PatientKeeper CEO Paul Brient on Accountable Care Organizations (Transcript))

This is the transcript of my recent podcast interview with PatientKeeper CEO Paul Brient.

David Williams:            This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Paul Brient, CEO of PatientKeeper.

Paul, Accountable Care Organizations (ACOs) are getting a lot of attention these days after the issuance of the draft regulations.

Paul Brient:            Certainly ACOs are a topic of almost every conversation I have with health care organizations. The concept is not a new one necessarily.  It looks fairly similar to delegated capitation arrangements that many payers attempted or, in some cases, successfully put in ten or fifteen years ago.

The best general characterization of ACOs is they are very, very good concepts, the right idea.  The legislation and the regulations to put it in practice, however are difficult at best for providers and members and the community to understand. It sparked much more confusion than clarity.

If you look at the specifics of the legislation and some of the requirements of ACOs, which makes sense, and then compare that to the size of the panels that they’re requiring, there is a major overhead problem.

The minimum panel size is 5,000 people.  With the governance and infrastructure requirements to properly manage a population, it just can’t be done anywhere near a scale of 5,000 people. You need hundreds of thousands or more people to effectively manage a population.  So it will be interesting to see how this plays out in the real world.

Williams:            Since you mentioned it, let’s go back to the delegated capitation concept and the similarity to ACOs. Why is this ACO concept coming to the fore now?

Brient:            We have a fundamental problem in our society, which is that health care costs are increasing at a rate faster than the domestic product. That can’t go on forever.

One thing you can say for sure about capitation was that it was fairly effective at controlling costs.  The population in general, the commercial population, responded negatively to it in many places. But in California, capitation still is the norm and in fact, many folks in California are quite happy with it.

We have a large client out there, HealthCare Partners, that was one of the ACO pilots.  They’re a full delegated risk capitation health group, both from the hospital side and on the primary care side.  It services about 500,000 patients, does a great job and they’re regarded as a very premier place to get your health care.

So in some parts of the country capitation has survived. It has certainly been an effective technique of managing costs and actually ensuring quality.

Harvard Pilgrim Health Care, which got started in a capitation clinic model, had some of the best quality ratings back when they had that model and some of the worst customer satisfaction ratings. I always found that very interesting because people don’t necessarily evaluate their providers based on the same quality measures that you might evaluate them if you were a health provider.

Williams:            So let’s go back to today.  You mentioned this issue about panel size and overhead problem.  You could have a 5000 patient panel, but the requirements might be such that the infrastructure would be more like the size of something you need for somebody 20 times bigger than that.  How did that happen and how will folks deal with it?  Will the smaller ACOs just not exist or will they find a way that’s more efficient?

Brient:            This is just a draft document.  When the comments come back –if the Meaningful Use guidelines are any indication of how this might play out– I suspect one of two things will happen.  One is they might raise the panel size.  I think that’s unfortunately impractical just given the way health care is organized in this country. I think what they’ll end up doing is watering down the requirements maybe to the point where it’s pretty ineffective.

If you look at Stage One Meaningful Use for example, the requirements on provisional entry are one medication order per year per patient for 30% of your patients.  Clearly that’s not going to make a difference to anybody and I suspect that the next version of ACO legislation will contain some watering down, hopefully not that much watering down.

If you read the current requirements, they’ve got boards and dedicated physician executives and all this stuff in there that you just can’t do to support 5,000 people, which is three or four PCPs.  So that’s just not going to work well.

Williams:            You mentioned that when Harvard Pilgrim started out, they had high quality and yet they didn’t have such great patient ratings.  One of things that’s said that’s different about ACOs compared to the old capitation models is that there is more direct incorporation of quality measures.  Will that help address some of that gap?

Brient:            Well, I think this is the dichotomy of consumer selection of health care and quality delivery of health care.  People don’t understand the quality metrics very well. If you look at what people really care about, they want to go see the doctor that they want to go see, they want to be able to see the doctor when they would like to see the doctor, they would like convenience, ease of access, good communication, more time with the physician. It’s not clear that the ACO model will help or hurt that.

There’s pieces in the legislation, and certainly in the press releases around the legislation, that are trying to reassure people that oh yes, you can still go see whatever doctor you want. But the model falls apart if people are going outside of the ACO.  So I’m not quite sure how to balance those two things.  I don’t think they’re reconciled well yet.  I don’t know whether it’s marketing and PR versus reality, but if an ACO is really going to work, you’ve got to get your care within the context of that ACO and the relationships that providers have are really important.

I think that was the frustration with capitation plus just the general suspicion that people know their  doctor is being incented to, in a sense, manage the cost of health care, which means in everyone’s mind not giving them the services that they would like or deserve.

Williams:            For those organizations that are moving toward an ACO model, either because they’re comfortable that they can handle the draft regulations as written or because they think that there will be some adjustment over time, how are such organizations thinking about their information strategy and does it represent a shift in priorities from where they were heading otherwise?

Brient:            Well, I think it depends on the organization.  HealthCare Partners is a client of ours and uses our technology to integrate across hospitals and the primary care practices. They’re already set up to do it.  They already have the technology in place.  You have to be able to give your primary care physicians the visibility into what is happening to those patients when they leave the primary care office.  That is a very good thing for lots of reasons.  It puts the primary care physician back into the role of providing health care, which is a role that ironically managed care has taken them out of because of the changes in the reimbursement and how little time they get to spend with the patients.  Directionally that makes a lot of sense.

