Bowtie Confidential: Is an ACO Right For Your Organization? 5/11/11

Although the acronym ACO (accountable care organization) is relatively new, the basic construct of this type of organization is at least 30 years old. The first PHO (physician hospital organization) was started in 1984. The PHO at Lutheran General (now part of Advocate Health Care) was unique in that it accepted risk on behalf of its physician membership and the hospital. This risk sharing is the same type of financial arrangement currently being promulgated through the ACO.

Most PHOs were not set up as risk-taking or risk-sharing organizations, but established as contracting mechanisms that would be attractive (often due to price reductions) to insurers. Under the Affordable Care Act, risk sharing (gain sharing for the initial time period for certain ACOs) is a cornerstone of the patient care delivery process. The federal government has mandated that there be savings from the delivery of care for designated populations, and have offered the ACO as the preferred alternative delivery model to achieve these savings.

Healthcare organizations are continuously looking at ways to hold down costs, especially as insurers are cutting payments to providers. Will ACOs be the answer to these current issues?

Healthcare organizations will need to determine whether they want to form or be a part of an ACO. Either way, each organization (hospital and other providers) must better organize resources, systems, and processes to be successful in this changing environment.

The elements needed to start a successful ACO are the same as launching any new endeavor:

• Effective leadership
• Patient-centered case management system
• Information technology that can support an ACO
• Diversity of providers
• Legal and actuarial services
• Financial reserves

The first priority is effective leadership. ACOs need effective and committed leadership from the physician community and the organization’s executive leadership. There must be a commitment to work together, to understand the intent of the ACO program, and to align the ACO organization to maximize the chance of success under this different payment method.

Once the leadership is in place, the ACO will need a robust, patient-centered case management system. Many organizations are establishing patient-centered care delivery models, most commonly referred to as the “medical home.”

Another critical success factor is capable information technology that can support an ACO. These requirements include:

• Systems to enable a patient-centered approach, such as CPOE, electronic prescriptions, and up-to-date patient discharge systems.
• An electronic health record (EHR) that is appropriately utilized by all of the providers, delivering the right information to the right provider, in the right format, at the right time.
• The capability to provide additional information in real time, such as which providers are in/out of network, and preferred vendors.
• Information systems that can show physicians their utilization and the costs for providing care to their patient panel need to be considered. This information might be in the form of a robust data warehousing system, which can integrate data from multiple sources. Another concept would be some form of internal claims processing. Some of this is already being done by insurers, but now the responsibility for providing this information will be the ACO’s.

A more obvious ACO requirement is a diversity of provider types. This is lacking among most hospitals and provider groups today. For example, does your organization have contractual arrangements for nursing home beds? Are you guaranteed these beds at a favorable price? Do you have the methodology in place to share risk (sub-capitation) with these providers, or will you have to pay market rates for beds and other essential services for patients that you will be responsible for (medically and financially)?

There will also be a need for professional support for the ACO, such as legal and actuarial services. Legal issues will be related to organizational structure, board creation, payment methodology, and OIG regulations. Actuarial services will help your organization decide how much risk it is willing to take and how to divide payments among the various providers (primary care, specialists, and other in-network providers).

You will also need to thoroughly assess your organization’s ability to put all of the building blocks of the ACO into place. Do you have the financial reserves to account for adverse selection? Do you have the appropriate leadership, including CMO, CIO and CMIO? Will creating an ACO give you a competitive advantage in your market, or at least keep you level with your competition?

You will need to feel confident that you have the elements mentioned above in place before you move forward with the formation of the ACO. The ACO is an opportunity to generate additional income through implementation of an effective care delivery system. However, without the aforementioned components in place, the risk, reward and revenue associated with a successful ACO will not come to fruition. In fact, the opposite can happen – higher risk, lower reward, and revenue loss.

Don Michaels, PhD is vice president, strategic and advisory services, for Hayes Management Consulting and teaches healthcare IT for the Harvard School of Public Health.

News 5/10/11

Emdeon first quarter results: revenue of $271.5 million, up 14.4% year-on-year; operating income of $23.7 million, off 23% from last year due to higher expenses. Net income grew 70% to $7.3 million and net income per diluted share was $0.05 compared to last year’s $0.02. Adjusted net income came in at $0.23/share, which is about a penny off analysts’ expectations.

