Agents of Change: ACOs Can Reduce Costs, Improve Care, Increase Income
Editor’s note: During the AAFP’s Scientific Assembly in San Diego, a panel discussion on practice transformation generated far more questions than the panelists could answer in the time allotted. This is the sixth post in an occasional series that will attempt to address the issues members raised — including questions regarding accountable care organizations — during the panel.
May 23, 2014 – I recently attended a payment forum where family physicians expressed their frustrations with the existing health care system, as well as their hopes for the future. We discussed the need to repeal and replace the sustainable growth rate formula, payment for telemedicine and much more.
For every success story these FPs shared, there were others who talked about the challenges we face in primary care. It was a mix of dreams of the future and realities of the present.
One of those realities was the potential for change posed by accountable care organizations (ACOs). One physician grabbed the audience’s attention by talking about his ACO, a group of about 40 physicians in Austin, Texas, that has negotiated a 5 percent positive payment differential with BlueCross and BlueShield.
Several physicians, in fact, talked of positive experiences with ACOs, which allow family physicians and other health care professionals to band together to pool data, develop best practices and make policy decisions that improve quality and reduce costs, and, ultimately allow them to negotiate contracts with the power of a larger group.
They didn’t need to convince me. I’m the medical director and board chair of a fledgling ACO that received its charter from CMS in December. So far, we have nearly three dozen practices and about 50 physicians (mostly family physicians) on board.
CMS is encouraging ACO development by offering shared savings bonuses to participating practices. Those short-term incentives can invigorate and strengthen family medicine practices. But in the long run, ACOs will need to look beyond Medicare to thrive.
My ACO has already signed a three-year contract with Aetna that will pay fee-for-service, plus incentives for quality outcomes and cost savings as well as fees to cover the cost of administering the ACO. We’re also in talks with two other large private payers with the goal of negotiating similar deals.
A representative of one of those payers told me his company sees itself transitioning from a traditional insurance model to a business based more on health maintenance. That revolutionary statement indicates that payers understand that fee-for-service is not the concept our future will be based on. Are we finally are on the verge of payment reform in this country?
We grew up with a health care system that had hospitals at the center of our medical communities, but that paradigm is about to shift radically, with primary care becoming the center of the health care delivery universe and hospitals becoming the satellites that orbit medical homes.
People resist change, especially when it doesn’t benefit them. Health care and payment reform stand to benefit both primary care physicians and our patients. The need to change has been obvious for decades, but progress previously had been checked by political roadblocks. For the first time in my career, this shift is realistically achievable, and I’m doing my best to make the ACO model work.
So how does a family physician become the head of an ACO? There’s no class or training that I’m aware of, so I did a lot of reading and networking and attended relevant conferences.
Maybe you don’t want to run an ACO but you’re interested in joining one and aren’t sure how to get started. I was fortunate that in 2000, my small, rural practice joined an independent practice association, which became the basis of our ACO. Given that my experience might be the exception rather than the rule, I would suggest you look for a physician-owned and -operated ACO. If there are none in your area, look for an ACO that has primary care-led governance built into its operations. If other parties are in positions of authority, that ACO might not share your goals or want the kind of change you hope to be part of.
The patient-centered medical home (PCMH) was another topic discussed at the payment forum, and it’s a vital part of the plans for our ACO. Our goal is for all the participating practices to achieve National Committee for Quality Assurance (NCQA) PCMH recognition within the next 12 months.
There has been a lot of concern from small practices about the cost and time needed to achieve PCMH recognition, but it can be done. My two-physician practice achieved Level 2 recognition by working together with other small practices in my area, and we have submitted paperwork for Level 3. Blue Cross and Blue Shield has pledged to provide a 5 percent positive payment differential for practices in our group that achieve Level 3 recognition.
There seems to be little question that fee-for-service is going to become a smaller and smaller part of how primary care physicians get paid in the future. We need to look at all the options available — whether that be an ACO, direct primary care or something else — and choose the best opportunity for our individual practices.
Finally, if you are interested in learning more about ACOs, or connecting with AAFP members who are participating in — or leading — ACO initiatives, you will be pleased to know that there are a number of family physicians interested in forming an ACO member interest group. At our most recent meeting, the AAFP Board of Directors approved the formation of member interest groups as a way to define, recognize and engage groups of AAFP active members who have shared professional interests. These groups will provide a forum for such members to have a voice in the development of Academy development.
If you are interested in participating in the formation of an ACO member interest group, contact AAFP delivery systems strategist Joe Grundy.
Lloyd Van Winkle, M.D., is a member of the AAFP Board of Directors.
Posted at 01:42PM May 23, 2014 by Lloyd Van Winkle, M.D.