In an ACO, Who's Accountable?

 Philip Betbeze, for HealthLeaders Media, April 14, 2011

If the accountable care organization becomes the dominant way healthcare is organized in the future, providers will likely face the wrath of both the public and the pundits under ACOs. That will come later, but it is inevitable because one of the chief priorities of ACOs concerns limiting utilization—the same role HMOs once filled.

Under the current payment system, hospitals are the hub of the healthcare experience. They do the most expensive procedures, but generally, their responsibility to the patient ends at discharge. Beyond broad regulations focusing on readmission rates and quality scores, the new healthcare reform law includes demonstration projects that provide incentives and, notably, penalties for providers if they do a poor job of coordinating care. That means if ACOs become the dominant reimbursement structure, communication and handoffs between the hospital and ancillaries, including ambulatory care, surgery centers, primary care providers, the pharmacy, even hospice, will become especially important.

Central to the ACO concept is the idea that patients deserve to have their care coordinated such that one entity giving a service to the patient has all the information about what has been done for that patient elsewhere in the continuum, and then takes that information into account when treating that patient. Such a model helps remove some of the waste in healthcare due to duplicative care, and also makes some entity responsible—through shared payment—for not only distributing that payment equitably among entities involved in the episode of care, but taking responsibility that the patient will not have to seek care to rectify a health problem that should have been addressed during the episode. But who, or what, should that entity be?

It doesn’t necessarily have to be the hospital. In many cases, it will be, but other organizations, most commonly health plans and large multispecialty physician practices and medical service organizations can also serve as the “accountable” party in the ACO.

What is an ACO?

It’s a legitimate question. Several organizations, including CMS, have demonstration projects or independent trials going on right now, with dozens of organizations spending real money to try to figure out how to compete in a new reimbursement paradigm. But they clearly haven’t figured out how transform an idea that makes common sense into one that makes business sense.

On its face, the ACO is a simple structure. It has two functions. Most important, says Michael Sachs, chairman and CEO of Sg2 Inc., a Chicago healthcare information company, it manages utilization. A distant second priority, when utilization of a service is to take place, is to find where it can be done most efficiently.

“Whatever the unit of service is, you want to reduce it,” says Sachs. “Whether I buy the procedure at $4,000 or $5,000 isn’t terribly significant. It’s whether the procedure is done at all.” He offers, as an example, visiting two different auto body shops and having them compete on the service. You may save by shopping around, but the big point is: Did you get in the accident?

“People always want to go straight to the second element, but that’s not where the savings are going to be and where the real innovation is,” he says. Instead, savings will revolve largely around new models of care, which is where the bigger payoff lurks. He mentioned that over the past 30 years, “whenever there’s been a preauthorization put in front of the utilization of the service, utilization has decreased.”


Ah, but that’s what managed care has done and has continued to do, much to the chagrin of many, if not most, patients and physicians. For example, over the past four years or so, managed care organizations have required preauthorization of imaging, although they have backed off of preauthorization in many other areas.
“The cost is really not in seeing the doc,” he says. “You can’t get the imaging anymore unless it’s preauthorized, so that’s how you manage utilization.”

The Access to Medical Imaging Coalition says in a report that imaging utilization has decreased since the Deficit Reduction Act of 2005, which included the provisions to do so. For instance, the use of CT, MRI, PET, and nuclear services grew by only 1.1%, much slower than before. Meanwhile, screening mammography and the use of dual energy x-ray absorptiometry to detect osteoporosis continue to decline in volume.

Much of the discussion about ACOs has hovered over what entity will have control. Will it be a business entity? Will it be a bunch of joint ventures? Those issues will be worked out, say those who have already embarked on accountable care. The main issue that needs to be solved is clinical integration among a wide variety of players in patients’ healthcare.

“Why does it have to be a hospital-based initiative?” asks Simon Prince, MD, president and CEO of Beacon IPA in Manhasset, NY. Prince and his colleagues believe an independent practice association can do the trick. He’s already got 200 physicians in his IPA, and he believes they are nearly ready for ACO-style healthcare.

“There are still a bunch of us private practitioners, but there’s also a lot of consolidation in our marketplace. Docs are running to the hospital for safety and security in fear of healthcare reform. Staying put in a private practice silo and not doing something may not be the right solution,” he says. “But it seemed there are other alternatives.”


