CIN, ACO and Other Acronyms of Interest
NOTE: This blog was revised August 18, 2017
In my travels and conversations with clients, two questions are very common:
· "What's the difference between an ACO and a CIN ?", and
· "Is there a structure or organizational type for an ACO that is more likely to succeed?"
The confusion is understandable because there are so many variations of CIN and ACO. There are so many ways to integrate clinical enterprises that confusion about what defines a CIN is expected. Several of the commercial payers call some of their provider–payer contracts an “ACO arrangement”, adding to the confusion. However, there are commonalities in all the versions of CIN and ACO that allow for basic definitions.
A Clinically Integrated Network (CIN) is both a structure and a functioning unit. The essential structural component is an information system housing digitized and searchable medical data. The entities that contribute and retrieve information are the members of the Network. This structure exists to make possible, but does not guarantee the success of, the functional component of the CIN. How completely the data are transformed into actionable information, and then used to drive improvement in the value of care provided, establishes the continuum of CIN functional effectiveness. The structural component can be accomplished through the use of a common Electronic Medical Record (EMR), the least expensive and most effective mechanism, or essential components of various brands of electronic records can be extracted and housed in a Health Information Exchange (HIE). How much of the data is digitized – enabling “slicing and dicing” for reports and queries – determines the effectiveness of the HIE. An HIE can be focused (an HIE can serve many other functions, but very focused is its most basic; e.g., opiate prescription history), or comprehensive and mirroring a single-brand EMR of pooled information (much more expensive than with a single brand EMR).
The value improvement goal can only be realized completely if all elements of the Triple Aim are addressed:
· Improved community health status
· Improved patient experience
· Reduced overall costs.
Having all data digitized is required to maximize value improvement. Documents that were printed and scanned into an EMR are only marginally contributory to the process. They cannot easily be searched, queried, and included in reports. So, the effectiveness potential of a CIN or an HIE is a measure of the digitization of information. If the system has one EMR, it’s less expensive to get to maximum effectiveness. If there are many EMRs, it’s more expensive to get to an equivalent level of effectiveness.
CINs can be one, or many separate, medical groups. It could include physicians, hospital(s), pharmacies and others that share patient data. It could be linked in a variety of ways to one or several hospitals and other physical treatment centers (Ambulatory Surgical Centers(ASC), Infusion Centers, Dialysis Centers, Pharmacies, etc). The key is the availability and use of a core of critical information that facilitates reaching the goals of appropriate care every time listed above. Implied, and necessary for success, is the agreement on and adherence to defined "appropriate care." This usually takes the form of "evidence based medicine" (EBM or Evidence Based Practice - EBP). But for the majority of care not having well established guidelines, there must be an agreed upon appropriate range of care that limits individual provider and patient preferences, and works toward some "expected care."
There are many strategies to integrate clinical services that do not require a Network. But the alternatives are generally more limited in the extent and/or in the methods available to achieve the Triple Aim of value improvement. Examples of clinical integration without a network (which are not mutually exclusive of a CIN or ACO) range from co-management of service lines on one end of comprehensiveness spectrum, through intermediate steps of joint ventures and co-investments, and finally to mergers, acquisitions, and physician employment via contracting or W-2 employment relationships. Co-management focuses on a particular service line or group of services. Joint ventures are limited to the services provided by the jointly owned facility or equipment, which could be very focused (lithotripsy equipment was popular for many years), to comprehensive within a set of diagnoses (Ambulatory Surgery Centers; Dialysis Centers; Infusion Centers). Quality, patient experience, and costs can all be addressed in these arrangements, but these attempts at clinical integration do not commonly focus on appropriateness of care unless entities external to the arrangement (i.e. payers) impose an incentive and/or requirement. I’ll discuss this more, and why I believe physician employment to be limited in its comprehensiveness, when I answer the question about which ACO structures are advantageous.
Successful CINs invariably deliver higher value by focusing on the delivery of care, that has demonstrated value to the patient, in the right place, at the right time, by the right people – including prevention of disease and worsening of existing disease states. The CIN is the structure that makes these goals attainable. Each of the integration arrangements strive to align the incentives of all the "players" in the healthcare delivery team to avoid unnecessary and/or duplicative care, remove barriers to timely care, address the causes of non-compliance, improve patients' personal choices that influence their health so greatly, and all the other mechanisms imaginable to facilitate improved health and patient experience, and reduced costs of treating illness.
So now the obvious question is what does that have to do with ACOs?
