A compilation of essential news for the ACO Medical Home markets.

1. Information Advantage Group’s Healthcare Digest is focused on the emerging delivery
models for the hospital to consumer continuum. In a fast-read format, we provide only
the vital news that is essential to keeping you current on the latest and most germane
trends, ideas, results, technological developments and resources.
Simply click on a category relevant to you below to jump to the news topics, click on the
Linked Topic Title to be taken to the source article. Most sources are publicly
available; you may have to subscribe for others.
Innovation
Trend Drivers HIE ACO
Trends
Physician & Consumer & Oversight &
Medical Home
Professional Caregiver Influence
Innovation Trends:
Clearly the trend toward hand-held healthcare and remote
care devices that the patient or a home caregiver can use
is adding to the digital growth curve. Telehealth
continues to get more attention with the VA continuing to
prove the benefits of the technology that is leading to its
vigorous expansion of pilot programs.
Together, high tech, medical device, traditional telehealth
and telecommunications interests may amass a strong
lobbying effort to secure better reimbursement. Without
reimbursement, the anticipated “consumer miracle” in not
showing signs to be strong enough to drive the market.
Digital Is The Only Growth Medium For News
According to the Pew Research Center study, The State of the News Media 2011, people
are spending more time with news than ever before, but when it comes to the
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2. platform of choice, the web is gaining ground rapidly with digital news being the
only media sector seeing audience growth. The December 2010 showed:
 41% of of US citizens polled said the internet is where most of their news about
national and international issues came from, up 17% the previous year.
 46% of people now say they get news online at least three times a week, surpassing
newspapers for the first time.
 Cable news joined the ranks of older media suffering audience decline.
The study suggests control of the data will be one of the bigger issues. To
deliver news in the digital world, content must fit the rules of device,
software and transport vendors. This gives them some control over the audience
and also access to the revenue steam. The implication for healthcare is that
patient and caregiver preferences for content and engagement will continue to
escalate the need for digital technologies.
AMA Ethics Forum: “Lemon Dropping” of Patients May
Increase Due To Electronic Medical Records
[NOTE: "Lemon-dropping" or "dumping" = The termination of care for a patient because they
are difficult, costly, elderly, have multiple chronic medical problems, low health literacy or
otherwise unwanted patients.]
In an AMA Ethics Forum response, Jim Bailey, MD, MPH and Carson Strong, PhD (both
professors, Dept. of Medicine, University of Tennessee Health Science Center) discussed
the concerns on how the practice of "lemon-dropping" over the past 20 years has
added to rising health care costs. They suggest that the adoption of electronic
medical records and analytics offers a powerful way to mine data and assist in
selection of optimally profitable patients - federal privacy regulations do not
specifically prohibit these activities by physicians.
The authors state that patient selection of this sort is unethical because:
 These practices are expected to increase both taxpayer and employer-funded health
care costs.
 Continuity of care is disrupted and can produce adverse health outcomes, particularly
for our most vulnerable citizens.
 Unfair competitive practice: providers who do not engage in these practices will care
for a disproportionate number of sicker, more costly patients.
(AMA Ethics Forum, April 18, 2011)
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3. Telemedicine and Diabetes Monitors To Show Greatest
Growth in Global Home Health Market
According to a new healthcare market research
report ‘Home Healthcare Market (2009-2014):
 The home telemedicine services market is
forecasted to show a 32% CAGR from
2009 to 2014.
 Diabetes devices alone constitute about
46% of the entire home healthcare
equipment market, while the market for
home therapeutic equipment is the
fastest-growing segment with a CAGR of
19.4%.
 In 2009, the global home healthcare market is
estimated to be approximately $159.6 billion in
2009.
 The home healthcare services market is estimated at $143.1 billion, about 90% of the
entire market is expected to grow to $207.0 billion by 2014
 A shift of patient’s focus from hospitals to home care is affecting a rise in proactive
monitoring opportunities.
 Patients prefer home healthcare over hospitals mainly for the latter’s cost and
convenience benefits; and are thus increasingly opting for third-party medical
professionals and caregivers.
 70% of revenues are from those aged 65 years and older.
Hot Consumer Product - Home Defibrillators
Market research publisher Kalorama expects home use
defibrillators will be the number one growth item in the
home care products industry through 2014.