Much of the discussion about ACOs has hovered over what entity will have control. Will it be a business entity? Will it be a bunch of joint ventures? Those issues will be worked out, say those who have already embarked on accountable care. The main issue that needs to be solved is clinical integration among a wide variety of players in patients’ healthcare.

“There are still a bunch of us private practitioners, but there’s also a lot of consolidation in our marketplace. Docs are running to the hospital for safety and security in fear of healthcare reform. Staying put in a private practice silo and not doing something may not be the right solution,” he says. “But it seemed there are other alternatives.”

It’s also easy to get rid of physicians who aren’t meeting the mandates of the IPA, which include some of the goals in ACOs, such as clinical integration and other infrastructure, such as a common electronic medical record system. That said, Prince is not yet completely committed to forming an ACO with Beacon, which is only a few months old. Much of that depends on the cooperation with private payers and CMS, after all.

But early signs are encouraging, he says. He’s courting third parties to help with billing software, determine what corporate functions of the IPA they can farm out. Also, he wanted to use an EMR that wasn’t necessarily linked to any one hospital or health system, so that the IPA can have a dialogue with payers allowing the IPA to remain free agents.
In general, as he’s spoken with all the commercial payers in his region, they are more supportive of his group than he anticipated, he says.

“There’s an appetite for this type of physician-led initiative. Competition is probably one reason because having a competitive playing field is important to the payers and our patients. If every practitioner runs en masse to a hospital or health system, it doesn’t help with that competitive balance.”

Payers, he says, want quality, value, and the understanding that the physicians in the IPA will police themselves. “They want assurances that we will work with them on cost savings,” he says.

One of the main initiatives of the IPA is to set up evidence-based guidelines for physician behavior to help limit overutilization.“We’ll have data and see who the outliers are, and there are teeth in the agreement,” he says. Quality initiatives will be put in place, and rates will be based on how well the group’s physicians meet those targets. Outliers will be asked to leave.

“If we do go down the road of the ACO, everyone needs to be rowing in the same direction. It won’t make sense to be a high utilizer and gaming the system. We value private practitioners because we are them. We will help you get there and give you a platform to have a voice.”

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Philip Betbeze is a senior leadership editor with HealthLeaders Media. He can be reached at pbetbeze@healthleadersmedia.com.

50 Things to Know About the Proposed ACO Regulations

By By Scott Becker, JD, CPA, R. Brent Rawlings, JD, Barton Walker, JD, and Lindsey Dunn | April 04, 2011

This article briefly outlines 50 things to know about the Medicare Shared Savings Program proposed rule — which established Medicare accountable care organizations — released by the U.S. Department of Health and Human Services on March 31. The article begins with a summary of key 45 provisions included in the proposed regulations and then provides five general observations regarding the ACO program, as established by the regulations.

45 key provisions in the proposed ACO regulations

1. ACO Participants cannot participate in other Medicare shared savings programs. A Medicare provider cannot participate in the Shared Saving Program as an ACO participant if it also participates in the independence at home medical practice pilot program or other Medicare programs that include shared savings.

2. An ACO may include the following types of groups of providers:
• ACO professionals (i.e., physicians and hospitals meeting the statutory definition in a group practice arrangement);
• Networks of individuals practices of ACO professionals;
• Partnership or joint venture arrangements between hospitals and ACO professionals; 
• Hospital employing ACO professionals; and
• Other Medicare providers and suppliers as determined by the HHS Secretary.

3. The regulations provide for a once-a-year start date of Jan. 1. Under the proposed rule, ACOs would apply for the three-year program and, if accepted, would be part of a cohort of ACOs joining the Shared Savings Program every Jan. 1.

4. ACO agreements will be for three years with one-year performance measurement periods. 

5. Medicare fee-for-service beneficiaries will be retroactively assigned to ACOs based on primary care utilization during a performance year. "We are proposing to assign beneficiaries for purposes of the Shared Savings Program to an ACO if they receive a plurality of their primary care services from primary care physicians within that ACO."

