Bryn Nelson, PhD

Success as an ACO likely won’t come from any one strategy, but from many. Christopher Kim, MD, MBA, SFHM, a hospitalist and associate professor of internal medicine at the University of Michigan, says the Michigan Pioneer ACO serving roughly 20,000 beneficiaries in the state’s southeastern region has benefited greatly from a variety of pre-existing relationships and initiatives. The university’s medical center, one of 10 participants in a Medicare ACO precursor called the Physician Group Practice demonstration project, was among the few sites to successfully meet the requirements and gain the full cost savings benefits in all five years.

The newer ACO, which officially launched in January 2012, pairs the university’s Faculty Group Practice with Integrated Health Associates Inc. (IHA), a large multispecialty private-practice group. Many IHA providers already had access to the university’s electronic health records so they could track admitted patients. One preliminary collaborative effort between the two entities hinted at a trend toward lower readmission rates among a small group of patients who were seen by a primary-care provider within seven days of a hospital discharge, underscoring the importance of a smooth transition.

Providers also have been able to tap into statewide initiatives aimed at improving quality and care coordination in key areas, such as cardiovascular disease, cancer, and hospital care transitions (sponsored by Blue Cross Blue Shield of Michigan).

“These programs helped physician organizations and hospitals throughout the state become familiar with best practices related to these kinds of conditions,” Dr. Kim says, “and I think partly because of that, we were very prepared to work on a quality-improvement initiative such as this while also improving efficiency.”

Listen to Dr. Kim discuss the added responsibility hospitalists in ACOs like the one formed between the university faculty and a large multi-specialty practice called Integrated Health Associates, Inc.

For stratifying beneficiaries by risk, the ACO has benefited from a separate initiative called the Michigan Primary Care Transformation Project, which uses the concept of a pyramid to classify increasingly complicated patients. A complex-case manager, typically an advanced practice nurse, acts as the point person for guiding patients in the upper half of the pyramid toward the best resources while preventing unnecessary duplication of tasks or consultation referrals. Optimal coordination means that hospitalists need to communicate effectively with these managers as well as with other providers.

From Medicare claims supplied by CMS, Beth Israel Deaconess Physician Organization (BIDPO) in the Boston metropolitan region has used software to identify its highest-risk patients, or those most likely to be admitted to the hospital within the next 12 months. As part of the process, BIDPO officials asked doctors to validate the results based on their own patient records and observations.

The ACO has hired nurse practitioners through a company called INSPIRIS Massachusetts to visit its sickest and frailest Medicare beneficiaries at home to prevent hospital admissions and to avoid post-discharge readmissions among the highest-risk patients. BIDPO also uses nurse care managers to do telephone-based care management for less acute patients, and is asking emergency department staff to recognize patients who could be sent home safely with appropriate care rather than be admitted. Patients with cellulitis, for example, could be treated via IV antibiotic therapy at home, a service made possible through a collaboration with a home infusion company.

Dr. Parker, BIDPO’s medical director, says hospitalists will be key to understanding the need for excellent inpatient care and thoughtful, comprehensive discharge planning that helps avoid adverse events post-discharge.

Success as an ACO likely won’t come from any one strategy, but from many. Christopher Kim, MD, MBA, SFHM, a hospitalist and associate professor of internal medicine at the University of Michigan, says the Michigan Pioneer ACO serving roughly 20,000 beneficiaries in the state’s southeastern region has benefited greatly from a variety of pre-existing relationships and initiatives. The university’s medical center, one of 10 participants in a Medicare ACO precursor called the Physician Group Practice demonstration project, was among the few sites to successfully meet the requirements and gain the full cost savings benefits in all five years.

The newer ACO, which officially launched in January 2012, pairs the university’s Faculty Group Practice with Integrated Health Associates Inc. (IHA), a large multispecialty private-practice group. Many IHA providers already had access to the university’s electronic health records so they could track admitted patients. One preliminary collaborative effort between the two entities hinted at a trend toward lower readmission rates among a small group of patients who were seen by a primary-care provider within seven days of a hospital discharge, underscoring the importance of a smooth transition.

Providers also have been able to tap into statewide initiatives aimed at improving quality and care coordination in key areas, such as cardiovascular disease, cancer, and hospital care transitions (sponsored by Blue Cross Blue Shield of Michigan).

“These programs helped physician organizations and hospitals throughout the state become familiar with best practices related to these kinds of conditions,” Dr. Kim says, “and I think partly because of that, we were very prepared to work on a quality-improvement initiative such as this while also improving efficiency.”

Listen to Dr. Kim discuss the added responsibility hospitalists in ACOs like the one formed between the university faculty and a large multi-specialty practice called Integrated Health Associates, Inc.

For stratifying beneficiaries by risk, the ACO has benefited from a separate initiative called the Michigan Primary Care Transformation Project, which uses the concept of a pyramid to classify increasingly complicated patients. A complex-case manager, typically an advanced practice nurse, acts as the point person for guiding patients in the upper half of the pyramid toward the best resources while preventing unnecessary duplication of tasks or consultation referrals. Optimal coordination means that hospitalists need to communicate effectively with these managers as well as with other providers.

From Medicare claims supplied by CMS, Beth Israel Deaconess Physician Organization (BIDPO) in the Boston metropolitan region has used software to identify its highest-risk patients, or those most likely to be admitted to the hospital within the next 12 months. As part of the process, BIDPO officials asked doctors to validate the results based on their own patient records and observations.

The ACO has hired nurse practitioners through a company called INSPIRIS Massachusetts to visit its sickest and frailest Medicare beneficiaries at home to prevent hospital admissions and to avoid post-discharge readmissions among the highest-risk patients. BIDPO also uses nurse care managers to do telephone-based care management for less acute patients, and is asking emergency department staff to recognize patients who could be sent home safely with appropriate care rather than be admitted. Patients with cellulitis, for example, could be treated via IV antibiotic therapy at home, a service made possible through a collaboration with a home infusion company.

Dr. Parker, BIDPO’s medical director, says hospitalists will be key to understanding the need for excellent inpatient care and thoughtful, comprehensive discharge planning that helps avoid adverse events post-discharge.

Success as an ACO likely won’t come from any one strategy, but from many. Christopher Kim, MD, MBA, SFHM, a hospitalist and associate professor of internal medicine at the University of Michigan, says the Michigan Pioneer ACO serving roughly 20,000 beneficiaries in the state’s southeastern region has benefited greatly from a variety of pre-existing relationships and initiatives. The university’s medical center, one of 10 participants in a Medicare ACO precursor called the Physician Group Practice demonstration project, was among the few sites to successfully meet the requirements and gain the full cost savings benefits in all five years.

The newer ACO, which officially launched in January 2012, pairs the university’s Faculty Group Practice with Integrated Health Associates Inc. (IHA), a large multispecialty private-practice group. Many IHA providers already had access to the university’s electronic health records so they could track admitted patients. One preliminary collaborative effort between the two entities hinted at a trend toward lower readmission rates among a small group of patients who were seen by a primary-care provider within seven days of a hospital discharge, underscoring the importance of a smooth transition.

Providers also have been able to tap into statewide initiatives aimed at improving quality and care coordination in key areas, such as cardiovascular disease, cancer, and hospital care transitions (sponsored by Blue Cross Blue Shield of Michigan).

“These programs helped physician organizations and hospitals throughout the state become familiar with best practices related to these kinds of conditions,” Dr. Kim says, “and I think partly because of that, we were very prepared to work on a quality-improvement initiative such as this while also improving efficiency.”

Listen to Dr. Kim discuss the added responsibility hospitalists in ACOs like the one formed between the university faculty and a large multi-specialty practice called Integrated Health Associates, Inc.

For stratifying beneficiaries by risk, the ACO has benefited from a separate initiative called the Michigan Primary Care Transformation Project, which uses the concept of a pyramid to classify increasingly complicated patients. A complex-case manager, typically an advanced practice nurse, acts as the point person for guiding patients in the upper half of the pyramid toward the best resources while preventing unnecessary duplication of tasks or consultation referrals. Optimal coordination means that hospitalists need to communicate effectively with these managers as well as with other providers.

From Medicare claims supplied by CMS, Beth Israel Deaconess Physician Organization (BIDPO) in the Boston metropolitan region has used software to identify its highest-risk patients, or those most likely to be admitted to the hospital within the next 12 months. As part of the process, BIDPO officials asked doctors to validate the results based on their own patient records and observations.

The ACO has hired nurse practitioners through a company called INSPIRIS Massachusetts to visit its sickest and frailest Medicare beneficiaries at home to prevent hospital admissions and to avoid post-discharge readmissions among the highest-risk patients. BIDPO also uses nurse care managers to do telephone-based care management for less acute patients, and is asking emergency department staff to recognize patients who could be sent home safely with appropriate care rather than be admitted. Patients with cellulitis, for example, could be treated via IV antibiotic therapy at home, a service made possible through a collaboration with a home infusion company.

Dr. Parker, BIDPO’s medical director, says hospitalists will be key to understanding the need for excellent inpatient care and thoughtful, comprehensive discharge planning that helps avoid adverse events post-discharge.

click for large version

Throughout much of 2011, ambivalence plagued efforts by the Centers for Medicare & Medicaid Services (CMS) to expand the federal government’s reach into integrated care delivery to help improve patient outcomes while lowering costs. Critics panned the initial draft of regulations for a large accountable-care demonstration project called the Shared Savings Program, and prominent medical groups announced their intention to sit on the sidelines.

At the start of 2013, the atmosphere couldn’t be more different. CMS won over most of its critics with a well-received final version of the rules that provided more incentives for groups to form accountable-care organizations (ACOs), and the presidential election provided more clarity about the future of healthcare reform. Medical groups around the country are readily jumping on the ACO bandwagon, with its emphasis on shared responsibility among provider groups for a defined pool of patients.

Few medical groups have enough data to suggest whether their varied approaches to managing patient populations will lead to better-quality care that’s also more affordable; the first batch of Medicare ACO data isn’t expected until later this spring. And healthcare experts differ on which models and components are likely to make the biggest long-term impact; even the precise definition of an ACO remains a moving target. But industry observers say they’re surprised and encouraged not only by the speed with which the movement has taken off, but also by the breadth of models being investigated, the strong engagement of the private sector, and a spreading sense of cautious optimism.

“This is actually moving faster than I thought—faster than I think anybody thought,” says SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM.

Although CMS still is in the beginning stages of its work and has focused most of its efforts on reviewing applications and providing feedback on organizations’ historical expenditure and utilization patterns, agency officials say the ACO initiative has not encountered any unexpected setbacks. “As with any new program, there are bumps along the way, but I don’t think we’ve experienced anything that is out of the ordinary,” says John Pilotte, director of Performance-Based Payment Policy in the Center for Medicare. “We’re pretty happy with where we are with the program.”

The Shared Savings Program, which Pilotte describes as “an easier on-ramp” to population management for providers and offers low financial risk in exchange for a modest level of shared cost savings, is proving especially popular. Combined, several hundred organizations submitted applications for the program’s second and third rounds, which began July 1, 2012, and Jan. 1, 2013, respectively.

