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A Physician-led Accountable Care Organization: From Award to Implementation
Lauren M. Steckler, MHA; Sue S. Feldman, PhD, MEd, RN; and Carolyn A. Watts, PhD
Transitioning Our Healthcare System Toward Accountable Care
Michael E. Chernew, PhD

A Physician-led Accountable Care Organization: From Award to Implementation

Lauren M. Steckler, MHA; Sue S. Feldman, PhD, MEd, RN; and Carolyn A. Watts, PhD
Gaps in ACO implementation readiness are identified as appointment reminders, referral follow-ups, care management, care transition alerts, clinical quality measure knowledge, and resources.
Physician-led accountable care organizations (ACOs) are experiencing greater growth than health-system ACOs, yet little has been published on their implementation. We identified ACO readiness gaps in order to determine the readiness of a group of independent physician practices to implement an ACO. We then established management and governance structures in a complex organization to address those gaps.

Study Design: Data were collected from a questionnaire and interviews with physician leaders and practice administrators.

Methods: The Hastings Gap Analysis Model was used as a conceptual framework to construct an ACO readiness questionnaire and develop an interview protocol. Data collection consisted of a qualitative ACO readiness paper-based questionnaire and ten 60-minute interviews with physician leaders and practice administrators  Using standardized data extraction methods, data were extracted from the questionnaires and interview notes for analysis.

Results: The most common gaps in ACO readiness were a lack of human and fiscal resources, few care management tools, and underutilization of health information technology. Challenges involved communication and knowledge of quality performance measures.

Conclusions: Early and thorough assessment of ACO readiness appears critical to expose gaps and understand resource allocation during ACO implementation.
Since the passage of the Health Maintenance Organization (HMO) Act of 1973, there have been several attempts to restructure healthcare providers into organizations that deliver more value to consumers. Most recently, the Affordable Care Act (ACA), enacted March 23, 2010, provides incentives for the creation of accountable care organizations (ACOs) with a similar purpose.

While there have been many types of ACOs, to date there have been few generalizable conclusions about the factors leading to their success. In this paper, we describe federal policy initiatives encouraging the formation of organizations that can deliver higher value to consumers and the factors that affect the success of physician-led ACOs. We then present the Hastings Gap Analysis Model to examine the development of a physician-led ACO, and apply it to the formation and implementation of MD Valuecare (MDVC).

HMOs, encouraged by the HMO Act of 1973, were an early effort to address escalating healthcare costs and to increase value in care.1 They were an early type of managed care organization, which have historically been valued for their “bottom line” organizational efficiencies. Recently, CMS and other payers embraced the Institute of Healthcare Improvement’s Triple Aim by extending value to include more holistic values: better care, for fewer dollars, with increased patient satisfaction.2

One early attempt to embrace the Triple Aim was the patient-centered medical home (PCMH) model. The National Committee for Quality Assurance developed quality measures for PCMH recognition: emphasis on primary care, comprehensive and coordinated care, chronic disease management, and use of electronic medical record (EMR) systems.3

The ACA advocated newer value-based payment models, including ACOs4,5—defined by CMS as groups of doctors, hospitals, and other healthcare providers who voluntarily collaborate to deliver coordinated, high-quality care to Medicare patients.6 ACOs are designed to use outcomes and utilization data to drive quality through evidence-based medicine, preventive care, and transparent quality performance reporting. Compared with earlier attempts to defragment care and contain costs, key ingredients enabling ACO sustainability include actionable outcomes and utilization data, clearer evidence-based guidelines and quality metrics, increased knowledge about preventive medicine’s role in reducing healthcare costs, and shared goals between collaborating organizations (including greater physician control in decision making).7,8

Medicare Shared Savings Program
The Medicare Shared Savings Program (MSSP), initiated October 20, 2011, rewards ACOs for demonstrating lowered healthcare costs, meeting or exceeding care quality performance measures, and succeeding in enhancing the patient experience.9 ACOs producing results congruent with the Triple Aim—evidenced in quality performance reporting, claims data analysis, and patient surveys—share the savings with CMS.

