Key Things to Look for in an ACO Analytics Solution
The term accountable care organization (ACO) has been around since 2006 when it was coined by Elliot Fisher, MD, MPH, director of the Center for Health Policy Research at Dartmouth Medical School, during a Medicare Payment Advisory Commission meeting. It has since taken the industry by storm. That’s what happens when the federal government adopts a term and incorporates it into the Affordable Care Act (ACA).
Definition of an ACO
Exact definitions for an ACO abound. In fact, the government’s formal definition of an ACO (as outlined in the ACA) is three pages long. For the sake of relative brevity, I’ll include one here from Dr. Fisher himself. In a 2010 Health Affairs article he co-authored with Mark McClellan, MD, PhD, and others, he stated:
ACOs consist of providers who are jointly held accountable for achieving measured quality improvements and reductions in the rate of spending growth. Our definition emphasizes that these cost and quality improvements must achieve overall, per capita improvements in quality and cost, and that ACOs should have at least limited accountability for achieving these improvements while caring for a defined population of patients.
ACOs may involve a variety of provider configurations, ranging from integrated delivery systems and primary care medical groups to hospital-based systems and virtual networks of physicians such as independent practice associations.
This definition is useful, but what it really tells us is that an ACO can take a number of different forms—as long as stakeholders are working together to assume accountability for improving the quality and cost of care for a population of members. Here are the types of ACOs that we’re seeing today:
- Medicare ACOs, including Pioneer ACOs and Shared Savings Program ACOs
- ACOs organized by hospitals
- ACOs organized by physicians
- ACOs organized by payers
- ACOs that are a uniquely structured collaboration between payers and providers and many other stakeholders
- ACOs organized by consumers (Consumer Operated and Oriented Plan)
The variety of ACO organizational structures and the relative ambiguity about how an ACO ideally functions add to the complexity of establishing one of these organizations. What kind of ACO to create is a fundamental question that ACO leaders must address.
Considerations After an ACO is Created
After the ACO is created, things only become more complex. ACO have to consider a variety of elements, including:
- Organizational factors: ACO leaders have to determine the appropriate board structure, governance, and representation for their organization. They also must take into account their appropriate role for managing a population of members.
- Financial factors: ACOs have to perform significant actuarial work to predict the cost of managing their population of members. They have to determine the appropriate rate for per-member per-month payments based on what health resources their members are likely to use in both inpatient and outpatient settings, what their breakeven point will be, and more.
- Analytics: ACOs must be able to leverage technology to achieve their objective of being accountable for the quality and cost of care for their members. Leaders must accurately define their population of members and help their providers more effectively manage the healthcare they deliver. They must consider where they sit on the Analytics Adoption Model and answer a variety of questions, such as:
- How do we manage the utilization of healthcare services by our members?
- How do we keep our members from being readmitted after an inpatient encounter?
- How do we partner with physicians to help them better manage our members who have certain diseases?
- How do we work with the community to sponsor wellness fairs and other wellness activities that help our members stay healthy?
There are many competent consulting groups that can help ACOs navigate the complexities of items 1 and 2 above. However, where many ACOs (both recently established and those still in the planning stages) have a large gap is in aggregating and leveraging all the clinical, financial, and other data they need to be successful. I want to focus further on this key third aspect of ACO planning and operations—analytics.
Healthcare Analytics: 2 Requirements for an ACO Solution
Analyzing the complexities of delivering healthcare is impossible without data, analytical tools, and experience. A lot of different companies market themselves as having what it takes to help an ACO collect and manage data. However, not all companies can really meet an ACO’s needs for data-driven improvement. The questions to ask about any such solution are these: Do they have a data warehouse architecture that can meet the evolving needs of an ACO? Do they have the flexibility to meet the unique needs and configuration of one particular ACO? How agile is this solution? How quick is the time-to-value?
The best solution for leveraging data to drive clinical and financial improvement in an ACO environment is a healthcare enterprise data warehouse (EDW) with a flexible, Late-Binding™ architecture. Why? Because a successful analytics solution for an ACO must be one that:
1. Gives rapid time-to-value. A sense of urgency surrounds ACOs. These organizations don’t have two years to waste getting the system up and running. With a late-binding approach to data warehousing, ACOs get needed results fast. Consider the following things that can be done with a Late-Binding™ EDW in a matter of months:
- Define and refine populations. Interact with physicians to determine the mix of diagnosis and procedure codes that best defines a particular population of members. Drill into this population and understand the cost of caring for these members. Analyze comorbidities to identify common characteristics that drive higher costs. This process quickly enables an ACO to build flexible, accurate, sophisticated registries that can be adapted based on physician input.
- Prioritize improvement efforts. Analyze each population and prioritize them by disease severity, utilization of healthcare resources, and other factors. By identifying which population holds the most clinical and financial risk for the ACO, leaders can target the best opportunities for quality and cost improvement.
- Empower clinicians. Publish a community dashboard that enables clinicians to see near-real-time data about their member panel.
2. Adapts easily to the changing needs of an organization. Because the ACO space is immature and highly unpredictable, these organizations need a technology infrastructure that can adapt quickly to new data sources and use cases. An ACO must have the ability to integrate all of the data sources across the organization—without even knowing what all of those sources are yet! The integration needs will change, and new sources will come into play. In fact, an ACO’s needs are going to grow in ways leaders can’t even anticipate today.
A Late-Binding™ EDW platform is the only type of solution that couples this level of adaptability with the depth and breadth of functionality an ACO requires. The Late-binding™ EDW platform also adds flexibility by allowing an ACO to develop its own applications to run on its platform; the ACO is not completely dependent on the vendor to build apps that meet its needs.
The bottom line for ACOs is that its leaders must effectively manage their biggest expense: inpatient and outpatient costs. A flexible Late-Binding™ EDW platform is proven to do just that. At Health Catalyst, we have had a great deal of success with this kind of architecture and have seen it:
Those kinds of real-world results are where the rubber meets the road in the ACO market today. The very definition of an ACO is marked by uncertainty. But with a Late-Binding™ EDW, you can be certain you have the infrastructure in place to realize quality and cost improvements now and throughout the life of your organization.
Are you forming or participating in an ACO? What do you see as your greatest challenges? How are you planning to handle clinical analytics?