“Two hundred twenty ACOs are currently up and running, and we expect to continue to add ACOs to the program annually,” Pilotte says.

Last January, another 32 groups joined Medicare’s Pioneer ACO program, designed for more experienced organizations with more resources. The groups assume more risk, and in return are more handsomely rewarded if they meet benchmarks.

All told, the tally of confirmed ACOs in the U.S. reached 428 by the end of January, according to Leavitt Partners, a Salt Lake City-based healthcare consulting firm that is tracking the growth of accountable care (see “A Sampling of Significant ACO Programs,” below). David Muhlestein, an analyst with Leavitt Partners, says private ACOs now account for roughly half of that total, a trend driven by their ability to experiment with different approaches and more easily track costs through clearly defined patient populations.

 

The central role for hospitalists within most ACOs is rooted in the reality that hospital care is the most expensive part of healthcare. Successfully implementing a plan to coordinate care and prevent hospital readmissions might not correlate directly with improved quality metrics, but it can lead to significant savings.

The diverse ACO models now being tested, however, could result in varying responsibilities for hospitalists, depending on the focal points of the sponsoring entities. After patients have been admitted to a hospital, for example, many hospitalists assume responsibility for managing inpatient care and the inpatient-outpatient handoff. A main goal of a physician-owned medical group, such as an independent practice association (IPA), by contrast, is to keep patients out of the hospital altogether, placing more of the focus on primary and specialty care. An IPA that forms an ACO, Muhlestein says, might hire its own hospitalists to monitor the care of patients in affiliated hospitals while using the association’s approach to limiting costs.

ACO participants also have varied widely in the effort expended to get up to speed. “Some people have said they haven’t had to make any major changes to their organization, while some people have had to drastically think how they provide care,” Muhlestein says. In general, many of the former have had the luxury of working within relatively integrated facilities and building upon existing frameworks, whereas many of the latter previously toiled away in silos and are now scrambling to establish more cohesive working relationships from scratch.

Optimism Abounds

Though many ACOs have only limited data so far, Muhlestein says most are generally optimistic that their early results will be positive. Even so, Dr. Greeno says, he fully expects the Pioneer ACOs to produce the best results among the Medicare demonstration projects. Those organizations already have successful track records in managing patient populations, and the Pioneer model’s incentives are stronger because the groups are assuming more risk. If the Pioneer ACO results are eclipsed by those of the Shared Savings Program, he says, “I’d fall out of my chair.”

The Beth Israel Deaconess Physician Organization (BIDPO) now has four global payment contracts, including its Pioneer ACO arrangement with CMS that serves 33,000 beneficiaries in the Boston metropolitan region. “The decision-making around joining was a recognition that the fee-for-service model is highly dysfunctional,” says Richard Parker, MD, BIDPO’s medical director. “Our organization and our leadership believed that most of the country, both private payor and governmental payor, would be moving toward global payment and that it would be to our advantage to get in early.”

Despite the complicated rollout and delays in receiving Medicare data on patients from CMS, Dr. Parker says, the feedback from both providers and patients has been mostly positive. “I would say, anecdotally, that the doctors seem appreciative that we’re trying to fix some of these gaps in care that we all know have existed for some time,” he says. “And, anecdotally from the patients, we get appreciation that we’re trying to take better care of them.”

Chris Coleman, chief financial officer for Phoenix-based Banner Health Network, another Pioneer ACO participant, says the project fits in well with his company’s decision “to transform itself into more of a value-based, performance-based provider.” Banner’s ACO, which serves about 50,000 beneficiaries, is still setting up needed systems, including a consistent platform for electronic medical records throughout the entire provider network. Even during the building phase, however, Coleman says company officials have been pleasantly surprised by the ACO’s positive effect on utilization, patient care, and apparent savings.

 

Although the company has only a partial year of Medicare claims to go by, Coleman says the data look “pretty good” so far and suggest the ACO is on track for modest savings of perhaps 3% or 4%. Like BIDPO, Banner has other shared-risk agreements in place, including one for a Medicare Advantage population and another with a private payor. So far, Coleman says, those arrangements also seem to be “performing positively.”

Dr. Greeno and other experts see the best ACO results coming from such rapidly growing private arrangements, and early published data have been generally encouraging.¹ The ability to more narrowly define patient groups and assume more control over payments, he says, has allowed private ACOs to keep better track of costs and implement innovative population health interventions.

Built to Last?

Whether public, private, or a hybrid between the two, some ACOs are trying to manage the care of their entire patient pool and look at everything that might help them accrue cost savings. Others are focusing only on the sickest patients to reach their quality improvement (QI) and savings goals, and targeting specific parameters, such as blood pressure or medication adherence, for patients with myocardial infarction.

Joane Goodroe, an Atlanta-based healthcare consultant, favors the latter approach, at least for new ACOs. Goodroe recommends adopting a streamlined strategy that will get an ACO up and running, then allow the group to gradually add to it, rather than waiting until all of the right pieces fall into place. Her own data analysis of Medicare patients, for example, suggests that a diabetic who’s been an inpatient can average $50,000 in yearly costs, compared with $2,400 for a diabetic who has never been admitted to a hospital.

Setting up a system to manage every diabetic patient from the start, she says, would require too much time and money. “If you try to build the perfect ACO structure, it’s going to be too expensive for the results you initially get back,” she says, making it seem like the ACO is an unsustainable failure. “You’ve got to figure out how to build a cost-effective infrastructure while you’re also improving the care of the patients, and the best place to go is to target your sickest patients first.”

CMS’ Advance Payment ACO Model is designed to help by providing upfront payments to smaller ACO organizations that might lack capital, giving them an advance on potential shared savings so they can install the infrastructure and support structures necessary to redesign care.

To maximize the overall chances of success, Dr. Parker says, ACO leadership should be fully engaged, and each organization should have enough resources to address its own care management and information technology needs. “My goal as medical director is to improve the quality of care of the patients and, hopefully, also improve the working life of the doctors and staff,” he says. “And my belief and expectation is that if we do that, the cost of care will ultimately go down.”

---

Bryn Nelson is a freelance medical writer in Seattle.

Reference

1. Salmon RB, Sanderson MI, Walters BA, et al. Innovation profile: a collaborative accountable care model in three practices showed promising early results on costs and quality of care. Health Aff. 2012;31:2379-2387.

click for large version

Throughout much of 2011, ambivalence plagued efforts by the Centers for Medicare & Medicaid Services (CMS) to expand the federal government’s reach into integrated care delivery to help improve patient outcomes while lowering costs. Critics panned the initial draft of regulations for a large accountable-care demonstration project called the Shared Savings Program, and prominent medical groups announced their intention to sit on the sidelines.

At the start of 2013, the atmosphere couldn’t be more different. CMS won over most of its critics with a well-received final version of the rules that provided more incentives for groups to form accountable-care organizations (ACOs), and the presidential election provided more clarity about the future of healthcare reform. Medical groups around the country are readily jumping on the ACO bandwagon, with its emphasis on shared responsibility among provider groups for a defined pool of patients.

Few medical groups have enough data to suggest whether their varied approaches to managing patient populations will lead to better-quality care that’s also more affordable; the first batch of Medicare ACO data isn’t expected until later this spring. And healthcare experts differ on which models and components are likely to make the biggest long-term impact; even the precise definition of an ACO remains a moving target. But industry observers say they’re surprised and encouraged not only by the speed with which the movement has taken off, but also by the breadth of models being investigated, the strong engagement of the private sector, and a spreading sense of cautious optimism.

“This is actually moving faster than I thought—faster than I think anybody thought,” says SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM.

Although CMS still is in the beginning stages of its work and has focused most of its efforts on reviewing applications and providing feedback on organizations’ historical expenditure and utilization patterns, agency officials say the ACO initiative has not encountered any unexpected setbacks. “As with any new program, there are bumps along the way, but I don’t think we’ve experienced anything that is out of the ordinary,” says John Pilotte, director of Performance-Based Payment Policy in the Center for Medicare. “We’re pretty happy with where we are with the program.”

The Shared Savings Program, which Pilotte describes as “an easier on-ramp” to population management for providers and offers low financial risk in exchange for a modest level of shared cost savings, is proving especially popular. Combined, several hundred organizations submitted applications for the program’s second and third rounds, which began July 1, 2012, and Jan. 1, 2013, respectively.

“Two hundred twenty ACOs are currently up and running, and we expect to continue to add ACOs to the program annually,” Pilotte says.

Last January, another 32 groups joined Medicare’s Pioneer ACO program, designed for more experienced organizations with more resources. The groups assume more risk, and in return are more handsomely rewarded if they meet benchmarks.

All told, the tally of confirmed ACOs in the U.S. reached 428 by the end of January, according to Leavitt Partners, a Salt Lake City-based healthcare consulting firm that is tracking the growth of accountable care (see “A Sampling of Significant ACO Programs,” below). David Muhlestein, an analyst with Leavitt Partners, says private ACOs now account for roughly half of that total, a trend driven by their ability to experiment with different approaches and more easily track costs through clearly defined patient populations.

 

The central role for hospitalists within most ACOs is rooted in the reality that hospital care is the most expensive part of healthcare. Successfully implementing a plan to coordinate care and prevent hospital readmissions might not correlate directly with improved quality metrics, but it can lead to significant savings.

The diverse ACO models now being tested, however, could result in varying responsibilities for hospitalists, depending on the focal points of the sponsoring entities. After patients have been admitted to a hospital, for example, many hospitalists assume responsibility for managing inpatient care and the inpatient-outpatient handoff. A main goal of a physician-owned medical group, such as an independent practice association (IPA), by contrast, is to keep patients out of the hospital altogether, placing more of the focus on primary and specialty care. An IPA that forms an ACO, Muhlestein says, might hire its own hospitalists to monitor the care of patients in affiliated hospitals while using the association’s approach to limiting costs.

ACO participants also have varied widely in the effort expended to get up to speed. “Some people have said they haven’t had to make any major changes to their organization, while some people have had to drastically think how they provide care,” Muhlestein says. In general, many of the former have had the luxury of working within relatively integrated facilities and building upon existing frameworks, whereas many of the latter previously toiled away in silos and are now scrambling to establish more cohesive working relationships from scratch.

Optimism Abounds

Though many ACOs have only limited data so far, Muhlestein says most are generally optimistic that their early results will be positive. Even so, Dr. Greeno says, he fully expects the Pioneer ACOs to produce the best results among the Medicare demonstration projects. Those organizations already have successful track records in managing patient populations, and the Pioneer model’s incentives are stronger because the groups are assuming more risk. If the Pioneer ACO results are eclipsed by those of the Shared Savings Program, he says, “I’d fall out of my chair.”

The Beth Israel Deaconess Physician Organization (BIDPO) now has four global payment contracts, including its Pioneer ACO arrangement with CMS that serves 33,000 beneficiaries in the Boston metropolitan region. “The decision-making around joining was a recognition that the fee-for-service model is highly dysfunctional,” says Richard Parker, MD, BIDPO’s medical director. “Our organization and our leadership believed that most of the country, both private payor and governmental payor, would be moving toward global payment and that it would be to our advantage to get in early.”

