Tuesday, November 4, 2014

Dual Eligibles and ACOs: A Blueprint for Success

By: Nalini K Pande, JD

Background:  Why Duals Need Stronger Focus and Attention

You may notice that when we talk about health reform, most health policy experts tend to bring the conversation back to the dual eligibles.  These beneficiaries are covered under both the Medicare and Medicaid programs and are generally sicker and costlier than Medicare and Medicaid beneficiaries as a whole.  Thus, it is no surprise that duals have been the focus of those trying to bend the cost curve.

ACOs May Be Uniquely Situated to Address Key Duals Issues

How do we improve the care of these beneficiaries while also working to reduce costs?  Accountable Care Organizations (ACOs) that take on dual eligibles, are uniquely positioned to provide effective solutions. An ACO is a group of coordinated providers in which provider reimbursements are linked to quality metrics and reductions in the total cost of care for an assigned population of patients. Given their emphasis on patient-centered, integrated care and coordinated Medicare and Medicaid benefits and funding streams, ACOs could facilitate greater quality improvements and reduce cost-shifting between programs as well as overall costs. Yet, the fundamental question still remains:  What is the blueprint for success?

Two core frameworks will need to be developed as part of a blueprint for success:
   • ROI Framework
   • Measurement Plan

Certainly additional key components will be necessary.  However, two critical components of the blueprint for ACO success are ROI (return-on-investment) and Measurement frameworks. First and foremost, a successful ROI framework is needed to ensure financial viability of the ACO structure: (e.g, hospitalization costs must be significantly reduced to pay for increased expenses in care coordination, care transitions, and care management). 

Second, a measurement framework will be needed to test improvements in quality.  Key measures should include patient-reported outcome measures, beneficiary experience, care coordination measures, utilization and cost measures, etc.

As part of this blueprint, the ACO must consider the barriers and challenges to changing the current system. How can the ACO overcome these barriers?  This will depend on whether the ACO can achieve a true culture change at three levels:
  • • at the governing level with a stronger focus on clear and attainable management goals and benchmarks with diverse stakeholder input
  • • at the clinical level with team-oriented care in order to improve care coordination and
  • • at the community level with a focus on population health and collaboration with community organizations.

Can ACOs that take on duals bend the cost curve and improve quality? This has yet to be seen.  Setting ACOs up with a blueprint for success may be just what the doctor ordered.

Nalini Pande, Managing Director, Sappho Health Strategies has nearly 20 years of experience in healthcare policy and reform.  She has considerable experience in Medicare and Medicaid, and emerging payment models including accountable care organizations and patient-centered medical homes. Ms. Pande also has strong expertise in dual eligibles and the specific issues facing this unique population.  Ms. Pande is a graduate of Harvard Law School and Princeton's Woodrow Wilson School of Public and International Affairs.

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