Corporate Research Group’s Weblog

Scott Gottlieb, M.D., a fellow at the conservative American Enterprise Institute, suggests in this Health Policy Outlook that the Obama Administration may view accountable care organizations as a replacement for traditional health plans and may be crafting rules that provide ACOs with favorable treatment in health insurance exchanges.

If ACOs contract directly with patients on a health exchange by setting themselves up as entities that resemble staff-model HMOs (similar to the way Kaiser Permanente operates), some may partner with traditional health insurers to re-insure a portion of the risk they will be taking on. But on the whole, the problem with cutting out the health insurers from these arrangements is that consumers will ultimately be left with fewer provider options if they become tied to a local ACO.

The Obama administration believes that the ACOs, and the hospitals that operate them, will invest in new innovations in the delivery of medical care that lead to better coordination of health care services. The trouble with this vision is that hospitals have never been sources of innovation in the way medical care is organized and delivered. Over the last several decades, most of the notable innovations in health care services have been developed in for-profit companies, often run by entrepreneurs and backed by venture capital.

 

Here are the headlines from the January 2011 issue of ACO Market News:

1. Tufts Medical Center Discovers How Complex Risk-Sharing Can Be
2. BCBS-MA Says Provider Quality Contract Addresses Past Failures of Capitation
3. Massachusetts to Move Toward Global Payments
4. HealthSpring Funds Primary Care Clinics Under Capitated Model 
5. HealthPartners, Sanford, Coventry, MagnaCare to Speak at Conference

We’re very happy to have Bob Ihrie, senior vice president of benefits for Lowes Companies, as the afternoon keynote speaker at our 2nd annual conference on New Directions for Health Plans: ACOs, Medical Homes, Product Innovation, Diversification, March 25, 2011 in New York City.  Bob will discuss Lowes’ arrangement with the Cleveland Clinic to contract directly for heart surgery. Click here for a complete agenda and registration information.

Solid coverage – if I do say so myself – appears in the January issue of ACO Market News concerning the involvement of Tufts Medical Center and the New England Quality Care Alliance in a global risk-sharing contract serving 95,000 Blue Cross Blue Shield of Massachusetts HMO members.

NEQCA is a five-year-old network of 1500 academic and community physicians founded by Tufts.   What stands out in comments from Jeff Lasker, M.D., chief executive of NEQCA, is just how messy global risk-sharing arrangements are – and how much care is outside the control of the provider organization at risk.

NEQCA doesn’t set or negotiate pricing at community hospitals involved in the arrangement or at third-party lab and radiology facilities.  It has no say over benefit design, such as copay levels.  It doesn’t control drug formularies, but is at risk for drug costs.  It has no input into employee wellness programs.  It has no say over premium dollars the insurer might devote to care and disease management programs.  And it has nowhere near the level of reserves of an insurance company like BCBS-MA. 

Another big challenge: while NEQCA can exert some influence over Tufts physicians – who are employees of the medical center – its influence over community physicians is mixed at best.  At some community hospitals, both specialties and PCPs are affiliated with NEQCA and are at risk under the BCBS-MA contract.  In other cases, only the PCPs are at risk – suggesting little incentive for specialists to fall in line.

Here’s a good segment on WGBH in Boston (click here for video) discussing physician global payment initiatives being implemented by Blue Cross Blue Shield of Massachusetts and being proposed by state Gov. Deval Patrick.

The 2nd annual ACOs, Medical Homes and Health Plan Partnerships conference, Friday, March 25, 2011, in New York City, is shaping up to be an information-packed day. 

Among the speakers: 1. Ruth Krystopolski, president of Sanford Health Plan, who will discuss how her organization has successfully worked with risk sharing and capitation for years; 2. Bob Ihrie, senior vice president of benefits for Lowes Companies, a top human resources executive who is going to talk about his company’s direct contracting relationship with Cleveland Clinic for heart surgery.  3. Babette Apland, senior vice president of health and care management for HealthPartners, who will assess the opportunities and pitfalls of changes to the delivery system envisioned by reform. 

Featured Speakers:

Babette Apland, SVP, Health and Care Management, HealthPartners
William Gillespie, M.D., Chief Medical Officer, EmblemHealth
Dennis Horrigan, President and CEO, CIPA WNY IPA Inc.
Bob Ihrie, SVP, Benefits, Lowes Companies
Ruth Krystopolski, President, Sanford Health Plan
Carl Mercurio, President, Corporate Research Group

Here are the headlines from the December 2010 issue of ACO Market News:

1. Thoughts on Aetna’s Acquisition of Medicity for $500 Million 
2. CMS Picks 8 States for Medical Home Demonstration
3. ACOs, Medical Homes: Where Do Health Plans Fit in the Mix?
4. Jury Still Out on Health Plans Medical Home Payment Models
5. UnitedHealth CFO Says Provider Payment Models May Take Many Forms
6. Humana to Buy 300+ Clinics with 650 Physicians
7. Is UnitedHealth Interested in Acquiring Physician Practices
8. WellPoint Has 10 Medical Home Pilots Touching 80,000 Members
9. Humana Has 50,000 Commercial, Medicare Lives in Medical Homes
10. 0.4% of U.S. Physician Practices Are Recognized as Medical Homes

Jonathan Niloff, M.D., chief medical officer, MedVentive, during the webinar Reports from the Field: Real-Life Adventures of ACOs in Massachusetts and California:

The risk for healthcare both from a financial point of view and a quality point of view is changing from the health plan to the provider.