Whether you call it health care reform or health insurance reform, we are not addressing the cost of care.
“Cost reductions will come from greater efficiencies and improving the health and well-being of the population, not across-the-board cuts,” says Albert Ertel, chief operating officer of Alliant Health Plans.
There are several ways health plans are working to improve patient outcomes. One idea that is creating a lot of buzz is Accountable Care Organizations, or ACOs — partnerships between health care providers, physicians and hospitals that are being designed to identify best practices, improve patient outcomes and ultimately reduce costs.
Smart Business spoke with Ertel about how health plans need to be working together with providers to improve patients’ health and impact costs.
Why is there an increased focus on accountability?
Health care reform conversations among providers are centering on ACOs. Hospitals and physicians are exploring ACOs as possible strategies. The whole idea is to improve a person’s care by getting all of his or her providers on the same page and accountable for the outcomes. Accountability is achieved by determining a starting point and then measuring future results. The easy part of accountability is to follow the dollar. What is the readmission rate at a specific hospital and who were the admitting physicians? For example, if a Medicare patient is readmitted for the same diagnosis within 30 days, Medicare will not pay the hospital for that second hospitalization. Today, that event is fragmented between the physician and hospital. What if they both were responsible and paid accordingly for that patient to be well? Today, many payments are transaction-based; more tests equals more payments.
You could see hospitals look to re-evaluate physicians with admitting privileges. Accountability is as valid as the chain of information and data captured. Historically health plans have had the data from claims. But claims data is only part of the ‘new normal.’
What type of information is shared between the health plan and physician?
All encounters need to be captured. Logically, the ideal would be a single source where you can access information related to diagnoses, treatments and prescriptions. Currently, that place is usually in the physician’s notes. How would a specialist gain access to the primary care doctor’s history? Unless the physicians and other providers in that area are ‘clinically integrated’ it is almost impossible without a physical handoff of the patient’s records. Many physicians have electronic medical records (EMR) but many systems do not talk to one another. Technology should be available soon to fill this gap.
In what other ways do these partnerships emphasize accountability?
Clinical improvements will continue. But today, providers are paid on a fee-for-service basis; more treatment equals more money. Getting ‘a lot’ of care does not necessarily equate to ‘best of care.’ ACOs are defining ‘pay-for-performance’ models. Hopefully, we can move from a transactional-based payment methodology to episodes of care where physicians are rewarded for keeping patients healthy — and use the most effective resources.
Managed care has been using what I call ‘mother may I’ medicine. A physician would ask the payer permission for many treatments. It started as ‘cost-containment’ and included pre-certification or prior authorization. Health care, or should I say health care information, is evolving. As best practices are identified, the challenge will be getting information into the hands of physicians in ‘real time.’
Will ACOs catch on with health care providers?
Hospitals in Georgia are discussing ACOs today. Physicians are motivated because it will help their patients. Also, physicians are finding it difficult to practice medicine due to the cost of running their business. Many small physician offices are in survival mode.
How can they ‘band together’ to gain efficiencies and share information? Physician groups large and small will be having similar discussions about how they can each share in the huge volume of information that is generated about the population they serve, what services are available and what are needed, and how they can appropriately share the millions paid in health care dollars.
How are ACOs formed?
It sounds simple, but it isn’t. Physicians and a local hospital must first agree to clinically integrate, share their information, agree on best practices, measure results and divide monies appropriately. Add federal and state laws, regulations and rules, and it equates to ‘herding cats in a hail storm.’ Once clinical integration is in place, the providers agree to become an ACO and accept a level of risk. The best practices agreed upon begin to unfold and positively influence the population the ACO serves. But remember — health care is local and providers take responsibility for their communities.
How will these changes affect pricing and coverage?
A health plan’s goal is to cover as many lives as it can by keeping prices as low as possible. We look at ACOs as a real strategy to ‘team’ with providers and share risk. Information is the key. Capturing data and relating it to the local demographics is vitally important.
Alliant Health Plans was founded by providers. We have a keen understanding of the health insurance cycle and the impact that uninsureds have on a health care community. Lower premiums are a direct result of lower health care costs. The possibility of sharing with providers the goal of keeping the community healthy could be a game changer. One of the best paying patients is one than never needs to seek care.
Albert Ertel is COO of Alliant Health Plans. Reach him at (706) 629-8848 or firstname.lastname@example.org.