Health Care Current: January 19, 2016

Flying solo: ACOs slow to integrate specialty physicians

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory and legislative changes.

Flying solo: ACOs slow to integrate specialty physicians

My mother, who is 77, has always been one of the healthiest people I know. For years, she played tennis and golfed regularly, took long walks with her dogs (most recently Shorty, the Welsh Corgi, and Topper, the Cairn Terrier), and went on more trips than I can count to Mexico, Europe, and around the US.

But, last fall, something went wrong. Her wrists started swelling and aching. And then it moved into her neck. She needed to find a doctor to sort out what was going on and help her address the problem and quickly. Like many other Medicare beneficiaries in the traditional fee-for-service program, she referred herself to a specialist who she found by asking a friend.

As I watched the episode unfold, I wondered: How would this have been different if my mother were in an accountable care organization (ACO)?

Deloitte sought to answer a similar question in its recent piece, Integrating specialty care into accountable care organizations: Perspectives from the field, which was published in Health Affairs this week. Through interviews with leaders at eight ACOs, we found two major trends among ACOs attempting to integrate specialists into their care models.

  • Influencing referral patterns: Many organizations are directing their efforts at primary care physicians aligned to their health system. A key goal for these ACOs is helping primary care physicians understand the practice patterns – patterns of quality and cost – of specialists in their area. By sharing the data on these patterns, they aim to help primary care physicians refer patients to specialists who consistently have strong results and low costs. This does not happen without challenges. Getting enough data to assess the comparative performance of specialist physicians in the market and having the right quality measures for all the types of specialists have both been major challenges for these systems.
  • Improving specialty care: Few organizations are trying influence how specialists practice medicine. One organization said it had begun trying to influence the cost and quality of care it provided with a broad set of physicians only to realize that first it needed to start with primary care physicians. Another organization said it had tried working with specialists on a few focused projects (e.g., working with a group of orthopedic surgeons to improve care and reduce costs for people with low-back pain). The local business community made the project easier because it had strong interest in this condition. Ultimately, the health system successfully made the case to the specialists that their attention to this condition could generate additional referrals from these employers.

Should ACOs be doing more to influence cost and quality in specialty care? Many experts say yes. They recognize that because specialists are so influential in driving health care spending, ACOs will need to influence the way they provide care. Today, research suggests that progress on this front is slow; in the future, data on costs and quality and new payment methods are likely to be as important for specialists as they have become for primary care physicians.

Influencing specialists is likely to be challenging, however, as many specialists have successful practices under traditional payment methodologies. Specialists make almost twice as much as primary care doctors,1 and some types of specialists continue to be in high demand. Picking and choosing isn’t always an option.

Deloitte’s 2014 Survey of US Physicians echoed this, finding that specialists were significantly less likely to have any of their compensation tied to value-based care arrangements.

Despite these obstacles, involving specialists is critical to the goal of improving the value of ACOs. A strategy aimed solely at primary care doctors may do little to improve the care patterns of Medicare patients like my mother who find their own specialists.

When I asked my mother why she hadn’t gone to her primary care physician to help her find a specialist, she said she only went to her internist for check-ups. Instead, she began by calling specialists and was confronted with receptionists who conveyed months-long waiting lists. Her search ended with a family friend (a retired internist) who helped her get in the door with a rheumatologist. To me, this was a missed opportunity for her primary care physician to engage with my mother, coordinate her care with the specialist, and help her get the care she needed to address her pain.

My mother, it turns out, has rheumatoid arthritis. Fortunately, she is responding well to medications, and she likes the physician she is seeing. Unfortunately, today it’s hard to tell whether she’s seeing a specialist who thinks in terms of quality outcomes and a conservative practice style or one who continues to fly solo.

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My Take

By Sarah Thomas, Research Director, Deloitte Center for Health Solutions, Deloitte LLP


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21 organizations join the Next Generation ACO model

Last week, the US Centers for Medicare and Medicaid Services (CMS) announced that 21 health care organizations signed up to participate as Next Generation ACOs. Nearly half of the Next Generation ACOs previously participated in the Pioneer ACO program, which has only nine organizations left in it.

