Episodes of Care: The Missing Link to Your ACO Strategy

Episodes of care (EoCs) have a pivotal role in any value-based healthcare strategy because EoCs help address a key physician gap in many current programs – specialists. A vast portion of the value-based space focuses on primary care. Primary care is fundamental in curbing health care spending, improving life expectancy, and overall healthcare quality in the long-term. However, it does not have the same level of impact on those already experiencing acute and chronic diseases. This is because their patient care is not being fully managed by a primary care physician (PCP); they also require the care of one or more specialists. When it comes to various accountable care organization (ACO) programs – whether quality metrics based, total cost of care or patient-centered medical home (PCMH) – these programs are not engaging specialists. Specialty physicians help ensure quality care is performed at the right time and in the right space for that patient. By the nature of the conditions they treat, specialists typically navigate patients through the most expensive part of their healthcare journey. By incorporating EoCs into your ACO strategy, this quality and financial gap is addressed.

Who’s Caring for the Patients? Primary Care Doctor or Specialists?

Six in ten adults have a chronic condition and four in ten have two or more chronic conditions. Chronic conditions are the leading cause of death and disability while driving up the nation’s $3.8 trillion annual healthcare costs. Chronic condition patients make up the bulk of the cost in healthcare, yet the expectation with many programs is that the PCP should be managing the care regardless of who or where it is performed. In many ACO programs, members are attributed to a PCP. Yet, when looking at the full spectrum of medical data, a patient could be going to see specialists more frequently than their primary care physician, indicating specialists are managing the patient’s care. Compounding this issue is the fact that PCPs may not have the time allotment needed for effective management of complex, chronic illnesses. In one survey, eighty-five percent (85%) of PCPs said they don’t have enough time to focus on all of a patient’s chronic disease management needs in primary care settings.

Though the ACO model’s goal is to have the PCP manage the full spectrum of a patient’s care, coordinating care across all physicians and healthcare settings can be difficult because there is little to no incentive for the specialists to fully engage. Any rewards from lowering the total cost of care aren’t necessarily shared with the specialist. Therefore, rerunning a test or choosing an equally-rated, lower-cost device doesn’t impact the specialist in the same way it would the managing PCP. Current state, these differences can be overlooked because as PCPs coordinate care, they can control some costs which result in overall savings. Although, as cost-control improves and care stabilizes, this will highlight the lack of specialty engagement which is needed for continued success.

How Episodes of Care Impact Value-Based ReImbursement

EoCs address specialty participation in two main ways. One, because an episode of care is at the level of granularity of the patient and not the population, it clearly calls out areas of control of the specialty physician. ACO models typically analyze performance based on a population’s average. Performing analytics that are EoC based, cost and quality aspects are undiluted in the statistics and more easily identified. Secondly, the specialist is in direct control of the specialized, more costly care. Thus, within EoC contracting models, the specialist or specialty group often has a financial stake. Whether at risk or part of a shared savings program, this incentivizes the specialist to coordinate and manage the patient’s care in the most effective and efficient manner. Quite often, through standardization of processes alone, specialists will recognize savings and improve quality outcomes.

Though some might be concerned about overlapping goals between ACO and EoC models, these can be addressed with an overall strategic plan4 and standardized contracting templates addressing hierarchical payment concerns5. By taking this ranked approach, one program can be flexible so as not to hinder another program, while ensuring standardization for areas where it is truly needed. Implementation of EoCs (and related value-based care models) fosters communication and accountability for any entity that would be involved in providing and coordinating care for the patient.

Episodes of care bring the specialists into the trifecta: hospitals, PCPs and specialists, needed to ensure high quality and cost-effective care for patients. This also addresses both the short-term and long-term needs that all patients will have over the course of their lives. EoCs incentivize the entire provider team to communicate effectively, providing transparency of services and treatments, to ensure that everyone is steering in the same direction providing appropriate, quality care. By engaging both PCPs and specialists in the care continuum for a patient, you are setting up your value-based strategy for true success.