Archive for the ‘Physician-Hospital Organizations’ Category

ACO Trends for Hospitals & Health Systems: 9 Metrics to Know

September 24th, 2015 by Patricia Donovan

Of all healthcare sectors, hospitals and health systems are the most engaged in ACO activity, with 72 percent belonging to an accountable care organization (ACO), versus 50 percent of overall respondents to the 2015 Accountable Care Organizations survey by the Healthcare Intelligence Network.

Hospitals and health systems made a strong showing in HIN's fourth annual ACO activity and trends snapshot.

Moreover, respondents in this sector are united on many ACO fronts, reporting 100 percent commitment to the following: use of electronic health records (EHRs); inclusion of population health management and care coordination in their ACOs; adoption of NCQA guidelines for ACO recognition; review of clinical outcomes, health claims and health utilization data to measure ACO success; and designation of program rollout as the chief challenge of ACO creation.

And while not unanimous, hospital ACOs are almost twice as likely to be administered by a physician-hospital organization (60 percent, versus 28 percent overall); and to incorporate telehealth into their ACO framework (60 percent versus 34 percent overall).

This fourth comprehensive accountable care snapshot by the Healthcare Intelligence Network also found that ACOs within the hospital/health system sector, which comprised 11 percent of 2015 survey respondents, are twice as likely to employ 100 to 500 physicians (a metric reported by 60 percent of hospitals and health systems, versus 29 percent overall).

Also, hospitals have the largest number of pending ACOs, with half of those not already in an ACO expecting to be part of an ACO launch in the next twelve months, as compared to 25 percent overall.

Additionally, 40 percent of hospital-reported ACOs say they will participate in the Next Generation ACO Model, the latest Medicare Accountable Care Organization introduced by CMS, as compared to 21 percent of overall respondents, the survey found.

On the payment front, the hospital sector reports the highest use of a “fee for service + care coordination + shared savings” reimbursement model within their ACOs (60 percent versus 45 percent overall), the survey found.

Return on investment for hospital ACOs also tended to be healthier, with responding hospitals almost four times more likely to report ACO ROI between 3:1 and 4:1 (20 percent of hospitals versus 5 percent overall).

Finally, despite robust value-based activity, this sector expressed the most skepticism over CMS’s ability to shift half of Medicare payments to value-based models, with 71 percent doubting Medicare would meet this 2018 goal, versus 46 percent of responding healthcare organizations overall.

Source: 2015 Healthcare Benchmarks: Accountable Care Organizations

ACO Evolution from 2011-2015: 8 Year-Over-Year Trends

July 21st, 2015 by Patricia Donovan

ACO Trends 2011-2015

Today's ACOs are larger, busier and better staffed than they were four years ago, according to a HIN year-over-year analysis.

Adoption of accountable care organizations (ACO) has more than tripled in four years and clinical integration continues to challenge non-adopters, according to a Healthcare Intelligence Network analysis of accountable care organization benchmarks from 2011 to 2015.

According to year-over-year ACO metrics published in 2015 Healthcare Benchmarks: Accountable Care Organizations, the percentage of healthcare organizations in ACOs has climbed from 14 to 50 percent in the last four years.

Leadership of ACOs by payor-provider co-ops or health plans has slowed to a trickle during this period, while the percentage of physician-hospital organization (PHOs) firmly grasping administration reins has nearly doubled—from 15 percent in 2011 to 28 percent among 2015 respondents.

ACO Staffs Support Healthcare Integration

The ACO staff has become more diverse, boasting more specialists, health coaches and clinical psychologists to support integration of behavioral health and primary care, the ‘sweet spot’ of patient-centered medicine. Watchwords are care coordination and care management, according to 2015 respondents who shared ACO success stories.

Staffing within ACOs has swelled as well: 29 percent of 2015 survey respondents support 500-1,000 physicians within its ACO, nearly double the 17 percent reporting this staffing ratio in 2011.

The average ACO is also busier than ever, with 61 percent encompassing 10,000 covered lives or more, up from 42 percent in 2011, perhaps reflecting consolidation occurring across the healthcare landscape.

