Accountable Care and Physician-Health System Partnerships
Part 4 of our series “Should I Stay or Should I Let It Go?”
In Part 1 of our series Medical Practice Consolidation & Physician Practice Viability, we discussed medical practice consolidation trends and the pandemic’s impact on the healthcare system and physicians in practice. We offered a practice viability self-assessment and recommended performance improvement actions to “Stay the Course.” In Part 2 Partnering with Others, we highlighted a variety of partnership options for physicians to consider including investor-owned companies that offer new models of clinical practice as alternatives to the fee-for-service treadmill. Part 3 Physician Partnerships with Health Systems discussed the dynamics of these ventures from a health system’s perspective within the context of an ongoing pandemic.
In Part 4 Accountable Care and Physician-Health System Partnerships, we describe the impact of accountable care and value-based reimbursement on physician-health system relationships. The health-system sponsored Clinically Integrated Network (CIN) is one option for physicians to remain independent and still participate in the accountable care movement. However, physicians can participate and succeed in value-based care transformation by joining non-health system driven Accountable Care Organizations (ACOs). Physician-led, private equity-backed ACO’s have become increasingly viable options for physicians and their practices to remain independent and be successful in improving care and reducing health care costs.
ACCOUNTABLE CARE AND HEALTH SYSTEM-PHYSICIAN PARTNERSHIPS
Clinically Integrated Networks (CINs)
There are a couple of different ways for physicians to partner with hospitals or health systems – including joining health system sponsored clinically integrated networks. Created in response to the development of accountable care and value-based reimbursement, a clinically integrated network (CIN) is defined as: “A collection of health providers, such as physicians, hospitals, and post-acute specialists that join together to improve care and reduce costs.”24
CINs have been a relatively recent “vehicle” for health systems and independent physicians or medical groups to come together to reduce cost and waste in the healthcare system, improve patient quality, and position both entities for managing the health of populations and taking value-based payments. With their size, infrastructure, and representation across the continuum of care, CINs have more resources and patient lives than physicians in solo or smaller private practice. As such they may be better able to succeed in Accountable Care Organization (ACO) programs offering alternative payments models with government payers such as Medicare Shared Savings Plans (MSSP) and Pioneer ACOs. The positives for joining a clinically integrated network include an opportunity to increase patient quality of care and reduce cost and waste in the system. In addition to positioning a practice for population health and value-based payments, physicians can remain independent and earn incentives for improving quality and reducing costs.
Just as there are some positives to joining a CIN, there are some pitfalls. Physicians may be reluctant to contribute membership fees to the CIN if they are skeptical of the promised cost savings performance tied to quality bonuses. Hospital-operated CINs, although well-intentioned, have inherent conflicts of interest built into their models. Despite the implementation of penalties over the past several years by government and commercial payers for overutilization, fee-for-service revenues in deep end services (e.g., hospital admissions, ER visits, high-end diagnostics) still drive the financial engines of hospitals and health systems.
EHR interoperability and data quality are both still big challenges for CINs. Access to useful clinical quality information, data analytics, and decision-support is still not consistent or easy for physicians to obtain. Before joining a CIN, physicians should investigate the management services offered by the CINs to help them meet the performance goals that result in cost savings and therefore bonuses for providers. Physicians should also be aware of certain exclusions for joining a CIN. For example, primary care physicians can only join one CIN and cannot be members in multiple CINs.
Finally, physicians should make sure that cost-saving and quality goals are aligned in the CIN between the hospital and the physician practice. The biggest cost savings in an alternative payment arrangement happen when the “big ticket” items are reduced — hospital admissions/readmissions, emergency room visits, surgeries — the core businesses of a hospital.
Accountable Care Organizations (ACOs)
Physicians are not required to join a CIN to participate or succeed in an ACO program. Investing in or joining an ACO is another way to help physicians remain independent. Physicians can join an ACO that is hospital or health system-owned or physician-led and owned. In the world of accountable care, the covered lives in a physician’s panel are their “currency.” The way they clinically manage the care of this precious panel of patients is at the center of truly accountable care, so incentives must be aligned to support physicians.
With the advent of payment reform and the development of the Accountable Care Organization (ACO) model, policymakers and stakeholders feared that physician practice consolidation would accelerate, and physician practices would merge with hospitals because of the accountable care model and its payment methods. However, researchers have found little evidence to support this assertion, noting that physician practice consolidation was well underway before the accountable care programs were established. 25
Physician-owned and led medium and large medical group practices, especially in primary care, can have a very positive impact on costs and quality, often greater than the results of health system-led ACOs. Participation in ACOs can also help physicians remain independent. Physician-owned or “low revenue” ACOs versus hospital-operated or “high revenue” ACOs perform better and have a better chance of passing on a tangible amount of incentive dollars to participating physicians. These incentives for care improvement and cost-reduction shared savings provide another revenue stream for physicians, especially in primary care. And as value-based payments become more prevalent than fee-for-service payments, physicians involved in ACOs will benefit.