6. Beneficiaries will not be assigned to more than one ACO.

7. Beneficiaries will not receive advance notice of their ACO assignment. However, providers participating in ACOs will be required to post signs in their facilities indicating their participation in the program and to make available standardized written information to Medicare fee-for-service beneficiaries whom they serve. Additionally, all Medicare patients treated by participating providers must receive a standardized written notice of the provider's participation in the program and a data use opt-out form.

8. CMS expects 5 million Medicare beneficiaries to receive care from providers participating in a shared savings program.
9. An ACO must have at least 5,000 beneficiaries. If an ACO accepted into the program falls short of the 5,000 requirement, it will be placed on a corrective action plan. 

10. The board of an ACO must include some Medicare beneficiaries. "Another of the proposed patient-centered criteria discussed previously is the requirement that ACOs provide for patient involvement in their governing processes. We are proposing that, in order to satisfy this criterion, ACOs will be required to demonstrate a partnership with Medicare FFS beneficiaries by having representation by a Medicare beneficiary serviced by the ACO, in the ACO governing body."

11. The ACO board must include representation from all ACO participants. CMS requires this in order ensure all ACO participants are provided "an appropriate proportionate control over the ACO's decision-making process."

12. No more than 25 percent of board seats can be held by non-ACO participants such as entrepreneurial companies. "In order to be eligible for participation in the Shared Savings Program, the ACO participants must have at least 75 percent control of the ACO's governing body."

13. The proposed regulations do not require an ACO to become a separate legal entity with a separate Tax Identification Number. However, CMS recognized not requiring this could make it more difficult for CMS to audit ACO performance. Thus, it is seeking comment on whether all ACOs should be required to be formed as separate legal entities. 

14. The ACO can enter into a one-sided or two-sided shared savings agreement. Under the first, "one-sided" risk model, an ACO that creates a savings of at least 2 percent would get 50 percent of the money above that threshold, but it would have no penalty if it spent more in the first and second year. Under the "two-sided" model, an ACO could receive 60 percent of the money above the threshold but also would be penalized if it led to higher costs. By the third year of the program, all ACOs would become responsible for losses. 

15. Cost targets, from which savings will be calculated, will be based on retrospective review of aggregate beneficiary-level data for the assigned population. Spending targets will be compared to actual spending and any savings above the ACO's minimum savings rate (generally 2 percent), will be shared between CMS and the ACO.

16. CMS will set spending benchmarks based on three years of data. These will be set with a higher weighting on the most recent year and the lowest weighting on the year three years ago (i.e., a 60, 30, and 10 rating). There are several adjustments to the benchmarking.

17. Generally there is no savings shared or costs to be borne unless savings are at least 2 percent above or below the benchmark. The higher the number of beneficiaries, the lower the minimum savings rate. For smaller populations (e.g., 5,000 beneficiaries), the minimum savings rate can be higher (i.e., up to 3.9 percent). However, there are exceptions to the rule for rural ACOs. 

18. The ACO entity is responsible for distributing savings to participating entities. Medicare will pay the savings to the ACO, which will distribute it to participants in the ACO.

19. ACOs will be subject to a withhold of shared savings to offset possible future losses. "The ACO will be subject to a 25 percent withhold of shared savings in order to offset any future losses under the two-sided model." If an ACO completes its three-year agreement, it can recoup the 25-percent withhold. If an ACO terminates its agreement before the three-year requirement, CMS will retain any portion of shared savings withheld. 

20. To be eligible to receive shared savings, the ACO must also meet certain quality standards. There are five standard measures for quality or areas. These include patient care giver experience, care coordination, patient safety, preventive health and at risk population/ frail elderly health. CMS will designate scoring and measurement concepts. "Each of the [five] domains is equally weighted in determining an ACO's overall quality performance score, regardless of whether the ACO is in Track 1 or Track 2."

21. An ACO must develop a process to promote evidence-based medicine, patient engagement and coordination of care.

22. ACOs must have a patient survey tool in place.
23. ACOs must have a process for evaluation the health needs of the population it serves.
24. ACOs must have systems to identify high risk beneficiaries and develop individual care plans for target populations. 

25. An ACO must report and maintain a database of all ACO participants and their National Provider Identifiers.
26. ACOs must have a compliance plan and conflicts of interest policies and means to screen ACO participants.
27. ACOs must get approval for any changes in ACO participants (i.e., providers) during the three-year contract period.

