Accountable Care Organizations Overview

The U.S. health care system got itself into its current mess because everyone, and rightfully so, was following their incentives: physicians were providing and being reimbursed for the maximum amount of care; payers were trying to control costs by questioning the medical necessity of many of those clinical decisions, and trying to control costs via claim and referral denials. Consumers had little vested economic interest in it all.

Both payers and providers have been pushing back against each other for so long, that seemingly no one thought to find a middle ground and align those incentives so that everyone wins, including patients. Until the federal government jumped in, any widespread movement on the Accountable Care Organization front remained basically nonexistent. Runaway inflation got everybody’s attention.
Healthcare providers are under intense pressure from all directions to improve quality of care, patient safety, and patient outcomes, while simultaneously reducing the cost of delivering that care.

Demographic factors, are driving more healthcare spending, and along with clinician shortages, are exacerbating access issues. Two such demographic factors are an aging population, and an increase in consumers with multiple chronic conditions. Employers and purchasers are pressing providers (and the payers that contract with them) to be more accountable for the quality and cost of care because the current trajectory of healthcare spending is unsustainable. National healthcare expenditures were 17.6% of gross domestic product (GDP) in 2009 (the last year for which data is available), up from 16.6% in 2008, according to the Centers for Medicare & Medicaid Services (CMS). The 2009 per capita spend was $8,086. If this spending continues unchecked at its current rate, CMS projects that healthcare spending will nearly double from $2.5 trillion in 2009 to $4.5 trillion in 2019, and will account for 19.3% of GDP.

The Affordable Care Act and the Emergence of the ACO
and Collaborative Care Model


On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act of 2010 (HR 3950), which aims to provide health insurance coverage to approximately 32 million uninsured Americans, and reform health insurance for all Americans. Provisions to prevent payers from excluding members with preexisting conditions — and rescinding their coverage or imposing lifetime limits — will result in more patients with chronic conditions being covered by health insurance.

 




Key elements of the ACO movement involve holding providers responsible for treating and coordinating care for a defined population of patients, for measured improvements in terms of quality and cost of care.

ACO providers can be organized as multispecialty group practices, independent physician organizations (IPOs), physician hospital organizations (PHOs), integrated delivery networks (IDNs), and even virtual physician organizations. ACOs will have to include hospitals, home health agencies, long-term care facilities, and other healthcare organizations to provide and coordinate the full spectrum of healthcare services.

ProMed is the perfect conduit to organize physicians. There are over 17,500 physician members in the parent company PRMA Holdings (Peer Review Mediation and Arbitration).

Holding off on creating ACOs is likely to be a bad long-term strategy for physicians. First, health care reform has passed, bringing extensive changes, and it would be very difficult to repeal or modify the ACA so as to delay reforms. Congress’s pay-as-you-go rules would require lawmakers to find equivalent savings if they discarded ACA provisions that were expected to save health care dollars — especially at a time when there is tremendous pressure to use any available savings to reduce the deficit.

Moreover, policies pursued by the new Independent Payment Advisory Board will probably increase the pressure on providers to coordinate care and form ACOs. Finally, private health plans are facing even more pressure from employers and state insurance commissioners to control premiums.

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Who Will Control ACOs?

Two possible futures: one of physician-controlled ACOs, with physicians affiliating and contracting with hospitals, controlling the flow of funds through the marketplace; and one of hospital-controlled ACOs that will employ physicians. Whoever controls the ACOs will capture the largest share of any savings.

If hospitals are to control ACOs, they too will need to overcome barriers. First, they will need to trade near-term revenue for long-term savings. Hospitals are typically at the center of current health care markets, and by focusing on procedures and severely ill patients, most have been fairly profitable. Building an ACO will require hospitals to shift to a more outpatient-focused, coordinated care model and forgo some profits from procedures and admissions.

Second, hospitals, which have generally struggled to operate outpatient practices effectively, may have difficulty designing ACOs. Acquiring practices and hiring physicians as employees typically reduce the physicians’ incentive to work long hours, and therefore, reduce their productivity.

Conversely, if hospitals come to dominate ACOs, they will accrue more of the savings from the new delivery system, and physicians’ incomes and status as independent professionals will decline. Once relegated to the position of employees and contractors, physicians will have difficulty regaining income, status, the ability to raise capital, and the influence necessary to control health care institutions.

 

 

 


Physicians and ProMed will be able to gain market leadership if they move first. How the development of ACOs plays out over the next few years is likely to have lasting implications for the practice of medicine, patients’ experience of health care, and health care costs in the United States.

ProMed, while a separate unit within PRMA Holdings will be able to leverage the relationships, expertise, consulting services, and technology solutions of the entire organization for its physicians and patients.