Despite the complicated rollout and delays in receiving Medicare data on patients from CMS, Dr. Parker says, the feedback from both providers and patients has been mostly positive. “I would say, anecdotally, that the doctors seem appreciative that we’re trying to fix some of these gaps in care that we all know have existed for some time,” he says. “And, anecdotally from the patients, we get appreciation that we’re trying to take better care of them.”

Chris Coleman, chief financial officer for Phoenix-based Banner Health Network, another Pioneer ACO participant, says the project fits in well with his company’s decision “to transform itself into more of a value-based, performance-based provider.” Banner’s ACO, which serves about 50,000 beneficiaries, is still setting up needed systems, including a consistent platform for electronic medical records throughout the entire provider network. Even during the building phase, however, Coleman says company officials have been pleasantly surprised by the ACO’s positive effect on utilization, patient care, and apparent savings.

 

Although the company has only a partial year of Medicare claims to go by, Coleman says the data look “pretty good” so far and suggest the ACO is on track for modest savings of perhaps 3% or 4%. Like BIDPO, Banner has other shared-risk agreements in place, including one for a Medicare Advantage population and another with a private payor. So far, Coleman says, those arrangements also seem to be “performing positively.”

Dr. Greeno and other experts see the best ACO results coming from such rapidly growing private arrangements, and early published data have been generally encouraging.¹ The ability to more narrowly define patient groups and assume more control over payments, he says, has allowed private ACOs to keep better track of costs and implement innovative population health interventions.

Built to Last?

Whether public, private, or a hybrid between the two, some ACOs are trying to manage the care of their entire patient pool and look at everything that might help them accrue cost savings. Others are focusing only on the sickest patients to reach their quality improvement (QI) and savings goals, and targeting specific parameters, such as blood pressure or medication adherence, for patients with myocardial infarction.

Joane Goodroe, an Atlanta-based healthcare consultant, favors the latter approach, at least for new ACOs. Goodroe recommends adopting a streamlined strategy that will get an ACO up and running, then allow the group to gradually add to it, rather than waiting until all of the right pieces fall into place. Her own data analysis of Medicare patients, for example, suggests that a diabetic who’s been an inpatient can average $50,000 in yearly costs, compared with $2,400 for a diabetic who has never been admitted to a hospital.

Setting up a system to manage every diabetic patient from the start, she says, would require too much time and money. “If you try to build the perfect ACO structure, it’s going to be too expensive for the results you initially get back,” she says, making it seem like the ACO is an unsustainable failure. “You’ve got to figure out how to build a cost-effective infrastructure while you’re also improving the care of the patients, and the best place to go is to target your sickest patients first.”

CMS’ Advance Payment ACO Model is designed to help by providing upfront payments to smaller ACO organizations that might lack capital, giving them an advance on potential shared savings so they can install the infrastructure and support structures necessary to redesign care.

To maximize the overall chances of success, Dr. Parker says, ACO leadership should be fully engaged, and each organization should have enough resources to address its own care management and information technology needs. “My goal as medical director is to improve the quality of care of the patients and, hopefully, also improve the working life of the doctors and staff,” he says. “And my belief and expectation is that if we do that, the cost of care will ultimately go down.”

---

Bryn Nelson is a freelance medical writer in Seattle.

Reference

1. Salmon RB, Sanderson MI, Walters BA, et al. Innovation profile: a collaborative accountable care model in three practices showed promising early results on costs and quality of care. Health Aff. 2012;31:2379-2387.

click for large version

Throughout much of 2011, ambivalence plagued efforts by the Centers for Medicare & Medicaid Services (CMS) to expand the federal government’s reach into integrated care delivery to help improve patient outcomes while lowering costs. Critics panned the initial draft of regulations for a large accountable-care demonstration project called the Shared Savings Program, and prominent medical groups announced their intention to sit on the sidelines.

At the start of 2013, the atmosphere couldn’t be more different. CMS won over most of its critics with a well-received final version of the rules that provided more incentives for groups to form accountable-care organizations (ACOs), and the presidential election provided more clarity about the future of healthcare reform. Medical groups around the country are readily jumping on the ACO bandwagon, with its emphasis on shared responsibility among provider groups for a defined pool of patients.

Few medical groups have enough data to suggest whether their varied approaches to managing patient populations will lead to better-quality care that’s also more affordable; the first batch of Medicare ACO data isn’t expected until later this spring. And healthcare experts differ on which models and components are likely to make the biggest long-term impact; even the precise definition of an ACO remains a moving target. But industry observers say they’re surprised and encouraged not only by the speed with which the movement has taken off, but also by the breadth of models being investigated, the strong engagement of the private sector, and a spreading sense of cautious optimism.

“This is actually moving faster than I thought—faster than I think anybody thought,” says SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM.

Although CMS still is in the beginning stages of its work and has focused most of its efforts on reviewing applications and providing feedback on organizations’ historical expenditure and utilization patterns, agency officials say the ACO initiative has not encountered any unexpected setbacks. “As with any new program, there are bumps along the way, but I don’t think we’ve experienced anything that is out of the ordinary,” says John Pilotte, director of Performance-Based Payment Policy in the Center for Medicare. “We’re pretty happy with where we are with the program.”

The Shared Savings Program, which Pilotte describes as “an easier on-ramp” to population management for providers and offers low financial risk in exchange for a modest level of shared cost savings, is proving especially popular. Combined, several hundred organizations submitted applications for the program’s second and third rounds, which began July 1, 2012, and Jan. 1, 2013, respectively.

“Two hundred twenty ACOs are currently up and running, and we expect to continue to add ACOs to the program annually,” Pilotte says.

Last January, another 32 groups joined Medicare’s Pioneer ACO program, designed for more experienced organizations with more resources. The groups assume more risk, and in return are more handsomely rewarded if they meet benchmarks.

All told, the tally of confirmed ACOs in the U.S. reached 428 by the end of January, according to Leavitt Partners, a Salt Lake City-based healthcare consulting firm that is tracking the growth of accountable care (see “A Sampling of Significant ACO Programs,” below). David Muhlestein, an analyst with Leavitt Partners, says private ACOs now account for roughly half of that total, a trend driven by their ability to experiment with different approaches and more easily track costs through clearly defined patient populations.

 

The central role for hospitalists within most ACOs is rooted in the reality that hospital care is the most expensive part of healthcare. Successfully implementing a plan to coordinate care and prevent hospital readmissions might not correlate directly with improved quality metrics, but it can lead to significant savings.

The diverse ACO models now being tested, however, could result in varying responsibilities for hospitalists, depending on the focal points of the sponsoring entities. After patients have been admitted to a hospital, for example, many hospitalists assume responsibility for managing inpatient care and the inpatient-outpatient handoff. A main goal of a physician-owned medical group, such as an independent practice association (IPA), by contrast, is to keep patients out of the hospital altogether, placing more of the focus on primary and specialty care. An IPA that forms an ACO, Muhlestein says, might hire its own hospitalists to monitor the care of patients in affiliated hospitals while using the association’s approach to limiting costs.

ACO participants also have varied widely in the effort expended to get up to speed. “Some people have said they haven’t had to make any major changes to their organization, while some people have had to drastically think how they provide care,” Muhlestein says. In general, many of the former have had the luxury of working within relatively integrated facilities and building upon existing frameworks, whereas many of the latter previously toiled away in silos and are now scrambling to establish more cohesive working relationships from scratch.

Optimism Abounds

Though many ACOs have only limited data so far, Muhlestein says most are generally optimistic that their early results will be positive. Even so, Dr. Greeno says, he fully expects the Pioneer ACOs to produce the best results among the Medicare demonstration projects. Those organizations already have successful track records in managing patient populations, and the Pioneer model’s incentives are stronger because the groups are assuming more risk. If the Pioneer ACO results are eclipsed by those of the Shared Savings Program, he says, “I’d fall out of my chair.”

The Beth Israel Deaconess Physician Organization (BIDPO) now has four global payment contracts, including its Pioneer ACO arrangement with CMS that serves 33,000 beneficiaries in the Boston metropolitan region. “The decision-making around joining was a recognition that the fee-for-service model is highly dysfunctional,” says Richard Parker, MD, BIDPO’s medical director. “Our organization and our leadership believed that most of the country, both private payor and governmental payor, would be moving toward global payment and that it would be to our advantage to get in early.”

Despite the complicated rollout and delays in receiving Medicare data on patients from CMS, Dr. Parker says, the feedback from both providers and patients has been mostly positive. “I would say, anecdotally, that the doctors seem appreciative that we’re trying to fix some of these gaps in care that we all know have existed for some time,” he says. “And, anecdotally from the patients, we get appreciation that we’re trying to take better care of them.”

Chris Coleman, chief financial officer for Phoenix-based Banner Health Network, another Pioneer ACO participant, says the project fits in well with his company’s decision “to transform itself into more of a value-based, performance-based provider.” Banner’s ACO, which serves about 50,000 beneficiaries, is still setting up needed systems, including a consistent platform for electronic medical records throughout the entire provider network. Even during the building phase, however, Coleman says company officials have been pleasantly surprised by the ACO’s positive effect on utilization, patient care, and apparent savings.

 

Although the company has only a partial year of Medicare claims to go by, Coleman says the data look “pretty good” so far and suggest the ACO is on track for modest savings of perhaps 3% or 4%. Like BIDPO, Banner has other shared-risk agreements in place, including one for a Medicare Advantage population and another with a private payor. So far, Coleman says, those arrangements also seem to be “performing positively.”

Dr. Greeno and other experts see the best ACO results coming from such rapidly growing private arrangements, and early published data have been generally encouraging.¹ The ability to more narrowly define patient groups and assume more control over payments, he says, has allowed private ACOs to keep better track of costs and implement innovative population health interventions.

Built to Last?

Whether public, private, or a hybrid between the two, some ACOs are trying to manage the care of their entire patient pool and look at everything that might help them accrue cost savings. Others are focusing only on the sickest patients to reach their quality improvement (QI) and savings goals, and targeting specific parameters, such as blood pressure or medication adherence, for patients with myocardial infarction.

Joane Goodroe, an Atlanta-based healthcare consultant, favors the latter approach, at least for new ACOs. Goodroe recommends adopting a streamlined strategy that will get an ACO up and running, then allow the group to gradually add to it, rather than waiting until all of the right pieces fall into place. Her own data analysis of Medicare patients, for example, suggests that a diabetic who’s been an inpatient can average $50,000 in yearly costs, compared with $2,400 for a diabetic who has never been admitted to a hospital.

Setting up a system to manage every diabetic patient from the start, she says, would require too much time and money. “If you try to build the perfect ACO structure, it’s going to be too expensive for the results you initially get back,” she says, making it seem like the ACO is an unsustainable failure. “You’ve got to figure out how to build a cost-effective infrastructure while you’re also improving the care of the patients, and the best place to go is to target your sickest patients first.”