28. Where an ACO's structure or participants changes during a term, CMS has five different ways it may respond. In some cases, the ACO will be allowed to move forward in the program. In others, it would be required to start over with a new three-year agreement. In some cases, the ACO would no longer be eligible for the Shared Savings Program. (See page 137 of the proposed regulations for the full list of CMS responses.)

29. Primary care providers may only participate in one ACO. However, a hospital can participate in more than one ACO, as can non-primary care medical and surgical providers.

30. Physicians eligible for primary care provider status include internal medicine, general practice, family practice and geriatric medicine specialists.
31. At least 50 percent of an ACO's primary care physicians must be meaningful EHR users as defined by the HITECH Act and subsequent Medicare regulations.

32. Each ACO will have significant public reporting requirements in a standardized format. Name; location; contact; participating providers; identification of participants in joint-ventures between ACO professionals and hospitals; identification of representatives on the governing body; associated committees and leadership; quality performance standard scores; shared savings information, total proportion of savings distributed to participants; and total used to support quality performance will be reported publicly.

33. ACOs must have a data-use agreement with CMS. However, Medicare beneficiaries assigned to ACOs can opt-out of data sharing. The ACO must supply beneficiaries with a form that allows them to opt-out. 

34. CMS will share aggregate population data regarding the ACO's population several times per year. Data from CMS will include financial performance; quality performance scores; aggregate metrics on the assigned beneficiary population; utilization data at the start of the agreement period based on historical beneficiaries; and identification of historically assigned beneficiaries used to calculate the benchmark.

35. CMS may monitor to ensure they are not avoiding at-risk beneficiaries or distributing unapproved marketing materials in addition to a whole range of other issues. In regards to marketing materials, CMS must approve any marketing materials or other communications promoting the ACO. 

36. ACOs must agree to be open wholly to audits. "We further propose that, if such data are generated by ACO participants or another individual or entity, or a contractor, or subcontractor of the ACO or the ACO participants, such ACO participant, individual, entity, contractor, or subcontractor must similarly certify the accuracy, completeness, and truthfulness of the data and provide the government with access to such data for audit, evaluation, and inspection."

37. The regulations set forth 16 grounds for termination of an ACO's shared savings agreement with CMS.Examples of these grounds include failure to report quality standards or failure to meet quality thresholds and avoidance of at-risk beneficiaries. (A full list of the 16 grounds can be found on pg. 409 of the proposed regulations.)

38. There are several concepts which are not subject to appeal by an ACO if it is terminated from the program by CMS. (A list of these can be found on pg. 412 of the proposed regulations). ACOs may appeal an initial determination if it is not prohibited for administrative or judicial review. 

39. CMS can change the program during a contract term, but can't change the rules regarding the eligibility requirements of an ACO, calculation of the shared savings rate and beneficiary assignment.

40. CMS and the OIG have proposed waivers with regard to Civil Monetary Penalty, Antikickback and Stark laws solely as to relationships wholly related to an ACO. For Stark and Antikickback, the waiver applies only to distributions of shared savings (not any other financial relationships). To view the CMS and OIG guidance, clickhere. 

41. Preliminary guidance from IRS available. The IRS has issued preliminary guidance to provide tax-exempt entities information on participating in ACOs. To view the IRS guidance, click here. 

42. Preliminary guidance from antitrust agencies available. The FTC and DOJ have also issued a proposed statement of antitrust enforcement policy as to ACOs. According to the guidance, ACO participants will not be challenged if they have a combined share of less than 30 percent of the common service in each area. If outside the safe zone it can still proceed if less than 50 percent. If more than 50 percent it must receive an approval to participate. If less than 50 percent, it doesn't need a review, but can request one. To view the antitrust guidance clickhere. 

43. The core concepts of the ACO program are to achieve better care for individuals, better health for populations and lower growth for Medicare expenditures. 

44. Comments on the proposed rule will be accepted for 60 days after the proposed rule is published in the Federal Register (expected April 7, 2011, so until June 6, 2011).

45. The ACO program is scheduled to go into effect on Jan. 1, 2012.

General observations on the ACO program

46. Will require massive bureaucracy. Given the scope of the regulations and the number of actions and approvals to qualify and participate and be accountable as an ACO, the ACO regulations likely will require the establishment a massive bureaucracy. In some ways, it's a different form with much more integration than providers that manage a Medicare advantage plan system but with arguably even more complexity.

