This article was originally published by Sg2 on March 15.
As we watch accountable care organization (ACO) fever rise—spiking again after the Centers for Medicare & Medicaid Services (CMS) announced it will be releasing a Notice of Proposed Rulemaking—academic medical centers (AMCs) are left wondering what their role will be in a coming “ACO era.” Healthcare innovation zones (HIZs) have gotten significantly less media attention than ACOs, but present a compelling model for AMCs to consider. HIZs are 1 of 20 pilot projects that will be managed by the Center for Medicare & Medicaid Innovation (CMI). HIZs are fundamentally ACOs with AMCs at their heart, combining the unique advanced care expertise, data research capabilities and physician training competencies of academic hospitals in partnerships with nonacademic organizations, including community providers and public and private payers.
House of Representatives Bill
Specifics about HIZs are sparse in the Patient Protection and Affordable Care Act (PPACA), and CMS has not yet released additional details. However, a House bill proposed in 2009 by US Representative Allyson Schwartz (D-PA) and developed with input from the Association of American Medical Colleges served as a template for HIZ language and provides hints as to how HIZs may be implemented. In the bill, an HIZ is defined as a partnership arrangement in which an AMC leads and coordinates care with other hospitals, primary care providers, outpatient care, recovery and rehabilitation facilities, public health, community services, and Medicare and private payers. In addition, the bill dictated that HIZs must:
- Identify a specific geographical zone and estimate the size of the patient population that could be cared for within the HIZ.
- Coordinate a group of clinical entities capable of providing inpatient, outpatient, post-acute and preventive care.
- Engage community and clinical care leaders in designing the HIZ plan.
- Leverage information technology (IT) to coordinate care across facilities and geography.
- Collect and report quality data to continuously maintain or improve the quality of care.
- Provide comprehensive services to at least 50% of the population in the HIZ.
- Collect and submit data on changes to medical education that reflect changes in how health care is delivered.
As of the writing of this post, it is unclear how (and if) HIZ pilot projects will be funded. The CMI has $10 billion to use at its discretion for the plethora of pilots proposed in the PPACA and may use it to provide seed funding for HIZ projects. However, the CMI is currently juggling many responsibilities with a small staff and partisan wrangling over defunding health care reform continues. Although the fate of HIZs is uncertain, they share much in common with ACOs, which continue to pick up momentum. While successful ACOs will require a strong foundation of primary care, most AMCs have emphasized tertiary and quaternary care. Future ACOs (and HIZs) will likely give AMCs the role of a “center of excellence” for patients who require specialty care beyond the scope of what community ACOs can provide. Thus, AMCs could have multiple contracts with different ACOs that refer to the AMC for tertiary and quaternary care. A surefire strategy for AMCs in the short- to mid-term includes the following actions:
Strengthen core competencies as “centers of excellence.” Take a disease-based approach to determine in which service lines, procedures or specialties your AMC excels—not every AMC can be a center of excellence in everything! Invest in these areas for sophisticated, high-margin care and strengthen the referral networks that bring in patients for these services.
Learn to partner with primary care providers and post-acute care providers. AMCs should establish a coordinated, collaborative approach to transitioning patients between sites of care. Tools to improve coordination include:
- A service culture in which both the patient and the referring physician are seen as high-value clients of the AMC.
- An electronic medical record that interfaces with both the primary care office and the AMC.
- Nurse navigators and patient coordinators who facilitate communication between sites of care, providers and patients.
- Clear guidelines for primary care and community sites on how to perform tests such as biopsies, imaging studies and other first-line treatments prior to transferring patients to the AMC. Primary care/community health sites and AMCs should develop these guidelines together.
- Clear referral pathways specifying to which provider the patient will be referred.
- Clear guidelines for post-acute care and effective communication regarding patients’ care plans.
Anticipate major organizational and cultural changes needed for AMCs to become ACOs or HIZs. Faculty practices that are unified with university hospitals and clinics will be in a better position to coordinate care and avoid interdepartmental conflict than organizations with fragmented leadership. AMCs will have to negotiate alignment strategies that balance the needs and goals of faculty, nonfaculty employed physicians and independent physicians aligned with the AMC network. Meaningful clinical quality incentives (financial and nonfinancial) will have to be developed for faculty, whose current incentives heavily favor research and grants.
AMCs Making ACO News
AMC interest in ACOs and HIZs varies considerably by organization. A few AMCs are aggressively pursuing ACO and ACO-like networks, while many are adapting a wait-and-see approach and others are sitting firmly on the sidelines. Interest, however, has picked up significantly in the last few months. Two examples include:
- Montefiore Medical Center, the university hospital for the Albert Einstein College of Medicine, is actively positioning itself to become an ACO. Montefiore’s 4-hospital system has maintained positive operating margins despite the fact that 80% of its volume comes from Medicare and Medicaid patients. It has done this by building an integrated system that includes 21 primary care clinics, multiple physician-led quality improvement initiatives and a health IT system that tracks patient data across the care continuum. This integration has allowed Montefiore to efficiently deliver care to 150,000 enrollees in capitated contracts from both government and private payers, laying the groundwork for eventual transformation into an ACO.
- Johns Hopkins Medicine’s plan to develop an ACO places it in a unique position because it already has an insurance plan, affiliated primary care groups, community hospitals and 2 recently acquired regional hospital centers. In addition, Johns Hopkins has been participating in innovative payment models, such as PACE (Program of All-Inclusive Care for the Elderly), a capitated program that provides outpatient senior care. Hopkins also has created a virtual, multidisciplinary Center for Innovative Medicine to promote patient-centered approaches to care delivery.
In planning for the long-term, AMCs should partner with (but not necessarily acquire) primary care providers and begin piloting care delivery models, payment models (eg, bundled payment) and care coordination strategies. Taking a data-driven approach to pilots is a helpful way to incrementally redesign care. Ultimately, metrics will make AMC partnerships more accountable for the care of patients in the community. AMCs should focus on areas such as hip replacements, cardiac surgery and high-risk obstetrics, in which the AMC has the means and opportunity to decrease utilization of expensive services. Regardless of the partnerships that emerge, a strong System of CARE (Clinical Alignment and Resource Effectiveness) provides the best foundation for any 3-letter acronym of the future.
Sources: Berkowitz SA and Miller ED. Accountable care at academic medical centers—lessons from Johns Hopkins. N Engl J Med 2011;364:e12(1)–e12(3) [Epublication ahead of print]; Kastor JA. Accountable care organizations at academic medical centers. N Engl J Med 2011;364:e11(1)–e11(3) [Epublication ahead of print]; Sg2 Interview With Montefiore Care Management Organization, February 2011; Chase D. Montefiore Medical Center Case Study. The Commonwealth Fund: October 2010; HR 3664: Healthcare Innovation Zone Pilot Act of 2009.
Julie Schulz, MD, is a consultant for Sg2