From the President


Richard L. Clarke, DHA, FHFMA

The timing couldn't have been better. In the middle of an HFMA conference on value and accountable care, CMS released its proposed accountable care organization regulations.

To put it mildly, the conference participants-mainly chief financial and chief medical officers at provider organizations-had a lively discussion as we all tried to figure out, on the fly, what this proposed rule meant to the future of our organizations and health care as a whole.

Many healthcare provider organizations have expressed interest in participating in this accountable care organization (ACO) pilot and believe that the ACO model should be extended to private payers as well. At the conference, we heard about great work that some provider organizations are doing to position themselves to be accountable for outcomes and cost by developing models to coordinate care.

During one of the question-and-answer sessions, I was asked, "Where are the payers? Shouldn't they be part of this discussion?" I answered that the process of improving quality while reducing cost involves changing how healthcare services are delivered-and that's what providers do. But as I thought about that answer, it became obvious that while providers are critical, they are not sufficient to the process of increasing value for purchasers.

From the purchaser perspective, value involves a broad definition of quality (medical outcomes, access to care, and the patient experience) and the total payments for services over time. This concept is related to the risk of managing population health in addition to managing medical episodes of care. Providers are critical to developing and executing coordinated care models, but patients experience healthcare services beyond the typical hospital or physician practice construct. Social services, fitness and wellness programs, and dietary and drug therapy programs are also part of managing population health. Although some providers offer many of these services, most do not.

And financially, most providers don't have the whole picture of the dollars spent on care. Some patients move among health systems and providers seeking specific services from different providers regardless of their health system affiliation. For example, I see physicians both in Chicago and Miami given my travels between the two cities. Only my payer has records of the services I seek in each location. In addition, surveys from HFMA's Value Project reveal that most providers have little experience in network development and actuarial services.

Finally, providers do not have extensive experience or expertise in direct employer contracting, underwriting, and insurance regulations. Some provider organizations already have insurance entities that perform these activities. But even those systems realize they have relatively small market share compared with major insurance companies.

During our Leadership Conference on Value, Fairview Health System and Medica Health Plans presented a case study of provider/payer collaboration. Based on their comments, it is clear both parties are needed to provide value for the purchaser, and that frank conversations and detailed planning are necessary to build a trusting and economically feasible working relationship.

Given all of these issues, it makes sense that providers would partner with payers to achieve value through accountable care. Next time, we'll make sure the payers are invited to the party.

Publication Date: Monday, May 02, 2011

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