Some form of shared savings and bundled payments will become a reality no matter if it looks like the current proposals of the Centers for Medicare and Medicaid Services (CMS) or a version that is developed for a Republican agenda because the current healthcare cost trends are unsustainable.
That means provider networks and hospital executives should start now to build those capabilities and examine those that have already tested shared patient delivery and payment models, said Matthew Eirick, executive director of strategic research at Healthcare Advisory Board, a division of the Advisory Board Company, which offers research and analysis.
Eirick said there is revenue opportunity in coordinating transitions of care, using quality measures and reducing hospital readmissions. For example, many patients return to the hospital with pneumonia at a cost of about $13,000 each time.
"If you fix the glitch in that transition that's driving a good portion of preventable readmissions, there is opportunity associated with bundling and structuring ourselves around it," he said at a June 28 healthcare payments conference.
[Q&A: The deep, wide gulf between ACO regs and reality.]
Aetna has tested for three years its Medicare Physician Collaboration model, in which it aligns incentives and resources for physician practices, with Medicare Advantage members, said Dr. Joseph Agostini, senior medical director for Aetna's Medicare team.
The project concentrates on elderly patients with several chronic conditions, including heart failure, diabetes and lung disease. Providers receive a certain amount of dollars per managed patient for achieving target quality measures, such as a follow-up visit within 30 days after a hospital discharge or office visits twice a year for patients with chronic conditions, and collaborating on care management.
One critical component is that Aetna provides the services of a nurse case manager, who views all patients' healthcare transactions, alerts patients to issues, such as delay in filling their prescription, and supplies follow-up information. The case manager works closely with the physician, tracks data on clinical interventions and offers programs for specialized care management, including end-of-life care and dementia.
According to Aetna, its Medicare managed population in 2010 had 31 percent fewer hospital acute care days compared with the unmanaged population and 24 percent fewer emergency room visits compared with the unmanaged group. The project group also experienced 34 percent fewer hospital rehabilitation sub-acute care days.
"We've done the low-hanging fruit of sharing data. Further reductions come with all meeting quality metrics through collaboration," Agostini said.
There was a high level of Medicare Advantage member and physician satisfaction with the program. So far, 47 physician groups have signed collaboration contracts with Aetna.
[See also: CMS: Want ACO savings? Start with meaningful use.]
In another pilot, Ardent Health Services is two years into a three-year demonstration of bundled payments for heart and orthopedic procedures in Tulsa, Okla. Physicians can earn up to 125 percent reimbursement if they are able to reduce costs and adhere to quality measures, said Jim Schnuck, Ardent senior vice president for financial operations.
As a result, the hospital surgical program has lowered costs. CMS also benefits because the provider has discounted its services, and the patient also receives a modest incentive for choosing a hospital in the CMS demonstration.
Providers have to change their thinking about where to focus their investments. In recent years, providers have invested in enlarging their facilities and in equipment to increase their utilization rate. In shared savings, providers will have to drive down admissions and move from increasing utilization to enhancing quality of care.
"Essentially, you are gatekeeping against the hospital use to keep people out of med/surg beds and the emergency room," Eirick said.
Instead, providers are going to be a steward of population health, developing patient-centered medical homes and investing in primary care, health information exchange and electronic health records, he said.