A Formula for Success: Accountable Care + Patient Experience = Accountable Experience

By Tina Minnick

“Capitation with gain-sharing,” “Improving outcomes and increasing value,” “Revisiting integrated delivery tactics among primary care physicians, specialists, and hospitals,” or “Bending the healthcare cost curve for managed populations,” whatever your definition (in whole or in part) may be, Accountable Care Organizations (ACOs) pose a strategic opportunity for hospitals and large physician practices alike. If ACOs can overcome concerns from a Stark and anti-trust perspective and are successfully implemented, patients and ACO market leaders will see stronger physician alignment, improved quality, cost reduction, and an improved patient experience.

What is and who will drive the ACO movement? The Medicare Shared Savings Program in the 2010 Patient Protection and Affordable Care Act broadly defined the ACO concept to include the many healthcare organizations across the country. While the organizational structure of an ACO is loosely defined, it does require that primary care physicians be a component. The ACO pilot program looks to work with Medicare populations beginning in January 2012, and healthcare observers agree that commercial payers will follow the Medicare lead.

The goal of the ACO movement is that provider organizations be accountable for the value of a population’s healthcare costs. Doing so “will require focused efforts to improve care for the 10% of patients who account for 64% of all U.S. healthcare costs,” according to both Peter Orszag and Ezekiel Emanuel.

The reality is that the U.S. cannot continue its current approach to healthcare delivery. Analysts predict healthcare will be one fifth of the nation’s gross domestic product (GDP) by 2019, and ACOs are part of the prescription to affect cost and quality. Coordinated care that provides value and reduces cost will become the standard. ACOs will be looked upon as major drivers of reducing the healthcare cost curve.

Both hospitals and large physician groups are prime leaders for the ACO movement. Growing market share is key for hospitals, and a strategy focused on retaining and gaining new patients will be needed to offset lower utilization. According to an article by John M. Harris, Daniel M. Grauman, and Rashi Hemnani, hospitals should “focus on retaining cases from the population that previously had been ending up in different hospitals, despite having been treated by the hospital’s primary care physicians.”

Large physician practices are also likely to want to lead ACO efforts. Physicians often self-refer, and the thought of obtaining additional “gain-sharing” funds by reducing hospitals’ census could be a motivating factor. Whether a large primary care group forms its own ACO or remains as an affiliated hospital partner, hospitals could see volume shift as primary care physicians choose alignment patterns. Domination of the market will occur by those who act and succeed first.

Critical Success Factors for ACOs: Dominating Market Share and the Patient Experience: Market share is the percentage of total sales volume in a market captured by a brand, product, or firm – in this case, by a practice or hospital. The patient experience will drive brand loyalty, result in repeat patient visits, and generate new business.

Contemplating healthcare market share can sometimes be difficult because many think “once a patient, always a patient” or are the only provider for a particular service or insurance type. In the past, these thoughts may have been valid, but with transparency and patients’ options, provider appeal and reputation need to be top of mind.

ACOs have to develop business plans for service area, target market, reimbursement, information technology (IT), quality, providers, and organizational structure. Each of these areas stand on its own as a major strategic decision, and execution of these plans will determine an ACO’s success. Independent of these components is the fact that ACOs are designed to increase value and decrease costs; it is imperative that market share and the patient experience be critical success factors in plans to maintain or grow revenue before, during, and after ACO implementation.

In considering where to begin, honestly answer these questions:

  • What are patients specifically saying about communication to and from their doctors and nurses?
  • How are you responding to patients’ comments, whether they are good, bad, or indifferent?
  • What reporting is available to help gain an understanding of your patient experience?
  • Would your patients recommend you to friends and family?
  • How are you capturing potential patient inquiries in the community?
  • How are you serving your community to grow awareness?
  • How are you managing unnecessary processes in a crowded and busy emergency department?
  • How consistent is your patient follow-up for both patient experience and quality care?
  • What tools are available to promote work/life balance for your physicians?
  • What risk management strategies are in place to document after-hours patient interaction and provide peace of mind for your employed physicians?

These questions and your answers can help you grow the patient experience, and you may also find that revenues increase and costs decrease because of your consistent follow through. For example, The Studer Group asserts that healthcare organizations making discharge follow-up calls achieve a 20 to 30 percent reduction in preventable readmissions. Furthermore, patients receiving discharge calls place in the 90th percentile as likely to recommend a hospital to friends or family. Practices and hospitals alike need these kinds of sustainable results to be successful in an ACO environment.

What proof do we have that ACOs might work? Geisinger Health System, based in Danville, Pennsylvania, is a fully integrated system. It is physician-led, employs 800 physicians, and spans 43 counties serving 500,000 patients annually. In a recent interview with Health Affairs, Dr. Glenn Steele, president and CEO, shared that high utilization and high cost may also be an indicator of low quality. He believes Geisinger’s use of the LEAN concept as a re-engineering technique helped to redefine processes to cut cost and improve outcomes and enabled the organization to determine in which direction they should go. It isn’t just about how to give care and the associated processes, but also how the patient interacts with physicians and nurses and the overall patient care experience.

Geisinger bent their cost curve by 7 to 8 percent because of their LEAN processes and their advanced medical home model that is a community approach to care called ProvenHealth NavigatorTM. “Our costs are still going up, but they’re 7 to 8 percent lower than what they would have been because of our fundamental re-engineering of our community practice-based care,” reports Dr. Steele. They worked with their primary care and specialty physicians to create unique incentives, and they collaborated with insurance company nurses and placed them in primary care and skilled nursing settings to keep patients with multiple chronic diseases healthier.

Hospital admissions and readmissions are lower for these patient groups because they, and their families, are keenly aware of the symptoms they need to be cognizant of. By knowing the symptoms and taking care treatment steps at home, they avoid going to the emergency department.

What about the patients? Are they happy with the outcomes? Kevin Brennan, executive vice president for finance and CFO of Geisinger Health System, says, “We participate in patient surveys for our ProvenHealth Navigator program, and we have unbelievably high degrees of satisfaction. And that carries over to our physicians, too. We manage our members and their care plans.”  Plus, on the cost side, they aren’t paid less for managing care better.

Mr. Brennan sums it up nicely, “At Geisinger, one of our organizational goals relates to our legacy – leaving the organization with a better-prepared set of leaders than existed before. We encourage innovation, especially with care processes, believing that quality and efficiency are inextricably linked. The environment is changing, and we have to adapt.”

Driver or Passenger? The ACO pilot project will launch in January 2012, and providers that choose to be involved will be responsible for lowering costs and improving quality of a defined Medicare population. Those that hesitate with a “wait and see” attitude because of the many unknowns related to ACO structure may find themselves sitting in the passenger seat; they will have a great view, but no control over the destination.

ACOs will make healthcare leaner and, based on what we’ve seen thus far, will create a more innovative approach to care giving. Whether or not you choose to drive ACO development, growing market share and the patient experience is vital to building and sustaining viability in an already competitive environment.

My advice? Don’t get left behind. Get in and drive the ultimate patient experience.

[From the April/May 2011 issue of AnswerStat magazine]