Rethinking the delivery of care: Focused health care and accountable care organizations

Introduction

Given the recently proposed changes to the U.S. health care system, we’d like to introduce a two-part report that focuses on new ways of thinking about care delivery. Understanding these new transformational approaches will position you and your hospital for the challenges ahead.

Here, in part 1, we will explain the concept of focused health care and accountable care organizations (ACOs) as championed by Regina Herzlinger, PhD, from the Harvard Business School. In part 2, we will show how you can use care experience based methodologies that focus on patient and family experiences to develop focused care centers and ACOs.

– Regina Herzlinger, PhD; Anthony M. DiGioia III, MD; and Kevin J. Bozic, MD, MBA

Most informed observers of modern U.S. medical care agree that its excessive fragmentation hampers its ability to meet the needs of patients who require specialized care. As a result, funding for the formation of ACOs which would coordinate care was a cornerstone of the 2010 health reform legislation.

Regina Herzlinger

Anthony M. DiGioia III

Kevin J. Bozic

What is an ACO?

The few vertically organized health care systems in the United States which own their own hospitals and employ physicians are one example; but they are not readily replicable because of the mammoth expense of duplicating their large scope and scale and because they may find it difficult to reproduce a culture which has resulted from decades of experience. Likely for this reason, vertically integrated organizations (IDNs) such as Kaiser and Mayo, which were established in the early 20th century, have not succeeded in broadly replicating themselves. Further, it is difficult to hold these large IDNs accountable for the results they achieve in chronic care management of one disease or disability because of the broad scope of their activities and because they may not directly control all the resources required, despite their vertically integrated organizational structure. Last, because of their large size, vertically integrated systems may lead to an oligopolistic market structure which often curtails price competition and may diminish quality due to lack of competition.

Focused teams

An alternative and more feasible approach for ACOs relies on focused teams of providers who deliver all the care needed for a specific disease or disability. They are more feasible than large integrated systems because their focus requires a smaller scale. Yet, the enormous spending on chronic diseases and disabilities enables the formation of these focused health care centers even in small communities. For example, a town of 50,000 inhabitants spends roughly $50 million a year on diabetes. This level of expenditure could support two or three competitive focused health care teams in one small area. Similarly, with prices averaging $30,000 for a hip or knee replacement in the commercial insurance population, a team which performs only 300 of these could earn $9 million in annual revenues.

Focused health care teams are also more likely to provide lower cost, higher quality medical care than large everything-for-everybody IDNs. In the rest of the U.S. economy, firms evolved from large vertically integrated organizations, which owned most of the factors of production, to networked entities, which buy their components for focused providers. The great farm equipment manufacturer, John Deere, for example, does not manufacture components such as tires, batteries, or wheels; instead it outsources their manufacture to firms who focus solely on producing them.

Focused health care teams can develop organically, with providers creating their own care protocols. They could quote a long-term, risk adjusted price to insurers in return for delivering all the care the chronic patient may need and for assuming accountability for outcome measures. Because providers quote a fixed price, they are financially rewarded if costs fall below this price. Yet, their accountability for outcomes and the long-term nature of the contract curbs inappropriate under utilization. Last, because focused health care teams can exist even in small areas, the competition among would enable better control of prices and quality.

Real world example

The following is a real world example of focused care in a hip and knee arthritis/total joint replacement center: From our recent “minimally invasive surgery (MIS)” joint replacement experience, we learned that improvements in care processes, in itself, improved outcomes and had a more lasting effect. In fact, in the end the process won out over the specific implants and surgical techniques. Outcomes and patient satisfaction improved because of the comprehensive attention to the entire care experience, which included better preparation and education for patients and families, improved anesthesia techniques and multimodal pain management programs, rapid-rehabilitation protocols and focused subspecialty-care teams. This experience demonstrated the importance of the “focused care approach” that meets on the needs of patients and families foremost.

As a practical example of this concept of a focused care center, we developed as have others, a hip and knee arthritis/total joint replacement care center which covers the complete care experience — nonoperative as well as operative — for patients and their families with hip or knee pain due to arthritis.

When surgery is required, the focused care center covers a full cycle of care and treatment: outpatient to teaching and education to inpatient to rehabilitation and back to the office again. We used the patient and family-centered care (PFCC) methodology and practice to develop the center and in the process created a high-performance orthopedic care team.

In a prospective study, we examined the care experience of 618 consecutive patients undergoing total hip arthroplasty (THA) or total knee arthroplasty (TKA). We found a very high level of patient satisfaction with an overall satisfaction scores in the 99th percentile in the country using the Press Ganey and Hospital Consumer Assessment of Healthcare Providers and Systems Surveys (HCAHPS) and 99.7% indicated they would refer others to our program. Average length of stay was 2.8 days for TKA and 2.7 days for THA with 91% of all patients being discharged directly home and 93% walking without handheld assistance at the time of discharge: 99% of patients reported that postoperative pain had little influence on their ability to perform post-surgical physical therapy, and exercises were started the same day as surgery and 43% of patients reported less than 5 on the Visual Analog Scale pain scale on postoperative day 1, 45% on postoperative day 2, and 74% on postoperative day 3. Compliance rates for the Surgical Care Infection Prevention (SCIP) Initiative were 98% for both THA and TKA for antibiotics being given within 1 hour of surgery. Antibiotics discontinued within 24 hours from surgery were 93% and 94% for THA and TKA, respectively, and antibiotic selection was at 99% for THA and 98% for TKA. All of these metrics are significantly better than nationally reported levels.

It is our belief that the combination of focused care centers and care experienced-based performance improvement tools can have an industry-wide impact and will be an important approach to developing new and improved care delivery platforms and seamless transitions of care delivery that are experience based as opposed to provider driven. The logical next step is that any focused care center can evolve into “care experience-based medical homes” (and not just for primary care) for specialty care and set the stage to become ACOs.

Editor’s note

In part 2 appearing in the December issue, we will show you in practical ways how to establish focused care centers and ACOs using care experience-based methodologies like the PFCC methodologies and practice.

References:

DiGioia AM. Greenhouse PK, Levinson TJ. Patient and Family-centered Collaborative Care: An Orthopaedic Model. Clin Orthop and Relat Research. 2007;463: 13-19.

Herzlinger RE. Who Killed Health Care. and the Consumer Driven Cure. 2007. McGraw Hill. New York.

Anthony M. DiGioia III, MD, is the editor of Emerging Technologies & Innovation, he can be reached at Renaissance Orthopaedics, PC, and Pittsburgh, Pennsylvania Innovation Center, Magee-Womens Hospital of UPMC, Pittsburgh, Pennsylvania. He is a shareholder in Blue Belt Technologies

Follow OrthoSuperSite.com on Twitter