Health Information Exchange Is the Foundation for ACOs

Reference to Accountable Care Organizations (ACO) appears in only seven pages of the massive healthcare reform law yet in healthcare circles ACOs have become one of the most discussed and debated pieces of that legislation. Conceived as a model for streamlining and improving delivery of health services through the realignment of incentives, ACOs seek to synchronize the motives and actions among physicians, clinicians and hospitals to better coordinate care to Medicare beneficiaries and other patients while keeping costs down. According to the legislation, an ACO must agree to manage all of the healthcare needs of a minimum of 5,000 Medicare beneficiaries for at least three years.

ACOs are intended to replace the traditional fee-for-service Medicare setting, where problems have long persisted in coordinating care among multiple physicians for beneficiaries who might have as many as five chronic conditions. These patients are more often than not subjected to redundant care, and are at increased risk for medical error and hospital readmission that, in many cases, could have been avoided if services had been aggressively communicated and synchronized among physicians, providers and suppliers of ancillary services.

When Congress found a way to incorporate ACOs as a major tenet of the sweeping 2010 healthcare reform law, it envisioned doctors and hospitals joining forces to prevent a great deal of careless oversight and to prevent blunders like patients doubling up on their medications or failing to follow through on treatment. By developing operable ACOs, the Department of Health and Human Services estimates that Medicare could save as much as $960 million over three years. If the idea succeeds in Medicare, the plan is expected to spread quickly to employer-provided health insurance.

Sound Familiar?

If this all sounds like managed care, ACOs are, in truth, based on the HMO models first proposed about 20 years ago, the last time a significant push was made to reform the healthcare delivery system. At that time, those models didn’t catch on because there were few incentives for doctors to participate. Instead, in an effort to preserve revenue streams, many providers attempted to protect or expand market share through acquisition. In their haste, many of these practices were overpriced, offered little patient choice, and often resulted in massive failures in quality and access to care. Times have changed, as has the healthcare environment. Insurers and the government are now dramatically cutting reimbursements to providers. That means providers have to get a lot more efficient, especially with Medicare beneficiaries. So, doctors and hospitals may have little choice but to be more amenable to a balanced approach between quality and activity as opposed to prior capitation models, where care providers received fixed, pre-arranged, monthly payments per patient enrolled in a plan.

 Putting IT and HIE to Work

Unfortunately for the most part, providers have been left to their own devices to sort out any confusion or uncertainty surrounding ACOs. And if they have learned anything by now, they know effective ACOs will be all about data. The trouble is that many of these providers still don’t have the electronic health records (EHR), data management, personal health records and health information exchanges needed to successfully operate as ACOs. A recent survey found that only 55% of physicians had EHRs. Even in their primitive stages, ACOs will need to acquire HIT and HIE infrastructure with all of the above, as well as advanced support for data standards and connectivity that have become available only within the last two years.

HIE as a Core Infrastructure for ACOs

ACOs will ultimately need to have HIE capabilities in order to successfully accomplish their missions. There are two basic health information exchange (HIE) designs within the market today.  One revolves around patient portability, the other around patient centeredness.  Patient portability models facilitate the transfer of patient data from one health provider to another giving them the information they need to care for the episode of care in question.  Patient centric models either physically aggregate or virtually aggregate data so that all information about the patient is visible to healthcare providers at any given time to diagnose and treat their patients.

ACOs will probably benefit most from a patient centric approach to HIE deployment because of a high affinity to both the patient and the local geography in which business is conducted, as well as the requirement to gather data for analysis to manage the risk associated with the enrolled patient base.  Having an HIE platform that is patient centric yet capable of patient portability is the ultimate architecture to support such initiatives.

Reaching New Heights

Shaping a management system in this time of reform presents an enormous challenge. As reform shifts, uncertainty will continue to prevail. Insight will be judged by performance. Strategic priorities should be set that drive administrative efforts to require new credentialing rules that ensure the future utilization of HIE be put in place. ACOs will also need to secure future financing for HIE and provide guidance on new revenue cycle management technologies that track budget goals based on evolving beneficiary populations and optimized reimbursement among providers. Providers must be more willing to bear more risk in order to manage the evolving beneficiary risk populations.  Increased quality can no longer be accompanied by increased cost. The goal is increased quality with lower cost.

Another key component necessary for ACOs to thrive is an HIE infrastructure that coordinates and embeds electronic safety checks, clinical analytics and data exchange into the patient experience. Over time, ACOs will need to expand this framework to include an arsenal of ongoing pervasive connectivity, data analytics and predictive modeling that keep cost of care down and quality up.

The vast majority of providers believe the state of healthcare in America has evolved to a point where change needs to take place. Anyone hoping for this change needs to engage patients, employers and healthcare providers. There is no need to wait any longer. The foundations of effective healthcare structures of tomorrow are being set in place today. Attracting new patients, retaining existing ones, improving employee productivity, increasing physician satisfaction and loyalty, and engaging the community, must build upon these structures and move them forward.

John Smith is Director of Communications at ICA. This blog post was first published on ICA’s HITme Blog. John has over 20 years of experience in healthcare communications with a focus on health information technology, having served as Senior Vice President and Healthcare Practice Leader at several communications firms, including Fleishmann Hillard, Manning Selvage and Lee and Brodeur Worldwide.