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● Think Tank

and the ability to allocate funds (per-member per-month or shared savings) across both in-and out-of-network providers. T ese systems have not traditionally existed in the provider world.

Barry P. Chaiken, M.D., MPH, Chief Medical Information Offi cer, Infor

Here are a few steps an ACO can take to overcome the challenges:

• Choose partners carefully to be sure they have the systems in place to collect the data for monitoring of clinical and fi nancial outcomes.

• Ensure that the partnering entities are capable of providing clinical care up to the standards of the ACO.

• Check that the partnering entities are able to proceed with clini- cal transformation as needed.

• Be sure the entities provide patient-centered care and their systems support patient-centered workfl ow.

• Ensure that the ACO and the partnering entities utilize a reliable interface engine among fi nancial and clinical systems to easily transfer data to provide effi cient care, while off ering data for ongoing monitoring of clinical and fi nancial outcomes. T is also allows for more effi cient administrative activities.

• Ensure that proper human capital management systems exist so that the right people are assigned to the right tasks to generate the best outcomes.

Steve Tolle, Chief Strategy Offi cer, Merge Healthcare

ACOs won’t be able to survive and have shared savings or bundled payment programs – or take risk on member lives – without the right data strategy. First, the appropriate health information exchange (HIE) must be incorporated for all data tied to patient care (administrative and clinical) for an episode of patient care to proactively move forward with treatment. Taking this risk with a patient requires an HIE. Typically, imaging takes a back seat, but just looking at the raw cost data on imaging and the large piece of the pie it has within a hospital, it needs to move up in priority. Along with putting an HIE in place, an imaging strategy must be incorporated. A vendor- neutral archive for image sharing and exchange checks this off the list. Not only from a cost perspective, but imaging is highly valued from a patient care perspective for providers.

What are some of the myths about “ideal” ACO fi nancial systems that should be “busted” and why?

Joe Damore, Vice President of Engagement and Delivery, Premier Inc.

One myth is that there is one system that will meet all the needs of an ACO. It will take an integrated EMR connected to a claims management system and a care management system. T is will require interface tools such as an HIE and interface engine. A Commonwealth Fund and Premier Inc. analysis based on

data from 59 diverse health systems also suggests that some existing assumptions about needed ACO capabilities may be misleading. Although much has been written about the potential merits of ACOs, little information exists to help providers understand the capabilities needed to create and participate in an eff ective model

8 March 2014

that can constrain healthcare costs while improving quality. Some myths include market share dominance, number of em-

ployed physicians and fi nancial strength. Despite industry speculation, the data show that market dominance may not translate into greater confi dence for health systems exploring ACO formation. In some cases, health systems controlling a relatively small local market share were moving toward accountable care early to get ahead of market- dominant systems. In addition, some of the highest performers in the study had the lowest proportion of employed physicians, contradicting the belief that physician employment is necessary for ACO formation. And ACO readiness was not correlated with greater operating margins or fi nancial reserves, with one of the highest scoring organizations a public hospital with a relatively poor fi nancial standing.

Jim Lacy, CFO and General Counsel, ZirMed

T e big myth about the idea of an ideal fi nancial system for ACOs is that a fi nancial system can model and execute on the reality of day- to-day ACO operations. Since the concept is based on a risk-based model, the ACO has to fi gure out its costs for providing care in totally diff erent ways and model the risk it’s taking on in a bundled payment or capitated payment approach. Today’s healthcare fi nancial systems are set up to support fee for service, and this risk-based ap- proach is a completely alien notion as is the concept of what it costs for a healthcare organization to provide a certain episode of care.

David Janotha, Industry Vice President, Healthcare, Axiom EPM

A myth that needs to be debunked is the idea that only chargeable services should be included in variable and/or direct care. T e cost of departments that are traditionally considered overhead or indirect should be included in the direct cost analysis, including laundry services, medical records (or health information management) and registration.

Barry P. Chaiken, M.D., MPH, Chief Medical Information Offi cer, Infor

One myth about "ideal" ACO fi nancial systems that should be busted is that fi nancial systems can function without a linkage to clinical data. T is is false because fi nancial and clinical data must be linked and analyzed together to truly understand how care is provided.

Another myth is that current cost accounting systems will satisfy

the requirements of value-based reimbursement, the conditions that ACOs will work under. Costing systems must more accurately record staffi ng costs and better leverage clinical data from EMRs, as reimbursement is no longer tied solely to volume. Without ac- curately measuring costs, ACOs will be unable to manage care so that they remain viable entities. Losses in one clinical area can no longer be “made up” through profi ts (e.g., increased volume) in another area. T e cost for each clinical area must be accurate and tied to the pricing (e.g., capitation rate) set for the population.

Steve Tolle, Chief Strategy Offi cer, Merge Healthcare

Myth: ACOs will be prepared for the future if they incorporate a value-based purchasing methodology behind their operations. Most ACOs are building fi nancial systems with too short a view in mind. T ey must keep in mind patient engagement strategies and self-pay responsibility for the long term. T is may be on their radar, but ACOs need to be much savvier and faster on population health and patient engagement strategies for creating longitudal records on patients that include fi nancial and clinical aspects.


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