MGMA: Step 1, Clinical integration; Step 2, ACO

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LAS VEGAS—Accountable care organizations (ACOs) cannot be achieved without cultural changes and clinical integration, which requires structured collaboration between physicians and the varied provider settings, and will be necessary to reducing the current waste in the healthcare system, according to a presentation Oct. 25 at the Medical Group Management Association (MGMA) 2011 annual conference.

Mark Shields, MD, MBA, senior medical director at Advocate Physician Partners (APP), a Northern Illinois-based joint venture of physicians and a health system, Advocate Health Care, and includes 1,100 primary care physicians, 2,700 specialists and 900 Advocate-employed physicians, explained how Advocate Health Care established a working ACO model. Shields deemed APP a “private practice network” because it is made up mainly of solo or small practices.

All the practices currently are connected to Advocate Health Care, which has 12 acute care hospitals and more than 250 other provider sites in Illinois. Advocate started this collaborative process in 1982 with the creation of a physician hospital organization. 

“We have a long history of working together across specialties. Even though a desire for change might be present, a change in culture cannot be developed overnight,” Shields said. “The first key step to forming an ACO is to bring physicians together across specialties, with which you can drive quality, patient safety and cost effectiveness.”

An organization needs to establish clinical integration to get on the road to becoming an ACO, Shields said. Advocate’s definition of clinical integration is: A structured collaboration among APP physicians and Advocate Hospitals on an active and ongoing program designed to improve the quality and efficiency of healthcare. Joint contracting with fee-for-service managed care organizations is a necessary component of this program in order to accelerate these improvements in healthcare delivery. 

“Because we drive these common goals across varied provider settings and specialties, we are able to have independent practices, which are viewed by the regulators as competitive, but we also are able to negotiate as one,” Shields explained. As an example on the regulatory side, the Federal Trade Commission issued a consent decree for APP in 2007.

Federally recognized ACOs, a program that the Department of Health and Human Services will initiate by January 2012, means the provider groups accept responsibility for the cost and quality for a specific population, and must provide the data to be used to assess performance, according to Shields.

He suggested that ACOs will ultimately address some of the challenges of healthcare reform, as only large multispecialty groups are able to achieve the desired patient outcomes, but nine out of 10 Americans receive medical care in a small or solo practice (N Engl J Med 2009;360:655-657). Also, solo or small practices don’t have the infrastructure required to adhere to the standards, so clinical integration may create that bridge by linking them to other practices. 

Clinical integration, according to Shields, also is the foundation for the ACO for these three reasons:

  • Overcomes problems seen with the fee-for-service model, and incentivizes providers to drive improvement;
  • Creates the business case for hospital and doctors to work for common goals; and
  • Allows one approach for commercial and governmental payors.

Importantly, the clinical integration process needs registry data collection and a reporting system back to the providers. At Advocate, quarterly reports are created and disseminated for each physician and provider setting, and the financial incentives are tied to specific outcomes. In fact, data are collected from 43 separate files across 13 functional areas within Advocate. All the information is available online to “view and compare,” so physicians can see how they compare with their physician peers, Shields noted.

In his conclusion, Shields highlighted several key points:

  • Culture evolves over time and takes effort;
  • Physician engagement requires physician involvement;
  • Technology plays an integral role; and
  • Evidence-based management is key.

Finally, Shields said that there is a need for change due to the increasing costs, aging population and the focus on the overutilization, so these strategies can help providers prepare for the future.