Today, healthcare organizations are more conservative about time required to adequately frame an ACO, with 20 percent of 2015 respondents reporting that two years or more was needed, up from 4 percent in 2011, while the percentage requiring 12 to 18 months for ACO creation dropped from 50 percent in 2011 to 37 percent this year.

Reimbursement Shifts from Volume- to Value-Based

The retrospective data supports the industry’s transition from the traditional fee for service payment environment to the value-based reimbursement structure favored today, with 45 percent of 2015 respondents favoring a FFS + care coordination + shared savings payment model, up from 15 percent in 2012. (Note: 2011 respondents were not surveyed on reimbursement models).

This handwriting is on CMS’s wall, in the form of its pledge to move half of Medicare payments into value-based payment models by 2018. More than half of 2015 respondents—54 percent—expressed faith in the federal payor’s ability to meet this financial goal.

Despite the latest benchmarks, operational ACOs insist no two accountable care organizations are alike. In the experience of Steward Health Care Network, a top-performing Medicare Pioneer ACO, “When you’ve seen one ACO, you ‘ve really seen…one ACO.” Having ended Pioneer performance year two with gross savings of $19.2 million, Steward still must scale the perennial hurdles of physician engagement, performance improvement and care management, explained Kelly Clements, Steward’s Pioneer program director.

This year’s ACO survey benchmarks bear this out. Clinical integration, which can only succeed with the support of an engaged physician population, is still the biggest barrier to ACO formation, say 17 percent of 2015 survey respondents with no plans for accountable care.

Source: 2015 Healthcare Benchmarks: Accountable Care Organizations

Integrated Networks Trigger Rise in Post-Acute Care Accountability

June 25th, 2015 by Patricia Donovan

Healthcare is examining new post-acute care (PAC) delivery and reimbursement models.

As physician-hospital associations (PHOs) and clinically integrated networks increasingly monitor referrals and where patients go once they leave the office or hospital setting, the post-acute care market will be held more accountable for the quality and cost of care they provide and their ability to manage readmissions, predicts Travis Ansel, senior manager with the Healthcare Strategy Group. Here, Ansel suggests how PHOs might prepare for the eventual inclusion of post-acute care in their networks.

Healthcare Strategy Group did a lot of work in Arkansas in 2011 and 2012. As providers started being held accountable for what happened once their patients left the hospital, post-acute care became very relevant in the Arkansas market. This was due to the impact on the providers, and on the physicians of the hospitals in that market. Almost immediately upon the announcement of the models, the hospital started bringing in different post-acute care organizations, saying, These are our incentives. We’re trying to manage patients who have been assigned these diagnosis-related groups (DRGs). We’re trying to manage these factors for those patients. Either you’re going to be the one to help us to do it, or we’ve going to find someone else in the market to do it.

My general expectation would be that as hospitals and physicians get together and start talking more about how post-acute care affects them, we’ll see them bringing in post-acute care to have that discussion: either help us with what we’re being held accountable for, or we will find someone else who can.

The natural market reaction to that is post-acute care organizations will either compete to respond to those requirements, because there will be some opportunity to grow market share or grow reimbursement if they’re effective in responding to those things.

We’ve already seen a tremendous amount of consolidation in the post-acute care world over the last five to ten years. To me, that would signal a lot more consolidation, the same as we’ve seen with the provider market. They’re going to look for a capital infusion and build competencies that will help them respond to PHOs’ requests.

Note: Have more thoughts on the rise of accountability for post-acute care? Answer 10 Questions on Post-Acute Care Trends.

Source: Physician-Hospital Organizations: Framework for Clinical Integration and Value-Based Reimbursement

Travis Ansel, MBA, is a Manager, Strategic Services with Healthcare Strategy Group, LLC, with a primary focus on hospital strategic planning, physician alignment planning and clinical integration.

Are Multi-Specialty Physician Groups ‘Next Generation’ to Transition to ACOs?

