Private practices join the ACO trend

The trend of physicians’ leaving their independent practices to become employed by hospitals, especially the large urban hospitals or hospital systems that are ACOs, makes it seem impossible for independent physicians to participate in value-based care models.  Dr. Kleeberg discusses the challenges and opportunities faced by these practices.

Q: Are there certain characteristics of the primary care practices that seek to become ACOs?

A: The practices tend to be more visionary; they recognize that the fee-for-service system cannot continue and that there needs to be accountability for value. They believe that they are already providing quality and cost-effective care and they are willing to compete to prove it.

These practices also tend to be highly collaborative with other providers and are willing to share tools, ideas, and best practices to succeed as a team. However, they also wish to remain independent and are uninterested in joining larger health systems that could rob them of their autonomy. They want to be able to make the best choices for their practices and patients, and not to have polices and referral networks dictated to them.

Q: From your experience, what are the drivers and attitudes of independent primary care practices toward the movement to value-based care and risk based contracts? 

A:  They see the writing on the wall: increasing regulation and decreasing reimbursement are challenging their survival as independent practices. The recent “Doc Fix” and proposed rule has made it abundantly clear that those who choose to stay in the classic fee-for-service model will see their incomes decline in comparison to the inflation rate. Their income will decline even more if they do not participate in the proposed activities of reporting quality and using EHRs.   However, if they join an ACO, they have the potential of reaching greater rewards for high-value care and, if they enroll in a dual-sided risk program, they will also receive a 5% increase in Medicare reimbursement for 6 years starting in 2019.

Q: Does the practice need to staff or manage differently as an ACO? 

A:  There are significant startup activities and related costs to be successful in a shared savings program. Although some solo practitioners are able to successfully divide new responsibilities among existing staff, typically more support staff is required.

An example is the establishment of a chronic care management program, which proactively identifies and engages with patients to avoid adverse events and hospitalizations.  Although chronic care management is reimbursed by CMS, a successful program requires an increase in staff and a ramp up period. The AIM program, instituted earlier this year by CMS, provides an ACO with capital to hire and train staff.  In the long run, because of the reimbursement for these activities as well as the savings achieved through them, these additional positions pay for themselves.

As an ACO, the practice also needs to know the cost of services ordered for patients, such as specialists, nursing homes, and homecare. For example, one cardiology practice may have higher costs because it charges a facility fee when the patient is seen, while another practice may not.

Q: How can independent practices leverage technology to better compete with larger hospital systems?

A:  EHRs are essential, but they are not enough. Many of them do not provide the population management tools, such as a registry or data analytics tools, to identify and prioritize patients who would receive the most benefit from chronic care management programs. Falls risk, cognitive impairment, isolation, and polypharmacy are all risk factors for medical complications that are not easily identified by a traditional EHR. The establishment of health information exchanges is also important for tracking patient status and events, such as ER visits and hospital discharges.

Q: What is your prediction for the future of independent practitioners becoming ACOs?

A: I believe they will continue to grow and have a positive impact on the practices, patients, and their communities.  They are able to become more collaborative than ever before---everyone starts working at the top of their license and optimal patient care becomes a shared responsibility.


About the authors: 

Dr. Paul Kleeberg is Medical Director at Aledade, Inc., which works with independent, primary care physicians to provide everything doctors need to create and operate an Accountable Care Organization (ACO). 

Karen Golden Russell is Vice President of Product Transformation at Verisk Health, Inc. whose solutions empower a sustainable, value-based healthcare delivery and payment system for health plans, providers, employers, and other risk-bearing entities.