CMS’ Advance Payment ACO Model is designed to help by providing upfront payments to smaller ACO organizations that might lack capital, giving them an advance on potential shared savings so they can install the infrastructure and support structures necessary to redesign care.

To maximize the overall chances of success, Dr. Parker says, ACO leadership should be fully engaged, and each organization should have enough resources to address its own care management and information technology needs. “My goal as medical director is to improve the quality of care of the patients and, hopefully, also improve the working life of the doctors and staff,” he says. “And my belief and expectation is that if we do that, the cost of care will ultimately go down.”

---

Bryn Nelson is a freelance medical writer in Seattle.

Reference

1. Salmon RB, Sanderson MI, Walters BA, et al. Innovation profile: a collaborative accountable care model in three practices showed promising early results on costs and quality of care. Health Aff. 2012;31:2379-2387.

Experts disagree on what a sustainable accountable-care organization (ACO) will look like in the future. The shared savings model currently dominates the ACO landscape, but David Muhlestein, an analyst with Washington, D.C.-based healthcare consulting firm Leavitt Partners, says his firm’s interviews with participants suggest that very few see the approach as the best long-term answer. Some believe those capitated models of the 1990s—the much-despised HMOs with their narrowly defined networks and global payments to provider groups—could make a comeback in a slightly altered form. Others feel strongly that a bundled payment model, which provides more flexibility in where patients can go for care, will instead dominate. A few providers have even suggested that the shared savings experiment will eventually revert back to a fee-for-service approach.

SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM, says bundled payments and shared savings alone are unlikely to deliver optimal value within the integrated care structure.

“There’s just not enough incentive, and the organization that’s taking risk doesn’t have enough flexibility in terms of how they use resources,” says Dr. Greeno, chief medical officer of Cogent HMG. The real improvements, Dr. Greeno says, might not come until ACOs assume a more capitated structure in which they accept global risk and are given unfettered freedom in how they allocate payments. In the meantime, he says, Medicare could be simply trying to encourage organizations “to start dipping their toe in the water of integrated care.”

John Pilotte, director of performance-based payment policy in the Center for Medicare at CMS, agreed that one major aim of its Shared Savings Program is to provide a “new avenue for providers to work together to better coordinate care for Medicare fee-for-service beneficiaries, and to move away from volume-based incentives and to recognize and reward them for improving the quality and efficiency and effectiveness of the care they deliver.”

Muhlestein says his firm has spoken with many organizations that are carefully monitoring how the current ACOs are faring. “Right now, the ACOs that have formed are people who want to forge their own trail,” he says. “There are many more providers that want to follow some path, and they want to follow a path that has some evidence that it has been successful.”

The more paths that are taken, he says, the greater the likelihood that one or more will achieve success. And although healthcare analysts often talk about success in terms of controlling costs, Muhlestein says, quality improvement (QI) and better outcomes alone could prove alluring to would-be ACOs.

“Even if we don’t see a moderation in cost growth, but we do see an improvement in quality, there is the chance that the model could still stick around, because that’s enough,” he says. “Even if we’re paying the same amount, we’re getting better results, so our value has improved.”

Regardless of how the ACO experiment plays out, Dr. Greeno says, it represents a fundamental shift toward a more integrated, pay-for-performance healthcare system that will not be optional for providers in the near future.

“Everyone is going to be asked to perform at a higher level, and there’s going to be tremendous pressure on hospitalists to lead that performance,” he says. “My advice would be to embrace it—it’s a great opportunity to bring value to the healthcare system.” TH

 

 Bryn Nelson is a freelance medical writer in Seattle.

 

Experts disagree on what a sustainable accountable-care organization (ACO) will look like in the future. The shared savings model currently dominates the ACO landscape, but David Muhlestein, an analyst with Washington, D.C.-based healthcare consulting firm Leavitt Partners, says his firm’s interviews with participants suggest that very few see the approach as the best long-term answer. Some believe those capitated models of the 1990s—the much-despised HMOs with their narrowly defined networks and global payments to provider groups—could make a comeback in a slightly altered form. Others feel strongly that a bundled payment model, which provides more flexibility in where patients can go for care, will instead dominate. A few providers have even suggested that the shared savings experiment will eventually revert back to a fee-for-service approach.

SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM, says bundled payments and shared savings alone are unlikely to deliver optimal value within the integrated care structure.

“There’s just not enough incentive, and the organization that’s taking risk doesn’t have enough flexibility in terms of how they use resources,” says Dr. Greeno, chief medical officer of Cogent HMG. The real improvements, Dr. Greeno says, might not come until ACOs assume a more capitated structure in which they accept global risk and are given unfettered freedom in how they allocate payments. In the meantime, he says, Medicare could be simply trying to encourage organizations “to start dipping their toe in the water of integrated care.”

John Pilotte, director of performance-based payment policy in the Center for Medicare at CMS, agreed that one major aim of its Shared Savings Program is to provide a “new avenue for providers to work together to better coordinate care for Medicare fee-for-service beneficiaries, and to move away from volume-based incentives and to recognize and reward them for improving the quality and efficiency and effectiveness of the care they deliver.”

Muhlestein says his firm has spoken with many organizations that are carefully monitoring how the current ACOs are faring. “Right now, the ACOs that have formed are people who want to forge their own trail,” he says. “There are many more providers that want to follow some path, and they want to follow a path that has some evidence that it has been successful.”

The more paths that are taken, he says, the greater the likelihood that one or more will achieve success. And although healthcare analysts often talk about success in terms of controlling costs, Muhlestein says, quality improvement (QI) and better outcomes alone could prove alluring to would-be ACOs.

“Even if we don’t see a moderation in cost growth, but we do see an improvement in quality, there is the chance that the model could still stick around, because that’s enough,” he says. “Even if we’re paying the same amount, we’re getting better results, so our value has improved.”

Regardless of how the ACO experiment plays out, Dr. Greeno says, it represents a fundamental shift toward a more integrated, pay-for-performance healthcare system that will not be optional for providers in the near future.

“Everyone is going to be asked to perform at a higher level, and there’s going to be tremendous pressure on hospitalists to lead that performance,” he says. “My advice would be to embrace it—it’s a great opportunity to bring value to the healthcare system.” TH

 

 Bryn Nelson is a freelance medical writer in Seattle.

 

Experts disagree on what a sustainable accountable-care organization (ACO) will look like in the future. The shared savings model currently dominates the ACO landscape, but David Muhlestein, an analyst with Washington, D.C.-based healthcare consulting firm Leavitt Partners, says his firm’s interviews with participants suggest that very few see the approach as the best long-term answer. Some believe those capitated models of the 1990s—the much-despised HMOs with their narrowly defined networks and global payments to provider groups—could make a comeback in a slightly altered form. Others feel strongly that a bundled payment model, which provides more flexibility in where patients can go for care, will instead dominate. A few providers have even suggested that the shared savings experiment will eventually revert back to a fee-for-service approach.

SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM, says bundled payments and shared savings alone are unlikely to deliver optimal value within the integrated care structure.

“There’s just not enough incentive, and the organization that’s taking risk doesn’t have enough flexibility in terms of how they use resources,” says Dr. Greeno, chief medical officer of Cogent HMG. The real improvements, Dr. Greeno says, might not come until ACOs assume a more capitated structure in which they accept global risk and are given unfettered freedom in how they allocate payments. In the meantime, he says, Medicare could be simply trying to encourage organizations “to start dipping their toe in the water of integrated care.”

John Pilotte, director of performance-based payment policy in the Center for Medicare at CMS, agreed that one major aim of its Shared Savings Program is to provide a “new avenue for providers to work together to better coordinate care for Medicare fee-for-service beneficiaries, and to move away from volume-based incentives and to recognize and reward them for improving the quality and efficiency and effectiveness of the care they deliver.”

Muhlestein says his firm has spoken with many organizations that are carefully monitoring how the current ACOs are faring. “Right now, the ACOs that have formed are people who want to forge their own trail,” he says. “There are many more providers that want to follow some path, and they want to follow a path that has some evidence that it has been successful.”

The more paths that are taken, he says, the greater the likelihood that one or more will achieve success. And although healthcare analysts often talk about success in terms of controlling costs, Muhlestein says, quality improvement (QI) and better outcomes alone could prove alluring to would-be ACOs.

“Even if we don’t see a moderation in cost growth, but we do see an improvement in quality, there is the chance that the model could still stick around, because that’s enough,” he says. “Even if we’re paying the same amount, we’re getting better results, so our value has improved.”

Regardless of how the ACO experiment plays out, Dr. Greeno says, it represents a fundamental shift toward a more integrated, pay-for-performance healthcare system that will not be optional for providers in the near future.

“Everyone is going to be asked to perform at a higher level, and there’s going to be tremendous pressure on hospitalists to lead that performance,” he says. “My advice would be to embrace it—it’s a great opportunity to bring value to the healthcare system.” TH

 

 Bryn Nelson is a freelance medical writer in Seattle.

 

Click here to listen to Dr. Wright

Click here to listen to Dr. Wright

Click here to listen to Dr. Wright

Engage

For hospitalists, the first order of business should be ensuring that your group is participating in the Physician Quality Reporting System (PQRS) and receiving the current 0.5% participation bonus (in some cases, that may require an electronic billing system add-on that adds the necessary PQRS codes to claims). If not, you could be leaving an estimated $800 in reporting incentives per hospitalist on the table. Once the PQRS penalty phase begins in 2015, your group could lose 1.5% of CMS reimbursements. Eventually, failure to engage will spur an additional 1% penalty through the Value-Based Payment Modifier (VBPM).

Respond

SHM’s early feedback to CMS was based in part on a problematic Quality and Resource Use Report (QRUR) brought to the society’s attention by a member hospitalist. Dr. Torcson says SHM carefully reviewed that report to register its concerns about proper attribution, fair comparisons, relevant metrics, and other issues. In turn, CMS signaled its appreciation of SHM’s due diligence and has indicated a willingness to work with SHM to address its concerns. The lesson is that a constructive, collaborative process was eased by the willingness of an SHM member to help the society develop a thoughtful and thorough response—one that is more likely to yield sought-after changes by federal officials. “CMS reacts much better to physician groups that are willing to collaborate with them versus the ones that just want to deny, deny, deny that changes are coming,” Dr. Whitcomb says.

Communicate

CMS has indicated that lack of communication among individual physicians and groups won’t excuse anyone from the PQRS and VBPM programs. Hospitalists clearly have an advantage here, and experts say a continued focus on collaborative teamwork and making sure providers are on the same page could help ensure that everyone is making the necessary improvements in care. To keep the conversation going, initiate and take part in online discussions with fellow HM providers via the advocacy and public policy community of SHM’s Hospital Medical Exchange.

Plan

Which PQRS measures are most applicable to you and your colleagues? Make sure you review the final rules and develop a plan for how to address the performance measures that you can control, either directly or indirectly. For group practices with 100 or more eligible providers, the first performance year for the VBPM program begins Jan. 1.

