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Doctors play major role in ACOs, but surgeons largely left out

Reform Update: Doctors play major role in ACOs, but surgeons largely left out

By Melanie Evans
Posted: June 2, 2014 - 4:00 pm ET

Doctors have a sizable role in the governance of the first private and public accountable care organizations, a study says. Surgeons, however, have been largely overlooked for executive committee memberships and in quality measures as Medicare ACOs develop early targets for quality measurement and savings.

Two newly published surveys take a closer look at who is running the first crop of ACOs and what their early priorities have been.

The research, published in the latest issue of the policy journal Health Affairs, offer a snapshot of ACOs in operation in 2012, the first year that Medicare joined a trickle of public sector accountable-care efforts.

Accountable care is the name given to healthcare networks that seek to achieve quality and cost-control targets in exchange for earning bonuses (and in a few, avoid losses).

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The Patient Protection and Affordable Care Act called for Medicare to launch ACOs. The program expanded rapidly to total roughly 370 organizations as of January, with more to come.

Medicaid, in some states, and commercial health plans also have entered accountable care contracts with doctors and hospitals. New incentives under accountable care could erode the inducement for providers to do multiple tests and procedures when insurance companies pay by the exam, clinic visits or laboratory test.

Incentives for the earliest ACOs, however, are widely considered too small and weak. Rather, physicians who will use their clout to sway others to change practice patterns are considered important to ACOs' success, researchers wrote in Health Affairs.

Doctors who use their influence to promote quality and efficiency efforts are important, the paper said, and adding physicians to governing boards is one avenue to build the necessary trust to win over physician leadership.

Early ACOs have done just that. Doctors accounted for more than half the governing board among three quarters of the 173 public and private ACOs surveyed by Carrie Cola, Valeria Lewis and Elliott Fisher of Dartmouth University and Stephen Shortell of the University of California at Berkeley. Doctors owned 40% of the ACOs in operation as of August 2012.

ACOs described as “physician-led” composed 51% of survey respondents and another 33% were led by doctors and hospitals.

Separately, physician-led Medicare ACOs dominated the four case studies (three out of four) profiled in a second Health Affairs analysis of surgeons' roles in accountable care.

The ACOs' top strategic priorities—fewer readmissions and emergency room visits, more coordination for the chronically ill—did not include surgical care. And surgeons were absent from the executive committee of two of the four ACOs. The researchers also surveyed early Medicare ACOs and 14 of 28 respondents said no surgeons sat on their executive committee.

One reason for ACOs lack of interest in surgeons? “Notably, none of CMS' 33 ACO quality measures directly addresses surgery or surgical care,” wrote authors James Dupree, formerly of the American College of Surgeons; Kavita Patel of the Brookings Institution; Mallory West, formerly of Brookings; and Sara Singer, Rui Wang, Michael Zinner and Joel Weissman of Harvard University. Quality measures must be met under Medicare's accountable care program before ACOs can earn financial bonuses.

Surgeons also lack a strong incentive to join ACOs, the researchers wrote. The relatively minor ACO incentives are believed to be too inconsequential to change surgeons' behavior on quality or cost targets, case study ACO officials said. (Referral patterns may give ACOs more clout in negotiations, which officials said they plan to explore.)

Surgery failed to rank among the high-priority targets for ACOs, the paper said, and 88% of surveyed ACOs did not know what role surgery played in total spending.

That may prove to be a costly oversight. “Nationally, surgery represents approximately 50% of hospital expenditures and accounts for an estimated 30% of total healthcare costs,” the authors wrote. “Thus, even if ACOs are able to achieve their goals in chronic disease management, overlooking the role and cost of surgical care may negate those savings.”

Highmark Health sees operating loss

Highmark Health, the company created to combine the insurance company Highmark with a struggling Pittsburgh health system and other providers, reported operating losses of $186 million last year. Highmark Health attributed the loss in a news release to a goodwill impairment of $311 million from its Allegheny Health Network, the newly formed health system that includes the faltering West Penn Allegheny Health System. Highmark acquired West Penn Allegheny in 2013. Operating losses at West Penn Allegheny narrowed during the final six months of 2013 to $15.6 million compared with $56.12 million during the same six months in 2012.

"Allegheny Health Network has made progress in strengthening its financial position," said Karen Hanlon, Highmark Health's senior vice president of finance, in a news release. "The results do not include a full year for each of the hospital affiliations from 2013 but rather a partial year based on the effective date of each affiliation as we move to align the organization on a calendar year."

Follow Melanie Evans on Twitter: @MHmevans

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