Culbert Healthcare Solutions hires Jeff Wasserman to lead the company’s Strategy and Executive Services team. He was previously with The Bard Group, Stroudwater Associates  and with the University of Wisconsin Hospital and Clinics.

athenahealth awards Atul Gawande, MD its first annual athenahealth Vision Award in recognition of “making healthcare work as it should.” Gawande is a staff writer for the New Yorker and on the surgical staff of Brigham and Women’s Hospitals and the Dana Farber Cancer Institute.

Johnson Dermatology (AR) opens a LEED-eligible clinic that includes a water tower for rainwater collection, geothermal heating and cooling, and building materials made primarily of pre- or post-consumer recycled content. The husband and wife physicians also use EHR in order to save some trees.

Online physician directory Avvo says that ophthalmologists and other eye care professionals use social media and online marketing more than any other physician segment. Seems to me that ophthalmologists have always been ahead of the curve in terms of self-promotion. Early in my career, the lead physician for a large ophthalmology group asked for my opinion of the use of a billboard to promote the practice. I told him I hated the idea because I felt billboards were unseemly for a medical professional. He ignored me.  Last I heard, he retired rich at a young age.

MED3OOO is hosting a Webinar May 11 to show off the integration between its InteGreat EHR with Medicomp’s Quippe technology. I checked out the InteGreat/Quippe product at HIMSS (as did Mr. H, Dr. Gregg, and Dr. Jayne) and was mighty impressed.

Practice Fusion introduces an EMR calculator that allows providers to predict how much they can save using Practice Fusion compared to three of the top EMR vendors. The company claims it has saved providers over $57 million to date, based on an estimate that EMR for a five-physician primary care practice is $50,000 for the first year, including implementation and operation costs. I am looking forward to comments from both the naysayers and the Practice Fusion faithful.

And in other free EHR news, Mitochon Systems announces that it is the first free EHR vendor to earn complete ONC-ATCB certification.

Doctors can make stroke diagnoses using an iPhone application with the same accuracy as using a medical computer station, according to research from the University of Calgary’s Faculty of Medicine. Using Calgary Scientific Inc.’s ResolutionMD Mobile application, neuro-radiologists diagnosed acute stroke by analyzing brain and head scans images. Researchers say that physicians using the iPhone app make correct diagnoses 94 to 100% of the time.

Meanwhile, a German study finds that a computer-based acromegaly detection program is more accurate than human experts. The computer program analyzed photos of individual faces and was correct 70% of the time; human experts identified the condition correctly just 60% of the time.

Allscripts makes a strategic investment in clinical analytics company Humedica. The companies will collaborate to market Allscripts Clinical Analytics Powered by Humedica, a new module which Allscripts will integrate with both its acute and ambulatory EHRs.

drawMD launches an iPad application developed by urologic surgeons. The The drawMD Urology iPad application allows physicians to use interactive imagery to illustrate and describe treatment options for medical conditions.

NaviNet names S. Michael Ross chief medical officer and David Kates VP of product management and clinical strategy. Both joined the company from Prematics, which NaviNet acquired last year.

Pediatric Alliance (PA) selects Ascent Data to provide data management services and support.

Physicians express concern with inaccuracies on Medicare’s Physician Compare Website, which by 2013 will also include physician quality performance details. Common problems include name misspellings, locality mistakes, and listings for physicians that are deceased or no longer associated with a practice. Physicians worry that if CMS can’t get biographical information right, then performance scores and other quality data might not be a trustworthy resource for patients.

Southeast Eye (GA) selects NextGen EPM PM and EHR for their eight-location practice. TSI Healthcare will provide implementation services.

E-mail inga.

Practice Perfect: The RVU Fallacy – Back to Compensation Plan Basics 5/9/11

The RVU Fallacy – Back to Compensation Plan Basics

Resource Based Relative Value units and their sub-component, Work RVUs (WRVUs), too often create perverse incentives for the participant physicians in a compensation plan when used as the main measure of productivity.

