Building the Components of Accountable Care Washington, DC October 22, 2012 Norman H. Chenven, M.D. Founder & CEO
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1 Austin Regional Clinic Seton Health Alliance Building the Components of Accountable Care Washington, DC October 22, 2012 Norman H. Chenven, M.D. Founder & CEO
2 Austin Regional Clinic (ARC) brought managed care to Central Texas in ARC spent it s first two decades focused on delivering high quality capitated care. Multiple environmental factors dictated a retreat from capitation in Austin and Central Texas in 2000.The passage of PPACA and the decision of Seton Healthcare Family to apply for Pioneer ACO designation drew ARC back to its future to participate in Seton Health Alliance in 2012.
3 The conditions required to provide value based care are: Motivated customers commercial or governmental Committed leadership in the provider community Significant capital to build infrastructure And ideally pricing mismatches These conditions existed in 1980 and appear to be reoccurring with the catalyst of PPACA.
4 Profile of Austin Regional Clinic Physician owned/physician governed 320 physicians 18 outpatient facilities in 3 counties 350,000 unique patients (seen within an 18 month period) 1,200,000 annual encounters (inpatient and outpatient) Multi-specialty group built on a primary care base Joint venture MSO with Seton Hospital (since 1999) Approximately $200M in annual revenue
5 Our History in a Nutshell Founded in an exclusive contract with PruCare HMO (group model). Strong growth from onset (17,000 health plan members within first 18 months). Health plan/medical group alignment started to fray in 1987 with Prudential management changes. Termination of exclusive PruCare contract in 1993 (80,000 fully capitated lives) : contracted with 7 regional and national health plans (HMO).
6 Our History in a Nutshell, cont d 1999: MSO formation with Seton Hospital provided a capital infusion allowing ARC to recover, reinvest & grow : unwinding of all capitated contracts 2007: Physician s Health Choice (2,000 Medicare Advantage patients) contract. Purchased by UHC (2012). 2011: BCBSTX PCMH pilot (44,000 patients) 2012: SHA Pioneer ACO (11,500 patients). Currently: PCMH discussions with United, Humana, Aetna and large employers in progress.
7 Questions: 1. What challenges were faced in developing SHA the hospital/physician contracting entity? 2. What does the hospital need? 3. What do the physicians need? 4. What inherent challenges and conflicts exist? 5. What are the opportunities for alignment and future success?
8 Developmental Challenges Faced by SHA All capital came from the Seton system physicians wouldn t (couldn t) participate. Physician leadership and commitment is an existential requirement. Austin physician community largely oblivious to concepts of care management and/or triple aim goals. IT systems and data analytic capability almost nil at outset. Resources for post acute coordination and/or palliative care relatively basic (primitive). Governance and physician incentive challenges.
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10 What Does The Hospital System Need? Must be able to grow market share. Must have a committed primary care base. Must identify committed specialty groups. Must move down a path toward true clinical integration for both operational and FTC reasons. Must be prepared to integrate IT systems ($$). Must be committed to invested in data analytics ($$). Committed leadership and competent management.
11 What s Needed for Physician Success? Committed and sophisticated physician leadership. Funding for currently un-reimbursed professional services. Comprehensive, accurate, convenient, real time clinical data. Nurse navigators, behavioral health specialists, outreach staff to support patient engagement. Predictable financial reward for predefined quality goals.
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13 Inherent Challenges and Conflicts for ACOs Revenue decline is certain and cost of care savings aren t. Culture trumps strategy always. Patients have no skin in the game. IT sucks (and costs a lot). Analytics are over-rated. The industry remains fragmented with powerful vested interests. National politics preclude rational consensus driven change.
14 What Are The Real Opportunities? Coordination and control of post acute care. End of life and palliative care. Behavioral problems as they affect compliance. Redirecting care to a redesigned outpatient environment. Closed (narrow) networks. Clinical Integration across care silos. Patient engagement ($$).
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