Oops! The input is malformed! Improving Health Care: ACOs and Analytics to the Rescue? by Greg Nelson - BeyeNETWORK
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Improving Health Care: ACOs and Analytics to the Rescue?

Originally published April 19, 2012

Health care in the United States has suffered a long and painful journey. As Jonathon Cohn outlines in his book, Sick: The Untold Story of America's Health Care Crisis – and the People Who Pay the Price, we have learned a lot about treating sick people since the early 1900s. However, as this knowledge enabled health care providers to reliably treat most ailments, they began to charge more than most people could afford – especially given the impact of the Great Depression. Out of this disparity, modern private health insurance evolved, starting with a program at Baylor Hospital in Dallas, Texas, that eventually became Blue Cross.

Since the 1930s, a number of initiatives were undertaken in an attempt to fix the realities that we live with in the U.S., namely:

  1. Inequality of access to affordable health care:  About 47 million* Americans lack health insurance, up from about 40 million in 2000.1

  2. Increased costs and poorer aggregate outcomes: The United States pays roughly twice as much per capita for health care as Canada, France and the United Kingdom.2

  3. Worse outcomes: The US has lower life expectancy than those countries and significantly higher infant mortality.3
In 2010, the Affordable Care Act outlined a number of provisions related to Medicare payments to health care providers and suppliers who participate in an Accountable Care Organization (ACO). As the single largest payer for health care in the United States, the Centers for Medicare and Medicaid Services (CMS) program represents a significant opportunity for health care providers and suppliers for not only increasing revenue (reimbursements) but also improving outcomes. In fact, if you consider government payments from all sources – Medicare, Medicaid, and CHIP (Children’s Health Insurance Program) – then about 45% is paid for by public funds. Increased need for continuum of care will also impact organizations seeking cooperation to build health information exchanges and clinical data repositories.

While much has been written about ACOs and the goal of improved wellness strategies for reducing costs in the Medicare system here in the United States 4,5, there is still much confusion about ACOs and what they mean. Essentially, providers participating in an ACO can receive fee-for-service payments under Medicare Parts A and B, as well as payments based on “meeting specified quality and savings requirements.”6 To become an ACO, there are three requirements:
  • Fulfill the requirement of meaningful use

  • Make use of interoperability

  • Implement a data strategy for quality measurement (and improvement)
At their cores, ACOs provide the vehicles for organizations to transition from modernized health records to the use of information technology and data for patient and population life care. The focus quickly shifts from ePrescribing and electronic nursing notes to wellness care  across the ecosystem and across the life span of an individual. 

The first health information exchanges (HIE) were primarily focused on continuity of care – that is, the ability of the patient’s health record to follow them within their provider ecosystem. The role of an ACO extends those foundational components of electronic records and exchange of data to true decision support.

If meaningful use of electronic health care records (EHR) and reporting milestones are the stick, then cost savings (CMS reimbursements) and improved patient care are the carrot. The evolution of ACOs represents a cultural shift from retrospective chart reviews to prospective population-based health care. An ACO demands more, but will it deliver on reduced costs and improved quality of care?

With few U.S. hospitals poised for profitability (or at least stakeholder value) and IT budgets on the rise, health care providers are in a battle of epic proportions. The direct and indirect costs of implementing electronic health records were unimagined even 10 years ago. Reimbursement rates, fraud and uninsured populations continue to chip away at the financial coffers of our health care systems and their ability to innovate. So, while some IT expenses are mandated without benefit, can ACOs turn provision into promise?

We know that in order to make effective use of data, we must have data that is sufficiently clean, organized and accessible.  The EHR (and the stages of meaningful use) provides the foundation for consistent, detailed data. The HIE helps organize it beyond the firewall and makes it accessible while the data warehouse and/or strategies that standardize the way that questions can be asked in a federated model ensures that data is collected and stored appropriately for analytics. 

So what are the opportunities for analytics? As Harvard Medical School’s CIO John Halamka explains: “We're on a journey from episodic care to coordinated care to patient directed care. … Our IT systems are evolving from segmented to integrated to community based.”7 We know that the quality metrics for ACOs include 65 measures that require a cross-provider registry and include elements from patient/caregiver experience, care coordination, patient safety, preventive health and at-risk populations.

The opportunities for decision support and data mining are immense and have tremendous benefits for both individuals and populations, payers and providers, and suppliers of therapies. For example, in Chapel Hill I worked with the EMS Performance Improvement Center to develop a system that collected pre-hospital information from EMS providers across the state, and analyzed the data for system-wide trends and opportunities for improvement. But instead of merely accepting traditional business intelligence strategies for reporting data in the aggregate, the Center took the results, compared them to the like-in-kind providers, and delivered an actionable report back to each EMS provider with interventions based on advanced analytics that could help them improve – think ‘report card’ with an improvement to-do list. Potentially,  ACOs could use similar strategies for combining their data in unique ways to conduct chronic disease and syndromic surveillance, provide community-wide pharmacovigilance, and certainly challenge traditional siloed models of data collection and measurement through active patient and population management.

There is little doubt that the change in our health care and economic environment will continue to outpace complacency and “tried and true” approaches for managing costs and increasing revenues. At the epicenter of this change, a tsunami of data is being generated at the point of daily activities – data about patients, costs, operations and outcomes. ACOs can and should be at the forefront of this strategy, and put our health care system on the trajectory for putting our data to work for us.

It is unclear how ACOs will function, as they will put providers in the business of analyzing and planning for risks associated with managing the outcomes (versus procedures) for patient populations. Analytics will be needed to support the evolving partnerships between payers and providers as well as to support new business models in order to manage this risk, which represents an even greater opportunity for the informaticist.

  1. Pear, Robert (2007) “A lack of health insurance turns life upside-down.”   The New York Times, March 5, 2007.

  2. Kaiser Family Foundation (2007)

  3. OECD (2004)

  4. Berwick, D. N (2011) “Launching Accountable Care Organizations – The Proposed Rule for the Medicare Shared Savings Program.”  The New England Journal of Medicine 2011; 364:e32.

  5. Berwick, D. N (2012) “Can Accountable-Care Organizations Improve Health Care While Reducing Costs?”  The Wall Street Journal 2012; 23-Jan-2012.

  6. HHS (2011) “Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations”

  7. Halamka, J. (December 7, 2011) “The Healthcare Leader's Dilemma”

*About 20 million of these are what I would term as rationally uninsured.  That is, they carry no cover for good reason and as rational economic actors.

SOURCE: Improving Health Care: ACOs and Analytics to the Rescue?

  • Greg NelsonGreg Nelson

    Greg Nelson is the Founder and Chief Executive Officer of ThotWave Technologies, the health and life sciences business intelligence company. Greg provides professional services to healthcare, biopharma as well as government and academic researchers. Greg has served as the Director of Technology for the largest, privately held CRO, Director of Application Development for the Gallup Organization and a director at the University of Georgia’s computer center. He has published and presented more than 150 professional papers in the United States and Europe.  

    While Greg has been a practitioner for the past 23 years, his academic roots began with a BA in Psychology from the University of California at Santa Cruz, in addition to doctoral level work in Social Psychology and Quantitative methods at the University of Georgia. Greg also holds a Project Management Professional Certificate. Greg can be reached at greg@thotwave.com.

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