The Next Generation model builds on lessons learned from the Pioneer ACOs and Medicare Shared Savings Program (MSSP). Next Generation ACOs take on greater financial risk than organizations in the other programs and will have the potential for greater losses and gains. Organizations that opted to participate in the Next Generation model are more likely to have experience with the care coordination, care management, and analytics capabilities required to take on additional risk.

Many health care organizations signed up or renewed contracts with CMS as MSSP ACOs. The 100 new MSSP ACOs bring the total number to 434. Most of the ACOs opted for Track 1 of the MSSP, which is the track that offers upside risk only. Twenty-two of the MSSP ACOs will accept risk for losses in this program; this is up from three last year. More than 180,000 physicians and health care professionals will serve the 7.7 million fee-for-service Medicare beneficiaries who are assigned to MSSP ACOs.

While many organizations signed up to participate in the Medicare ACO programs – whether new or returning – some stakeholders said that too few organizations are willing to accept higher risk in the programs. The National Association of ACOs said that the 70 organizations that dropped out did so because they failed to earn shared savings, even after investing considerable time and money to establish an ACO. Many organizations continue to cite the benchmarking methodology as problematic.

Analysis: The Medicare ACO programs are testing incentives for providers to coordinate patient care across settings and the care continuum while reducing spending and improving quality. According to a recent Deloitte Health policy brief, Medicare accountable care organizations: Balancing risk and opportunity, health care organizations that wish to establish or continue a Medicare ACO may look at several factors key to participating in the Medicare ACOs. Among these are how CMS tracks patients and aligns ACO performance to them, how ACOs are paid and what opportunities exist for participating organizations to share in savings, and how performance will be measured. Each ACO model offers benefits (e.g., lower risk or higher savings) and risks (e.g., higher shared losses and lower flexibility).

The different programs offer organizations different levels of upside and downside financial risk:

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Implementation & Adoption

Health Care Payment Learning and Action Network’s framework will help measure and guide progress toward value-based care adoption

Last week, the Health Care Payment Learning and Action Network (HCP-LAN) published a white paper that outlines its final framework for alternative payment models (APMs), which will be a part of the new Medicare payment system for physicians. The framework will help stakeholders measure progress toward APM adoption through the Medicare Access and Children’s Health Insurance Program Reauthorization Act of 2015 (MACRA).

HCP-LAN founded the framework on three pillars:

In addition to these pillars, the group finalized seven key principles that will guide its work on measuring progress toward HHS’s commitment to tying 50 percent of payments to quality and value through APMs in Medicare by 2018 (see the November 3, 2015 Health Care Current). The framework aligns with four payment categories proposed by HHS:

(Source: HCP-LAN, “Alternative Payment Model Framework: Final White Paper,” January 12, 2016)

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Study: Average ongoing costs of transforming into PCMH vary widely

The RAND Corporation recently published a study in the Journal of General Internal Medicine examining the costs associated with transitioning from a primary care practice into a patient-centered medical home (PCMH). The study looked at costs for 12 practices that participate in the Pennsylvania Chronic Care Initiative and found that the startup and ongoing costs can be high and may be especially challenging for small and independent practices.

The median one-time cost is $30,991 per practice ($9,815 per clinician, $8 per patient), and the median ongoing costs are $147,573 per practice per year ($64,768 per clinician, $30 per patient per year. Most of the ongoing costs are for investments in information technology and care management activities that are critical to providing high quality patient care. While many health plans are providing financial help to small and independent practices, other practices do not have this funding.

Background: PCMHs are primary care practices that show they provide team-based care using patient registries, electronic health records, and other advanced tools. Their goal is to improve the quality of care and minimize unnecessary medical care.

