Guest Post: 5 ACO Competencies to Create Value-Based Change

Tuesday, May 3rd, 2016
This post was written by Bob Wadsworth, Client Executive, Freed Associates

Only when an accountable care organization (ACO) succeeds in both delivering high-quality care and spending healthcare dollars wisely will it share in savings it achieves from its efforts. In this guest post, Bob Wadsworth, Client Executive with Freed Associates, suggests five steps for organizations to consider as they think critically about ACO development.

Step 1: Set Holistic Quality Goals

In care management, simpler is often better, especially if the same program can be used across numerous payor-specific ACOs. Some program capabilities are needed to address unique and specific line-of-business needs; others work across multiple insurance lines. If several ACO contracts delegate medical management, healthcare delivery organizations have the opportunity to set up across-the-board quality and cost/utilization management programs to achieve steadily improving quality, resource efficiency, and patient satisfaction improvements.

To prevent assumptions about the burden of illness in attributed populations, get smart on their risk profiles. Find the target populations for risk/care management, and match them to specific programs. Better-performing ACOs have high-cost stratification in place for common episode treatment groups (ETGs) with high incidence rates and uncommon ETGs with lower incidence rates, allowing them to proactively address care coordination needs for an all-encompassing set of expensive chronic episodes.

Integrated care management efforts require clinical staff to re-think and remodel their care approach, from a physician-only care delivery model to one involving team-based care across the medical, behavioral health, and social services continuum. It requires empowerment of care team members, and ensuring all roles are operating at the “top of their license” with clear delineation of who’s coordinating what across a range of medical and non-medical services.

Step 2: Emphasize Financial and Organizational Goals

Your board and physician leadership need to be aligned with your long-term plan for reimbursement mix changes. Establish how you plan to grow at-risk lives over your planning time horizon, specify percentage shifts in fee-for-service (FFS) and at-risk revenues. Given the increasing exposure to downside insurance risk in shared risk and capitation contracts, this is a difficult, yet essential, dialogue. This value-based transformation should be led by your CEO, CFO, and clinical leadership in visible ways.

Be clear about the financial impact of the value-based ACO model and the individual contributions required of clinicians and administrative staff to reach sustained financial viability under new reimbursement models. Align financial incentives, such as individual physician bonus programs, with the new ACO financial contract structure.

As second-generation ACOs gain steam, they get smarter on their end-to-end risk/care management models. Many ACOs build up internal HIT knowledge and secure objective, third-party input on enterprise-wide HIT strategies. These strategies will address overall enterprise needs and narrow the unique line of business needs. The objective of this effort should be to align senior staff on a multi-year, holistic vision of the organization and its operations. It can pay for itself by identifying technology rationalization opportunities (latent or un-identified by staff who could be wedded to a particular solution/vendor because of convenience or other subjective criteria).

Step 3: Involve People and Roles

Aligning the roles of patient care delivery staff to support an ACO model is a cultural and operational shift. First, educate clinical and administrative staff on management expectations for their departments and how individual roles might change. The dual focus on both quality and cost efficiency can be a difficult transition. Provide real examples and proof points, such as showing how reduced utilization through use of evidenced-based medicine guidelines (and joint physician/patient decision-making) can benefit the patient, curb medical cost inflation, and increase patient satisfaction.

As you examine roles in a new ACO world, there may be duplicative roles across your organization and others, particularly payor medical management and inpatient case management. Remind staff that moving along the ACO ‘change curve’ will require a series of steps, with changes happening incrementally inside and outside the organization. Management’s goal is to orchestrate these changes in ways that incremental quality, cost, and patient satisfaction improvements can be readily seen as “waypoints” toward the desired future state of the enterprise.

Step 4: Create and Maintain Sustainable Processes

Process orientation and management is becoming a valuable competency in most ACOs. First, develop a process to identify the right group of patients for care coordination. If you don’t have the patient “risk score” data needed in-house, collaborate with your payors; they’re likely rich with the information needed to make informed decisions about areas of focus. Staff the care coordination of higher risk patients accordingly, using conservative case load benchmarks in the beginning, so case managers/care coordinators are not initially overwhelmed by productivity expectations. Work intelligently to determine the location of care coordination roles and their work activity —those that should be situated centrally or at physician offices. Measure results and continuously modify and improve processes.

Being process-oriented means being “performance tracking”-oriented. Develop measurement capability so leaders can be informed by dashboards that tell them the health of the processes along with results. Inform and engage physicians continuously during the change process, so they can effectively champion the improvements.

Step 5: Connect with the Right Technology

One area of potential long-term financial gain is making better use of existing technologies, or replacing them with simpler, cheaper, and more effective technologies. Your organization may have purchased a veritable hodgepodge of niche technologies. But are they all working together to your utmost advantage? Might a narrower set of existing and new solutions be far better than, say, six disparate systems? As your ACO begins accepting more financial risk, the need to enhance IT systems increases, so people and processes supporting ‘risk management’ can be sufficiently supported.

In an ACO world, it’s essential that technology be placed within the natural workflow of clinical staff. If they’re taking a lot of extra time training and re-training themselves to use a particular technology, they’ll be relieved when provided with a less time-consuming, superior solution in one or a few, easy-to-use software applications.

Be sure your technologies meet multi-payor needs, so that a simpler technological footprint can be realized, which has speed and cost-to-market benefits when trying to improve overall operations. A simpler and easy-to-use technology portfolio will likely yield improved patient service and quality, and provide the benefit of higher staff satisfaction with their work environment.

Bob Wadsworth joined Freed Associates in 2015 as a Client Executive. He has significant experience in deploying technology for cost, quality, and service improvement in both payor and provider operational settings. Prior to this position, Bob was a senior vice president of healthcare delivery networks with an integrated care management software company. He also has held executive positions at a large health plan and leadership positions in other health care technology companies, in addition to his management consulting experience.

HIN Disclaimer: The opinions, representations and statements made within this guest article are those of the author and not of the Healthcare Intelligence Network as a whole. Any copyright remains with the author and any liability with regard to infringement of intellectual property rights remain with them. The company accepts no liability for any errors, omissions or representations.

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