Rather than jump into an accountable care organization all at once, it might be more useful for healthcare organizations to start on a targeted arrangement, focusing on a particular patient group and set of providers, says Steve Miff, vice president and general manager of the INSIGHT clinical performance management system at the software company Sg2. "It all depends on how much appetite you have and your degree of readiness," he says. "You don’t have to choose an ACO," he adds. For example, "it could be a bundled arrangement just for certain subset of patients, such as joint replacements." Here are eight steps to take to determine what sort of arrangement to start with.
1. Target particular patients. The types of patients you want to target can tell you which payment method you might want to use, Mr. Miff says. For example, if you focus on elective patients, such as joint, spine or bariatrics patients, you might want to start with a bundled payment, since they involve a specific episode of care. On the other hand, an ACO-type structure might work better with occasional patients, such as those with ankle fractures or chronic patients, such as people with COPD, diabetes or back pain. Finally, because highly complex patients involve high costs of care, you might want to keep these patients in a fee-for-service arrangement perhaps linked to potential penalties, he says.
2. Assess your control over delivery. How much control does your organization have over the continuum of care for each group of patients? If it owns a preadmission testing service, a rehabilitation service or a skilled nursing facility, focus on patients who would use those services. "The more control and better relationships you have, the more success you will have in taking on shared accountability," Mr. Miff says.
3. Predict physician readiness. Examine the degree of alignment your have with physicians treating various patient groups. Are these physicians employed, in co-management agreements or aligned in some other way? Also examine how efficient they are across various metrics. "What you find out will tell you which physicians you will want to include and which you won’t," Mr. Miff says. For example, you might not want to include a group with high readmission rates.
4. Assess the value of services. Then value you can deliver equals costs times quality, such as mortality, readmission rates or return to full function. Review value in specific areas, such as joint replacement patients. "If you are a high-cost provider you are not going to be able to handle the higher complexity," Mr. Miff says. "If you are in a bundled fee arrangement, for example, you have to determine whether you are capable of delivering bundled services within a budget," he says.
5. Choose patient metrics. Choose a variety of measurements to make sure you are truly delivering value. If you only measure costs per case, for example, you'd fail to see that cost reductions are impairing patient satisfaction. Improvements in length of stay, on the other hand, might lead to increased readmissions. Mr. Miff recommends four basic metrics: potentially avoidable admissions, cost per case, length of stay and 30-day readmission.
6. Determine future savings. Under the new arrangement, payors will reimburse based on your historic performance with some inflation factor. Pick a particular sub-segment of patients or diseases where you have a good chance of reducing costs by steps such as working with physicians to keep patients out of the hospital or reducing readmissions for patients already in the hospital.
7. Partner with a payor. You'll need to find a payor that will agree to the reimbursement methodology. If you cannot link up with a health plan or an employer, you might be able to work with your own employee group.
8. Narrow down your test group. To mitigate your risk, it is important to pinpoint a group of patients with whom you have good chances of success. In addition to picking certain disease groups and a particular payor, you might want to start with just one group of physicians.
Find out more about Sg2.
Read more coverage on getting ready for an ACO:
- 5 Critical ACO Success Factors
- Should Your Hospital Develop or Join an ACO? 5 Questions to Ask
- 6 Considerations for Providers in an Accountable Care Environment
.
1. Target particular patients. The types of patients you want to target can tell you which payment method you might want to use, Mr. Miff says. For example, if you focus on elective patients, such as joint, spine or bariatrics patients, you might want to start with a bundled payment, since they involve a specific episode of care. On the other hand, an ACO-type structure might work better with occasional patients, such as those with ankle fractures or chronic patients, such as people with COPD, diabetes or back pain. Finally, because highly complex patients involve high costs of care, you might want to keep these patients in a fee-for-service arrangement perhaps linked to potential penalties, he says.
2. Assess your control over delivery. How much control does your organization have over the continuum of care for each group of patients? If it owns a preadmission testing service, a rehabilitation service or a skilled nursing facility, focus on patients who would use those services. "The more control and better relationships you have, the more success you will have in taking on shared accountability," Mr. Miff says.
3. Predict physician readiness. Examine the degree of alignment your have with physicians treating various patient groups. Are these physicians employed, in co-management agreements or aligned in some other way? Also examine how efficient they are across various metrics. "What you find out will tell you which physicians you will want to include and which you won’t," Mr. Miff says. For example, you might not want to include a group with high readmission rates.
4. Assess the value of services. Then value you can deliver equals costs times quality, such as mortality, readmission rates or return to full function. Review value in specific areas, such as joint replacement patients. "If you are a high-cost provider you are not going to be able to handle the higher complexity," Mr. Miff says. "If you are in a bundled fee arrangement, for example, you have to determine whether you are capable of delivering bundled services within a budget," he says.
5. Choose patient metrics. Choose a variety of measurements to make sure you are truly delivering value. If you only measure costs per case, for example, you'd fail to see that cost reductions are impairing patient satisfaction. Improvements in length of stay, on the other hand, might lead to increased readmissions. Mr. Miff recommends four basic metrics: potentially avoidable admissions, cost per case, length of stay and 30-day readmission.
6. Determine future savings. Under the new arrangement, payors will reimburse based on your historic performance with some inflation factor. Pick a particular sub-segment of patients or diseases where you have a good chance of reducing costs by steps such as working with physicians to keep patients out of the hospital or reducing readmissions for patients already in the hospital.
7. Partner with a payor. You'll need to find a payor that will agree to the reimbursement methodology. If you cannot link up with a health plan or an employer, you might be able to work with your own employee group.
8. Narrow down your test group. To mitigate your risk, it is important to pinpoint a group of patients with whom you have good chances of success. In addition to picking certain disease groups and a particular payor, you might want to start with just one group of physicians.
Find out more about Sg2.
Read more coverage on getting ready for an ACO:
- 5 Critical ACO Success Factors
- Should Your Hospital Develop or Join an ACO? 5 Questions to Ask
- 6 Considerations for Providers in an Accountable Care Environment
.