Supporting physicians in the world of accountable care, private equity backed MSOs (e.g., Aledade, Agilon) have grown in the past few years and focus on government payor value-based reimbursement arrangements in the Managed Medicaid and Medicare Advantage space. These MSOs partner with independent primary care physicians providing practice management services, data analytics, and value-based care contracting capabilities for private practice physicians to take advantage of and remain independent. Using delegated contracting methods, for example, these companies partner with physician practices to take full-risk arrangements, while providing a variety of management services (e.g., case management, utilization management, credentialing, etc.) that help physicians achieve better patient outcomes and reduce the costs of care. Improved value-based care performance drives shared savings bonuses and other financial incentives. These MSOs tend to be larger in size and scope and more dispersed geographically across multiple markets. It will be interesting to see how well this model performs across a much more diffused landscape and if the incentives offered to physicians to participate will be adequate to sustain them.
Coming in Part 5
For physicians in practice, “Should I Stay or Should I Let it Go?” is such an important question even in normal times. In Part 5, Decision Making and Next Steps: The Multi-Dimensional Due Diligence (MD-DD™) Method we conclude our series by offering a practical decision-making framework for physicians contemplating their next steps in a potential partnership during these challenging times made even more urgent by the pandemic.
ABOUT THE AUTHORS
Amanda Hopkins Tirrell, MBA, FACHE
For over 30 years, Amanda Hopkins Tirrell, MBA, FACHE has partnered with physicians in academic medical centers, integrated healthcare delivery systems and medical group practices across the country. An energetic change agent with a reliable track record in transformation, operations management and establishing a culture of patient service excellence, Ms. Hopkins Tirrell is a knowledgeable advisor and mediator in developing collaborative alliances and partnerships with physicians, hospitals and community organizations.
Based in North Augusta, South Carolina, Ms. Hopkins Tirrell is President and Founder of Hopkins Tirrell & Associates, LLC a health care management consulting practice offering strategic and operational management solutions to health systems, academic medical centers and physician practices. Consulting services include clinical strategic planning, patient access redesign, behavioral health solutions, physician engagement and network development. Physician practice advisory services include business growth, revenue cycle management and contracting strategy, as well as individualized leadership development, career planning and compensation strategy.
Most recently, Ms. Hopkins Tirrell served as technology strategy advisor for Mass General Brigham’s Chief Information & Digital Officer. As a member of the CIDO’s digital transformation team, she focused on senior stakeholder engagement and digital patient experience transformation to include digital front door redesign and CRM technology implementation to support access improvement and call center optimization. Key deliverables included developing the Digital Patient Experience Strategic Plan & Roadmap and Governance Strategy & Implementation Plan.
Ms. Hopkins Tirrell holds an MBA in health care management from the Wharton School and is a Fellow in the American College of Healthcare Executives.
Contact: (413) 427-4714 (cell) — email: Amanda@hopkinstirrell.com
Saria Saccocio, MD, FAAFP, MHA
Dr. Saria Saccocio is the Chief Medical Officer for Essence Healthcare, of Lumeris.
Dr. Saccocio has demonstrated a consistent history of leading award-winning programs and improving patient care and safety across the continuum as a Chief Medical Officer for health care delivery systems, including on the payer and health system environments. She received her Doctor of Medicine from the University of Florida, and her Executive Master of Health Administration from the University of North Carolina-Chapel Hill. She completed her Family Medicine residency at the University of Miami before opening her own solo family practice. She continues to serve patients at the Greenville Free Medical Clinic.
Becker’s Hospital Review has recognized Dr. Saccocio as one of the top 100 Hospital and Health System CMOs to Know and has been elected to the Alpha Omega Alpha Medical Honor Society. Her extensive civic involvement has included serving with many national, state, and local community organizations such as: the Modern Healthcare Women Advisory Board, Pisacano Leadership Foundation, South Carolina Hospital Association, United Way of Greenville County; Greenville Free Medical Clinic, the South Carolina Academy of Family Physicians, and is an Alum of the Women’s Leadership Institute and the Diversity Leadership Institute and Women of Distinction for Women’s Basketball at Furman University.
Contact Dr. Saccocio at: Saria.Saccocio@gmail.com
Part 4 – Accountable Care and Physician-Hospital Partnerships
- “Clinically integrated networks: 5 roadblocks and how to overcome them,” A. Gallegos, MDEdge Ob.Gyn. News, (July 2017)
- “Little Evidence Exists to Support the Expectation that Providers Would Consolidate to Enter New Payment Models”, H. Neprash, M. Chernow & J. McWilliams, Health Affairs (February 2017)