 The home care products market is expected
to grow by only 2.2% through 2014, the
home defibrillators segment is expected to
grow at a whopping 17.1% during the same period.
This growth is seen as indication of the willingness of consumers to take on the
responsibilities for sophisticated medical procedures performed at home. In the
U.S. an estimated 18 million people receive some kind of home health care from
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4. either professional or unpaid caregivers, and most of these individuals require home care
products.
VA Invests $1.38 Billion In Drive Toward Advancing
Telehealth Services
Continuing with its trend toward telehealth and a 2010 budget increase of 50%
over 2009, the Department of Veterans Affairs awarded contracts to six IT
vendors to run its massive telehealth program for the next five years.
The prize: About $1.38 billion in VA telehealth contracts. The individual vendor contracts
run anywhere from $150 million to $372 million over the five-year period, The smallest of
the new contracts--$150 million is just shy of the agency's entire telehealth budget of $163
million last year. (Fierce Mobil Healthcare, April 14, 2011)
VA Moves Toward Patient Hand-Held Communication Devices
The Department of Veterans Affairs is now piloting a handheld device veterans
can use to contact their primary-care providers. Veterans can use the software
to communicate with clinicians and also store personal, military and family health
information. VA officials say they're hoping that on the clinical side, the technology will
help treat conditions like post-traumatic stress disorder and traumatic brain injury. (Fierce
Mobil Healthcare, February 1, 2011)
VA Sees Remote ICU Telehealth Monitoring By Clinicians
Reducing Mortality And Length Of Stay
A literature review of thirteen studies conducted between 2004 through 2010 and
covered 41,374 patients at 35 ICUs across the country by Veteran Affair
researchers showed:
 20% reduction in mortality a length of stay by 1.3 days through the use of
telehealth services to monitor ICU patients.
Telehealth interventions included: videoconferencing, telemetry and remote access to
electronic medical records that enabled off-site ICU clinicians to intervene early and help
guide treatment.
64% Of Docs Using Smartphones
A new survey of 5,400 physicians from Knowledge Networks for the pharmaceutical industry
found:
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5.  64% of physicians use a smartphone
 27 percent of primary care providers and specialists say they have a tablet
This somewhat confirms a mid-2010 Manhattan Research survey that found that 72% of
physicians in the US used a smartphone or PDA. (Mobihealthnews March 31, 2011)
Physicians Love The iPhone, But iPad And Android Are
Starting To Get Their Share
Although Neilson recently crowned Android devices as dominate in the consumer
market, Apple’s iPhone and iPad still hold a commanding lead over all competing
platforms in the physician market. Bulletin Healthcare's analysis of 550,000 healthcare
providers, including more than 400,000 physicians who subscribe to their daily email
briefings between June 1, 2010 and February 28, 2011 and accounts for roughly half of the
practicing U.S. physicians found:
 Mobile consumption of medical news climbed by 45% between June
and February.
 30% of healthcare professionals now access the daily medical
information on mobile platforms, compared to 70% using traditional
desk platforms.
 The iPhone and iPad combined accounts for more than 90% share
of use in February, Android 6% and all others, including RIM and
Palm, barely registered.
 Share changed - iPhone use fell to 79%, from 86% in June 2010, while iPad share
nearly doubled to 14% in February 2011, up from 8% in the previous June.
 Devices based on Google’s® Android operating system more than doubled their share
between June and February.
Mobile device use by specialty showed:
 Physician Assistants – 41%
 Emergency Room Physicians – 40%
 Cardiologists – 33%
 Urologists – 31%
 Nephrologists – 31%
 Dermatologists – 30%
Gastroenterologists – 30%
 Psychiatrists – 28%
 Optometrists – 28%
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6.  Radiologists – 24%
 Rheumatologists – 22%
 Endocrinologists – 21%
 Oncologists – 20%
 Clinical Pathologists – 16%
(Medical Smartphones.com, April 6, 2011)
American Telemedicine Association Calls For Removal Of
Telemedicine Restrictions
Recommendations include:
 Medical videoconferencing for the 35 million beneficiaries who live in
metropolitan areas,
 Store-and-forward of medical images for the 43 million beneficiaries who
don't live in Alaska or Hawaii,
 Physicians to judge the appropriate ACO use of telemedicine for otherwise
covered services,
 Home-based medical videoconferencing, and
 Otherwise covered therapy services to be delivered via telehealth.
