How Health Plans Can Help Employers Evaluate Accountable Care Organizations

posted by Darcy Lewis

on September 25, 2017

As the U.S. health care system continues its steady march away from the fee-for-service “pay as you go” payments that have held sway for decades, health plans, employers, and others search for value-based payment systems that reward effective and efficient care.

Accountable care organizations (ACOs) are networks of health care providers including doctors and hospitals that agree to take on financial responsibility for the care costs and health outcomes for a defined population. While ACOs show great potential, they can be daunting for employers to navigate when selecting plans to offer their employees.

The National Business Group on Health (NBGH) launched an ACO toolkit to help employers successfully implement an ACO strategy. Health plans can help bridge the gap between ACOs and employers by honing their understanding of employers’ decision-making priorities, NBGH President and CEO Brian Marcotte told attendees at AHIP’s Institute and Expo in Austin.

Clarify ACOs’ Value Proposition

According to Marcotte, the health care industry needs to make its value proposition clear to employers: “Employers want data on quality and employee experience but they only receive data on costs,” he says. “If cost data is all you provide, that’s how companies will make decisions, even though ACOs are much more nuanced.”

Referring to ACOs as “a market opportunity in need of understanding,” Marcotte noted that there is confusion in the marketplace about ACOs’ design, finance, and administration.

Marcotte believes that, like any other commercial product, ACOs have a developmental life cycle. He also thinks employers would benefit from guidance that indicates how far along in its development a particular ACO is. “More mature ACOs are actually delivering something different in the market but it’s currently hard to distinguish one ACO from another,” he says.

Journey Map Guides Employers, ACOs

To gauge where an ACO is in its development cycle, employers should focus on six core competencies:

  • Clinical governance – What are providers’ responsibilities?
  • Network – Primary care, specialists, or hospitals
  • Care model – Medical home, risk stratification, care coordination, etc.
  • Consumer experience – Access, proactive outreach, satisfaction
  • Technology & analytics – Electronic medical record (EMR), predictive analytics, data analytics
  • Finance model – ACO risk, physician incentives

Then stratify each competency by ACO status: launching (one to three years), developing (two to five years), and maturing (four to eight years).

Once an ACO’s current status in each competency has been identified, this completes the ACO journey map and makes an effective tool for employers to use in evaluating plan options. “The journey map is a good way to start the conversation,” Marcotte says. “ACOs can use the journey map as a tool to see what they need to do to get employers’ business and it positions them to be more consultative on identifying areas of opportunity with employers.”

The Tipping Point

Marcotte says a consensus emerged about a tipping point that ACOs must reach to achieve significant market success. The tipping point usually occurs when the ACO is in its developing phase, around two to five years of age, and includes key competency areas:

  • Provider-led planning and leadership is in place.
  • Primary care providers have at least 33 percent of their patient panels in alternative payment models.
  • EMR-based clinical guidelines and protocols are used for high- and moderate-risk patients across providers
  • Coordinated care uses integrated medical and behavioral health models throughout ACO.
  • Referral to efficient sites of care is standard operating procedure.
  • Patients have consistent 24/7 and same-day urgent access.
  • Proactive outreach for high- and moderate-risk patients occurs automatically.
  • Providers have EMRs with active data exchange of high-priority data and guidelines in their workflow.
  • ACO has gain/loss-sharing agreements with one or more health plans.
  • At least 10 percent to 25 percent of physician total pay is at risk.

Marcotte suggests that when employers evaluate an ACO they know has reached its tipping point, they can then probe deeper into quality and cost considerations, including key points like:

  • Are results better than local market alternatives, improving each year and approaching national best practices?
  • Do risk results and contract terms show sustained positive performance?
  • How does the ACO consumer experience differentiate from the market for high-risk, moderate-risk and healthy patients?

The ultimate goal is to help align health plan and employer expectations. “It becomes a very market-relevant exercise because employers can look at an actual model in the market and prioritize their needs explicitly,” Marcotte says. “If one ACO is only doing care coordination for high-risk patients but another has grown to expand it to moderate-risk patients, that difference can be clearly articulated and quantified.”

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