ACO’s and New Health Reform

KPIs Assessment Tool for ACO’s and Health Reform

Sarianne Gruber MPH, MS
SG Healthcare Analytics LLC

I have been collaborating on projects that integrate technology with the new models of Healthcare reform.  We have been putting the principles of the “pyramid” in to practice, working with medical practices, hospitals and insurers payers who are joining together in newly formed Accountable Care Organization   managements.  As we start seeing more Accountable Care Organizations (ACOs) spring up and disease management programs evolve, KPIs will be the strategic assessment tool for both the healthcare provider and the healthcare executive to improve quality of care and manage costs. For any healthcare organization implementing Health Reform, new metrics will include:

  1. Measures of costs
  2. Measures for disease outcomes
  3. Measures for quality of healthcare provided.

To provide some background on the “New Health Reform”,  the U.S. Department of Health and Human Services (HHS)  released back in March 2011 new rules to help doctors, hospitals, and other health care providers better coordinate care for Medicare patients through the formation of ACOs.   The move is now away from the old “fee for service” model that encouraged “quantity” to one that includes quality of care.  New ACOs will foster coordination and communication among doctors and hospitals, improve the quality of the care their patients receive, and help lower costs.  New initiatives use market-based principles to recognize and reward performance and encourage best practices and accountability for monetary incentives. One of the goals of the health reform is to abandon the procedure based fees in favor of bundled payments consolidating the many costs of an episode of care, like hospitalization, into a single payment, as well as incentivizing efficient delivery of tests and treatments. Basically, the ACO model is about changing the reimbursement structure to one that pays for the quality of care delivered and the outcomes achieved.

If you can measure it – then you can manage it 

For the purpose of illustration, Peoples Hospital is joining 10 primary care physician practices and 4 specialists to form new ACO, called Peoples ACO.  In keeping with federal guidelines, their objectives will be to reduce care costs (less than Medicare’s current system) and improve healthcare quality and performance.   Since ACOs are also required to show improved performance on a series of 65 clinical measures during a 3 year reporting period, Peoples ACO will try to include as many of these metrics in their performance management strategy.  Healthcare performance measures are divided into five specific areas: (1) patient/caregiver experience, (2) care coordination, (3) patient safety, (4) preventive health and (5) at-risk population/frail elderly health.  Many of these measures pertain to chronic disease management such as diabetes, chronic obstructive pulmonary disease and congestive heart failure.  Chronic disease care is extremely costly. The Centers for Disease Control and Prevention report that chronic diseases account for $3 of every $4 spent on healthcare. That’s nearly $7,900 for every American with a chronic disease.  In addition, ACO performance metrics consider the sustainability of population health by encouraging better outcomes of care which can be as broad as reducing mortality rates or as narrow as the percentage of diabetics with well-controlled sugar levels.

Peoples ACO felt it would have the best chance for success by adopting a population health management model.  The population health management premise is to improve health and reduce the health care expenditures for the portion of the population that is driving the majority of the health care cost, notably the chronically ill.  Population health management also includes preventive measures for the segment of patients that are high risk for chronic disease, but have never experienced an acute episode.  Peoples ACO decided its strategic goals are: (1) to enhance their patients’ health through improved preventive care, (2) to reduce health care expenditures through better patient compliance (3) to improve the standards for the quality of care given by providers, and (4) reduce incidence of chronic illness in high risk populations.  Peoples ACO choose to set up well-designed Disease Management Programs for select chronic illnesses. These programs are aimed to coordinate care among providers, reduce hospitalizations, encourage compliance and self management and, in effect, lower treatment costs.  Peoples ACO also decided to take a proactive approach to control high risk patients with screening programs, education and supportive self-managed care programs.

