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What Do ACO-Minded Hospitals Want?


Practices that want to join ACOs should start asking what hospitals are after.

In the four weeks or so since CMS released its prosaic ACO proposal, there’s been a lot of buzz as to what it all means for practices. Common questions run the gamut of ‘How will organizations share savings?’ to ‘Which of the risk models that CMS is proposing makes sense?’ and ‘What kind of technology will my practice need to make an ACO work?’ 

But to get some insight as to what the future holds for ACO-minded practices, one may not have to look further than the hospitals down the street (or the associations that represent them).

“Hospitals are going to want partners who have good outcomes and who are efficient in their use of resources,” said Christina Thielst, a freelance hospital administrator and consultant based in Santa Barbara. “They’re going to look at their internal data, as well as others’ external data, so they can identify good partners.”

That said, many hospitals - while interested in buying practices, perhaps - have not yet embraced the idea of forming the kind of ACO that CMS describes in its proposal. Many hospitals see barriers that are still a bit steep, says American Medical Group Association President Don Fisher, whose association mostly represents providers in larger healthcare organizations.

One big barrier, says Fisher, is that many elderly patients - the patients that are potential participants in these programs - may not warm to the idea of their healthcare information to be passed around.

“This is a problem, because if the frailest Medicare patients are more likely to say no to data sharing, there’s no way to know you’re improving outcomes and cost,” he said.

Fisher said he also takes issue with the proposal’s apparent lack of a patient-attribution model: Should the existing rule go into effect, ACOs may not know who their tracked patients are until they’ve been taking care of them for a while. So if “Mrs. Jones sees you three times a year, but she sees the practice down the street four times a year, she’ll be attributed to them,” said Fisher. “You may be working really hard [on certain patients] thinking you have those patients attributed to you.”

Lisa Grabert, the American Hospital Association’s senior associate director for policy, noted there one of the big concerns her organization has is the ACO proposal’s lack of a “partial capitation” payment plan.

“Partial capitation would allow you to receive some money up front, which is a big concern for everyone,” said Grabert. “It isn’t in there.”

Though AHA plans to comment on the current proposed regulations by the early June deadline, it already addressed some of its concerns in an 11-page letter to CMS sent Dec. 3.

One suggestion: “There needs to be a way for physicians in small and solo practices to come together with other providers to form the entity required to contract with the Medicare shared savings program,” the letter stated. “The historical approach to creating such an entity is the formation of a physician hospital organization (PHO) that combines providers without physicians having to become employees of hospitals, but there are other more contemporary models, such as health networks, that could be viable.”

Meanwhile, healthcare consulting firm PwC’s recently report “From courtship to marriage Part II: How physicians and hospitals are creating sustainable relationships,” the second of a two-part series, provides a few case studies on hospitals and physician practices that have combined forces to improve patient care and save money.

“Moving from a fee-for-service model to an outcomes-based model is going to be about quality and transitioning patients across the continuum of care,” Warren Skea, a director in PwC’s Health Enterprise Growth Practice, told Physicians Practice.

Does your practice want to join an ACO? Post your response below.

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