This is a controversial statement in today’s physician compensation environment. But it is not so controversial when viewed in light of the changes coming in the form of ACOs and other forms of reimbursement that emphasize collaboration and outcomes over “RVU piecework.”

Examples abound where current productivity-based compensation plans have created bad situations. We have seen plans where the physician is owed more in compensation than the organization has to spend (comp based on WRVUs without regard to paid WRVUs). Physicians have slighted post-surgical follow-up.

They have criticized an otherwise well-functioning IT revenue cycle product and process because of a lack of trust in how it captures and creates the WRVUs that drive their compensation. This has been heightened, perversely, by the move to integrated EHR and revenue cycle IT platforms.

Using WRVUs in a compensation plan is not a bad thing, but it should not be the main thing. The goal is to balance and align the needs of the individual with those of the organization. Align productivity (measured by WRVUs) with the ongoing changes in reimbursement linked to quality indicators and a plan becomes a forward-thinking approach to physician compensation. A plan that simply rewards physicians for producing WRVUs mistakes productivity for achievement.

To design and implement a good physician compensation plan requires a basic set of principles that are understandable, relatively simple, measurable, and widely held by the members of the group. The following are often overlooked principles that a compensation plan should be grounded in.

1. It must be fair economically. Not necessarily producing equal compensation, but fair.
2. It must be easily understood, especially to the physicians that are part of the group and therefore the plan.
3. It must not be difficult to monitor and administer and it must be flexible enough to allow for reasonable modifications as the practice and the environment change.
4. It should be consistent with the financial situation of the practice and responsive to changes in the financial situation. It must incent participants to control cost reasonably and as a normal part of their daily work.
5. Most importantly, it must stimulate its physicians to be effective and aligned with the group, with definable financial rewards for behavior and activity the practice needs and wishes to encourage.

In our experience, a base salary + incentive plan is the most common and best meets the needs of most of our clients. This is because it addresses the two most important concerns mentioned in the beginning of the article and, critically, it is the most flexible of all the models. There are as many ways to implement base + incentive compensation plans as there are physician groups.

In summary, the most important thing to remember when designing an effective and efficient compensation plan is, “Exactly what kind of behavior am I trying to elicit?” Make sure there is a clear understanding of your data source quality (aka, your revenue cycle product). Ask yourself; is it really more RVUs that are important to success of the practice? Or is it new patients, reduced wait times, increased room and equipment usage, better outcomes, higher margin, or increased grant or research activity?

There is no cookie cutter solution. Each group or subspecialty might have some basic principles, but each will almost certainly have slightly different goals.

Victor Arnold is managing partner with AsquaredM Resources.

DOCtalk by Dr. Gregg 5/6/11

A, O, Oh, Way to Go, Ohio

Chrissie Hynde (The Pretenders) wrote and sang that line condemning Ohio’s industrialization, pollution, and general state of ill health back in 1982. She’s an Akron gal, but often associated with Cleveland. That whole northeast corner has been hit hard by excessive and poorly planned industrialization, the subsequent “Rust Belt” blues, and, most recently, the dis from home town wunderkind LeBron.

Columbus has more recently been hit in its favorite point of pride, THE Ohio State University Buckeyes, with the memorabilia-for-tattoos swapping by some of the sainted Buckeye football squad along with the implications of improper handling by their otherwise extraordinarily ethical coach, Jim Tressel.

Depending upon your political affiliations … well, actually, your redness or blueness doesn’t really matter, as Ohio has had tons of complaints from both Dems and the GOP on its elected officials and election results during recent years.

And, of course, our state’s economy is just a mess, though I suppose we’re not alone there.

Ohio sure needs some good news.

Well, thank you, thank you, thank you, and praises be — we have some! No, LeBron isn’t coming back. But, I did hear some gospel that I thought was worth sharing, just in case you haven’t noticed anything good out of Ohio for a while.

First off, the state’s HIE/REC, OHIP (Ohio health Information Partnership) is leading the country in signing up PPCPs for their Meaningful Use journey. OHIP has nearly 3,700 providers signed up and many more nearing “signage.” (Fair notice: I was recently added to their board of directors, so I am a little extra proud.)