(ATA, April 25, 2011)
2011 – Surge In Wireless Point Of Care Mobile Device
Approvals
With the FDA giving 501(k) clearance to Abbott’s i-STAT 1 Wireless point-of-
care blood analyzer, it becomes the fourth wireless-enabled medical device to
receive FDA clearance this year and joins Ascom, Monica Healthcare and Mobisante.
The wireless model allows the transmission of data from the hospital bedside to a central
computer allowing physicians to receive immediate test information in the electronic medical
record. We can only surmise how helpful this will be in the medical home/remote monitoring
model. Abbott there are about 50,000 i-STAT devices are in use worldwide and they
process about 100 million test cartridges annually.
As to mobile software applications (apps), the FDA has cleared more than a dozen software
apps for mobile devices over the years including one this year: Mobile MIM.
(Mobihealthnews April 3, 2011)
Top 5 Apps at Harvard Medical School
While Harvard Medical School does not distribute mobile devices or recommends
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7. applications to its students, however, they think it’s OK for them to use their
favorites. The school’s CIO, John Halamka , surveyed their medical students and
residents to find out just what they are using most. The five apps include:
 Dynamed – A clinical reference tool created by physicians for point-of-care situations and
CEU.
 Unbound Medicine uCentral – Aggregates popular medical publications to an iPad
including: 5 Minute Clinical Consult, A to Z Drug Facts, Drug Interaction Facts, and
others.
 VisualDx Mobile – Physician-reviewed clinical reference with medical images showing the
variation of disease presentation through age, stage and skin type.
 Epocrates Essentials – A workhorse all-in-one mobile reference guide covering drugs,
disease, conditions, diagnostic and laboratory tests and OTC products.
 iRadiology – A quick review of classic radiology cases and images for medical students
and residents.
(Mobihealthnews, April 19, 2010)
Health Games May Prove To Be Very Helpful
A new category - Health Video Games - is showing early signs of showing value
than though before, according to a Journal of the American Medical Association (JAMA)
article. Games that have a motivating narrative that moves users toward defined
goals, provides clear feedback, awards points, delineates levels of competition,
encourages teamwork and trading, and in some cases, uses an avatar to represent
the player move them past casual entertainment. Some data on efficacy does
exist:
 77% reducing of diabetes related ER visits over six months by users of
Packy & Marlon--an older Nintendo - . The game allows players to inhabit a
character with Type I diabetes, perform glucose testing, make food choice
and perform other activities to manage his condition.
 Another study in the March issue of Archives of Pediatrics & Adolescent
Medicine found that a segment of six highly active video games provide the
equivalent of anywhere from moderate to vigorous exercise, and keep kids
off the couch.
Creation of The Robert Wood Johnson Foundation's Health Games Research Initiative is
intended to vet health games' effectiveness and thus applicability to the $10 billion set aside
in the Affordable Health Care Act for disease prevention and education. (Fierce Mobile
Health, April 6, 2011)
Healthcare IT Consolidation Sets Record -Stocks Outperform
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8. And M&A Volume Set All Time High.
Health Growth Partners (HGP), Q1 report on healthcare’s IT vendor market shows:
 Healthcare IT stocks outperformed broader markets during the first quarter
with a doubling of returns seen from the S&P 500.
 HGP Payer Index was the performing index, which posted gains of nearly 30% during
Q1, 2011.
 Healthcare IT and services M&A posted its strongest quarter on record.
Transaction volume during the quarter was 33% higher than the quarterly average in
2010, which was 36% higher than 2009.
M&A trends include:
 The ACO movement and other integrated payment models is driving
investment in data collection, transport, storage, analytics, and care
management technologies,
 Large enterprise and non-traditional HIT companies are aggressively pursuing a
stronger foothold in this sector with acquisitions,
 Healthcare reform has payors advancing new HIT strategies that address risk and
data management and the medical loss ratio in the coming environment, leading to
heightened interest in acquisition and investment,,
 The HITECH Act continues to drive spending for new applications in an effort to meet
Meaningful Use requirements, and
 This favorable market has attracted private equity investors looking to capitalize on it.