47. Regulations are idealistic. The regulations in many ways speak of what is viewed by CMS as ideal concepts in healthcare, concepts used as platitudes such as "patient-centered care," "patient engagement" and many other terms. It will be fascinating to see how the actual practical hard-nosed implementation meshes with such ideals.

Further, the regulations speak of the kind of leadership expected in ACOs as though government can choose leaders or dictate what they look like in what we know is an imperfect world and where the reality of capitalism and a free market. In reality, who leads such organizations is never going to be as clean and clear as the regulations seem to believe and the leaders won't fit a certain stereotype.

48. Regulations limit business involvement. The program set forth the kind of negative attitude that one might expect from CMS towards business and further tends to reflect CMS' demonization of business and insurance. For example, while some might think business involvement is needed to drive this, the regulations specifically require that business interests cannot make-up more than 25 percent of the board in ACOs.

49. Regulations require beneficiary representation in ACO governance. The program requires a means for equal and shared governance in ACOs and requires beneficiaries to have a say in the ACO governance. Specifically, the proposed regulations require the ACO governing body to include including "a Medicare beneficiary serviced by the ACO." 

50. Regulations favor PCPs. The ACO regulations — much like intended reform in the 90s — view the primary care physician as the leader of patients' healthcare and really relegates many other parties to being cost centers. Language regarding PCP roles is somewhat glowing, further suggesting this perspective.

A Watershed Day for Accountable Care Organizations

By David A. Manko, Esq. and George Choriatis, Esq.


Yesterday was a watershed day for accountable care organizations (ACOs) - a new type of healthcare organization being promoted under ongoing health reform initiatives, particularly the recently enacted federal health reform legislation (the "Patient Protection and Affordable Care Act" or "PPACA"). Such reform initiatives seek to encourage physicians, hospitals, and other healthcare providers to form ACOs assume accountability and coordinate their services for a defined patient population and to be rewarded for improving the effectiveness and efficiency of their care with respect to the defined patient population. Yesterday, the following took place:The Centers for Medicare and Medicaid Services (CMS) issued proposed regulations implementing the ACO program to be established under Medicare, which is known as the Medicare "Shared Savings Program." To access the regulations, click here:

• CMS and the HHS Office of Inspector General (OIG) issued a proposal to waive the application of the Stark law, the Anti-Kickback law, and the Civil Monetary Penalties Law with respect to specified financial arrangements involving ACOs. To access the proposal, click here:
• The Federal Trade Commission (FTC) issued new guidance regarding the application of the federal anti-trust laws to ACOs. To access the guidance, click here:
• The Internal Revenue Service (IRS) issued a notice soliciting comments regarding the application of the federal tax laws governing tax exempt organizations to hospitals and other healthcare organizations that are recognized as tax exempt under Section 501(c)(3) of the Internal Revenue Code and participate in ACOs. To access the notice, click here:
• The New York State legislature enacted a law establishing an ACO demonstration project in New York State. The legislation requires the New York State Department of Health (DOH) to establish an ACO demonstration project, pursuant to which the DOH would certify up to 7 qualifying organizations as ACOs through December 2015. The December 2015 sunset date does not mean that an organization qualified as an ACO prior to that date would be required to cease operating on that date, but that DOH may not approve any new ACOs after that date unless such date is extended. Organizations certified as ACOs by DOH would be protected from certain types of liability under anti-trust, corporate practice of medicine, self-referral, and state insurance laws. The enactment of this legislation is intended to facilitate the development of ACOs beyond the Medicare context.

We intend to publish further analyses of the above items. Stay tuned.

WSJ: What is an ACO?

By AVERY JOHNSON

The 2010 health-care law encourages the development of accountable-care organizations as a way to improve care and reduce costs.

So what exactly are accountable-care organizations, anyway?

In broad outline, these entities propose to unite doctors and clinics or hospitals in groups that pool their resources with the goal of trimming spending while boosting the quality of care. When the group can show that it is improving care and delivers it for less than the cost projected—arrived at by crunching historical patient data for that market—a share of the savings goes to the ACO's bottom line.