Secondly, I just heard some great news about one of the local companies in Columbus, Ohio, that I wrote about briefly in a pre-HIMSS HIStalk piece earlier this year, Health Care DataWorks. HCD was just listed by Gartner as one of their Cool Vendors in HealthCare Providers, 2011. This is a pretty excellent acknowledgement from Gartner, as these are the companies that they see as leading the way in healthcare with innovative and “potentially transformative” solutions.

Third, my alma mater, the Ohio University-College of Osteopathic Medicine, just announced this weekend that they have received something definitely transformative. The Osteopathic Heritage Foundation just awarded them $105 million, the largest private donation ever given to any college or university within the state of Ohio. They’re planning on using it to help bridge the impending “doctor gap” of primary care physicians by becoming “…nothing less than the leader of primary care [medical] education.”

Plus, they’re creating research centers for diabetes (a disease that is expected to skyrocket in coming years) and for musculoskeletal disorders. (Please don’t quote me, but I also heard from “well-placed sources” that there would be “some impact” upon HIT here in Ohio.)

OK, so this isn’t all the most HIStalk Practice-specific stuff, but from one hard-hit state, it is all definitely news we needed and some fun stuff we can finally crow about a bit — at least until the next election.

A, O, Oh, way to go, Ohio!

From the Ohio trenches…

“I’m just a lucky slob from Ohio who happened to be in the right place at the right time.” – Clark Gable

Dr. Gregg Alexander, a grunt in the trenches pediatrician at Madison Pediatrics, is Chief Medical Officer for Health Nuts Media, directs the Pediatric Office of the Future exhibit for the American Academy of Pediatrics, and sits on the board of directors of the Ohio Health Information Partnership (OHIP).

Pretzel Logic: Stage 1’s Nasty Little Surprises 5/5/11

Meaningful Use attestation began on April 18, which means that there is now some field experience on how to meet Meaningful Use Stage 1 requirements. I polled my staff to see what we’ve learned through the process. Which requirements seem to be the hardest? What are the best ways to meet those requirements?

The findings, though obviously not statistically meaningful in any way, were quite interesting and instructive (well, interesting at least to that perverse sliver of humanity who find health IT and Meaningful Use interesting enough to write and read about it).

Looking at the Core Requirements, the most difficult requirements seem to be (in order of difficulty):

Capability to exchange key clinical information. The biggest difficulty with this objective seems to be figuring out what the heck it means. What are “different legal entities?” What are “distinct certified EHR technologies?” What is “key clinical information?” What does it mean to “electronically exchange” key clinical information?

There are some answers available at CMS, but health care delivery is too complex, and the FAQs a tad too vague, to be really useful in many if not most circumstances.

One large source of confusion with this requirement is whether it requires some kind of connection to a Health Information Exchange. The answer is a resounding NO. Indeed, meeting the requirement doesn’t seem to require an electronic connection to another practice at all. All it requires is that a valid clinical summary CCD/c32 be generated from one certified system, and that an attempt be made to upload it into another distinct certified system.

Thus it would be perfectly acceptable to create the file using your certified EHR system, encrypt it (using a cheap and easily available commercial utility like WinZip, for example), pass the file to another practice on a CD or a thumb drive or even using commercial e-mail (like Gmail or Yahoo), and ask them to try to upload it into their system.

Doesn’t have to be through an organized HIE activity. Doesn’t have to be structured data. Doesn’t have to be transported electronically, since ONC somehow decided not to create any standards for that. Doesn’t even have to be successfully uploaded by the receiving practice! It’s like testing my high school son’s ability to show up for the SAT exam on time and with a number 2 pencil, rather than his ability to actually answer the questions on the test. (He’d be thrilled!)

If you are part of an organized HIE activity (like the New England Health Exchange Network, for example), you can transport your test file electronically. And some EHR vendors are helping their customers meet this requirement by matching up different customers with each other and facilitating transport through their own proprietary exchange infrastructure.

For example, eClinicalWorks, Medent, and Epic provide this service to their customers. But if you don’t happen to have such options, you can go just do it the old-fashioned way described above, and maybe even make it a little fun. “Hey Dr. Jayne, bring your flash drive on Wednesday morning and we’ll take care of MU before our tee time.”

