The establishment and predicted growth of accountable care organizations is giving group purchasing organizations a new wrinkle to consider regarding procurement, membership and services they offer to hospital members. As the inpatient-centric business model is gradually transitioned into the post-acute care provider sector, GPOs must re-think their own approaches, relationships and sourcing patterns as it relates to this stratified new provider landscape.
At this point, the change is still in its nascent stage, but anticipation about how the industry will evolve over the next few years is paramount, said Les Popiolek, senior vice president of strategic sourcing for Atlanta-based MedAssets.
"ACOs may be causing some changes, but they aren't dramatic as it relates to sourcing at this point," he said. "What the whole ACO model and the Affordable Care Act have done so far is get everyone thinking about a more collaborative environment, with the formation of acquisitions and partnerships to offer incentives about working together. It has made us think about our strategies around collaboration and managing costs."
MedAssets has a national collaborative in which it aligns clients around sourcing medical/surgical supplies at one-third to one-half of total customer spend for a single sourcing event, Popiolek said.
"To get size and scale, if you get it at national level, that is the best leverage," he said. "Regional and local sourcing do make sense in certain ways - if they result in great outcomes, it could lead to greater collaboration. But there is no one solution for every challenge."
GPOs & ACOs
Although ACOs are still in a gestational phase, some early results have been charted in The Many Journeys to Accountable Care, a white paper by the Charlotte, N.C.-based Premier Research Institute and supported by the Commonwealth Fund. The report is a firsthand look into the experiences of the diverse groups of providers attempting to develop ACOs.
"As more providers move toward accountable care, it's vital to understand the capabilities needed to create and participate in an effective model that improves quality while constraining healthcare costs," said co-author R. Wesley Champion, senior vice president of Premier Performance Partners. "There's no better way to learn than from firsthand experiences of these innovative health systems that have taken steps to become ACOs."
The Premier team gauged the performance of four health systems during their formative periods, including Fairview Health Services in Minneapolis; Memorial Healthcare System in Hollywood, Fla.; AtlantiCare in Egg Harbor Township, N.J.; and Presbyterian Healthcare Services in Albuquerque, N.M. The white paper chronicles the challenges these early adopters of accountable care faced, their lessons learned and the implications of their work for policymakers, commercial payers and other providers.
All four organizations "identified determining the ideal speed at which to implement accountable care as one of the most challenging aspects of transformation," said co-author Joseph F. Damore, Premier's vice president of population health management.
One of the most interesting aspects of the study, Damore said, was how each health system approached organizing their ACOs.
"Every community is so different - they are not generic or homogenous at all," he said. "Based on their geographies, every organization faced different challenges. Our goal was to make this paper a learning document for others so they could see there isn't one way to go into it - there are multiple ways to do it."
Adding value
Premier facilitates the PACT Population Health Collaborative, one of the industry's largest ACO collaboratives, comprised of approximately 80 health systems with 350 hospitals and 17,000 physicians across 40 states. Launched in 2010, it represents about 25 Medicare ACOs. Through this initiative, Damore plans to continue charting the progress of ACO formation and report the findings.
"There is a lot of building that needs to happen; so, are they able to build those components and get value agreements from the payer?" he wondered. "As most of those organizations have contracts, we're measuring how they are doing. We want to know what is happening with quality of care. We are just starting to do that, so over the next year we will look at the data and publish the results."
To date, Premier has a team of 30 people who have worked in 130 communities on this issue, so the group is heavily invested in learning as much as it can about how ACOs will influence healthcare going forward, Damore said.
"ACOs will transform the entire healthcare system eventually," he said. "Our philosophy is to add value where we can, whether it is through purchasing or collaboratives or informatics. Our goal is to find ways to do that by working with suppliers, physicians and delivery systems."
A new view
Group purchasing organizations - which now prefer to be called alliances or membership organizations - built their reputations on negotiating the lowest prices for volume purchases on commodity products. But in recent years they have evolved into multiple service groups that offer consulting, education and training, outsourcing and financial services.
"Price is a metric that is easy to measure and is probably the most single quantifiable thing in the equation," Popiolek said. "But move ahead in time and as more information became available, the demands and expectations have gone beyond that into margin management. It has gone from price to cost into price plus utilization."
Actually, the main components are price, utilization and outcomes, he says. "It is delivering efficacy for care and service is a big part of it. Sourcing is a combination of provision, procurement, utilization and outcomes."