The answer involves money and jail. The CIN is incredibly expensive, most estimates putting it at $1.5 to $2M and 16-24 months of work to get it started, depending on the nuber of sites, physician groups and other entities to be connected, and how many different EMRs exist. The successful outcome is fewer procedures, less lab and imaging, and more patient contact with nurses, nurse practitioners, pharmacists, dieticians, care coordinators, etc. So, the transition to a CIN involves spending a lot of money to do less of what you get paid for in a fee-for-service environment. What a deal ! The solution is negotiating contracts that pay the network for the required work. There is a continuum of ways this can happen - direct payment support from insurance entities for care coordinators and or pharmacists (or even embedding their employees in your organization), bonus pay for quality metric achievement (what some commercial payers call ACO arrangements), sharing a portion of the savings realized (Medicare [or Commercial] Shared Savings Plans), bundles of fixed payment for episodes of care, and of course partial or global fixed monthly payments (capitation).
But unfortunately, the solution can introduce another challenge. If there is more than one legal entity - two or more physician practices, a practice and a hospital or an ASC, etc - then contracting jointly with insurance companies or large employers on behalf of all the entities can be problematic, and possibly illegal. Certain kinds of information sharing can be an issue. And some of the interventions to promote health and appropriate care is actually prohibited (e.g. giving Medicare patient a ride to a pharmacy or doctor’s office). Now enter the ACO.
The Accountable Care Organization (ACO) is a federally anointed entity (by the Affordable Care Act) that has blessings of the Federal Trade Commission and the Justice Department to do many of the things prohibited if the structure and form of the ACO were not in place. Joint contracting is allowed. Information sharing is required. Monitoring and enforcement of treatment parameters is expected, even when it results in a reduction in services provided (e.g. protocols that require non-acute cardiac caths to meet certain requirements). You need a specialist in healthcare law to help you with all the nuances, but the short answer is that if you contract with Medicare in a Shared Savings Model of Alternative Payment Mechanism, and demonstrate that you are meeting its requirements, then you “are an ACO" and can engage in contacting with commercial payers to get them to also pay for the CIN’s activities and results, without invoking anti-trust and other laws.
The CIN provides the structure and facilitates the function of integrating care, sharing of information, and alignment of incentives and goals. The ACO is the legal mechanism that allows the entity to get paid for what the CIN makes possible.
Can you have a CIN without an ACO? ---- Yes, but why would you want to? You would be increasing your costs of providing care, while simultaneously driving down compensation (fewer procedures, less imaging, less lab, etc).
Can you have an ACO without a CIN? ---- Yes, but the opportunities for that to be successful are rapidly disappearing. You need:
· A high average cost of care for Medicare beneficiaries (high starting costs in order for there to be saving to share); and
· A single medical group providing a large portion of the care for at least 5,000 Medicare enrollees (five thousand because that's the rule, and serving most of their needs because of "attribution" - a challenge we won't get into here, but trust me you could do a lot of work and not get credit for it in a lot of circumstances that don't meet the criteria I just described); and
· Be in a group that desires to address the Triple Aim. The reality is that in most markets, one group can’t do the work themselves. It requires “integration” with other providers.
Why not have multiple medical groups for the ACO without a CIN? ---- Well then you would need to share information, and agree on treatment plans, care pathways, "expected care", and the ability to monitor and when necessary impose repercussions of “expected but not realized care.” All of this is more difficult without the backbone, the structural element, called the CIN. And it can be harder to determine how to pay for all those people needed to coordinate care, search the data for opportunities to improve health and patient experience.
Now back to that preferred organizational type for ACOs.discussed / predicted earlier in a 2014 JAMA article -
"A key difference between physician-led ACOs compared with other ACOs, such as those organized by hospitals, is that physician-led ACOs have clearer financial benefits from reducing health care costs outside the physician group, which are much larger than physician costs. In contrast, hospital-based ACOs also receive shared savings for avoiding hospitalizations or shifting care to a less costly ambulatory setting, but those cost reductions are lost revenue for the hospital. The interests and incentives of physicians in physician-led ACOs are not similarly conflicted, and the benefits are more concentrated."
This observation is consistent with my experience, logic, and with the best available evidence. Single specialty, physician led ACOs are performing better than those led by hospitals. And in the general patient population (i.e. not renal failure, or cancer, etc) Primary Care is the specialty of choice.
A little background will make this more understandable. Hospitals (and all bricks and mortar based providers) have high fixed costs and depend on volume to make it work -- just like the airline industry. It costs almost nothing for one more passenger or (on average) one more patient. All organizations with this cost structure chase volume. They live on "contribution margin" - the portion of compensation for services that exceeds variable costs, that "contributes" to the payment of those high fixed costs.