March 26th, 2015 by Cheryl Miller

In another step towards advancing models of care that reward value over volume, HHS recently announced the Next Generation Accountable Care Organization (ACO) Model of payment and care delivery, a new initiative designed to move an increasing percentage of Medicare payments into models that support value-based care, and which supports a number of tools including telehealth and post-discharge home services.

With their built-in cadre of healthcare providers, multi-specialty physician groups (referred to here as physician groups), which comprised about a tenth of survey respondents to the Healthcare Intelligence Network’s third annual Accountable Care Organization survey administered in 2013, would seem ideally placed to transition to accountable care organizations. Percentage-wise, this sector has the highest rate of existing ACOs (57 percent participating in ACOs versus 34 percent of overall respondents) and twice the rate of participants in the CMS Pioneer ACO program (25 percent versus 13 percent).

Other characteristics of this sector follow.

In other deviations from the norm, twice the number of physician group-reported ACOs favor the hybrid FFS + care coordination + shared savings payment model (75 percent of physician-group ACOs versus 37 percent of overall respondents).

More than half of ACOs in this sector are administered by independent physician associations (IPAs), and most are smaller than the hospital-sized ACOs reported above, with three-quarters reporting a physician staff of less than 100. These ACOs benefit from having specialists on board in greater numbers to help with care coordination of the chronically ill (100 percent include specialists, versus 71 percent overall).

They also unanimously include nurse practitioners (versus 90 percent of overall respondents) and with 50 percent including clinical psychologists in the ACO (versus 42 percent overall), are a little further along on the path of integrating behavioral health into the accountable care initiative.

Cognizant of the full care continuum, these IPA-led ACOs are almost twice as likely as overall respondents to include skilled nursing facilities (50 percent versus 29 percent overall) and hospice (75 percent versus 42 percent overall) in their ACOs.

Perhaps because their organizational structure lends itself to the ACO model, the majority of this sector—75 percent—needed less than year to launch its accountable care organization (versus 29 percent of overall respondents, whose comfort level was between 18 months and two years).

These ACOs seem to have all the clinical pieces in place, reporting near-unanimous usage of evidence-based care, case management, care transition management and population health management. They are also unanimous in the review of clinical outcomes as an ACO success measurement, and much more likely than their counterparts to consider provider satisfaction in program evaluation (50 percent of physician group-led ACOs, versus 32 percent of overall respondents).

Technology-wise, however, there’s some catch-up to be done here: only three-fourths of responding physician groups report the use of EHRs and patient portals, versus near-global usage levels reported in other sectors. This could explain why this sector was three times more likely to report technology as a barrier to ACO creation

Source: 2013 Healthcare Benchmarks: Accountable Care Organizations

2013 Healthcare Benchmarks: Accountable Care Organizations documents the numerous ways in which accountable care is transforming healthcare delivery, particularly in the area of care coordination, where the ACO model has had the greatest impact for this year’s respondents.

3 Factors Driving Healthcare’s Transition from Volume to Value

December 9th, 2014 by Patricia Donovan

Long term, the healthcare industry’s well-documented transition from a value-based system to one that rewards value will ultimately promote consolidation in the industry, putting some companies out of business while making consumers more accountable for their care, predicted Steven Valentine, president of The Camden Group, during HIN’s eleventh annual healthcare trends forecast.

But how rapidly will the market complete this transformation? Valentine shares three factors that will impact the change.

People always say how fast our market will change. There are three factors to consider as the market transitions from volume to value.

The first is the time frame for the transition. Driving the time frame are concerns such as competitors’ activities, payor payment models (capitation, shared savings, case rates). What is going on in payor models that will help move the market? Another driver is managed care penetration. Some parts across the country have little to no managed care penetration. Those will be areas with lower change in terms of that market.