(Source: Grant Martsolf, Ryan Kandrack, Robert A. Gabbay, and Mark W. Friedberg, “Cost of Transformation among Primary Care Practices Participating in a Medical Home Pilot,” Journal of General Internal Medicine, December 29, 2015)

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BCBSA finds less variation in exchange premiums in 2016

The Blue Cross Blue Shield Association (BCBSA) analyzed premiums for health insurance plans and found less variation in 2016 than in prior years. Key takeaways include:

  • Health plans offered fewer very high and very low priced plans. The number of lowest-cost silver benefit packages priced more than 10 percent lower than the next lowest-cost competitor’s option decreased to 38 percent of all counties (compared with 53 percent in 2014)
  • The share of health maintenance organization (HMO) and exclusive provider organization (EPO) products offered in the exchanges increased to 52 percent in 2016 (compared with 41 percent in 2015)
  • HMO products offered the lowest-cost silver benefit packages in 58 percent of all counties (compared with 47 percent in 2015)

Meanwhile, the exchanges continue to have a wide range of insurance carriers and product offerings. Analysts say that these results suggest health plans are gaining a better understanding of the individual exchange market and are more confident in their pricing strategies.

(Source: BCBSA, “The Evolving Affordable Care Act Marketplaces: The 2015 to 2016 Transition,” January 2016)

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IOM framework for value-based payment outlines ways to incorporate socioeconomic factors

The Institute of Medicine (IOM) published the first in a series of five reports that will explore whether Medicare payment and quality programs could better take into account socioeconomic status (SES) and other social risk factors. The Improving Medicare and Post-Acute Care Transformation (IMPACT) Act of 2014 requires the US Department of Health and Human Services (HHS) to provide a report to Congress by October 2016 on the impact of SES on quality of care and resource utilization.

This first report lays out a conceptual framework and presents the IOM’s initial results from a literature review that aimed to understand how various social risk factors and SES impact health-related measures of Medicare payment and resource use. The IOM concludes that socioeconomic position, race, ethnicity, gender, social relationships, and residential context can influence health care services use, costs, and outcomes. Subsequent reports will assess factors that may influence costs and health outcomes and identify the extent to which they should be incorporated into measures used for Medicare payment.

Background: Proponents of risk adjustment for social factors say paying for value increases the importance of properly measuring quality and not penalizing providers for social factors that are outside of their control. Critics of including certain social risk factors in Medicare risk adjustment believe adjusting for social factors could obscure genuine disparities and remove incentives for providers to improve care quality for vulnerable populations.

(Source: IOM, "Accounting for Social Risk Factors in Medicare Payment: Identifying Social Risk Factors (2016),” 2016)

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CMS to tighten rules around special enrollment periods in exchanges

Andy Slavitt, Acting Administrator of CMS, said last week that the agency plans to change special enrollment periods (SEPs) for the federal health insurance exchanges. SEPs are currently available to individuals who experience a qualifying life event, including having a baby, getting married, or losing health coverage.

CMS also announced recently that there will not be a 2016 special enrollment period linked to tax season, as there was in 2015 (see the December 15, 2015 Health Care Current). CMS plans to clarify some of the eligibility requirements for certain SEPs and remove some of the circumstances for special enrollment. According to Slavitt, CMS has established an enforcement unit that has already terminated coverage for individuals who are inappropriately enrolled through the SEPs. With these changes and additional ones to follow, the agency aims to create a more stable pool of customers in the exchanges and prevent individuals from signing up for coverage only after they become sick.

Analysis: Individuals who sign up outside of a normal enrollment period are often more expensive to cover. According to a Blue Cross Blue Shield Association analysis, consumers who enroll during special enrollment periods are 55 percent more expensive on average. These individuals are often sicker and need more care. Many health plans say that special enrollees can also make it more difficult for them to adequately manage and distribute risk.

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On the Hill & In the Courts

IRS: 1.4M households failed to report ACA tax credits properly

The Internal Revenue Service (IRS) reported last week that around 1.4 million households failed to document the tax credits they received through the ACA on their 2014 tax filings.

Some key numbers include:

Under the ACA, qualifying households can receive tax credits in advance if their tax returns show that they would qualify for subsidies the following year. The tax credits average around $290 per month and cover about 75 percent of monthly premiums. Individuals who fail to report the subsidies in their tax returns could miss out on receiving financial assistance the following year.

The IRS began notifying affected taxpayers about this issue; IRS Commissioner, John Koskinen, seeks to implement policies that improve the process and provide more clarity for consumers.