ProMed’s collaborative nature, coupled with the advanced standards, processes, data gathering, and reporting tools ProMed has developed, enhances the sharing of best practices. This sharing also occurs by using an agreed-upon framework, and consistent, common measures of success. This approach delivers to members a more timely view of trends, and it helps them pinpoint opportunities for continued improvement. Both quality of care and healthcare savings turns into more money for the ACO distribution to the physicians, investors, and ProMed.

 

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Practice Partnership Solutions

Innovation, Technology,
Management and Investment

The interests of the Physician and ProMed are identical. Profitability, efficiency, physician satisfaction, and better overall patient healthcare are all achievable through the use of technology, workflow innovations, and strategic alliances.

The synergies of expert management coupled with the peace of mind that the suppression of stress brings is the holistic end result of a true collaboration between superior healthcare and the business of medicine.

In these times of increasing regulatory oversight, the Physician needs a partner that you trust will make critical decisions based on sound business principles, proven processes, and insightful and innovative thinking that comes from decades of real world experience.

Medical Enterprise Operations System-M.E.O.S.

Is a completely integrated workflow management operating system. The system covers the scheduling of the first patient encounter, through to the physician consultation, into the electronic health record of all labs, procedures and diagnostic tests, to the billable event with appropriate documentation in an auditable environment for third party payors

eMR Anywhere

eMR Anywhere is an electronic medical record system that enables ambulatory care physicians and clinical staff to document patient encounters, streamline clinical workflow, and secure the exchange of clinical data with other providers, patients, and information systems. It empowers health care providers and patients to access critical information virtually anywhere, anytime through eMR Anywhere, the Medical Enterprise Operations System (MEOS), and our smart-cloud technology platform.

Revenue Cycle Management

RCM solutions relate to all of the processes, sub-processes, and enabling technologies associated with the initial contact through the collection of inbound revenue. Solutions may include new practice protocols, contract negotiations, net collections improvements, and new revenue opportunities.

 

Expense Cycle Management

The Practice will be evaluated by a team of seasoned industry professionals with extensive knowledge of current best practices, regulatory requirements, medical service strategies and marketplace opportunities. We will work with the Physician to understand areas of concern, and customize our approach to meet specific goals and objectives.

Our qualified expense management experts utilize a proven methodology to capture a meaningful cost savings across a wide range of indirect expense areas.

Because of our large member base, our Group Purchasing Organization (GPO) is able to negotiate more favorable prices with suppliers for particular items or services than our individual providers could on their own. This GPO will be supported by the acquisition of related expense-side suppliers. This approach will leverage a single physician member’s purchasing power by the combined volumes of all participating members.

New Practice Profit Centers

ProMed Alliance will establish practice protocols to generate new revenues by establishing a specialized “Clinic” within the practice. New Practice Profit Center Clinic opportunities that are adjunct Health and Wellness programs that manage emerging chronic conditions. Examples are group counseling, cosmetic procedures, physician pharmaceutical dispensing, monthly laboratory testing for target populations (diabetics), diet programs, and diagnostic testing catered to specific demographics of the practice population.

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Summary


The interests of the Physician and ProMed are identical. Profitability, efficiency, physician satisfaction and better overall patient health care are all achievable through the use of technology, workflow innovations and strategic alliances.

The synergies of expert management, coupled with the peace of mind that the suppression of stress brings, are the holistic end-result of a true collaboration between superior health care and the business of medicine.
Practice Partnership solutions will provide much needed revenue to each practice partner in a climate of reduced reimbursements and increased governmental documentation scrutiny.


The culmination of proven management, technology, and innovation will provide most physician practice partners with an increased income of approximately $100,000 per year, free of any capital investment by the physician.

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Click here to see how it works

 
 
Implementation

 

Phase I
Analysis

Evaluate, assess and establish a baseline for the business of the practice, through interviewing staff, review of financial statements, provider contracts, purchasing arrangements, etc.

 

 
   
Phase II
Practice Partnership
Practice Investment

ProMed Invests $50,000 to $100,000 in each Practice for Modernization, Technology & Innovation Improve practice operations and processes to reduce costs, increase earned revenue, and generate new revenue.

• Improve Patient Experience      • Better Lifestyle
• Share Liability                           • Fiducial Partnering

 
 
Phase III
ProMed Group Medical
Enterprise Operation

Strategic Plan
• Medical Services Organization    • Group Paycom Contractor
• Direct Patient Care Model           • Improved Quality
• Negotiation Leverage with           • Profits from Ancillary Services   payors & hospitals
 
Phase IV
Accountable Care Organization

• Accountable Care Organization      • Shared Savings distribution
• Retirement Planning                       • Direct Contracting
• Real Estate Management

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