Six Signs that Your ACO is Headed for Trouble
Value based contracts are becoming the norm in the healthcare industry. Whether you agree or not with the structure of these payment models and the impetus behind the advent of the new paradigm, the fact is that they are here to stay. Initial results show successes as well as failures begin at the “first mile” stretch. Studies and research indicate that physician led ACOs are gaining popularity.
Director, Vitreos Health, Plano, TX
Raymond Carter, Senior Editor, Accountable Care News
We continue with our series of op-eds and reports from the field in this space with a piece from Sandeep Misra,
Director of Sales for VitreosHealth.
Six Signs that Your ACO is Headed for Trouble
Value based contracts are becoming the norm in the healthcare industry. Whether you agree or not with the structure of these payment models and the impetus behind the advent of the new paradigm, the fact is that they are here to stay. Initial results show successes as well as failures begin at the “first mile” stretch. Studies and research indicate that physician led ACOs are gaining popularity. However, several physicians organizations are signing these risk contracts only to realize that they are achieving minimal success (if any at all) while few others are delivering the desired financial results. The realization of poor results hit the executive leadership teams like a ton of bricks and the blame game ensues. However, what most of these organization either (a) don’t realize or (b) realize too late, is that the main drivers of lack of success are avoidable and in complete control of the key decision makers and are made long before the risk contract renders successes or failures. There are six main reasons why most ACOs are struggling with delivering the success that they set out to achieve:
- Lack of Understanding of the Beneficiary Assignment.
The Medicare beneficiary assignment process is a work in progress, and if your organization accepted the beneficiaries assigned without due diligence and in-depth analysis, you could be responsible for patients that should have never been attributed to your list. We have seen up to 18% error rates in patient attribution (false positives as well as false negatives). Beneficiaries are added and/or dropped from the ACO on a regular basis. Do you have a process in place to monitor the validity of these assignments?
- We Have “Spreadsheets”.
If your healthcare organization believes that you can perform advanced level analytics to understand risk and cost profiles of your patient population by using spreadsheets, you are headed down a path that is hard to turn back on. The key behind every successful ACO is the ability to look at ALL aspects of risk and cost for the patient population to make best possible care delivery decisions and “spreadsheets” just won’t cut it. It is a sign that there is a lack of understanding about the complexity of analyzing the population risk. A poor design ends up being a bad foundation for a great ACO.
- High Cost = High Risk.
Nothing can be farther from the truth. Consider this example: If I go through a knee replacement, I become a high cost, and as a result, high-risk patient for the organization. However, I will not go through the same surgery again (hopefully). Should I still be identified as a high-risk patient in the future? If your organization only uses historical cost analysis as the basis for assigning future risk, you are looking at half the picture. Take another example: John has three chronic conditions but all of them are under control. Predictive models using only claims will determine John as risky for the combination of the conditions but in reality the ACO is wasting the clinical care management (precious resource) while annoying the patient. What about members’ current clinical risk based on specific disease(s) that are out of control?
- Our Predictive Risk Stratification Solution Uses EHR Data.
Does it really? Most predictive analytics solutions utilize the ICD codes from EHRs for risk stratification and predictive modeling which is the same data that is available in claims. So they are providing cost analytics, not risk analytics. Same old approach on a different data source WILL NOT deliver better results.
- Performance Year Shared Savings TBD.
Why are your shared savings TBD? Shouldn’t you be able to track, monitor and execute on the shared savings targets on a regular basis?
Shouldn’t you be able to course correct at the first sign of trouble when designing and executing care management programs? Do you wait till the end of the journey to identify your destination? How are you navigating your care program effectiveness journey? Large public conglomerates rely on earnings guidance to increase investor confidence and hold themselves accountable to a minimum financial performance. Why should healthcare providers be different?
- Clinical Risk Information Is All You Need.
Studies indicate that up to 50 percent of a patient’s overall risk comes from non-clinical factors (i.e. socio economic, access to care and perceived well-being). You could have the best healthcare organization and the most qualified care providers, but if the patient(s) cannot be compliant and engaged to effectively access your services, shouldn’t that factor into the overall risk for outcomes and total cost of care?
Be intellectually honest and measure your organization’s processes against these factors. When evaluating winners and laggards at the first stretch of the race, these are the traits of success (or lack thereof) we have identified to date. The decisions that your organization has to make are extremely complex and should be made with utmost care and diligence. Your long-term success depends on them.