Provider Opportunities Afforded by New Federal Initiatives

The Congressional Budget Office (CBO) stated in June, 2010 -”Slowing the growth rate of outlays for Medicare and Medicaid is the central long term challenge for federal fiscal policy.” Two recently deployed federal initiatives are being used to align hospitals’ and physicians’ incentives and thereby control costs. Both programs are synergistic with the providers’ and purchasers’ desires to improve both the quality and cost efficiencies for all patients. Both the Accountable Care Organizations (ACO) and Acute Care Episodes (ACE) use global (shared) fees to align hospitals’ and physicians’ financial incentives and facilitate quality improvements. Innovative providers are taking advantage of these opportunities to gain market share and increased profits. A third program targets commercial patients and creates federally subsidized, not-for-profit insurance companies that can be formed and managed by integrated hospitals and physicians. These Consumer Operated and Oriented Plans (CO-OP) are the means by which providers can market directly to employers and self-pay individuals and share profits generated by improved efficiencies. The strength of the CO-OP concept for providers is that contracting is done without a traditional insurer or HMO.

Verras answers the three most important questions facing hospitals that are considering becoming an ACO or CO-OP:

1. Does the hospital have the data to objectively measure clinical outcomes improvements that will determine the percentage of year-end financial savings to be shared between the hospital and physicians? (Only objective, transparent and clinically reliable data can create a “trust but verify” environment that will satisfy both the hospital and physicians as they share financial savings.)
2. Does the hospital have the objective outcomes to measure each clinical service’s (cardiology, orthopedics etc) quality and financial improvements that will determine the percentage of year-end, financial savings to be shared among the physician groups?
3. Does the hospital have the ACO mandated, interoperable information infrastructure for secure, standards-based data sharing between the hospital and physicians’ present and future office EMRs?

Accountability and Transparency: Objective, comprehensible clinical data are the basis for collaborative hospital and physician relations as well as the means of effective communication with patients, employers and governmental agencies.

• Physician Incentives
• Acute Care Episodes (ACE)
• Consumer Operated and Oriented Plans (CO-OP)
• Accountable Care Organizations (ACO)