Doctors can teach hospitals a thing or two about running an accountable care organization

Doctor and nurse with patient

Perhaps it's the hospitals that should be listening to doctors when it comes to managing an accountable care organization.

Though data released in late August by the Centers for Medicare and Medicaid Services showed that less than one-third of the accountable care organizations in the Medicare Shared Savings Program received payouts, a surprisingly large number of those were ACOs run by physicians. 

"There is not too much in the way of savings in the program overall, but there is clearly a subset of ACOs that are figuring out how to improve quality and lower costs," said Mark McClellan, director of the Health Care Innovation and Value Initiative at the Brookings Institution. "Not all are physician-led, but a disproportionate number seems to be."

[Also: See which shared savings ACOs earned payments in 2014 (Data)]

Part of the challenge for hospitals in the ACO landscape is the duality of the program. A majority of the savings elicited comes from keeping patients out of their doors, making them bear the loss. This has hospitals focusing on getting revenue through seeing more patients and preventing leakage from the system, said Collaborative Health Systems' president Jeffery Spight.

"Trying to satisfy both aims is difficult," he said.

Spight said health systems have also looked to post-acute care to reduce costs. They try to avoid long patient stints in nursing homes or rehabilitation facilities after leaving their care. This can be effective, but there simply isn't as much savings as there would be from keeping patients out of the hospital in the first place, Spight said.

There are a handful of simple reasons why physician-led ACOs received millions in the program in 2014 – and hospitals can learn some lessons from these groups.

First, instead of taking on hundreds of changes, physician groups often only have the bandwidth to implement a few meaningful and targeted changes. Then they implement them quickly.

"There are not as many levels of management to get through," he said.

A physician-led group can identify high-risk patients and take specific steps like increasing clinic access, setting up a care manager and tracking data to cut costs. Developing better data on patients, working with case managers and focusing on chronic care have all been effective in cutting costs, McClellan said.

[Also: See how Pioneer ACOs performed in 2014 (Data)]

All of these initiatives are part of focusing on population health, which is key to reducing costs and improving shared savings for ACOs. And it tends to be physicians, rather than hospitals, that have been on the front line of these efforts.

"When you look at key decisions being made with population health, 90 percent of the decisions made on their care are based on physicians," said Dennis Butts, director with Navigant's Strategic Healthcare Solutions.

For this reason, Butts said his group believes physicians have to be the decision makers in an ACO – regardless of ownership – in order for it to be successful.

An ACO with a strong primary care network can increase outpatient care and reduce unnecessary hospital admissions. They can organize around that idea quickly and can be more effective than a hospital in trying to get physician buy-in around the concept, Butts said. A physician-led group is often more successful at doing things like reducing imaging, providing urgent care on weekends and increasing medication compliance.

Patients also tend to be more trusting of their primary care providers during care transitions, making them more apt to follow their guidance.

To keep physicians at the fore, an ACO's board should primarily be made up of physicians, Butts said. Committees that develop care protocols, make quality-based and IT decisions and determine financial distributions should all have physician representation, he said.

"It doesn't matter who owns the network, but it needs to be physician-led," he said. 

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