Atrius Health
Atrius Health - Examining Health Care Series Part 6

Demystifying Global Payments - Part 6
Moving Ahead with Massachusetts Payment Reform

In this series, we've covered how well-designed global payment works. This final installment discusses how providers can participate in global payment by developing Accountable Care Organizations (ACOs). Although the state hasn't yet determined the specific criteria that will qualify provider organizations as ACOs, many already meet the commonly accepted definition. In simplest terms, ACOs bring together physicians, hospitals, and others who provide the full range of medical services a defined group of patients will need and are accountable for the cost and quality of their patients' care.

The medical groups of Atrius Health have been ACOs for many years. Today, we have hundreds of primary care physicians and specialists who provide and coordinate care at our practice sites, and we work closely with hospitals and other facilities to ensure safe, effective, and efficient care for our patients. We are only one model for an ACO, however. For instance, while Atrius Health doesn't include a hospital as part of our corporate structure, other organizations managing global payments include both hospitals and multi-specialty physician offices. Here are some other issues that providers forming an ACO should consider:

Scale: Even relatively small groups can succeed with global payment if they have a sufficient number of patients and the leadership, commitment, and organizational capacity needed to manage a fixed budget, coordinate patient care, and accurately measure quality performance. For example, Granite Medical in Quincy, an Atrius Health group with 23 physicians and five nurse practitioners, embraced global payment even before affiliating with our organization.

Outpatient Services: Minimally, ACOs require a core group of primary care physicians, preferably working with a team of medical and surgical specialists and supported by case managers, outreach nurses, clinical pharmacists, etc. Groups don't need to provide all of these services themselves, however, nor must they employ all of the specialists and other clinical support staff. Instead, they can contract with outside providers for specialty care and ancillary services, and with health plans or other third parties for care management, using service-level agreements that are closely aligned with the group's quality and efficiency goals.

Inpatient Services: Close collaboration between physician groups and hospitals creates a higher degree of accountability for quality and cost along the entire spectrum of patients' care. At Atrius Health, we work with a preferred group of hospitals and have hospitalists based at some of them to help with coordination of care and discharge planning. Our patients' hospital costs are funded from our global payments, so, over time, we expect to incorporate quality incentives and shared risk into some of our hospital relationships.

Health Information Technology: ACOs will need timely access to claims and encounter data, and the ability to analyze it, in order to coordinate care, track quality performance, and manage spending. While an electronic medical record (EMR) is bound to be a key element of any provider group's long-term strategy, it is not a prerequisite for an ACO. A number of Massachusetts provider organizations that still operate with paper records participate in global payment contracts. Federal assistance to pay providers for adopting qualified EMR's begins in 2011; in the meantime, ACOs can work with health plans and other third parties to develop needed data gathering and analytical capabilities.

Our Closing Thoughts

For some in the Massachusetts provider community, the transition to ACOs and global payments will be very challenging, but we believe it can be done. A critical first step will be to ensure that each patient has a primary care physician or nurse practitioner. Even when referrals are not required by the insurer, a PCP can lead the coordination of care and help guide the patient toward care choices that produce the best outcomes, cost-effectively.

The collaborative efforts of public and private health care stakeholders to reform provider payments have given the Commonwealth an enormous opportunity to transform health care delivery, improve the quality of care available to our citizens, and reduce the rate of growth in medical spending. Atrius Health has embraced this vision of the future and we stand ready to help others move toward it.

October 28, 2009

This article is for general information purposes only and is not intended as legal or other professional advice. ŠAtrius Health. All Rights Reserved.

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Part 1: Introduction

Part 2: How Payments and Quality Incentives Are Determined

Part 3: Organizing for Clinical Quality and Efficiency

Part 4: Investing in More Effective and Efficient Care

Part 5: Managing the Flow of Funds and Financial Risk

Gene Lindsey, MD, President & CEO of Atrius Health, offers his perspective on payment reform.

Marci Sindell
Chief External Affairs Officer
275 Grove Street, Suite 3-300
Newton, MA 02466
Phone: 617-559-8323
Fax: 617-559-8099

Coming up next in Examining Health Care:

Moving ahead with Massachusetts payment reform.