In the transition from fee-for-service to pay-for-value inherent to CINs and ACOs formation, hospitals face a dilemma - fewer procedures, admits, diagnostics, etc are going to be needed. As a hospital manager, your strategies are limited:
· Moth-ball a wing of the hospital (which increases the fixed costs of every admit in the remaining open hospital), or convert it to some other use
· Grow your market or market share (if the rate of surgeries goes from 5 per 100,000 to 2.5 per 100,000 then we need another 100,000 in our “market” to maintain volume)
o Geographically grow the area you serve by acquiring physicians’ practices in your out-lying / secondary market and gain their referrals
o Employ physicians in your core / primary market and secure a larger percentage of their referrals into your facility
o Destroy your competing hospital
· Down-size the work-force (care-givers that won't be noticed at first, then management)
· Acquiring the competing hospital can also work, sometimes
· Denial is also a useful strategy, but as the psychiatrists have taught us, only in the short term
There are hospitals that can get beyond the inherent dilemma of fewer procedures, fewer re-admits, and fewer first admits. I have seen them. But they are not, in my experience, common. Most are dealing with the new demands of pay-for-value, promoting community wellness, and ultimately reducing the need for hospitals by pursuing a strategy to maintain and grow volume. Unfortunately, there are also the system CEOs that achieving another goal that has frustrated them for their entire career, by seizing the opportunity (through employment) to control physicians. They are easy to spot. Their hallmark is the rapid accumulation of physician practices with very generous salaries (pricing grads out of reach of independent practices, often losing $180,000 to $220,000 annually per doctor) that convert to productivity-based pay after two to three years, combined with highly restrictive non-compete clauses if the physician leaves.
Multi-specialty groups also perform less well than single specialty groups because of the same, but less intense, dynamic. These groups almost always have primary care and specialists. Reducing the number of procedures can be very challenging in that environment, compared to a single-specialty primary-care group. Compared to the alternatives, primary care based ACOs have no (or at least less) internal conflict with working to reduce the burden of illness, promote health, and eliminate unnecessary / unproven care. And when the shared savings come in, they have less difficulty in determining how to split up the bonuses. In short, they have fewer conflicts of interest when developing and enforcing EBM guidelines, and addressing appropriateness of care. Without financial or contractual incentives, the other mechanisms of integrating care discussed above will rarely implement changes that reduce the number of services within their focus. Who would want to joint venture in an ASC and then work to decrease the number of surgeries done there, or co-manage a cath lab and work to decrease volume?
And lastly, let’s complete the discussion of the Health Information Exchange (HIE). I offer two perspectives at opposite ends of the comprehensiveness spectrum. There are more.
One easy way to think of an HIE is as a giant, but less restrictive, CIN. Giant because more providers contribute data, and less restrictive because they can share some or all info but not be obligated to align all incentives, agree to a broad set of EBM care plans, or be a contracted part of an ACO. If designed correctly, it doesn't require a change to a single Electronic Health Record, even if more expensive to manage. It could in its simplest form be forever a highly focused way to address a specific problem – e.g. opioid-prescription doctor shopping; or share widely vital information – e.g. immunization records. It can be a transition phase to a CIN, but doesn’t need to be. From the transition perspective, it is a shallow end of the pool that - for example - specialists could put their toes in the water and not dive into the deep end until there is some demonstration of how they can get paid for doing less. It allows specialists to keep the primary care group happy, without giving up their autonomy. For the ACO physicians it’s a way to capture more attribution while getting some of the information out of the specialists’ record; information that could eliminate duplication of services, reveal patterns in patient preference of specialist selection or specialist’s variation in costs, secure better insight into how patients are accessing the care, etc., etc.
At the comprehensive end of the spectrum, the HIE empowers the ACO / CIN to more completely move into Population Health Management (Pop Health, or PHM). Big data is power. Having more data allows more robust data analytics: better understanding of how to change patient behavior (who would have guessed that the managing the attitude of the grandmother-to-be about breast feeding or Vaginal Birth After C-Section[VBAC] has the greatest impact on those services?); greater understanding of the predictors of illness (e.g. who would have imagined that diabetics that don't get foot exams on schedule would be at an increased risk of admission for lower-leg cellulitis?); or greater insight into total costs (how would you know that the “least expensive” by visit charge neurologist had the highest admit rate?)
The final aspect of the HIE - that unfortunately has largely been squandered for the present - is the value and sale of all that pooled patient data. Squandered because EHR vendors and analytic firms realized the value of the data, and wrote into their contracts an exclusive right to sell pooled / HIPPA compliant data to any number of willing buyers.
So now you know what they mean: ACO, CIN, PHM, and HIE. For a more complete discussion of all the relative acronyms and a review of progress on Physician Payment Reform, see a recent New England Journal article.