ACOs exist more on paper than in reality, for now. But a few organizations up and running for decades do closely resemble how the concept can work. One of the most prominent is Atrius Health of Newton, Mass., an alliance of five medical groups comprising more than 800 physicians, about 700,000 patients and 30-plus care centers in eastern Massachusetts.

"An ACO is like a unicorn; everyone thinks they know what one is, but no one has ever seen one," says Gene Lindsey, president and chief executive of Atrius Health. "A few months ago, I announced to our organization, 'We are an ACO.' "

The term was invented only in 2006 and was just recently worked into the 2010 health-care reform law. Regulations for ACOs from the Department of Health and Human Services are pending, and the National Committee for Quality Assurance, a nonprofit that accredits health-care organizations, is in the process of developing ways to accredit the groups.

Roots in the '60s
Doctors, nurses and technicians at Atrius Health, part of Harvard Community Health Plan back in the 1960s, constantly strive to shave costs and improve quality. The group saved $62 million in 2010 from improvements that lowered costs.

A committee of doctors and other employees reviews operations looking for specific ways to make them more efficient. A few months ago, for example, the panel noted it was taking MRI technicians and nurses 10 minutes to turn over exam rooms between patients. After making some adjustments, such as removing cabinet doors so technicians could get at supplies more easily, it now takes five minutes. The result: an increase of two MRI patients a day, or 700 scans a year. Atrius Health recorded roughly $3.5 million in savings last year from this change alone.

Other innovations adopted include an electronic medical records system that helps measure quality and identify problems in patient care. Atrius Health also uses case managers, who help patients with chronic conditions coordinate care using multiple doctors and medicines; and pharmacists who review patient records to identify problematic drug interactions or cheaper alternatives for persons on multiple medications.

Two years ago, the group's doctors started a monthly process of sharing and discussing patient records. Physicians performing near the bottom of the pack thus can learn from peers who are seeing better results. Atrius Health executives say the practice has improved quality of care across the organization.

Quality measures are showing improvements, too. Atrius Health reports it has been able to boost the number of patients receiving cholesterol screenings to 88% from 80% and the number of diabetics getting a certain blood test to 79% from 68%.

An Adoptable Model?
Still, some critics argue that the ACO concept is not widely adoptable.

The health-care law calls for paying providers for the services they use and for rewarding them for any savings, initially in the Medicare program.

Atrius Health is paid by health plans with traditional fee-for-service deals for about 50% of patients. For the rest, when cost of a patient's care exceeds the limit set by the payor, Atrius Health has to cover the difference. The group has enough scale that it is able to improve quality, wring out waste and absorb losses on certain cases.

But smaller ACOs might not be able to get to that scale.

"It's so much like the old managed care that people really didn't want," says Jeff Goldsmith, a professor at the University of Virginia. That model, tried extensively in the 1990s, led to outcry over care rationing and caused some providers to lose money. Mr. Goldsmith worries that patients could find themselves in ACOs without being given a choice.

Organizations can try to limit their risk, as Atrius Health does, by accepting pay from some insurers for total care, and pay for services as performed from others. But critics say it also could be confusing for doctors in an ACO if they're paid different ways by different insurers.

Payor Problems
Atrius Health admits having multiple payor sources can be a problem, as it can create conflicting agendas for care. For instance, the group's global payments cover care coordinators for patients, while its fee-for-service payments do not. It has resolved this problem, it says, by allowing the global payments to subsidize the fee-for-service patients. But Chief Physician Executive Rick Lopez acknowledges that not every group would be able to do that.

Another concern: "Hospitals and doctors don't work together well," says Mr. Goldsmith. Hospitals' incentive is to maximize revenue through admissions, Mr. Goldsmith says, while doctors aim to keep their patients at home or in outpatient facilities.

Dr. Lopez agrees: "It absolutely is a tension that underlies the concept." Atrius Health has ended preferred relationships with hospitals when they didn't share its collaborative approach, he says. But the group has saved roughly $5 million in 2010 from its hospital partnerships.

Atrius Health is unique in some ways. It's a large and sophisticated group that is able to pull off care coordination because it can afford to invest in information technology and other costly improvements.

