Dr. JACQUE J SOKOLOV

Momentum is mounting for the federal drive to save money on Medicare referred to as the Accountable Care Organization (ACO) program under the Patient Protection and Affordable Care Act (PPACA). 

The goal is to provide insurance coverage to 32 million people, while improving quality of care, reducing medical errors and creating savings.

More clarity is emerging as the Medicare ACO rules begin to shed light on how participating hospitals, payers and physicians will navigate through this new healthcare model launching in 2014.

Meaningful Clinical Integration

Jacque Sokolov, MD and Chair of SSB Solutions, helped develop clinically integrated physician/hospital alignment models in more than 30 markets in 20 states. Sokolov said, “Meaningful Clinical Integration, as defined by the FTC, DOJ and HHS, is the topic that physicians will be hearing about for the next 12 months. The key takeaway is that physicians will be in the center of an evolution from fee for service payment to value-based payment methodologies, that require an integrated team-based care approach for the populations served.”

Physician alignment is among the top 3 concerns for nearly every hospital this year as they know the strength of those collaborations is key to the success of an ACO.  Hospitals are challenged with slowing capital spending, reducing operating cost structures to breakeven on Medicare, reducing waste associated with avoidable care and readmissions, and reducing length of stay.  

Sokolov explains, physician/hospital clinical integration models include, but are not limited to:

• Hospital Sponsored Medical Group Employment,
• Co-Management Service Lines Structures,
• Contractual Joint Ventures/Networks that are coordinated through CIC's (Clinical Integration Councils).

These physician or hospital structures are able to work or contract closely with commercial payers, CMS, and ACOs with reimbursement methodologies such as P4P, Bundled Payments, and at risk contracts, he said.

Each model is market and provider specific. These options are designed to improve alignment to enhance collaboration, secure referring sources, and create a new sustainability for favorable health outcomes and patient safety.   

Physician Centric Models

There are multiple ACO model options, but the physicians are at the center of them all, as they remain the primary driver of patients to hospitals. 

Robert Campbell, vice-president of business development for Catholic Healthcare West in Arizona oversees three hospitals with more than 2,000 physicians on staff. Campbell stated, “Over the past 12 months, we have found the Medical Services Organization (MSO), hospital employed, and wrap around Independent Practice Association (IPA) models have provided the strongest opportunities for integration with our physicians.

“Our physicians are very interested in building stronger collaborations with our hospitals. After the physicians are on-board, the goal is to also partner with key payers to develop a strong provider network, improve payer mix, and secure additional enrollment and patient volume.”

The various models can include physician incentives such as teaching and research agreements, unit director or medical director positions, professional service contracts and employment physician agreements. 

The idea is that physicians will be in roles that help propel healthcare forward and provide governance as it relates to credentialing, peer reviews, reduce avoidable care and associated waste, and overall have a vested interest in value and quality reviews, which in turn will lead to reenergized accountability.  

Bundled Payments Equate to Savings

Hospitals are moving toward bundled payments which become effective January 2013, and will manage to a single price point for each clinical episode including everything from admission to discharge. The scope of services in the bundled payment entails pre-admit, hospital based inpatient acute care, 30-days post acute care, and 90-days post acute care. If hospitals provide care within the agreed upon bundled payments, then they achieve savings to be shared with their participating physicians.

Physicians Open to Collaborations

The team approach between physicians and hospitals to streamline coordinated care comes at a time when more physicians may be struggling to maintain their practices, due to accelerating costs and decreasing reimbursements. This new incentive model will be attractive to many physicians who truly want to focus on delivering care and remove themselves from the administrative headaches of running a practice. The ACO models and bundled payments have already worked in some markets and have translated into considerable savings.  

Robert Minkin, FACHE, senior vice-president with The Camden Group said, “CMS has reported $42.3 million in savings  due to bundled payment demos over the past two years with five providers in four markets; Denver, Kansas, New Mexico and Texas.  The demos were focused on the cardiac and ortho service lines and all of these hospitals experienced an increase in quality and a decrease in cost per case. CMMI’s nationwide bundled payment program seeks to prove that higher levels of clinical quality along with lower cost are a viable solution to Medicare’s long term funding issues.” 

Evolution of the Primary Care Physicians

More than ever, the role of the primary care physicians is central and critical to this success since they will be the medical home for all patients, they will determine the need for specialty care and they will drive the flow of patients for care delivery. 

The strength and quality of primary care physicians combined with the level of collaboration with their hospital and specialists will determine the success of the new ACO program. In every market in the last 18 months, hospitals have been entering into discussions to employ more primary care physicians. 

In the past year, across the country payers have been evaluating their markets in a new way. While in markets with favorable cost structures, payers have been aligning with physicians, but also they’re approaching the more “fragmented” markets by strategically purchasing physician practices. Additionally, hospital business planning teams will be approaching primary care physician groups to present winning models for both parties.

The ACO program is still being defined and great uncertainty remains, but what we know is that to ensure Medicare savings, team-based care is being encouraged and will be rewarded.

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