From an IT perspective, you have to have infrastructure to be able to give them this ability. What happens is if one of your patients shows up in the ED and you don’t know about it, you really can’t do much about it. Whether you’re above or below the cost targets or whether you effectively manage them or not, it’s a crapshoot.  So certainly from an IT perspective, some organizations have the IT infrastructure in place.  Integrated delivery systems, in many cases, have a lot of it.

Where a lot of scrambling is going on is when you go out into smaller traditional communities and towns, a couple of community hospitals and a physician community, that are mostly small physician practices and they don’t have the infrastructure in place.  They’re lucky to have an EMR, much less a networked EMR. With Meaningful Use role, all that stuff is getting built, but it’s going slowly.

So I think there’s going to be a real challenge for ACO formation in the near term outside of places that already have the relationships and the infrastructure in place.

Williams:            Sounds like as PatientKeeper you’re already supporting some entities that are in a capitation mode, so presumably a lot of that applies to the ACOs.  How does your suite of offerings at PatientKeeper support what Accountable Care Organizations will need to do?

Brient:            Well the whole idea behind PatientKeeper is to give our physicians complete visibility into everything that’s happening to their patients.  That often is within a given hospital, but we have a variety of customers that either have or are in the process of extending their reach and connecting their community so that when your patient shows up, you essentially see their whole longitudinal medical record across the whole continuum of care.

You don’t need to be in an ACO.  But certainly if you are in an ACO, that enables you to be more effective at what you’re doing.  I think the question is one of these chicken and egg things.  The question is do you need an ACO to force that or are some of the Meaningful Use provisions going to create that anyway?  I have a lot of trust in physicians that given the right information, given the right time, they generally make the best possible decisions for the patients within their skill set.

I don’t think getting an extra five percent in incentive payments is going to cause them, if they have the right information, to make a better decision.  I think what it will do potentially is cause them to go buy the infrastructure so they have information in the first place so they can make a better decision. But I’m not even sure that’s enough.

Meaningful Use is actually more meaningful towards achieving that goal because it requires them and it puts real money into infrastructure. It’s very explicit, whereas the ACO legislation is much more about ACO governance.  There are a few sections in there about using technology to make this work. But there’s a lot of technology needed to make that happen and actually a lot of it is covered in the Meaningful Use requirements.  The timing doesn’t line up so great because ACOs start in 2012 and most people are still struggling through Stage One of Meaningful Use.

Williams:            Let me change the topic just slightly and talk about readmissions.  I saw an article recently that was looking at whether clinicians or case managers could predict whether a patient would be readmitted to the hospital within 30 days and whether they could predict the reason for that readmission.

What is showed was that they were unable to do so. The article left off at that point, but it seemed to me that what was missing there was a feedback loop.  People didn’t have any chance to learn about whether somebody was readmitted and why. They don’t know very well what’s going to happen, but there’s not a way for them to learn.  Is there something in what you do with PatientKeeper that could help address that problem?

Brient:            Well, that’s very much what we’ve been doing for the past six or seven years with HealthCare Partners.  It’s very specifically focused around readmission and transitions of care from the hospital back into the community.  That is certainly an area where there is a lot of opportunity for improvement.

There are always no-brainer costs and quality improvements and this is clearly one where you reduce cost and you improve quality and you improve patient satisfaction hands down, unequivocally.  No one wants to go back to the hospital and it’s expensive.

So we’ve been actually working a lot with Health Care Partners and they’ve been able to impact the readmission rates very significantly, but they do it proactively.  What happens is those physicians, once they get ready to discharge the patient, they actually use our system to write orders for what should happen post-discharge.  Those orders go to the primary care physician and to their EMR and to a care manager.  The care manager is responsible for quarterbacking and making sure the patient gets the follow-up care that the discharging physician says is needed and also makes sure the primary care physician knows about the fact that the patient is getting discharged.

If you look at the model outside of an organization like that, especially with hospitalists, a patient presents at the ED, they go to the ED, they get taken care of, and the PCP might not even ever know that that ever happened.  In some cases the hospital doesn’t even know who the PCP is.  So that’s not a recipe for great transition back into the community. It’s very easy to fall through the cracks and end up back in the hospital.

So I think there is a big opportunity across the country around readmissions, but it’s tricky to get right. The hospitalist movement has ironically made that more difficult.  In the old days, you went and saw your family practice guy. If you needed to go to the hospital, they admitted you, they rounded on you, they took care of you, and they were the continuum of care manager.

That’s not very efficient necessarily nor effective. Physicians didn’t necessarily have a lot of people in the hospital, so they weren’t necessarily the best people to manage you while you were in the hospital, but at least they made sure that you transitioned in and out effectively.

So I think it’s a big opportunity and if ACOs could focus, that would be a good area to focus on

Williams:            That’s a helpful perspective.  Paul, before we close, any other topics that are top of mind today?

Brient:            It’s both exciting and concerning.  The government is really trying to figure out how to fix health care.  It’s a challenging thing.  It’s a political process and obviously the ACOs are all focused around Medicare and the government is the payer, but historically Medicare has not been a very aggressive manager of care.

They’ve got very low administrative costs, they’re very excited about that, but largely what they do is set payment rates and pay claims.  Medicare Advantage and ACOs are, in some ways, a step towards managing care in Medicare.  Unfortunately it will subject to the political process which will be difficult.

Williams:            I’ve been speaking today with Paul Brient, CEO of PatientKeeper.  We’ve been talking about Accountable Care Organizations.  Paul, thank you very much.

Brient:            Thank you so much.

June 23, 2011

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