Protect Health Information. This objective requires that the practice implement “appropriate technical capabilities” to protect health information and validate that they have done so by “conducting or reviewing a security risk analysis” of their internal capabilities. We’ve found that most providers generally know what the privacy and security rules are, but they’re shockingly unfamiliar with the details and they probably don’t know the severity of the punishments for violating such rules. Obviously, knowing the penalties should make people focus on the rules, but no one thinks it’s going to happen to them, so they put it on the back burner, if it’s on the stove at all.

You don’t have to be Sony to get seriously whacked by the long arm of the law. If you have some kind of breach and are determined by federal authorities to be “cavalier” toward protection of health information, for example, you could face a $250K fine, and up to $1.5M if you seem to be repeatedly “cavalier.” If you lose track of information on over 500 individuals (by having a laptop stolen, for example), you could be required to issue a press release to media outlets in your area and have your practice name listed on a federal Web site, in addition to any fines you might face.

And that’s just the federal requirements. Some states, like my own state of Massachusetts, have equally strict laws that correlate with, but don’t exactly match, federal rules.

This requirement is deceptive because it leads one to believe that protecting health information is just a technical issue, when any privacy/security professional would say that it’s mostly policy, procedure, and attitude. Because this requirement is so vague and so focused on technical capabilities, there is a risk that an EP merely checking the box on this one could be lulled into thinking that they’ve adequately addressed federal and state privacy and security rules when they might not even be close.

The best way to address this requirement is to hire a well-respected third party security audit firm. If you don’t know where to find one of those, your hospital or a large practice in your area would almost certainly be able to point in the right direction. Your IT vendor may say that they can provide this service, but be careful — some will only focus on technical issues like firewalls and will give scant attention or completely ignore the policies and training that you and your staff need to really meet the letter and the spirit of the law.

And in no circumstance should you rely on your EHR vendor for this. They’ll be highly unlikely to have the holistic view of your operations necessary to protecting you and your patients. And as much as it hurts, it might be worth paying you lawyer for a short chat about your legal exposure in this brave new world.

Provide patients with an electronic copy of their health information, and Provide clinical summaries for patients for each office visit. I lumped two objectives together here because both of them involve providing information to patients, which makes them incredibly important because they are customer-facing and directly embedded in day-to-day and visit-to-visit workflow.

The general difficulties practices have with these requirements are: What information am I supposed to provide? Do I really have to provide in any way that they want? And how long do I have to provide it?

In terms of what to provide, the requirement itself is a long list that seems fairly innocuous on the face of it, but has a few undefined oddities, like “recommended patient decision aids.” The harder part is that the EHR certification requirements don’t match exactly with what’s supposed to be included in the patient information, so any hope of automating this process in your office could get seriously bollixed up (a technical term) if the information you’re supposed to give to patients isn’t what the software spits out.

The other barrier we’ve experienced is that, as much love as we have for patients, they aren’t always as well behaved as we might like. So terms that say “per patient preference” can start to get complicated if it means that some patients want it on paper, others ask for it in a patient portal, others want it in their PHR, still others want it on a CD, and the rest want it on a thumb drive (the latter being patient-provided and possibly virus-laden and unencrypted, of course). And that just covers the reasonable options.

The reality so far is that the electronic information requirement is manageable because few patients are requesting the information and, I suspect, few providers are pushing it. The clinical summary information is a little easier because most EHRs do create some kind of post-visit summary, which is maybe probably mostly hopefully compliant with what the objective requires … or close enough for government work, anyway.

All of this isn’t to suggest that the other requirements are a walk in the rose garden (quality measures, for example, are like a whole new set of requirements). These are just the ones that we’ve found particularly troubling for those pioneering physicians who are attesting now.

I haven’t yet talked about the Menu set, which is a minefield onto itself. And whether meeting all these requirements is actually getting us to a world of better and more affordable health care is an even bigger issue that I won’t even try to tackle here. Gotta save something for future entries …

Micky Tripathi is president and CEO of the Massachusetts eHealth Collaborative. The views expressed are his own.