Engage

For hospitalists, the first order of business should be ensuring that your group is participating in the Physician Quality Reporting System (PQRS) and receiving the current 0.5% participation bonus (in some cases, that may require an electronic billing system add-on that adds the necessary PQRS codes to claims). If not, you could be leaving an estimated $800 in reporting incentives per hospitalist on the table. Once the PQRS penalty phase begins in 2015, your group could lose 1.5% of CMS reimbursements. Eventually, failure to engage will spur an additional 1% penalty through the Value-Based Payment Modifier (VBPM).

Respond

SHM’s early feedback to CMS was based in part on a problematic Quality and Resource Use Report (QRUR) brought to the society’s attention by a member hospitalist. Dr. Torcson says SHM carefully reviewed that report to register its concerns about proper attribution, fair comparisons, relevant metrics, and other issues. In turn, CMS signaled its appreciation of SHM’s due diligence and has indicated a willingness to work with SHM to address its concerns. The lesson is that a constructive, collaborative process was eased by the willingness of an SHM member to help the society develop a thoughtful and thorough response—one that is more likely to yield sought-after changes by federal officials. “CMS reacts much better to physician groups that are willing to collaborate with them versus the ones that just want to deny, deny, deny that changes are coming,” Dr. Whitcomb says.

Communicate

CMS has indicated that lack of communication among individual physicians and groups won’t excuse anyone from the PQRS and VBPM programs. Hospitalists clearly have an advantage here, and experts say a continued focus on collaborative teamwork and making sure providers are on the same page could help ensure that everyone is making the necessary improvements in care. To keep the conversation going, initiate and take part in online discussions with fellow HM providers via the advocacy and public policy community of SHM’s Hospital Medical Exchange.

Plan

Which PQRS measures are most applicable to you and your colleagues? Make sure you review the final rules and develop a plan for how to address the performance measures that you can control, either directly or indirectly. For group practices with 100 or more eligible providers, the first performance year for the VBPM program begins Jan. 1.

Engage

For hospitalists, the first order of business should be ensuring that your group is participating in the Physician Quality Reporting System (PQRS) and receiving the current 0.5% participation bonus (in some cases, that may require an electronic billing system add-on that adds the necessary PQRS codes to claims). If not, you could be leaving an estimated $800 in reporting incentives per hospitalist on the table. Once the PQRS penalty phase begins in 2015, your group could lose 1.5% of CMS reimbursements. Eventually, failure to engage will spur an additional 1% penalty through the Value-Based Payment Modifier (VBPM).

Respond

SHM’s early feedback to CMS was based in part on a problematic Quality and Resource Use Report (QRUR) brought to the society’s attention by a member hospitalist. Dr. Torcson says SHM carefully reviewed that report to register its concerns about proper attribution, fair comparisons, relevant metrics, and other issues. In turn, CMS signaled its appreciation of SHM’s due diligence and has indicated a willingness to work with SHM to address its concerns. The lesson is that a constructive, collaborative process was eased by the willingness of an SHM member to help the society develop a thoughtful and thorough response—one that is more likely to yield sought-after changes by federal officials. “CMS reacts much better to physician groups that are willing to collaborate with them versus the ones that just want to deny, deny, deny that changes are coming,” Dr. Whitcomb says.

Communicate

CMS has indicated that lack of communication among individual physicians and groups won’t excuse anyone from the PQRS and VBPM programs. Hospitalists clearly have an advantage here, and experts say a continued focus on collaborative teamwork and making sure providers are on the same page could help ensure that everyone is making the necessary improvements in care. To keep the conversation going, initiate and take part in online discussions with fellow HM providers via the advocacy and public policy community of SHM’s Hospital Medical Exchange.

Plan

Which PQRS measures are most applicable to you and your colleagues? Make sure you review the final rules and develop a plan for how to address the performance measures that you can control, either directly or indirectly. For group practices with 100 or more eligible providers, the first performance year for the VBPM program begins Jan. 1.

Russell Cowles III, MD, lead hospitalist at Bergan Mercy Medical Center in Omaha, Neb., recalls the shock on the faces of hospitalists who attended his presentation to SHM’s Nebraska Area chapter meeting last spring. Dr. Cowles and co-presenter Eric Rice, MD, MMM, SFHM, chapter president and assistant medical director of Alegent Creighton Hospital Medicine Services, were introducing their fellow hospitalists to a forthcoming Medicare initiative called the Physician Feedback/Value-Based Payment Modifier (VBPM) program.

“And everyone in the audience was completely stunned,” Dr. Cowles says. “They had never even dreamed that any of this would come down to the physician level.”

They’re not alone.

“Unless you work in administration or you’re leading a group, I don’t think very many people know this exists,” Dr. Cowles says. “Your average practicing physician, I think, has no clue that this measurement is going on behind the scenes.”

Authorized by the Affordable Care Act, the budget-neutral scheme ties future Medicare reimbursements to measures of quality and efficiency, and grades physicians on a curve. The Physician Quality Reporting System (PQRS), in place since 2007, forms the foundation of the new program, with feedback arriving in the form of a Quality and Resource Use Report (QRUR), a confidential report card sent to providers. The VBPM program then uses those reports as the basis for a financial reward or penalty.

In principle, SHM and hospitalist leaders have supported the concept of quality measurements as a way to hold doctors more accountable and to help the Centers for Medicare & Medicaid Services (CMS) take a more proactive role in improving quality of care while containing costs. And, in theory, HM leaders say hospitalists might be better able to adapt to the added responsibility of performance measurement and reporting due to their central role in the like-minded hospital value-based purchasing (VBP) program that began Oct. 1.

“If the expectation is that we will be involved in some of these initiatives and help the hospitals gain revenue, now we can actually see some dollars for those efforts,” says Julia Wright, MD, SFHM, FACP, president of the MidAtlantic Business Unit for Brentwood, Tenn.-based Cogent HMG. But the inverse is also true: If hospitals are going to have dollars at risk for performance, she says, CMS believes physicians should share in that risk as the providers of healthcare.

On that score, Dr. Rice says, hospitalists might have an advantage due to their focus on teamwork and their role in transitioning patients between inpatient and outpatient settings. In fact, he sees the VBPM as an “enormous opportunity” for hospitalists to demonstrate their leadership in helping to shape how organizations and institutions adapt to a quickly evolving healthcare environment.

But first, hospitalists will need to fully engage. In 2010, CMS found that only about 1 in 4 eligible physicians were participating in the voluntary PQRS and earning a reporting bonus of what is now 0.5% of allowable Medicare charges (roughly $800 for the average hospitalist). The stakes will grow when the PQRS transforms into a negative incentive program in 2015, with a 1.5% penalty for doctors who do not meet its reporting requirements. In 2016 and thereafter, the assessed penalty grows to 2% (about $3,200 for the average hospitalist).

“I think the unfolding timeline has really provided the potential for lulling us into complacency and procrastination,” says Patrick Torcson, MD, MMM, FACP, SFHM, director of hospital medicine at St. Tammany Parish Hospital in Covington, La., and chair of SHM’s Performance Measurement and Reporting Committee.

According to CMS, “physician groups can avoid all negative adjustments simply by participating in the PQRS.” Nonparticipants, however, could get hit with a double whammy. With no quality data, CMS would have no way to assess groups’ performances and would automatically deduct an extra 1% of Medicare reimbursements under the VBPM program. For groups of 100 eligible providers or more, that combined PQRS-VBPM penalty could amount to 2.5% in 2015.

 

PQRS participants have more leeway and a smaller downside. Starting January 2015, eligible provider groups who meet the reporting requirements can choose either to have no adjustments at all or to compete in the VBPM program for a performance-based bonus or a penalty of 1%, based on cost and quality scores. In January 2017, the program is expected to expand to include all providers, whether in individual or group practice.

A Measure of Relevance

Based on the first QRURs, sent out in March 2012 to providers in four pilot states, SHM wrote a letter to CMS that offered a detailed analysis of several additional concerns. The society followed up with a second letter that provided a more expansive critique of the proposed 2013 Physician Fee Schedule.

One worry is whether the physician feedback/VBPM program has included enough performance measures that are relevant to hospitalists. A Public Policy column in The Hospitalist (“Metric Accountability,” November 2012, p. 18) counted only 10 PQRS measures that apply routinely to HM providers out of a list of more than 200. Even those 10 aren’t always applicable.

“I work at a teaching hospital that’s large enough to have a neurology program, so most acute-stroke patients are admitted by the neurologists,” says Gregory Seymann, MD, SFHM, chief of the division of hospital medicine at the University of California at San Diego and a member of SHM’s Performance Measurement and Reporting Committee. “Five of the 10 measures are related to stroke patients, but my group rarely admits stroke patients.” That means only five PQRS measures remain relevant to him.

On paper, the issue might be readily resolved by expanding the number of measures to better reflect HM responsibilities—such as four measures proposed by SHM that relate to transitions of care and medication reconciliation.

Other groups, though, have their own ideas. A letter to CMS signed by 28 patient and healthcare payor groups calls for the elimination of almost two dozen PQRS measures deemed unnecessary, duplicative, or uninformative, and for the addition of nine others that might better assess patient outcomes and quality of care. Jennifer Eames Huff, director of the Consumer-Purchaser Disclosure Project at San Francisco-based Pacific Business Group on Health, one of the letter’s signatories, says some of those potential measures might be more applicable to hospitalists as well.

But therein lies the rub. Although process measures might not always be strong indicators of quality of care, the introduction of outcome measures often makes providers nervous, says Gary Young, JD, PhD, director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston. “Most providers feel that their patients are sicker and more vulnerable to poorer outcomes, and they don’t want to be judged poorly because they have sicker patients,” he says. Reaching an agreement on the best collection of measures may require some intense negotiations, he says.

Fairer Comparisons

Dr. Cowles cites two de-identified QRURs received by Alegent Creighton Health back in March—one for a hospitalist and one for an office-based general internist—to illustrate another major concern shared by many HM providers. The reports broke down each doctor’s relative healthcare contributions, using predetermined percentages of the total care and costs to conclude whether that doctor directed, influenced, or contributed to a patient’s care.

 

Hospitalists, by the nature of their jobs, seldom direct the care of any patient. But because their influence or contribution is almost always within the inpatient environment, HM providers account for proportionately higher costs than office-based physicians. The result can be a rather ugly curve: For healthcare costs incurred, the general internist was at the 65th percentile, while the hospitalist was at the 96th percentile.

The point, Dr. Cowles says, is that hospitalists and clinic-based physicians see patients with remarkably different acuities. “We just need to make sure that we’re comparing apples to apples, that you’re going to compare someone who sees a high-acuity patient with someone else who sees a high-acuity patient,” he says.

One silver lining could be increased momentum toward establishing HM as its own Medicare-recognized specialty. Hospitalist leaders who say the process is likely to be difficult but not impossible cite the successful effort to win recognition of HM as a focused practice by the American Board of Internal Medicine.

“We’re going to have to think outside the box in terms of working toward an identifier for hospitalists,” says Win Whitcomb, MD, MHM, medical director of healthcare quality at Baystate Medical Center in Springfield, Mass., and a member of SHM’s Performance and Measurement Reporting Committee. “But that’s going to happen—it’s not a matter of if, it’s a matter of when and how.”

