But really…..what is an ACO?

When broken down into its simplest form, an ACO is not so much a thing” as it is a set of operating and behavioral/cultural principles designed and implemented to accomplish two

overarching goals“:

Transformation and expansion of the care delivery enterprise to deliver the right care (via evidence-based population-specific

disease management care guidelines and appropriateness criteria) in the most appropriate setting (i.e.: ambulatory setting where appropriate/avoid

unnecessary ED/hospitalizations by 24/7 ambulatory access), at the right time (i.e.: preventive screenings, chronic disease status checks, etc). Further, the Care Delivery System will embrace performance measurement and use such to continually improve individual and population outcomes. *

Transformation of the payment system to models and methodologies that reward value(*) rather than volume

*as measured by both individual and population outcomes/results

2

ACO Opportunity – What Does it Mean?Cultural/Behavioral/Paradigm Shift

FROM

• Profit from sickness

• Minimal focus on high utilization

• Emphasis on procedures

• $ in Specialty Care

• Minimal consult/continuum management

• Fragmentation

• Misaligned financial incentives

• Autonomy is paramount

• All care driven by MD….i.e. if there is a highest cost model…

• Patient and family members as nuisance

TO

• Profit from wellness/health

• Reduce preference and supply driven care

• Emphasis on Prevention

• Increase $ in Primary care

• PCP team manages care through continuum

• Integration/Interdependent

• Aligned financial incentives

• Evidence-based and consistent, reliable medicine & service

• Responsibility shifted to non-physician providers

• Patient and family members as integral members of the team

ACO Guiding Principles and Attributes

Clockwork Medicine/Seamless Transitions

Team Care – including case management and patient self-care

Performance-driven Provider Network

Payment for Value

IT as a key enabler

4

Don’t Underestimate the Magnitude of Change……… Expectations of Participating Physicians

Participating physicians will need to agree to (most or all):

Open sharing of clinical files Referral constraints – i.e. refer within Network/Group Use of and adherence to Clinical Guidelines Practice expectations around documentation, computerized

ordering, etc. Willingness to use case managers, physician extenders,

hospitalists, etc Utilize group practice services such as after-hours care, nurse

triage, central scheduling, etc. Reporting of process and outcome measures Participation in peer review activities up to and including

terminating nonperforming physicians when other remediation efforts have failed

Transition in both the Payment and the Delivery Systems

Adapted from: Harold D. Miller. From Volume To Value: Better Ways To Pay For Health Care Health Affairs, September/October 2009; 28(5): 1418-1428.

Fee-for-Service

Episode-of-Care or

Comprehensive Care Payment

Delivery

System

Payment

System

Volume Driven

Fragmented Care

Value Driven Coordinated

Care

YESTERDAY

TODAY(TRANSITIO

N)

IDEAL

Volume Driven to Value Driven Care

Chronic diseases are also the primary driver of health care costs – accounting for more than 75 cents of every dollar we spend on health care in this country.

In 2007, this amounted to $1.65 trillion of the $2.2 trillion spent on health care. CDC

Follow the money Jerry

“One quarter of Medicare beneficiaries have five or more chronic conditions, sees an average of 13 physicians each year, and fills 50 prescriptions per year.” ―

Clayton M. Christensen, The Innovator's Prescription: A Disruptive Solution for Health Care

“The art of medicine consists of amusing the patient while nature cures the disease.”

Voltaire

Realign the Business and Clinical Strategies

Chronic High Risk

Well-controlled & Healthy

Advanced Palliative

We must be able to manage a population and not a groupof patients

•Complex Case Management•Palliative Care

•Disease Management•Case Management

•Screening and Prevention•Wellness

“Perfection is not attainable but if we chase perfection

we can catch excellence” - Vince Lombardi

10

The thing about paradigms…

Shift Happens!

Why all the focus on Disease Management?

Approximately 12 billion dollars a year are spent on “ potentially preventable” readmissions. (Medicare

Payment Advisory Commission)

There has been a paradigm shift for healthcare as Medicare moves to cut reimbursement for readmissions while focusing funding on follow up educational services and prevention for discharged patients at high risk.

On February 4, 2013 Medicare announced the Comprehensive ESRD care initiative.

There is profound concern regarding the future sustainability of the Medicare program and efforts to ensure resources are being utilized in the most cost effective manner have emerged.

Proposals have been made for ACOs to be created to focus on systems to deliver care to the general population.

On February 4, 2013 Medicare announced the Comprehensive ESRD care initiative.

Transformation and Change

People with the highest medical costs are often those who receive “bad healthcare” .

They are the chronically ill who cycle in and out of emergency departments and doctor’s offices.

Multiple “emergency room visits and hospital admissions should be considered failures of the healthcare system until proven otherwise”

“Bad healthcare” contributes to increased cost

15

Why Kidney Disease?

25 million Americans with CKD◦ Increasing due to diabetes, aging, and the

obesity epidemic

Prevalent patients surviving cohort year without ESRD, age 65 & older (Medicare) & 20–64 (MarketScan & Ingenix i3).

16

Current outcomes in Late Stage CKD present an ideal population for improved outcomes at lower costs…

There is direct savings in pt. management. 82% of patients start dialysis with catheters. The overwhelming cost of care in the “acute” phase of dialysis far outweighs the cost of prevention and disease management. The initial cost to manage a patient in the early initiation of HD spike as does the mortality rate.