New Journal Article: A Report From the Field

December 2, 2020

The trillion dollar shift in healthcare payment “from volume to value” is well underway with both public and private payers and purchasers pushing provider organizations to participate in outcome-based risk contracts, stepping up from pay-for-performance and medical home models to a variety of accountable care and bundled payment programs.

But what are we to take away from the mixed results of these programs — from the lack of savings in the Comprehensive Primary Care demonstration, to the dropouts from the Pioneer program, the recently released underwhelming results from the first year of the Bundled Payment for Care Improvement Initiative, or the 2015 results from the Medicare Shared Savings Program?

One approach would be for partisans for each of these approaches to search for positive nuggets in the results from their preferred program, while heaping scorn on the other “competing” reforms.

Another would be to retreat altogether from the aspirations of achieving better care at lower cost, towards either resignation towards ever-escalating health care costs or more likely to (altogether regretful!) rationing of access to good healthcare for the most vulnerable in our society.

A third path would be to acknowledge that there is no magic bullet for “transforming healthcare” overnight, and that the work of redesigning our delivery systems to meet the expectations of the outcome-based payment models will be slow, hard, and uneven. We would accept that there are likely multiple payment reforms that will need to be implemented alongside each other, targeting different healthcare markets and different participants. (Capitated payments for truly integrated delivery networks. Mandatory bundled payments for proceduralists and hospitals. Accountable care for independent physician networks). And each model will need to be iterated and tweaked and incrementally improved.

That is what I choose to believe.

We are publishing today in the new issue of the American Journal of Managed Care, “A Report From the Field,” the detailed description of what our two ACO “freshman” accomplished in 2015, and openly discussing the challenges we faced, what we are doing differently now, and some policy changes that can put more wind to the backs of those in these trenches.

Here are a few of the key findings:

In the two of our ACOs that were part of the 2015 cohort, we successfully increased primary care utilization (and revenue). We saw significant quality improvements. We achieved rates of aspirin use for patients with ischemic vascular disease of 87 percent, screening and follow up for elevated blood pressure at 90 percent, and tobacco use screening and cessation at 93 percent.

Our independent primary care practices decreased emergency department (ED) visits by being more available and accessible to their patients and educating them about appropriate ED use. They increased contact with their patients after discharge (sometimes with the active help of hospitals, sometimes despite its absence), and substantially reduced readmissions and acute hospital utilization. (see table)

There are regulatory headwinds that ACOs in the MSSP program face. For instance, the calculated “benchmark” used to determine savings is a flawed measure of the counterfactual. By using national trends rather than regional comparators, MSSP program success is an inaccurate reflection of what costs would have been for ACO patients in the absence of the ACO (“difference in difference”). Regional trends (eg. in hospital coding, whereby utilization decreased but cost increased) will not be reflected in some ACO results, while others will benefit simply from downward regional trends. In addition, we (and I suspect many other ACOs) saw millions of dollars of savings evaporate due to downward risk adjustment, as a peculiar feature of the MSSP, wherein risk adjustment can decrease the benchmark, but never increase it. Aledade has the resources to understand and accommodate to these factors, but many ACOs do not. These are the sorts of regulatory tweaks that can make a true difference in health care delivery innovators staying with the program over the long run.

While physician-led ACOs do not have to contend with the “demand destruction” that stymie hospital-led ACOs, they need to pay particular attention to specialist costs. In particular, specialist practices that have been reclassified as hospital outpatient settings can double the cost to Medicare for visits and procedures. As we move forward, we are bringing more focus – and scale—to influencing downstream care through specialist tiering, referral management, and compacts.

There is a lot more detail in the full article. Overall, we have learned that given the right support and incentives, independent primary care practices can deliver better outcomes to patients, boost quality across the health care system, and lower costs. Achieving savings on the total cost of care takes time, but the benefits of the program to patients and taxpayers are not limited to those ACOs that received shared savings distributions. The movement “from volume to value” in payments must co-evolve with the delivery system’s ability to transform itself to deliver better care at lower cost. For the health of patients and the health of the health care system, we cannot retreat.