The second factor is the delivery system change. Impacting this is the physician-hospital economic alignment. We look for contiguous geography. A hopscotch strategy doesn’t work very well for transitioning the market. We look at the integration along the continuum, starting with doctors through a minimum, then the ambulatory and acute area. Our belief is that this year, post-acute begins to show up. We see most of the money that can be made in bundled payment really comes from a longer period of time to be at risk: 90 to 120 days. We find it in the post-acute care arena to save the money. Other drivers for change in the delivery system include the use of population health tools (PCMH, ACOs and chronic care centers), as well as clinical integration.

Finally, we look at the payment system—incentives, pay for performance, shared savings—any value-based purchasing programs put in place. You will need to take risks. Organizations that take risks, especially well organized medical groups, will help to drive a market and the transition to value much more quickly.

healthcare trends 2015
Steven T. Valentine, MPA, is president of The Camden Group, a national healthcare management consulting company. With more than 35 years of healthcare consulting experience, he has considerable expertise in the areas of strategic planning, business transactions, mergers, hospital-physician relationships, and financial analysis.

Source: Healthcare Trends & Forecasts in 2015: Performance Expectations for the Healthcare Industry

4 Factors Driving Resurgence in the Physician-Hospital Organization Model Today

October 10th, 2014 by Cheryl Miller

As healthcare organizations seek the infrastructure to respond to emerging payment models like accountable care organizations (ACOs), bundled payments, narrow networks and direct contracts, the physician-hospital organization (PHO) model is experiencing a resurgence nationwide.

But will it work this time? Four factors make the PHO attractive, says Travis Ansel, senior manager with the Healthcare Strategy Group, during Preparing for Value-Based Reimbursement Models: PHO Development for ACOs, Bundled Payments and Direct Contracting, a 45-minute webinar from the Healthcare Intelligence Network (HIN) now available for replay.

The first most immediate driver is independent physician alignment, says Mr. Ansel. While most markets are mature in terms of employment, there are still a number of markets where there are a significant number of independent physicians in key specialties. In these areas, the PHO model is more of an initial catchall type of alignment model, one that creates a loose tie between the hospital and the physicians in the market, and provides value to the physicians in terms of being protected as part of a larger group without having to become employed. One benefit for the hospitals is that they can align independent physicians en masse and create common incentives, instead of having to negotiate alignment models or arrangements with all independent physicians in their market.

The second driver is the increasing mutual accountability for quality and cost across providers. In the wake of transitioning payment models under payment and insurance reform, insurers and payors are trying to drive mutual accountability for patient costs to physicians and hospitals. The PHO is an appropriate response for those providers to work together to manage the cost of a population and of an episode of care in order to make sure everybody’s successful.

The third factor driving resurgence in PHO activity is the consolidation and distribution of resources that will allow providers to be successful in managing quality and cost. As healthcare reform and payment reform mature, information technology (IT) competencies, clinical competencies, care coordination practices, and exploring the patient-centered medical home (PCMH) concept are often unrealistic at the individual practice level. The PHO gives physicians and hospitals the platform to work on those care competencies together, build them in one place and then distribute them to PHO members — a “win-win for everybody,” Mr. Ansel says.

The final driver is the need for an effective framework for clinical integration. While there are already a number of clinically integrated organizations around the country, “For the bottom 90 percent of healthcare organizations in the country, clinical integration is still that thing that’s on our to-do list, but it always gets bumped to the back of the to-do list; because, we have more immediate needs, or more immediate strategic priorities,” Mr. Ansel says. Clinically integrated models are needed as a strategy to respond to payment reform, to allow joint contracts between physicians and hospitals, and to enable sharing of payments effectively, whether those are shared savings payments, bundled payments, etc. Adds Mr. Ansel:

“The PHO model provides a great initial step to building that clinically integrated network platform, and gives providers and the hospital a great model for working together to start building the competencies towards a clinically integrated network.”

Click here for an interview with Mr. Ansel.

Infographic: Critical Factors in Developing ACOs and PHOs

May 14th, 2014 by Jackie Lyons

The number of accountable care organizations (ACOs) led by a physician-hospital organization (PHO) nearly doubled over the last year, according to the third annual ACO survey conducted by the Healthcare Intelligence Network. Properly developing and operating these integrated heath systems is critical for healthcare organizations.