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Surveys find most consumers who leave exchange plans do so for other coverage

Most people who leave plans offered through health insurance exchanges enroll in coverage elsewhere, according to policy analysts from Families USA. The group cited a survey from Covered California, which found that 85 percent of consumers who left Covered California plans remained insured. A comparable survey conducted by PerryUndem Research/Communication and GMMB for the Robert Wood Johnson Foundation found that nationally three-quarters of people who dropped exchange coverage acquired insurance elsewhere. Most often these people transitioned to employer-based coverage or to Medicare.

One in five of those who dropped coverage from the federal exchange or their state exchange reported doing so because their premiums were too high. The survey of California exchange customers found that approximately 15 percent of new enrollees do not end paying their premiums and roughly one third of individuals who sign up at the beginning of the year will drop exchange coverage for coverage from other sources.

Background: Findings from the Deloitte Center for Health Solutions 2015 Survey of US Health Care Consumers suggest that affordability remains a problem for health insurance exchange customers. One-in-three enrollees with coverage for the entire year had trouble paying their out-of-pocket expenses. However, the desire to find a plan with lower costs may have increased engagement from exchange customers. Overall, they are more cost-conscious, price-sensitive, and focused on finding a plan that offers good value and fit than individuals with other types of coverage. Moreover, by the time they enroll in plans, these customers say they have a better understanding of plan benefits and costs than individuals with coverage through employers.

(Source: “Covered California Active Member Profile,” October, 2015; “Marketplace Enrollees: Results From a Survey of Individuals Who Purchased Health Plans Through the Health Insurance Marketplace” Robert Wood Johnson Foundation, October 2015)

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Around the Country

New research suggests that patient-reported outcomes may improve care delivery

Researchers and health care professionals are increasingly interested in using patient-reported outcomes (PROs) in clinical research and care delivery, and recent research suggests that PROs may improve clinical outcomes.

PROs are any status report on a patient’s health condition that comes directly from the patient without a clinician or other individual interpreting the patient’s response. Researchers examined whether or not monitoring symptoms of cancer patients using PROs could improve clinical outcomes. They randomly assigned patients receiving outpatient chemotherapy for advanced solid tumors to report 12 common symptoms using a tablet or computer or to receive usual care consisting of symptom and side effect monitoring at the clinician’s discretion. The researchers hypothesized that systematic collection of symptom information using PRO standardized questionnaires may be a strategy to improve symptom control and enhance patient-clinician communication, patient satisfaction, and well-being.

The study had a total of 766 patients. The main findings were:

  • Health-related quality of life (HQRL) improved among more participants in the intervention group (34 percent) than in the usual care group (18 percent). 
  • HQRLs worsened among fewer in the intervention group (38 percent vs. 53 percent in the usual care group). 
  • Patients in the intervention group visited the emergency room or hospital less and remained on chemotherapy longer. 
  • Seventy-five percent of the intervention group was alive at one year compared with 69 percent in the usual care group.

PROs typically include information about HRQL, symptoms, function (disability), satisfaction with care, adherence to prescribed medications or other therapy, and perceived value of treatment. Some of the PROs that patients reported in the study included pain, vomiting, nausea, diarrhea, constipation, energy loss, weight loss, and sleep disturbances.

Analysis: Deloitte’s recent paper, The next frontier of drug development and approval, outlines ways that the use of PROs could make the drug development pipeline more efficient. This includes:

  • Reducing the complexity of clinical trials and expediting patient recruitment
  • Providing an early indication of patient experiences and preferences, which would support better-designed Phase II trials
  • Helping identify patient subsets who may benefit from treatment and advance new label indications and having the potential to make the approval process for subsequent indications faster and more likely

The recent study shows how PROs may enhance clinical delivery downstream. PROs have the potential to enable physicians to improve the quality of cancer care through having a better understanding of their patients’ experience and encouraging patients to closely follow and report their experience. The results of the study also show the effect of practices for collecting this type of information and tracking it over time.

(Source: Ethan Basch et al, “Symptom monitoring with patient-reported outcomes during routine care treatment: A randomized controlled trial,” December 7, 2015)

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Breaking Boundaries

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