Continuing to be Accountable

| Posted On Jul 22, 2013 | By:

The following is an excerpt from an email that Dr. Gene Lindsey sent to the Atrius Health practices.

Many of you have heard via external media or internal communications that Atrius Health was one of two Pioneer Accountable Care Organizations (ACOs) for 2012 that would incur a shared loss.  In full, 14 ACOs showed a loss, but 12 did not share in the loss because of the financial models they chose. There were 9 Pioneers who chose to move to the Medicare Shared Savings Program, a similar program with less risk and less potential upside, or to leave the program. Some of the articles were trying to hint that the Pioneer ACO Model is not accomplishing its means, and that many institutions and their doctors are dropping out. Some of those same voices are the ones that have been continuously attacking the Affordable Care Act since the moment it was conceptualized. Centers for Medicare and Medicaid Services (CMS) was focused on the positive news that in its first year the Pioneer model produced a savings of nearly $33 million to the Medicare Trust Funds and demonstrated overall quality performance better than the national average for all 15 clinical quality measures for which comparable data are available. As strong supporters of the ACO model of care, with a payment model that allows us to spend on the care coordination and support activities that enable higher quality care for our patients and that produce lower overall costs, it is important that the program in total be successful, so it is good news that the program was net positive in its first year.  

It never feels good to be highlighted near the bottom of the list, but I am feeling good about our performance in the Pioneer program this year. To understand that, it might help to know that the mechanics of the Pioneer ACO financial result are complicated because it is built on continuous improvement. Your progress is measured against a budget that starts with the actual experience of weighted total Medicare expenses for the prior three years for the patients for whom you provided much of the care during the prior three years. The patients have been attributed to your ACO because your medical practices provided most of their primary care. That is the easy part. Then the formula adds in growth based largely on a comparison to a national matched population to arrive at the budget.  The final calculation of actual shared expense and loss and factors that affect the amount of risk in your particular financial option include the percentage of sharing with Medicare, a risk cap, and a noise level above or below which nothing is shared. Because of timing issues with CMS delivering data in the first quarter this past year, they also added in a one-time option that allowed us to shift our first year for settlement purposes to the 12 months ending March 31, 2013. The calculation becomes even more complicated starting next year when 33 quality measures that attempt to capture patient experience, care coordination and patient safety, preventative health, and healthcare for the at-risk population (largely related to diabetes and CAD) are factored into the sharing percentage.  There has been debate about those metrics because this is the first time that many of them are being measured, so there is no consensus about how aggressive the goals should be. For this first year, 100% quality was achieved by reporting on all of the measures, which sounds simple, but actually involved a tremendous amount of work to establish the right fields in EPIC for counting and a lot of manual chart review as the only way to measure in some cases.

When we first received our financial data from CMS prior to the start of the program back in 2011, it looked like we had a really good shot at success.  By the time we saw the next round of data which had been adjusted for new learning by CMS, we knew that our target budget would be a challenge because it was one of the lowest in our high cost market. That was because we had already been caring for these patients with many of the tools that would be available to others to choose. The average cost of a year of Medicare for less than $11,000 is pretty remarkable in Massachusetts.

Despite this, it was, and continues to be, our opinion that even “losses” at this stage constitute an investment in the future because we have to make these changes to meet the challenges ahead of us. We know that federal reimbursement will continue to fall in the future. Even tougher will be the relatively flat reimbursement from our commercial insurers.  Our Board was very positive in its support on the front end. We prudently reserved in 2012 for a 4 million dollar “loss” because we knew that it would be hard to beat a budget of less than $900 a month for each Pioneer patient. We started the year constructing the programs that by mid-year were making measurable improvements. We are now running at rates that are impressive and that suggest that by next year there is the possibility that we will have improved care to the point that we are positive financially as well as in quality. If we can continue to make this kind of progress, we are hopeful that we can do more than recoup our investments and losses by the end of the program. We are in a 5 year process to improve care and not a one-year contest to see how much money we can make.

There are other considerations. The final accounting has not yet been completed by CMS. More importantly, our quality was, as reported to us by the CMS Innovation Center, “spectacular”. The quality scores were not announced to the world, but we will be delighted to talk about our performance. As measured against the other Pioneers (whose combined performance far exceeds the national average) we had 5 metrics that were among the highest and 23 metrics that were greatly above the mean.    Furthermore, we planned for the improvement in the care of our 25,000 Pioneer patients to improve the care of the patient in Medicare Advantage and our more compromised patients in commercial products, and we believe that we have done that too.

 Our Pioneer ACO patients are quite satisfied with our continually improving care and appreciative of this new reality. One even announced it to the world. This week the family of Professor William Burto published his obituary in The New York Times. Professor Burto wrote many books about literature, art and nature in his 91 years. The last line of the obituary recognizes both one of our medical groups and our VNA whose work together has become more and more integrated as a result of our Pioneer experience:

William Burto is survived by Barnet, by a niece, Sheila Wilson, and by five Geraghty nephews, Elihu, Ennis, Jonathan, Kevin, and Sean. We wish to express our deepest gratitude to Harvard Vanguard Medical Associates and to VNA Care Network and Hospice for their unstinting tender support.

Need I say more? The care of the frail elderly and the support of their families is a major objective of the Pioneer ACO Model. We do well with that objective, and I am confident that soon the world and its accountants will understand how to measure the total success of your efforts. I am proud of what you have done, and like Professor Burto’s family would encourage you to continue your efforts to get even better.

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About Dr. Gene Lindsey

Dr. Lindsey has been President and CEO of Atrius Health and also of its largest affiliate, Harvard Vanguard Medical Associates, since February 2008. Previously he was Chairman of the Board of Directors for Atrius Health and Chairman of the Board of Directors for Harvard Vanguard Medical Associates. Dr. Lindsey joined Harvard Vanguard Medical Associates in 1975 and practiced cardiology and internal medicine at the Kenmore, Wellesley and West Roxbury Harvard Vanguard practices. He served on the board of Harvard Community Health Plan/Harvard Pilgrim Health Care from 1991 to 2000. Dr. Lindsey received his medical degree from Harvard Medical School. Dr. Lindsey is a sought-after speaker on the healthcare topics of payment reform, accountable care organizations, practice innovation, quality and efficiency.

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