Physician-led MSSP ACOs
Since 2012, physician-led ACOs have grown 138%—nearly 1.4 times more than hospital-sponsored ACOs.10 Approximately 51% of ACOs are physician-led, while 33% are hospital-sponsored.11 Shortly after introduction of the ACO model, physician-led ACOs were commonly viewed as disadvantaged because of their typically small size, lack of capital, and inattention to systematic quality improvement. However, research by Farzad Mostashari, MD, former National Coordinator for Health IT, showed that 29% of physician-led ACOs earned savings in their first MSSP year compared with fewer than 20% of hospital-sponsored ACOs.12

Dr Mostashari explains why physician-led ACOs are well-suited for meeting MSSP requirements: “Hospital-sponsored ACOs must contend with ‘demand destruction’ on their fee-for-service lines of business if they reduce procedures, admissions, and emergency department visits. However, physician-led ACOs are not similarly encumbered, and this model provides them with a ‘safe’ transitional path toward taking risk.”13

Critical Success Factors of Physician-led ACOs
Little is known about the scope of ACO implementation,4,14 but the limited literature does identify 4 critical success factors: 1) using health information technology, 2) using practice leaders to drive change management, 3) including frontline workers, and 4) learning from peer organizations.15,16

Health Information Technology
Physician groups that have invested in EMRs may be better equipped to handle MSSP quality reporting requirements. Generally, the use of health information technologies (ITs), such as transition of care alerts and health information exchanges (HIEs), has been considered a major contributor to successful progress toward the Triple Aim, and critical in achieving systemwide collaboration.17,18

Use of Practice Leaders to Drive Change Management
Change management literature demonstrates that organizational change occurs best when internal champions are identified. Physician practices that participate in ACOs must undergo extensive transformations, often entailing significant changes to daily practice work flows and technologies. For physician-led ACOs with many separate practices, it is critical that a physician champion at each practice leads the charge in communicating shared goals and responsibilities, implementing necessary changes, and mollifying those who object to needed changes within and among practices. Additionally, physicians can influence the use of resources (eg, radiology, prescriptions)—a critical component in cost containment or avoidance.19,20 Cornerstone Health Care, a North Carolina MSSP ACO, credits support from the chief medical officer and physician buy-in as critical in vetting systemwide redesign at participating practices.16

Inclusion of Frontline Workers
Physicians cannot successfully accomplish ACO implementation alone. Their success depends on physicians’ ability to integrate frontline workers into the practice work flow. Frontline workers perform many routine and essential tasks needed for MSSP ACO success (eg, medication reconciliation) that do not require physician oversight.

Learning From Peer Organizations
While organizations may work through various programs to achieve the Triple Aim, they must learn from the mistakes and successes of others, including peer organizations. Physician-led ACOs can learn from other physician-led ACOs, as well as from organizations such as group purchasing organizations (GPOs). GPOs are traditionally regarded for supply chain efficiencies, but their experience has generated extensive resources, knowledge, and expertise in successful value-based healthcare transformations.

Hastings Gap Analysis Model
An organization preparing for ACO transformation typically undergoes several rounds of careful deliberation. Douglas A. Hastings provides a conceptual framework for weighing the pros and cons of ACO implementation. The Hastings Gap Analysis Model (see Figure 1) comprises 4 phases:

1. Gap Assessment: quickly assessing ACO-capable readiness, addressing key questions, pinpointing major gaps and priorities, and determining the “case to act”;
2. Strategy and Business Case Development: determining market and performance goals, identifying alternative strategies, developing the preferred strategy, and documenting the “business case”;
3. Glide Path Development: considering how to manage the transition to ACO-capable care, detailing individual projects and milestones, and prioritizing “low hanging fruit” opportunities; and
4. Execution: managing the transition to milestones and financial targets.21

Hastings notes that Glide Path Development typically requires 2 to 3 months, whereas Execution can be 2 to 3 years.21

Physician-led ACOs are rarely implemented in a vacuum. This is primarily because they do not have the administrative, technology, analytic, or reporting infrastructure. As such, they seek to employ or consult with experts who advise on and execute the elements necessary for implementation of an ACO.

MD Valuecare, LLC (MDVC)
MDVC was formed in April 2012 by a group of independent physician practices in Richmond, Virginia. The original 12 practices of MDVC shared a vision to provide better care for fewer dollars with increased patient satisfaction, while maintaining autonomy and sharing responsibility. MDVC now has 20 practices (5 primary care physician [PCP] practices and 15 specialty practices) with over 450 physicians. The MDVC ACO sees more than 13,000 assigned Medicare lives (60% female; aged 20 to 104 years).

Founded in 1996 in Richmond, Virginia, inHEALTH, LLC provides ACO services for MDVC, including governance, administrative support, HIE, data analytics, quality performance reporting, and care management. inHEALTH is a joint physician-hospital venture dedicated to improving efficiency and effectiveness of healthcare delivery through advanced health IT and enhanced care management support, and it has performed well in Triple Aim initiatives targeting Medicare, Medicaid, and commercial populations. MedVirginia, its HIE subsidiary, provides inHEALTH clients with information and analytics services supporting population health and accountable care.

Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
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