Peoples ACO required that all practices be equipped with EHRs and a HIE provide an exchange of information for an interactive “community dashboard”.  In this way KPIs will cascade throughout for all departments to view how well they are performing or where immediate attention needs to be taken to keep on track.  The next stage was determining what KPIs were to be tracked and why, what would be reasonable targets, and what information should be on a dashboard.   All KPIs had to be tied to the ACO’s strategic goals.

New Health BI

Peoples ACO has set the bar extremely high and has every intention of meeting its goals. The next step is to make sure healthcare performance dashboards link their strategy to metrics.  Well designed dashboards will enable all decision makers to uniformly monitor and continuously track the KPIs.  Several technology companies have been building BI dashboards for healthcare organizations.  Here are a few noteworthy software products:

  1. BI-Clinical from Citius Tech offers integrated clinical, operational and financial performance management.  The Health BI platform includes:  (i) accelerated compliance to Meaningful Use,  (ii) reporting and analytic needs of hospitals, physician practices, IDNs, ACOs and HIES, (iii) 600 pre-built measures and key performance indicators, (iv) state-of-the-art technology tools to enhance point-of-care clinical decision support, (v) performance benchmarking, (vi) persona-based dashboards, (vii) all clinical quality measures and data submission requirements for both Eligible Hospitals  and Eligible Professionals, and (viii) 100% coverage of all PQRS, HEDIS, JCAHO and ACO measures.
  2. MedeAnalytics delivers performance management solutions across the healthcare system including hospitals, physician practices and payers to ensure accountability and improve financial, operational and clinical outcomes.  They developed a framework that identifies the essential technology building blocks to support both Medicare ACOs and commercial ACOs.  The Clinical Performance Manager product is specially designed for clinical and financial decision makers to evaluate physician performance and understand key drivers of cost and quality.  Dashboards and reports assist physicians with benchmarking clinical and financial performance with peers and industry targets, so they can aim meet their goals such as reduced clinical costs, reduced average length of stay and improved quality outcomes.
  3. Physmark’s tools are designed to manage new provider organizations like the ACO. A web-based tool to manage chronic patient populations and a patent pending program to analyze chronic diseases and the efficacy of preventive care programs in populations. PayerSoft-ACO application offers flexibility in ACO administration, integration of clinical and financial data, with tools to enhance care coordination efficiently and robust reporting combined with data analysis to make mid-course corrections. Health Keys, a new decision support program, is based on patent pending chronic model that can create maps showing effectiveness of various preventive care programs and their impact on costs.  Insurance or health plans can use this to identify the ACOs that offer the best quality of care and the lowest costs. Using best practices as a benchmark can help health plans replicate them in other service areas as well.  Care Maps uses a new and patent pending population model and the maps take into account multiple chronic conditions and display both costs and outcome of various preventive care programs.
  4. CureMD has introduced two new modules to support ACOs. ProtocolPathTM overlays the best practice treatment plans developed by provider organizations to real time patient test ordering, referral and treatment plans, allowing the ACO to monitor compliance with protocol. Perform/ACOTM converts extensive data on services being provided by all providers in the system into measures of performance for the organization in aggregate, and drillable down to the provider level, including across locations, disease states,  and treatment patterns. Perform/ACOTM can create key performance indicators throughout the system. This technology can (i) identify patients who will need the most complex care management  (ii) improve coordination of care, (iii) evaluate health care delivery against evidence-based medicine guidelines and (iv) predict future care delivery resource utilization and costs. Gain insights from clinical data to support health delivery transition including efforts to create ACOs with clinical partners by providing physicians with valid clinical data that helps them understand how to make quality and cost improvements.
  5. GE Healthcare and Microsoft Corp announced in December a joint venture to help healthcare organizations and professionals improve healthcare quality and patient experience. The joint venture intends providing a centralized platform to assist enhanced tracking of chronic conditions, coordination of treatment schedules, management of medication regimens and timely intervention.

If you like to discuss or share how your organization is working on meeting the New Healthcare Reform challenges such as planning strategies, selecting and tracking measures and attaining KPI goals, please contact me at