How Psychiatrists Can Thrive In The Accountable Care Era

North Carolina Council of Community ProgramsMedical Forum

Pinehurst, North CarolinaDecember 12, 2013

Julian D. “Bo” Bobbitt, Jr., J.D.

©2013 Smith Anderson

INTRODUCTION

• Part One: Elements for a successful ACO and implementation steps which transcend provider resource or facility and apply equally to all ACO stakeholders.

• Part Two: Recommended ACO strategies for psychiatrists.

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Part One: The Keys to ACO Success

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WHAT IS AN ACO?

• A provider-based organization;• That takes responsibility for healthcare needs of a defined

population;• With goals of improving health, improving efficiency, and

improving patient satisfaction;• That should include primary care physicians;• And produces shared savings or other financial measures to

align incentives.

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HOW IS THIS DIFFERENT FROM A MEDICAL HOME?

• The Patient-Centered Medical Home (“Medical Home”) empowers primary care to coordinate care for patients across the continuum of care.

• It can become the core of an ACO but lacks the financial incentives, like shared savings, to encourage providers to deliver the highest quality at the lowest cost. It does not involve specialists.

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ARE ACOs REALLY COMING?

• Federal taxesand other revenues consume about 19%of America’s gross domestic product

Source: Congressional Budget Office

Total Spending for Health Care Under CBO’s Extended-Baseline Scenario

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RAPID TRANSITION TO REWARD VALUETHROUGHS ACOS

• “[T]his bipartisan, bicameral discussion draft (SGR Repeal and Medicare Physician Payment Reform)…seeks to move away from the current volume-based payment system to one that rewards quality, efficiency, and innovation.”

House Ways and Means and Senate Finance Committee Staff – October 30, 2013

• Professionals with a significant portion of revenues in risk-sharing ACOs, or related alternative payment models, would receive a 5% bonus each year.

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Inpatient Days Per Decedent During The Last Six Months Of Life, By Gender And Level Of Care Intensity(Level of Care Intensity: Overall; Gender: Overall; Year: 2007; Region Level: HRR)

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Percent Of Diabetic Medicare Enrollees Receiving Appropriate Management, by Race and Type of Screening(Race: Overall; Type of Screening: Hemoglobin A1c Test; Year: 2003-2007; Region Level: HRR)

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Price-Adjusted Medicare Payments per Enrollee, by Adjustment Type and Program Component(Program Component: Overall; Adjustment Type: Price, Age, Sex & Race; Year: 2008; Region Level: HRR)

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WHY THE U.S. HEALTH CARE SYSTEM NEEDS ACCONTABLE CARE ORGANIZATIONS

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THE 8 ESSENTIAL ELEMENTS OF A SUCCESSFUL ACO

• The keys to recognizing whether to join or build an ACO that is likely to succeed:

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ESSENTIAL ELEMENT 1:CULTURE OF TEAMWORK

• Will be biggest challenge• Depends on Champions• Physician hurdles• Hospital hurdles• Strategic tips• Isn’t hospital employment the obvious answer?

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ESSENTIAL ELEMENT 2:CENTRAL ROLE OF PRIMARY CARE

• Developing consensus• Recent Medical Home successes• Drivers of so many high-impact ACO initiatives• But short supply

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ESSENTIAL ELEMENT 3: ADEQUATE ADMINISTRATIVE CAPABILITIES

• What type of legal structure?Network Model (IPA, PHO, Medical Home Network, etc.)

ContractContracts

Optional Contracts

Integrated Model(Integrated Health System – usually through subsidiary or affiliate entity)

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ESSENTIAL ELEMENT 3: ADEQUATE ADMINISTRATIVE CAPABILITIES (cont’d.)

• Functional Capability 1 – Performance Measurement• Functional Capability 2 – Financial Administration• Functional Capability 3 – Clinical

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ESSENTIAL ELEMENT 3: ADEQUATE ADMINISTRATIVE CAPABILITIES (cont’d.)

• Who should be in an ACO?– All primary care?– What about specialists?– What about hospitals?– What about community partners?

• How many in a region?

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ESSENTIAL ELEMENT 4: SUFFICIENT FINANCIAL INCENTIVES TOPROMOTE SHARED ACCOUNTABILITY

• Three tiers of ACO financial incentives– “Asymmetrical” – Shared

Savings

Symmetrical – Savings Bonus and Penalty Capitation

Low Risk High Risk

Fee For Service

Shared Savings

Shared Savings + Penalty

Capitation

Savings Based on Spending Targets

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ESSENTIAL ELEMENT 5: HEALTH INFORMATION EXCHANGE CAPABILITY AND DATA

• What data?– Baseline – for comparison– Performance metrics – aligned with initiatives– Clinical support – at the point of care

• Who gathers it?• Who decides?

