Pharmaceutical Industry Implications of Accountable Care Organization Performance Metrics

The Patient Protection and Affordable Care Act has prompted CMS (Centers for Medicare and Medicaid Services) in the US to draft a proposal for establishing Accountable Care Organizations (ACO’s).  This draft proposal outlines a concept for enrolling patients into healthcare provider systems (local networks of hospitals, physicians, laboratories, etc) to coordinate a continuum of care to keep patients healthy and to better manage their diseases for improved clinical outcomes at lower cost.

Included in this proposal are 65 performance metrics (Table 1, pages 174-194); specific quality and clinical outcome measures of care delivery.  Healthcare providers in an ACO will be required to track, record, and report their performance against these metrics to qualify for what’s called “Shared Savings” …  financial rewards … or essentially bonuses for meeting or exceeding these performance metrics, but they’ll also be subject to financial penalties for delivering expensive care or under-performance against these metrics.

What kinds of metrics are we talking about?

Well … some are more general … like the use of survey results to capture for example;

  • The  level of satisfaction with physician – patient communications
  • patient feedback about their provider experiences
  • And whether or not the healthcare system has best practice processes in place like patient education, the extent of electronic medical records, and the use of e-prescibing

Other performance metrics are clinically oriented and much more quantitative, for example;

  • The number of readmissions following hospitalization
  • Healthcare acquired conditions (e.g., surgical or catheter related infections, pressure ulcers)
  • The percentage of patients vaccinated or being treated with specifically identified treatments of choice ( e.g., beta-blockers, ACE- inhibitors, or ARB therapy for heart failure patients with Left Ventricular Systolic Dysfunction, warfarin for patients with atrial fibrillation)
  • or the percentage of patients controlling their hypertension, blood glucose if they’re diabetics, or controlling their cholesterol levels

The ACO performance metrics go well beyond the tracking and reporting requirements hospitals now capture in their quality systems.   More importantly, these performance metrics are more likely to get the attention of healthcare system administrators and individual healthcare providers because they will be held financially accountable for delivering against these metrics.

While there is considerable debate about, and even resistance to,  the details of the draft proposal and uncertainty as to whether or not CMS can actually implement the ACO concept, this should not create a “wait and see” mentality for pharmaceutical marketing and sales.  The ACO draft proposal should be viewed as a feasible strawman proposal which will foster pilot programs at a few healthcare provider systems and will certainly elicit commentary and alternative proposals as to how to hold healthcare providers accountable for delivering higher quality care at lower cost.

In an earlier post we discussed the pharmaceutical sales and marketing challenges created by the complexity of ACO organizational structures and decision making processes. In our next post we’ll explore how this ACO concept and the 65 performance metrics could actually provide a platform to help drive revenues for pharmaceutical companies in this evolving new healthcare market.   mike@pharmareform.com

  • http://www.healthcaretownhall.com Jeremy Engdahl-Johnson

    With disenchantment over the Medicare ACO concept growing, will commercial payor-driven ACOs gain momentum? http://www.healthcaretownhall.com/?p=4029

  • http://www.pharmareform.com Mike Wokasch

    Jeremy,
    Delivering higher quality healthcare at lower cost implies doing things differently. The draft ACO concept may not be perfect but it proposes three important changes. Healthcare system integration for a continuum of care for the benefit of the patient, defining specific performance expectations, and holding individual healthcare providers financially accountable for the cost implications of care delivery. I believe it is going to be hard for commercial payor-driven healthcare provider systems and insurers to ignore the concept of defining performance expectations (quality and clinical outcomes) and providing incentives for delivering high quality care at lower cost. This not only could enhance a healthcare system reputation for care delivery but could lead to significant profitability from similar levels of spending while keeping insurance premiums down. I’m sure antitrust regulators may find this challenging in the non-government healthcare market but there are competitive advantages to be created. mike@pharmareform.com