By contrast, so many mom-and-pop medical groups and small hospitals lack these kinds of resources, Mr. Goldsmith says, "the idea that this could scale to the rest of the health system is seriously flawed."

Elliott Fisher, the Dartmouth Medical School professor who helped coin the term ACO, and who worked with members of Congress to draft the ACO concept into the health-care law, concedes that "there are some really important questions about whether this will work."

But, Dr. Fisher adds: "I think it's the best hope we have."

Ms. Johnson is a reporter for
The Wall Street Journal in New York. She can be reached at
avery.johnson@wsj.com.

In Search of an Accountable Care Organization (ACO)

New survey shows EHRs benefit even small providers

By Mary MosqueraTuesday, March 08, 2011

A survey of studies from recent years shows that health information technology has benefited healthcare providers, even small practices, refuting other recent findings that suggest electronic health records and other health IT do not produce positive effects for patient care.

Previous studies focused on the early years of electronic health records (EHR) when functions were not as mature, according to one of the authors of the survey article, Dr. David Blumenthal, the national coordinator for health IT.

Furthermore, the survey found evidence of emerging measurable benefits for small practices in addition to the larger health IT leaders, such as Kaiser Permanente and the Veterans Affairs Department, which have been the source of much experience data in the past, he said at a March 8 briefing sponsored by Health Affairs journal to announce its latest published studies.

“Two salient aspects of this more recent synthesis is that it brings the literature up to date and extends it beyond the few large systems that were the source of most information on the record for health information technology, and looks at it in a much more representative set of provider settings,” Blumenthal said.

In the survey of 154 peer-reviewed articles from 2007 to 2010, the article found that 92 percent of the studies reached conclusions that indicated overall positive effects with the use of health IT, he said.

As far as the  time and cost for deploying an EHR is concerned, Dr. Neil Fleming, vice president for healthcare research at Baylor Health Center System, said that it cost its HealthTexas primary care providers $10,325 per physician and took 134.3 hours to put the EHR into practice.

The time was split between chart loading and working with the physicians, he said. For a five-member practice, EHR implementation cost $7,857 and 130 hours.

“The level of support services from vendors is a critical factor,” Fleming said.

Another study concluded that more than four in five office-based physicians could qualify for the meaningful use incentives, said one of its authors, Brian Bruen, lead research scientist and lecturer at George Washington University’s School of Public Health and Health Services. He suggested that ONC monitor where gaps in eligibility and use emerge.

Blumenthal said that regional extension centers, which ONC established to assist primary providers with overcoming the technical hurdles to adopting EHRs, have signed up 50,000 providers nationwide. And almost 34,000 providers have registered with the Centers for Medicare and Medicaid Services to participate in the meaningful use incentive program to date.

CMS has already paid $34 million in incentives under the Medicaid program to 216 Medicaid providers in four states, Blumenthal said.

Meaningful use puts a floor on the capacity and performance of electronic health systems and creates a market for the technology, he said. That market now consists of 450 certified EHRs and modules produced by 280 companies, of which 64 percent have fewer than 15 employees.

“Here is a microcosm of robust innovation in a market created by the new federal program of incentives,” he noted. 

Current and past ONC staff members, in addition to Blumenthal, authored the paper, “The Benefits of Health Information Technology: A Review of the Recent Literature Shows Predominantly Positive Results.” The other authors were Melinda Beeuwkes Buntin, director of ONC’s office of economic analysis, evaluation and modeling; Matthew Burke, ONC policy analyst; and Michael C. Hoaglin, former ONC policy analyst.

Despite the focus on health IT, the “human element” is critical to effective EHR implementation. The association between the assessment of provider satisfaction and negative findings is strong. That underscores the importance of strong leadership and staff “buy in” if systems are to successfully manage and see benefits from health IT, according to the paper.

There is also a need for studies that explore how to resolve the challenges of implementing health IT, the aspects and tools of EHRs that physicians find the most difficult to use, and the training and support that are needed for implementation.

Beacon IPA - Empire BCBS Partnership

It gives me great pleasure to announce that today, March 1st, 2011 we officially go live with our agreement with Empire BCBS. We look forward to a fantastic partnership combining increases in quality of care with cost savings. We are all confident this partnership will be beneficial to all the physician providers of Beacon IPA, Empire BCBS, and most of all... the patients we serve.