Highly effective leadership, sustained organizational committees and adequate up-front capitalization are just some of the key elements to the success of an integrated heath system, according to a new infographic from Mercury Advisor Group. This infographic identifies five key elements, along with detailed descriptions of each.

Want to know more accountable care trends? 2013 Healthcare Benchmarks: Accountable Care Organizations documents the numerous ways in which accountable care is transforming healthcare delivery, particularly in the area of care coordination, where the ACO model has had the greatest impact for this year’s respondents.

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Predictors of PHO Longevity and Financial Success

April 15th, 2014 by Patricia Donovan

Today, value-based payment models encourage hospitals and physicians to work together and make each more accountable for the other’s actions in a physician-hospital organization (PHO). But what are predictors of PHO longevity and financial success?

Here, Healthcare thought leaders Travis Ansel, MBA, manager of strategic services, Healthcare Strategy Group, and Greg Mertz, MBA, FACMPE, director of consulting operations, Healthcare Strategy Group, debate the question.

Response (Greg Mertz): It’s pretty evident that no one entity is going to be able to meet the needs of the population. If you’ve got a hospital that employs physicians, there’s an excellent chance that the employed physician network isn’t the total answer for caring for the population. They’re going to have to embrace non-employed physicians, other specialties, larger based primary care. Some entity is going to have to be created to make that happen.

But the PHO is an excellent model. Basically, it creates a collaborative entity that can bring in hospitals, employed physicians, non-employed physicians, ancillary providers. The PHO this time is something that is going to be necessary. Value is inevitable. I don’t see any reason that it would not have great longevity.

Response (Travis Ansel): I definitely agree. I think the biggest predictor of long-term success is the culture, but it’s going to be how the governance of the PHO is set up. It’s going to be giving the physicians, both employed and independent, a real voice in the organization and getting their expertise leveraged going forward. That’s going to be the biggest predictor. Beyond that, a willingness to experiment.

We’re in a situation now where organizations can’t really afford to sit on the sidelines for too long with all the different models that CMS and private payors are putting up in order to encourage shared risk between providers and hospitals. A willingness to experiment would be another key to success in my mind because it’s really the only way to learn how to be successful in this new environment, how to get involved in it and not hang on to the current FFS environment until it withers and dies.

Excerpted from Essential Guide to Physician-Hospital Organizations: 7 Key Elements for PHO Success.

HINfographic: 12 Questions to Guide a Physician Compensation Strategy

March 28th, 2014 by Jackie Lyons

A successful physician compensation strategy includes organizational goals, governance and physician engagement, according to Cynthia Kilroy, senior VP of provider strategy and business development at Optum.

This new infographic from the Healthcare Intelligence Network features 12 questions to guide the implementation of a physician compensation strategy for healthcare organizations. Addressing all three areas of the strategy can improve satisfaction while creating an environment and structure that supports transparency and enables quality and efficiency.

You may also be interested in this related resource: 6 Value-Based Reimbursement Models: Strategies for Selection, Alignment and Engagement. This 40-page resource examines a set of provider compensation models across the collaboration continuum, advising adopters on potential pitfalls and suggesting strategies to survive implementation bumps.

Get the latest healthcare infographics delivered to your e-inbox with Eye on Infographics, a bi-weekly, e-newsletter digest of visual healthcare data. Click here to sign up today.

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HINfographic: 9 Measures of ACO Success

March 12th, 2014 by Jackie Lyons

What is the mark of a successful accountable care organization (ACO)? For healthcare organizations, clinical outcomes topped the list of ACO success metrics.

This HINfographic depicts nine key ACO metrics identified by 138 healthcare companies. Also among the top three measures was patient satisfaction and health utilization.

9 Measures of ACO Success

 title= You may also be interested in this related resource: Guide to Accountable Care Organizations. This 160-page resource lays the groundwork for an ACO program. It includes a framework for clinical integration, a key ACO prerequisite that puts participating providers on the same performance and payment page, and much more.

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