1. a look under the hood
five critical questions you should be
asking about ACOs

2. 1. what is an ACO?
2. are ACOs DOA?
3. is there really money to be made?
4. are there any successful ACOs?
5. what IT costs are there

3. let’s get
started

4. what is an
ACO?

5. Medicare providers and
suppliers participating in
Accountable Care
Organizations (ACOs) can
continue to receive traditional
FFS payments and are eligible
for additional payments based
on meeting specified quality
and savings requirements.

6. are ACOs
DOA?

7. Are ACOs DOA?
“ACOs are about fundamental
changes,” said former CMS
administrator Mark McClellan. “The
main emphasis is to get away from
fee for service payment structures.
Despite the difficulties in launching
them, they are not going away.”
The reports of my
death have been CMS has received
greatly exaggerated. considerable pushback from
providers of its proposed
rule-making.

8. Payment Reform Activity

9. CMS reform timeline
2010 2011 2012 2013 2014 2015
HIPAA 5010 ICD 10
Penalty for
non
PQRI PQRI (eRx) PQRS
submission
of PQRI
Penalty for
ARRA Meaningful Use non
compliance
Reduced
No Matching
Hospital Acquired Conditions Payment for
Payment
HAC
Accountable Care Organizations
Penalties for High Rates of Readmissions
Inpatient Value Based Purchasing Program
Bundled Payment Pilot
Source: Kaiser Family Foundation Health Reform Source 11/10/2010

11. ACO building blocks
• Operational • Payer
Efficiency Strategies
– Workflow – Contracting
– Patient rates
throughput – Risk sharing
– Order sets & cost – Payer
management alignment
• Physician
• Population Health
Alignment
Management
– Clinical
integration – Care registries
– Governance, – Quality
structure, & improvement
culture – Patient
– Incentive engagement
structure

12. is there really
money to be
made?

13. show me the money!

14. the opportunity for savings comes from
real-world statistics
Almost 50% of U.S.
healthcare spending is
for the care of only 5%
of the population
Nearly 50% of U.S.
healthcare spending—
$1.13 trillion—is for the
treatment of chronic
conditions

15. are there any
successful ACOs?

17. Advocate Physician Partners
• 3,400 physicians, 8 hospitals, 280,000 capitated lives, 137
performance measures
Performance Year Incentive Funds Distributed
2005 $12.4 million
2006 $16.7 million
2007 $25.0 million
2008 $28.2 million
2009 $32 million*
* Estimated from 2010 Value Report, Advocate Physician Partners

18. Marshfield Clinic
• Participant in Physician Performance Group Demonstration
• Theodore Praxel, MD, medical director of Marshfield’s institute for
Quality “Our success year after year is the result of investment in a
well developed HER and other tools to enable improvement.”
Savings to CMS Bonus Earned
Year 1 $12M $4.5M
Year 2 $13M $5.78M
Year 3 $16M $13.8M
Year 4 $35M $16M
Year 5 $34.5M $15.8M

19. 2009-2010 ACO: Hill Physicians, Catholic
Healthcare West, & BCBS of California
• Shared financial and medical data to identify possible areas to
improve care and reduce cost
• Reduced readmissions by 15% in one year
• Shortened hospital stays by paying greater attention to follow
up care
• Transferred ER patients from out of network to CHW
• Reduced by 13% the number of elective surgeries, particularly
bariatric
• First year savings of $20 million on 41,500 lives

20. • Clinical Integration is a physician and
provider led effort
• Internally motivated to monitor
themselves and deliver better quality and
higher value – not something that is
forced on them from the outside
• The “secret sauce” is the empowerment
of the physicians
• Financial incentives are important but not
the only motivating factor in a successful
ACO
• Need to foster an entrepreneurial
attitude and a desire to seek out novel
solutions and accept the challenge to
explore and learn how to make this work

21. what IT costs are
there?

22. • Inpatient HIS
• Ambulatory EHRs
• Health Information Exchange
–Interoperability
• Data Warehouse
–Disease Registries
–Analytics of claims data
–Quality reporting

23. data challenges of clinical integration
Health Information needs to be
• Data will come from many disparate EXCHANGED within Communities
sources, including physician offices
with paper records
Physicians
• Physicians will question validity of
data Hospitals Health Plans
• Need to be able to access from
anywhere
Public Long
Health Term
• Need to be able to drill down and Agencies Care
identify patients who make up
summary report values
• Speed of report time is important Pharmacies Consumers
Laboratories Other Medical
Standardized Analytics & Informatics Intermediaries
solutions drive improvements in
QUALITY & EFFICIENCY

24. data drives quality and efficiency reports
Physician Performance
• Quality scorecards
• Patient chart view through
continuum of care
• Use of referrals and ancillaries
Financial Performance
• Total cost of care reports
• Payer analytics
• Areas of improvement
Population Health
• Chronic disease registries
• Care gap management
• Patient satisfaction

25. registries empower care management
Data Acquisition Data Integration Diabetes and
Other
Medicare Chronic Diseases
Intermediary
Employer &
Health Plans Population
R Management
Hospitals Data Aggregation E Acute and Chronic
Hospital &
Physician Office Labs
P Cardiovascular
Diseases
M Data O
National & Childhood
Regional Labs P Data R Flu
Immunizations
Pharmacy Benefit I Engine T
Managers Breast, Cervical, &
I
Colorectal
EMRs N Preventive Care
Web Based G
Generic Prescribing
Administrative
Efficiency
Data Inputs
Primary Care • Data arrives from a variety of sources in a Smoking, BMI, BP
Physicians variety of formats Clinical
Observations
Specialists & • Data is scrubbed, checked for accuracy,
Ancillary Providers normalized, and risk adjusted Seamlessly View
Patients Across
• Compared to master directory Registries
• Sorted into Disease Registries

26. Dell’s Health Strategy – “In the Cloud”
ACO infrastructure basics
Simplifies use with interoperability that creates a true “healthcare system”
Sources
Hospitals Physicians Payers Life Science Other
Service Dell Healthcare Cloud Platform
Areas Data Management Interoperability Mobility/Communications Security
Data Aggregation / Major HIT Vendors Patient
Partners Reporting Physician/Patient Portals Outreach
Dell Healthcare Solutions
Electronic Revenue
Image Payers Reporting
Analytics Medical Cycle Portals
Archiving Solutions & Alerting
Records Services
Applications

27. estimated IT expenses for ACO infrastructure
Based on interviews with 4 facilities: New West, Metrohealth, Memorial
Hermann, and Catholic Medical Partners.
Categories of Costs Start Up Ongoing
Developing Financial Management IS Systems $500,000 $80,000
Disease Registries $75,000 $10,000
EHR System $2,000,000 $1,200,000
Intra-system EHR Interoperability $200,000 $200,000
Link to HIE $150,000 $100,000
Analysis of Care Patterns $210,000 $210,000
Quality Reporting $75,000 $75,000
Total ( 200 bed hospital)* $3,210,000 $1,875,000
*Assume they already have purchased EHR $1,210,000 $675,000
Source: The Work Ahead: Activities and Costs to build an ACO American Hospital Association April 2011

28. summary

29. Thank You
Betsy Block Mike Morris
Director of Accountable Care Solutions National Practice Leader
(317) 225-6244 (615) 210-1812
betsy_block@dell.com mike_b_morris@dell.com