As one potential interim solution, SHM has suggested a self-identification designation by which hospitalists would distinguish themselves from the larger, general internal-medicine category and thereby avoid unfair comparisons.

A Question of Attribution

Of the concerns raised by SHM, the question of attribution might be among the thorniest. Dr. Young says the “big-time issue” is pitting many consumer groups, payors, and employers against healthcare providers. The consumer groups want accountability at the individual provider level, while the providers strongly prefer group accountability, setting up a major clash over how responsibility will be parceled out.

Hospitalists have been taught to embrace responsibility while viewing healthcare delivery as a team sport. And the contributions of individual HM providers aren’t easily untangled. “If somebody has a bad outcome and they’ve been under the care of three different hospitalists, it’s virtually impossible to attribute that outcome to one of those three hospitalists,” Dr. Whitcomb says. “We really need to think about attribution differently, and it’s going to need to be across groups of hospitalists.”

SHM has suggested that CMS include an option for group rather than individual evaluation. “You’re just making it explicit that you can’t assign some of these measures to individual physicians. We can assign some of these measures to groups,” Dr. Whitcomb says.

In its 2013 Medicare Physician Fee Schedule final rule, CMS opted to alter the doctor comparison methodology used for upcoming QRURs and the 2015 application of the VBPM. The agency also agreed to consider hospitalists’ concerns about fair attribution, relevant measures, and proper designation as it develops future proposals. Regardless of how those issues are ironed out, Dr. Torcson says, it’s clear to him that sitting on the sidelines is no longer an option for any physician group. Nor is it acceptable “to say this won’t work for me. We’re having to come up with proactive proposals for what will work to be part of the CMS quality agenda.”

 

SHM’s thorough analysis and realistic feedback, he says, has been well received by Medicare officials, raising hopes that many of the remaining differences can be resolved. “I am very confident that self-reporting or self-nomination as a hospitalist is going to be in place by the time those negative incentives kick in,” Dr. Torcson says. “And I’m also very confident that we’re going to have other, very creative options for quality measurement and performance reporting.”

One idea under consideration by CMS would allow hospitalists or other doctors to designate their hospitals’ quality data as a surrogate measure of their own performance. “I think that’s going to be a really great option for hospitalists who self-nominate,” Dr. Torcson says.

For many hospitalists, the option would effectively get around the issue of individual versus group attribution and instead align doctors’ fates with that of their institutions. SHM, Dr. Torcson says, has endorsed the proposal and offered to work with CMS to help institute it. He’s also confident that the reporting requirements for multiple, overlapping CMS programs will be more streamlined over time.

Some health professionals believe that hospitals and doctors already are devoting too much time and energy to measuring and recording the proliferating set of mandatory metrics. But Dr. Whitcomb says payors and patients are unlikely to have much sympathy.

“We as a profession are accountable to society at large. And that argument, that there are too many measurements and that we shouldn’t be held accountable as physicians for our performance, is a nonstarter when you’re trying to explain that to consumers,” he says. “The status quo is not tenable, and so it’s going to be a long journey and we need to be able to move in that direction.”

---

Bryn Nelson is a freelance medical writer in Seattle.

Russell Cowles III, MD, lead hospitalist at Bergan Mercy Medical Center in Omaha, Neb., recalls the shock on the faces of hospitalists who attended his presentation to SHM’s Nebraska Area chapter meeting last spring. Dr. Cowles and co-presenter Eric Rice, MD, MMM, SFHM, chapter president and assistant medical director of Alegent Creighton Hospital Medicine Services, were introducing their fellow hospitalists to a forthcoming Medicare initiative called the Physician Feedback/Value-Based Payment Modifier (VBPM) program.

“And everyone in the audience was completely stunned,” Dr. Cowles says. “They had never even dreamed that any of this would come down to the physician level.”

They’re not alone.

“Unless you work in administration or you’re leading a group, I don’t think very many people know this exists,” Dr. Cowles says. “Your average practicing physician, I think, has no clue that this measurement is going on behind the scenes.”

Authorized by the Affordable Care Act, the budget-neutral scheme ties future Medicare reimbursements to measures of quality and efficiency, and grades physicians on a curve. The Physician Quality Reporting System (PQRS), in place since 2007, forms the foundation of the new program, with feedback arriving in the form of a Quality and Resource Use Report (QRUR), a confidential report card sent to providers. The VBPM program then uses those reports as the basis for a financial reward or penalty.

In principle, SHM and hospitalist leaders have supported the concept of quality measurements as a way to hold doctors more accountable and to help the Centers for Medicare & Medicaid Services (CMS) take a more proactive role in improving quality of care while containing costs. And, in theory, HM leaders say hospitalists might be better able to adapt to the added responsibility of performance measurement and reporting due to their central role in the like-minded hospital value-based purchasing (VBP) program that began Oct. 1.

“If the expectation is that we will be involved in some of these initiatives and help the hospitals gain revenue, now we can actually see some dollars for those efforts,” says Julia Wright, MD, SFHM, FACP, president of the MidAtlantic Business Unit for Brentwood, Tenn.-based Cogent HMG. But the inverse is also true: If hospitals are going to have dollars at risk for performance, she says, CMS believes physicians should share in that risk as the providers of healthcare.

On that score, Dr. Rice says, hospitalists might have an advantage due to their focus on teamwork and their role in transitioning patients between inpatient and outpatient settings. In fact, he sees the VBPM as an “enormous opportunity” for hospitalists to demonstrate their leadership in helping to shape how organizations and institutions adapt to a quickly evolving healthcare environment.

But first, hospitalists will need to fully engage. In 2010, CMS found that only about 1 in 4 eligible physicians were participating in the voluntary PQRS and earning a reporting bonus of what is now 0.5% of allowable Medicare charges (roughly $800 for the average hospitalist). The stakes will grow when the PQRS transforms into a negative incentive program in 2015, with a 1.5% penalty for doctors who do not meet its reporting requirements. In 2016 and thereafter, the assessed penalty grows to 2% (about $3,200 for the average hospitalist).

“I think the unfolding timeline has really provided the potential for lulling us into complacency and procrastination,” says Patrick Torcson, MD, MMM, FACP, SFHM, director of hospital medicine at St. Tammany Parish Hospital in Covington, La., and chair of SHM’s Performance Measurement and Reporting Committee.

According to CMS, “physician groups can avoid all negative adjustments simply by participating in the PQRS.” Nonparticipants, however, could get hit with a double whammy. With no quality data, CMS would have no way to assess groups’ performances and would automatically deduct an extra 1% of Medicare reimbursements under the VBPM program. For groups of 100 eligible providers or more, that combined PQRS-VBPM penalty could amount to 2.5% in 2015.

 

PQRS participants have more leeway and a smaller downside. Starting January 2015, eligible provider groups who meet the reporting requirements can choose either to have no adjustments at all or to compete in the VBPM program for a performance-based bonus or a penalty of 1%, based on cost and quality scores. In January 2017, the program is expected to expand to include all providers, whether in individual or group practice.

A Measure of Relevance

Based on the first QRURs, sent out in March 2012 to providers in four pilot states, SHM wrote a letter to CMS that offered a detailed analysis of several additional concerns. The society followed up with a second letter that provided a more expansive critique of the proposed 2013 Physician Fee Schedule.

One worry is whether the physician feedback/VBPM program has included enough performance measures that are relevant to hospitalists. A Public Policy column in The Hospitalist (“Metric Accountability,” November 2012, p. 18) counted only 10 PQRS measures that apply routinely to HM providers out of a list of more than 200. Even those 10 aren’t always applicable.

“I work at a teaching hospital that’s large enough to have a neurology program, so most acute-stroke patients are admitted by the neurologists,” says Gregory Seymann, MD, SFHM, chief of the division of hospital medicine at the University of California at San Diego and a member of SHM’s Performance Measurement and Reporting Committee. “Five of the 10 measures are related to stroke patients, but my group rarely admits stroke patients.” That means only five PQRS measures remain relevant to him.

On paper, the issue might be readily resolved by expanding the number of measures to better reflect HM responsibilities—such as four measures proposed by SHM that relate to transitions of care and medication reconciliation.

Other groups, though, have their own ideas. A letter to CMS signed by 28 patient and healthcare payor groups calls for the elimination of almost two dozen PQRS measures deemed unnecessary, duplicative, or uninformative, and for the addition of nine others that might better assess patient outcomes and quality of care. Jennifer Eames Huff, director of the Consumer-Purchaser Disclosure Project at San Francisco-based Pacific Business Group on Health, one of the letter’s signatories, says some of those potential measures might be more applicable to hospitalists as well.

But therein lies the rub. Although process measures might not always be strong indicators of quality of care, the introduction of outcome measures often makes providers nervous, says Gary Young, JD, PhD, director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston. “Most providers feel that their patients are sicker and more vulnerable to poorer outcomes, and they don’t want to be judged poorly because they have sicker patients,” he says. Reaching an agreement on the best collection of measures may require some intense negotiations, he says.

Fairer Comparisons

Dr. Cowles cites two de-identified QRURs received by Alegent Creighton Health back in March—one for a hospitalist and one for an office-based general internist—to illustrate another major concern shared by many HM providers. The reports broke down each doctor’s relative healthcare contributions, using predetermined percentages of the total care and costs to conclude whether that doctor directed, influenced, or contributed to a patient’s care.

 

Hospitalists, by the nature of their jobs, seldom direct the care of any patient. But because their influence or contribution is almost always within the inpatient environment, HM providers account for proportionately higher costs than office-based physicians. The result can be a rather ugly curve: For healthcare costs incurred, the general internist was at the 65th percentile, while the hospitalist was at the 96th percentile.

The point, Dr. Cowles says, is that hospitalists and clinic-based physicians see patients with remarkably different acuities. “We just need to make sure that we’re comparing apples to apples, that you’re going to compare someone who sees a high-acuity patient with someone else who sees a high-acuity patient,” he says.

One silver lining could be increased momentum toward establishing HM as its own Medicare-recognized specialty. Hospitalist leaders who say the process is likely to be difficult but not impossible cite the successful effort to win recognition of HM as a focused practice by the American Board of Internal Medicine.

“We’re going to have to think outside the box in terms of working toward an identifier for hospitalists,” says Win Whitcomb, MD, MHM, medical director of healthcare quality at Baystate Medical Center in Springfield, Mass., and a member of SHM’s Performance and Measurement Reporting Committee. “But that’s going to happen—it’s not a matter of if, it’s a matter of when and how.”

As one potential interim solution, SHM has suggested a self-identification designation by which hospitalists would distinguish themselves from the larger, general internal-medicine category and thereby avoid unfair comparisons.

A Question of Attribution

Of the concerns raised by SHM, the question of attribution might be among the thorniest. Dr. Young says the “big-time issue” is pitting many consumer groups, payors, and employers against healthcare providers. The consumer groups want accountability at the individual provider level, while the providers strongly prefer group accountability, setting up a major clash over how responsibility will be parceled out.