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ESSENTIAL ELEMENT 5: HEALTH INFORMATION EXCHANGE CAPABILITY AND DATA (cont’d.)

Basic EHR ACO IT InfrastructureHIE

Scope of Information Sharing

Functional Complexity

• Patient health information available at point of care

• Reporting capabilities to state and federal agencies• Patient health information

available at point of care

• Data mining capabilities to contribute to financial impact modeling, value reporting, and payor negotiations• Decision support capabilities at

point of care• Expanded access to patient records

across the continuum• Comparative data collection to

determine gaps in care delivery processes and outcomes vs. peers

• Reporting capabilities to state and federal agencies• Patient health information available

at point of care

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ESSENTIAL ELEMENT 6: BEST PRACTICES ACROSS THE CONTINUUM OF CARE

• Top targets:– Prevention– Chronic disease management– Reduced hospitalizations– Care transitions across fragmented system– Multi-specialty management of complex patients

• Match ACO strengths to greatest community gaps in care needs

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ESSENTIAL ELEMENT 7: PATIENT ENGAGEMENT

• What can an ACO do to engage patients?• Why is it so important?

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ESSENTIAL ELEMENT 8: SCALE-SUFFICIENT PATIENT POPULATION

• Economies of scale; savings pool• How a start-up ACO can get there

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THE 8 ESSENTIAL ELEMENTS OF A SUCCESSFUL ACO

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Part Two: Applying the ACO Strategies toPsychiatrists

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WHY CARE? – PRO

• Return of control of physician/patient relationship• Leverage your power to heal• With > one-half primary care physician visits

associated with psycho/social issues, averaging 2x to 3x the costs, psychiatrists well positioned for pay-for-performance

• Essential to be in “narrow network” because of aggressive payor steerage to them

• America rapidly moving away from fee-for-service to value-based payment

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WHY CARE? – CON

• No time, no war chest, no experience• Some ACOs don’t include psychiatry• Hard to be interdependent with others• This too shall pass• Being unprepared is an option

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ACO INITIATIVES

• Review Top ACO Initiative Areas:– Prevention/wellness– Chronic disease management– Transitions across fragmented system– Reduced hospitalizations– Multi-specialty complex patient management

• What is the best match for your ACO’s strengths and the market’s greatest needs/gaps in care?

• Where do psychiatrists fill those gaps?

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PSYCHIATRY’S POTENTIAL TO ADD VALUE (AND RECEIVE CORRESPONDING REWARD)

• Psychiatric disease as a co-morbidity “is the rule rather than the exception” in high-cost cases. (Robert Woods Johnson)

• The ACO approach accepts the premise that treatment for general physical care must be integrated with mental health and substance abuse treatment.

• Impact Model shows benefit.

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PSYCHIATRY’S POTENTIAL TO ADD VALUE

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RECOMMENDED ACCOUNTABLE CARE INITIATIVES

• The psychiatrist as leader of ACO Behavioral Health Teamo Stepped Careo Develop systematic pcp screening program for psychiatric

illnesso Treatment guidelineso Onsite collaboration with pcp

• Avoid expensive drugs with marginal value• Patient communication• Telepsychiatry

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WE’VE GOT SOME GREAT VALUE-ADD CONTRIBUTIONS—NOW WHAT?

• Pick the right ACO(s)• Have them want to pick you

o Relationshipso Have a compelling storyo Primary care is the cliento Protect your legal and financial interests

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METRICS ARE KEY

• You must own the metrics.• They should reflect each selected initiative’s tasks

(process) you want to occur and goals (outcomes) you want to achieve.

• Do not waste your contributions: even if you do a great job, if the metrics are off, you will not be rewarded.

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HOW DO I ASSURE THAT THE SAVINGS POOL DISTRIBUTION IS FAIR?

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CONCLUSION: IT’S AGOOD PROBLEM TO HAVE!

• THANK YOU!

• QUESTIONS?Julian D. “Bo” Bobbitt, Jr.Smith Anderson Blount Dorsett Mitchell & Jernigan, LLPPost Office Box 2611Raleigh, North Carolina 27602-2611919-821-6612bbobbitt@smithlaw.com

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