Tag: Triple Aim

Jul 31
2015

How ACOs are Influencing the Provider-Payer Battle

Guest post by April Wortham Collins, manager of customer segment analysis, Decision Resources Group.

April Wortham Collins
April Wortham Collins

Under the traditional fee-for-service reimbursement model, providers and payers are natural adversaries. To maintain a steady source of revenue, providers are incentivized to render as many services as possible without running afoul of controls designed by payers to keep utilization in check. When healthcare costs inevitably creep up, providers demand higher reimbursements from payers. Payers, trying to keep claim in check and health insurance premiums competitive, respond by restricting members’ access to certain providers.

It’s this tension between payers and providers that forms the backbone of the U.S. healthcare system. At least, it has until recently. Policy and political leaders have come to realize that, absent of other factors such as quality, efficiency and patient satisfaction, healthcare costs will continue to rise, creating a weight under which the system will eventually collapse.

Enter the accountable care organization, a new model for healthcare delivery and reimbursement that exemplifies the key tenants of the Affordable Care Act and the healthcare Triple Aim: improving the patient experience of care, improving the health of populations and reducing per capita costs. Unlike the fee-for-service reimbursement model that rewards providers based on volume of services, the ACO model rewards providers for achieving specified quality objectives and constraining costs.

On their face, ACOs would seem to encourage cooperation between payers and providers. After all, to improve population health, providers need claims data and the type of technology solutions that payers have been investing in for decades. And to reduce healthcare costs, payers need to partner with quality providers with proven track records for keeping patients healthy. Ask any patient who has bounced back and forth between doctors’ offices and their health insurance company trying to sort out a medical bill, and the opportunity for improving the patient experience of care is tremendous.

So far, many ACOs are doing just that. Of the nearly 1,100 ACO contracts that Decision Resources Group is tracking today, more than half are commercial agreements involving 70 private payers. The largest private-payer ACO initiative in the country is led by Cigna, whose Collaborative Accountable Care program has 124 ACO agreements in 29 states encompassing more than 24,000 primary-care physicians and 27,000  specialists.

However, other aspects of healthcare reform are adding fuel to the payer-provider fire—and ACOs are a flashpoint. To keep health insurance premiums competitive, payers are excluding high-cost providers from their networks. Many of these narrow or exclusive provider networks also function as an ACO, with attached health plan products that are proving popular in public health insurance exchanges.

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Jul 16
2015

Health IT Industry Slips Under Radar of Accountability

Guest post by Dr. Andrey Ostrovsky, co-founder and CEO, Care at Hand.

Andrey Ostrovsky, MD
Andrey Ostrovsky, MD

Seven-hundred-and-seventy billion dollars in Medicare and Medicaid spending and more than one fifth of the federal budget is going to be spent very differently in 2018 compared to today. In particular, Health and Human Services (HHS) secretary Sylvia Burwell declared that at least 50 percent of Medicare payments will be tied to value-based models, such as bundled payment or accountable care organizations, by the end of 2018. The majority of Medicaid dollars have already shifted from fee-for-service (FFS) to managed care. Providers, payers and even patients are increasingly being held accountable for health outcomes and cost of care. So how come there is no accountability for the health IT industry?

There is no 30-day readmission penalty for EHR vendors. There is no medical-loss ratio applied to population health management platforms. There is no shared savings for predictive analytics apps supporting bundles. The lack of accountability in the health IT industry is hampering the promising shift in the rest of the healthcare system from volume to value.

Technology has the potential to speed up adoption of payment-for-performance and achievement of the Triple Aim including improving outcomes, decreasing cost and improving patient experience. However, a recent analysis by the Institute for Healthcare Improvement (IHI) found major gaps in the current digital health ecosystem with only 2 percent of technologies achieving all three aims and only 23 percent of technologies having any peer-reviewed research evidence for their claims.

While regulation can slow tech innovation and the FDA should be commended for loosening its regulatory grip over apps, financial incentives and constraints should be put in place to spread the risk – and reward – that the entire healthcare system is facing to the HIT industry as well.

Before the federal government realizes that health IT has slipped under the radar of accountability, our industry has a chance to shape it’s own future by incorporating risk-bearing into our business models. More important than the viability of technology vendors is the implication of accountability on the lives of vulnerable consumers and sustainability of providers serving those consumers.

The following guiding principles can ensure that vendors are held accountable of supporting high-quality, patient-centric delivery models and achievement of the Triple Aim:

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