Hospitalists have been taught to embrace responsibility while viewing healthcare delivery as a team sport. And the contributions of individual HM providers aren’t easily untangled. “If somebody has a bad outcome and they’ve been under the care of three different hospitalists, it’s virtually impossible to attribute that outcome to one of those three hospitalists,” Dr. Whitcomb says. “We really need to think about attribution differently, and it’s going to need to be across groups of hospitalists.”

SHM has suggested that CMS include an option for group rather than individual evaluation. “You’re just making it explicit that you can’t assign some of these measures to individual physicians. We can assign some of these measures to groups,” Dr. Whitcomb says.

In its 2013 Medicare Physician Fee Schedule final rule, CMS opted to alter the doctor comparison methodology used for upcoming QRURs and the 2015 application of the VBPM. The agency also agreed to consider hospitalists’ concerns about fair attribution, relevant measures, and proper designation as it develops future proposals. Regardless of how those issues are ironed out, Dr. Torcson says, it’s clear to him that sitting on the sidelines is no longer an option for any physician group. Nor is it acceptable “to say this won’t work for me. We’re having to come up with proactive proposals for what will work to be part of the CMS quality agenda.”

 

SHM’s thorough analysis and realistic feedback, he says, has been well received by Medicare officials, raising hopes that many of the remaining differences can be resolved. “I am very confident that self-reporting or self-nomination as a hospitalist is going to be in place by the time those negative incentives kick in,” Dr. Torcson says. “And I’m also very confident that we’re going to have other, very creative options for quality measurement and performance reporting.”

One idea under consideration by CMS would allow hospitalists or other doctors to designate their hospitals’ quality data as a surrogate measure of their own performance. “I think that’s going to be a really great option for hospitalists who self-nominate,” Dr. Torcson says.

For many hospitalists, the option would effectively get around the issue of individual versus group attribution and instead align doctors’ fates with that of their institutions. SHM, Dr. Torcson says, has endorsed the proposal and offered to work with CMS to help institute it. He’s also confident that the reporting requirements for multiple, overlapping CMS programs will be more streamlined over time.

Some health professionals believe that hospitals and doctors already are devoting too much time and energy to measuring and recording the proliferating set of mandatory metrics. But Dr. Whitcomb says payors and patients are unlikely to have much sympathy.

“We as a profession are accountable to society at large. And that argument, that there are too many measurements and that we shouldn’t be held accountable as physicians for our performance, is a nonstarter when you’re trying to explain that to consumers,” he says. “The status quo is not tenable, and so it’s going to be a long journey and we need to be able to move in that direction.”

---

Bryn Nelson is a freelance medical writer in Seattle.

Russell Cowles III, MD, lead hospitalist at Bergan Mercy Medical Center in Omaha, Neb., recalls the shock on the faces of hospitalists who attended his presentation to SHM’s Nebraska Area chapter meeting last spring. Dr. Cowles and co-presenter Eric Rice, MD, MMM, SFHM, chapter president and assistant medical director of Alegent Creighton Hospital Medicine Services, were introducing their fellow hospitalists to a forthcoming Medicare initiative called the Physician Feedback/Value-Based Payment Modifier (VBPM) program.

“And everyone in the audience was completely stunned,” Dr. Cowles says. “They had never even dreamed that any of this would come down to the physician level.”

They’re not alone.

“Unless you work in administration or you’re leading a group, I don’t think very many people know this exists,” Dr. Cowles says. “Your average practicing physician, I think, has no clue that this measurement is going on behind the scenes.”

Authorized by the Affordable Care Act, the budget-neutral scheme ties future Medicare reimbursements to measures of quality and efficiency, and grades physicians on a curve. The Physician Quality Reporting System (PQRS), in place since 2007, forms the foundation of the new program, with feedback arriving in the form of a Quality and Resource Use Report (QRUR), a confidential report card sent to providers. The VBPM program then uses those reports as the basis for a financial reward or penalty.

In principle, SHM and hospitalist leaders have supported the concept of quality measurements as a way to hold doctors more accountable and to help the Centers for Medicare & Medicaid Services (CMS) take a more proactive role in improving quality of care while containing costs. And, in theory, HM leaders say hospitalists might be better able to adapt to the added responsibility of performance measurement and reporting due to their central role in the like-minded hospital value-based purchasing (VBP) program that began Oct. 1.

“If the expectation is that we will be involved in some of these initiatives and help the hospitals gain revenue, now we can actually see some dollars for those efforts,” says Julia Wright, MD, SFHM, FACP, president of the MidAtlantic Business Unit for Brentwood, Tenn.-based Cogent HMG. But the inverse is also true: If hospitals are going to have dollars at risk for performance, she says, CMS believes physicians should share in that risk as the providers of healthcare.

On that score, Dr. Rice says, hospitalists might have an advantage due to their focus on teamwork and their role in transitioning patients between inpatient and outpatient settings. In fact, he sees the VBPM as an “enormous opportunity” for hospitalists to demonstrate their leadership in helping to shape how organizations and institutions adapt to a quickly evolving healthcare environment.

But first, hospitalists will need to fully engage. In 2010, CMS found that only about 1 in 4 eligible physicians were participating in the voluntary PQRS and earning a reporting bonus of what is now 0.5% of allowable Medicare charges (roughly $800 for the average hospitalist). The stakes will grow when the PQRS transforms into a negative incentive program in 2015, with a 1.5% penalty for doctors who do not meet its reporting requirements. In 2016 and thereafter, the assessed penalty grows to 2% (about $3,200 for the average hospitalist).

“I think the unfolding timeline has really provided the potential for lulling us into complacency and procrastination,” says Patrick Torcson, MD, MMM, FACP, SFHM, director of hospital medicine at St. Tammany Parish Hospital in Covington, La., and chair of SHM’s Performance Measurement and Reporting Committee.

According to CMS, “physician groups can avoid all negative adjustments simply by participating in the PQRS.” Nonparticipants, however, could get hit with a double whammy. With no quality data, CMS would have no way to assess groups’ performances and would automatically deduct an extra 1% of Medicare reimbursements under the VBPM program. For groups of 100 eligible providers or more, that combined PQRS-VBPM penalty could amount to 2.5% in 2015.

 

PQRS participants have more leeway and a smaller downside. Starting January 2015, eligible provider groups who meet the reporting requirements can choose either to have no adjustments at all or to compete in the VBPM program for a performance-based bonus or a penalty of 1%, based on cost and quality scores. In January 2017, the program is expected to expand to include all providers, whether in individual or group practice.

A Measure of Relevance

Based on the first QRURs, sent out in March 2012 to providers in four pilot states, SHM wrote a letter to CMS that offered a detailed analysis of several additional concerns. The society followed up with a second letter that provided a more expansive critique of the proposed 2013 Physician Fee Schedule.

One worry is whether the physician feedback/VBPM program has included enough performance measures that are relevant to hospitalists. A Public Policy column in The Hospitalist (“Metric Accountability,” November 2012, p. 18) counted only 10 PQRS measures that apply routinely to HM providers out of a list of more than 200. Even those 10 aren’t always applicable.

“I work at a teaching hospital that’s large enough to have a neurology program, so most acute-stroke patients are admitted by the neurologists,” says Gregory Seymann, MD, SFHM, chief of the division of hospital medicine at the University of California at San Diego and a member of SHM’s Performance Measurement and Reporting Committee. “Five of the 10 measures are related to stroke patients, but my group rarely admits stroke patients.” That means only five PQRS measures remain relevant to him.

On paper, the issue might be readily resolved by expanding the number of measures to better reflect HM responsibilities—such as four measures proposed by SHM that relate to transitions of care and medication reconciliation.

Other groups, though, have their own ideas. A letter to CMS signed by 28 patient and healthcare payor groups calls for the elimination of almost two dozen PQRS measures deemed unnecessary, duplicative, or uninformative, and for the addition of nine others that might better assess patient outcomes and quality of care. Jennifer Eames Huff, director of the Consumer-Purchaser Disclosure Project at San Francisco-based Pacific Business Group on Health, one of the letter’s signatories, says some of those potential measures might be more applicable to hospitalists as well.

But therein lies the rub. Although process measures might not always be strong indicators of quality of care, the introduction of outcome measures often makes providers nervous, says Gary Young, JD, PhD, director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston. “Most providers feel that their patients are sicker and more vulnerable to poorer outcomes, and they don’t want to be judged poorly because they have sicker patients,” he says. Reaching an agreement on the best collection of measures may require some intense negotiations, he says.

Fairer Comparisons

Dr. Cowles cites two de-identified QRURs received by Alegent Creighton Health back in March—one for a hospitalist and one for an office-based general internist—to illustrate another major concern shared by many HM providers. The reports broke down each doctor’s relative healthcare contributions, using predetermined percentages of the total care and costs to conclude whether that doctor directed, influenced, or contributed to a patient’s care.

 

Hospitalists, by the nature of their jobs, seldom direct the care of any patient. But because their influence or contribution is almost always within the inpatient environment, HM providers account for proportionately higher costs than office-based physicians. The result can be a rather ugly curve: For healthcare costs incurred, the general internist was at the 65th percentile, while the hospitalist was at the 96th percentile.

The point, Dr. Cowles says, is that hospitalists and clinic-based physicians see patients with remarkably different acuities. “We just need to make sure that we’re comparing apples to apples, that you’re going to compare someone who sees a high-acuity patient with someone else who sees a high-acuity patient,” he says.

One silver lining could be increased momentum toward establishing HM as its own Medicare-recognized specialty. Hospitalist leaders who say the process is likely to be difficult but not impossible cite the successful effort to win recognition of HM as a focused practice by the American Board of Internal Medicine.

“We’re going to have to think outside the box in terms of working toward an identifier for hospitalists,” says Win Whitcomb, MD, MHM, medical director of healthcare quality at Baystate Medical Center in Springfield, Mass., and a member of SHM’s Performance and Measurement Reporting Committee. “But that’s going to happen—it’s not a matter of if, it’s a matter of when and how.”

As one potential interim solution, SHM has suggested a self-identification designation by which hospitalists would distinguish themselves from the larger, general internal-medicine category and thereby avoid unfair comparisons.

A Question of Attribution

Of the concerns raised by SHM, the question of attribution might be among the thorniest. Dr. Young says the “big-time issue” is pitting many consumer groups, payors, and employers against healthcare providers. The consumer groups want accountability at the individual provider level, while the providers strongly prefer group accountability, setting up a major clash over how responsibility will be parceled out.

Hospitalists have been taught to embrace responsibility while viewing healthcare delivery as a team sport. And the contributions of individual HM providers aren’t easily untangled. “If somebody has a bad outcome and they’ve been under the care of three different hospitalists, it’s virtually impossible to attribute that outcome to one of those three hospitalists,” Dr. Whitcomb says. “We really need to think about attribution differently, and it’s going to need to be across groups of hospitalists.”

SHM has suggested that CMS include an option for group rather than individual evaluation. “You’re just making it explicit that you can’t assign some of these measures to individual physicians. We can assign some of these measures to groups,” Dr. Whitcomb says.

