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ACO Survey: Physician ACOs are the new normal

Shaun Sutner

What was most surprising to the authors of the first national survey of accountable care organizations -- the fact that most ACOs are physician-owned -- wasn't that shocking

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to those who actually run ACOs.

"The difference in performance and the biggest reason physician-led organizations are probably more effective is they're closer to getting things done for patients and families," said Mark Wagar, president of Heritage Medical Systems, an affiliate of Heritage Provider Network, one of the country's biggest accountable care organizations (ACOs). "It's what we've been doing all along."

The ACO survey by the Dartmouth Institute for Health Policy & Clinical Practice and the University of California, Berkeley, School of Public Health, started with the presumption that ACOs are doing their jobs mandated by the Affordable Care Act.

ACOs are an area of focus for researchers at both schools. Like federal health policy makers, they see accountable care as a promising new model for both keeping healthcare costs down and improving care, largely through prevention and mining data from patient populations under their care to potentially share in a portion of the savings. In some programs, when ACOs aren't successful in cutting costs, they are penalized.

The biggest reason physician-led organizations are probably more effective is they're closer to getting things done for patients and families.

Mark Wagar, president of Heritage Medical Systems

The survey's latest findings showed that 51% of ACOs are physician-led, with 33% of respondents saying their groups were jointly led by hospitals and doctors. Three percent were run by hospitals alone, and the remaining 11% were directed by other entities.

Further, physicians dominated the governing boards of 78% of ACOs, 94% of physician-led ACOs and 65% of jointly-led ACOs, and comprised a majority of the boards of most other types of ACOs.

Also, researchers found that doctor-led ACOs possessed the same levels of advanced care management and health IT capabilities as did other kinds of ACOS, according to the study.

The ACO survey, published in Health Affairs, said: "Timely financial data that allows ACOs to gauge their performance against a benchmark may be important in the organizations' ability to stay within a global budget and be eligible to receive shared savings."

One of the study's lead authors, Stephen Shortell, professor of health policy and management and organization behavior at University of California, Berkley, said that while he was surprised the survey showed ACO leadership is dominated by doctors, he also thinks physician-led ACOs will be able to overcome some of the challenges survey respondents reported.

For example, Shortell said the doctor-dominated providers will need to broaden their range of services to include skilled nursing and post-acute facilities and to build alliances with hospitals. At the same time, they will find it just as critical to invest in technology, he said.

"That's key in terms of electronic health record information," Shortell said.

But Shortell maintained that the study affirmed what the Affordable Care Act stipulated by granting dramatic financial incentives, particularly for Pioneer ACOs such as Heritage, to attain less expensive, yet better, healthcare for patients.

"Under the Affordable Care Act you have to deliver care that is fundamentally different," Shortell said. "You're not going to do that without physician leadership."

At Heritage, which has about 33,000 physicians and is affiliated with 100 hospitals in California, Arizona and New York, and about 1 million patients, health IT is viewed as critical to the core mission of the ACO, Wagar said.

Wagar said high-quality data underpins Heritage's strategy of avoiding "episodic" care in favor of health management and prevention.

Under conventional healthcare approaches, "it's all set up for patients to fall in the door when they get sick," Wagar said.

"But I want to know about someone with COPD [chronic obstructive pulmonary disease], everyone in their family's names, where they live, do they have any money and other statistics," he added. "I want to know everything about their health."

One example of how data analytics provided by health IT systems can help control costs under population health management is in price transparency, i.e., which imaging center near a patient's neighborhood charges the least?

"It's not being cheap," Wagar said. "We use the money we save for the right things. Population management isn't about saying 'no' to things. … It's figuring out as quickly as possible" where and how to find the right services, he said.

Problems ACOs will need to deal with in the future are designing efficient organizational structures and access to investment capital to create better IT systems, Wagar continued.

In addition to forming their own groups, small physician-led ACOs can grow and prosper by joining other, bigger groups.

Let us know what you think about the story; email Shaun Sutner, news and features writer or contact @SSutner on Twitter.


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