In its 2013 Medicare Physician Fee Schedule final rule, CMS opted to alter the doctor comparison methodology used for upcoming QRURs and the 2015 application of the VBPM. The agency also agreed to consider hospitalists’ concerns about fair attribution, relevant measures, and proper designation as it develops future proposals. Regardless of how those issues are ironed out, Dr. Torcson says, it’s clear to him that sitting on the sidelines is no longer an option for any physician group. Nor is it acceptable “to say this won’t work for me. We’re having to come up with proactive proposals for what will work to be part of the CMS quality agenda.”

 

SHM’s thorough analysis and realistic feedback, he says, has been well received by Medicare officials, raising hopes that many of the remaining differences can be resolved. “I am very confident that self-reporting or self-nomination as a hospitalist is going to be in place by the time those negative incentives kick in,” Dr. Torcson says. “And I’m also very confident that we’re going to have other, very creative options for quality measurement and performance reporting.”

One idea under consideration by CMS would allow hospitalists or other doctors to designate their hospitals’ quality data as a surrogate measure of their own performance. “I think that’s going to be a really great option for hospitalists who self-nominate,” Dr. Torcson says.

For many hospitalists, the option would effectively get around the issue of individual versus group attribution and instead align doctors’ fates with that of their institutions. SHM, Dr. Torcson says, has endorsed the proposal and offered to work with CMS to help institute it. He’s also confident that the reporting requirements for multiple, overlapping CMS programs will be more streamlined over time.

Some health professionals believe that hospitals and doctors already are devoting too much time and energy to measuring and recording the proliferating set of mandatory metrics. But Dr. Whitcomb says payors and patients are unlikely to have much sympathy.

“We as a profession are accountable to society at large. And that argument, that there are too many measurements and that we shouldn’t be held accountable as physicians for our performance, is a nonstarter when you’re trying to explain that to consumers,” he says. “The status quo is not tenable, and so it’s going to be a long journey and we need to be able to move in that direction.”

---

Bryn Nelson is a freelance medical writer in Seattle.

click for large version

What: The program, authorized by 2010’s Affordable Care Act, extends CMS’ concept of value-based purchasing to the individual physician level. That means a portion of doctors’ Medicare reimbursements will be contingent on scores designed to measure the quality and efficiency of the healthcare they deliver.

How: The program is designed to be budget-neutral, meaning that doctors will be graded on a curve; some will lose a percentage of Medicare reimbursements, while others will gain increased payments. A prerequisite for any bonus will be participation in the Physician Quality Reporting System (PQRS), which carries its own nonparticipation penalties. The PQRS forms the core of the program, with a beefed-up Physician Compare website and the Physician Feedback Program providing public and private report cards, respectively. The latter will consist of confidential Quality and Resource Use Reports (QRURs), based on information from Medicare claims and the PQRS.

Who: At first, the VBPM program will apply to groups of 100 or more eligible professionals, currently defined as physicians, practitioners, and therapists. By 2017, however, all physicians will participate. Those in rural practices, critical-access hospitals, and federally qualified health centers are exempt; ACO participants are exempt for 2015 and 2016.

click for large version

What: The program, authorized by 2010’s Affordable Care Act, extends CMS’ concept of value-based purchasing to the individual physician level. That means a portion of doctors’ Medicare reimbursements will be contingent on scores designed to measure the quality and efficiency of the healthcare they deliver.

How: The program is designed to be budget-neutral, meaning that doctors will be graded on a curve; some will lose a percentage of Medicare reimbursements, while others will gain increased payments. A prerequisite for any bonus will be participation in the Physician Quality Reporting System (PQRS), which carries its own nonparticipation penalties. The PQRS forms the core of the program, with a beefed-up Physician Compare website and the Physician Feedback Program providing public and private report cards, respectively. The latter will consist of confidential Quality and Resource Use Reports (QRURs), based on information from Medicare claims and the PQRS.

Who: At first, the VBPM program will apply to groups of 100 or more eligible professionals, currently defined as physicians, practitioners, and therapists. By 2017, however, all physicians will participate. Those in rural practices, critical-access hospitals, and federally qualified health centers are exempt; ACO participants are exempt for 2015 and 2016.

click for large version

What: The program, authorized by 2010’s Affordable Care Act, extends CMS’ concept of value-based purchasing to the individual physician level. That means a portion of doctors’ Medicare reimbursements will be contingent on scores designed to measure the quality and efficiency of the healthcare they deliver.

How: The program is designed to be budget-neutral, meaning that doctors will be graded on a curve; some will lose a percentage of Medicare reimbursements, while others will gain increased payments. A prerequisite for any bonus will be participation in the Physician Quality Reporting System (PQRS), which carries its own nonparticipation penalties. The PQRS forms the core of the program, with a beefed-up Physician Compare website and the Physician Feedback Program providing public and private report cards, respectively. The latter will consist of confidential Quality and Resource Use Reports (QRURs), based on information from Medicare claims and the PQRS.

Who: At first, the VBPM program will apply to groups of 100 or more eligible professionals, currently defined as physicians, practitioners, and therapists. By 2017, however, all physicians will participate. Those in rural practices, critical-access hospitals, and federally qualified health centers are exempt; ACO participants are exempt for 2015 and 2016.

Click here to listen to Dr. Angus

Click here to listen to Dr. Angus

Click here to listen to Dr. Angus

Click here to listen to Dr. Dressler

Click here to listen to Dr. Dressler

Click here to listen to Dr. Dressler

Critical-care experts point to three types of competency that are crucial for any hospitalist working within an ICU environment. First, hospitalists need a solid knowledge base of the pharmacology, physiology, and pathophysiology of critical illnesses and conditions such as renal failure, respiratory failure, cardiac failure, sepsis, and seizures.

Second, providers need to acquire an array of psychomotor and interpersonal skills. Core skills like endotracheal intubation, chest-tube placement, and arterial and central venous catheterization are essential. But so are broader abilities like bringing people together to work as a team, says Timothy Buchman, PhD, MD, director of Emory University’s Center for Critical Care in Atlanta.

Eric Siegal, MD, SFHM, director of critical care medicine at Aurora St Luke’s Medical Center in Milwaukee, concurs. Much of the value of intensivists, he says, comes from their ability to understand the ICU as a multidisciplinary, team-based environment that emphasizes system improvement, quality control, and consistent patient care.

“Does that sound familiar? It’s what hospitalists do,” he says. “So the conceptual structure of a high-functioning intensivist team is nearly identical to the conceptual structure of a high-functioning hospitalist team; it’s just located in a smaller area, with a higher acuity patient population.”

Dr. Siegal emphasizes the importance of inpatient procedural skills, which he says are no longer emphasized in internal-medicine training. “The good news is, those skills are definable, are fairly easily taught, and are simply a matter of repetition,” he says.

Finally, hospitalists need to adopt the right attitude about what care is or isn’t possible for critically-ill patients, and how families can be integrated into complex, culturally-sensitive decision-making about difficult topics such as organ donation.

“That’s very different when the patient is unable to speak for him or herself,” Dr. Buchman says. “There’s a list of what I would call attitudinal competencies, which is longer than I think most people understand it to be to be an effective clinician. … Although all of them, to some degree, overlap with experience during residency training, they are often at a complexity level that can only be mastered through additional training.”

Bryn Nelson is a freelance medical writer in Seattle.

 

Critical-care experts point to three types of competency that are crucial for any hospitalist working within an ICU environment. First, hospitalists need a solid knowledge base of the pharmacology, physiology, and pathophysiology of critical illnesses and conditions such as renal failure, respiratory failure, cardiac failure, sepsis, and seizures.

Second, providers need to acquire an array of psychomotor and interpersonal skills. Core skills like endotracheal intubation, chest-tube placement, and arterial and central venous catheterization are essential. But so are broader abilities like bringing people together to work as a team, says Timothy Buchman, PhD, MD, director of Emory University’s Center for Critical Care in Atlanta.

Eric Siegal, MD, SFHM, director of critical care medicine at Aurora St Luke’s Medical Center in Milwaukee, concurs. Much of the value of intensivists, he says, comes from their ability to understand the ICU as a multidisciplinary, team-based environment that emphasizes system improvement, quality control, and consistent patient care.

“Does that sound familiar? It’s what hospitalists do,” he says. “So the conceptual structure of a high-functioning intensivist team is nearly identical to the conceptual structure of a high-functioning hospitalist team; it’s just located in a smaller area, with a higher acuity patient population.”

Dr. Siegal emphasizes the importance of inpatient procedural skills, which he says are no longer emphasized in internal-medicine training. “The good news is, those skills are definable, are fairly easily taught, and are simply a matter of repetition,” he says.

Finally, hospitalists need to adopt the right attitude about what care is or isn’t possible for critically-ill patients, and how families can be integrated into complex, culturally-sensitive decision-making about difficult topics such as organ donation.

“That’s very different when the patient is unable to speak for him or herself,” Dr. Buchman says. “There’s a list of what I would call attitudinal competencies, which is longer than I think most people understand it to be to be an effective clinician. … Although all of them, to some degree, overlap with experience during residency training, they are often at a complexity level that can only be mastered through additional training.”

Bryn Nelson is a freelance medical writer in Seattle.

 

Critical-care experts point to three types of competency that are crucial for any hospitalist working within an ICU environment. First, hospitalists need a solid knowledge base of the pharmacology, physiology, and pathophysiology of critical illnesses and conditions such as renal failure, respiratory failure, cardiac failure, sepsis, and seizures.

Second, providers need to acquire an array of psychomotor and interpersonal skills. Core skills like endotracheal intubation, chest-tube placement, and arterial and central venous catheterization are essential. But so are broader abilities like bringing people together to work as a team, says Timothy Buchman, PhD, MD, director of Emory University’s Center for Critical Care in Atlanta.

Eric Siegal, MD, SFHM, director of critical care medicine at Aurora St Luke’s Medical Center in Milwaukee, concurs. Much of the value of intensivists, he says, comes from their ability to understand the ICU as a multidisciplinary, team-based environment that emphasizes system improvement, quality control, and consistent patient care.

“Does that sound familiar? It’s what hospitalists do,” he says. “So the conceptual structure of a high-functioning intensivist team is nearly identical to the conceptual structure of a high-functioning hospitalist team; it’s just located in a smaller area, with a higher acuity patient population.”

Dr. Siegal emphasizes the importance of inpatient procedural skills, which he says are no longer emphasized in internal-medicine training. “The good news is, those skills are definable, are fairly easily taught, and are simply a matter of repetition,” he says.

Finally, hospitalists need to adopt the right attitude about what care is or isn’t possible for critically-ill patients, and how families can be integrated into complex, culturally-sensitive decision-making about difficult topics such as organ donation.

“That’s very different when the patient is unable to speak for him or herself,” Dr. Buchman says. “There’s a list of what I would call attitudinal competencies, which is longer than I think most people understand it to be to be an effective clinician. … Although all of them, to some degree, overlap with experience during residency training, they are often at a complexity level that can only be mastered through additional training.”

Bryn Nelson is a freelance medical writer in Seattle.