(HGP April 20, 2011)
NEWLY RELEASED - HELPFUL INNOVATION TRENDS RESOURCES
Healthcare Information Technology and Related Services
Quarterly Market Report Q1 2011 - An excellent summary of healthcare IT
market activity from Healthcare Growth Partners an investment banking services company.
Meaningful Use Crib Sheet – Physician Perspective
HITRUST FRAMEWORK - Developed in collaboration with healthcare and
information security professionals, the Common Security Framework (CSF) is the first
IT security framework developed specifically for healthcare information.
HITRUST offers a series of videos to provide an introduction to the CSF and related
programs. It is only through registering for a subscription that individuals can access the
CSF. A FREE Standard subscription at no charge is available to any organization
employing a function or activity involving the use or disclosure of individually identifiable
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9. health information, provided that said organization does not provide technology or security
products or services.
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10. Trend Drivers:
With a slow return to positive economic signs, it’s still not
enough to overcome people having higher copays and not
having enough money to pay for healthcare or retirement.
With quality improvement efforts over the last decade
barely improving the cost curves, there is a question of
whether the new models of healthcare will help – early
ACO results (later in the newsletter) say yes!
Consumer Sentiment Turning Upward
On April 29, 2011 the University
of Michigan as its revised
consumer confidence index
did better than expected for
April, increasing a bit to
69.8 from the 67.5 March
level.
Banks Starting To Lend More - A Key Ingredient For Future
Growth In The Economy.
Banks are beginning to show an
uptrend in lending activity.
Although only growing at a 7%
annualized rate since December,
it is seen as the beginning of a
new lending cycle brought about
by increased confidence on the
part of banks and businesses.
(Seeking Alpha. April 20, 2011)
Inflation Remains Low
– Healthcare At
3%...Same As Food
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11. Labor Department reports point
to fast rising energy and food costs
drove consumer prices 0.5% higher
in March, just like the prior three
months, and, on a year-over-year
basis.
 Overall inflation is at 2%,
the highest level since
December 2009's 2.8%.
 Inflation has been running at
6% for the last quarter and 4%
for the last six months.
 Healthcare's 6.5%
contribution to the CPI
is showing about a 3%
inflation rate year-over-year, almost the same as food and beverage.
 The WSJ touted “Underlying Inflation Remains Tame”
 Concerns center on another few months like the most recent may be replace price
declines in early 2010 with big increases and shoot the CPI sharply higher.
(Seeking Alpha, April 15, 2011)
WSJ: Deloitte Macro Survey - 20% Serge in Revenues
Needed To Trigger Substantial Hiring...It's Not All Bad
Despite corporate earnings showing double-digit gains for the last six quarters, a quarterly
Deloitte poll completed at the end of February of 77 CFOs of mostly $1 billion annual
revenues public and private companies in the U.S., Canada and Mexico showed:
 Almost 50% would want to see a 20% increases in earnings to substantially
stimulate hiring.
 Only 11% thought that a 10% increases in revenues would produce hiring.
 Those surveyed estimated only a line growth for North American to be 8.2%
this year, up from Q4 estimates of 6.5% for 2011.
 Healthcare Mention: Not even a major revision to the healthcare reform or
incentives like lower corporate tax rate or payroll tax would stimulate CFOs
to add employees.
Department of Labor numbers appear to support these results. February job openings rate
rose to 2.3% from 2.1% a month earlier and a total of 3.1 million jobs at the end of February
- unemployment remains around 9%. (WSJ April 14, 2011)
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12. Patients Not Buying As Many Prescriptions Medication
Recent slowing of growth in sales of
prescription drugs was attributed to
fewer doctor visits and fewer people
starting new therapies according to a
new study from IMS Institute for
Healthcare Informatics. IMS attributed
this drop to high unemployment levels and
the rising costs of healthcare motivating
patients to spend more conservatively on
healthcare. Highlights of the study include:
 Patients made 4.2% fewer visits to doctors in 2010.
 Sales of prescription drugs in the United States grew just 2.3% in 2010 ($307B total
spent), down from 5.1% growth rate in 2009 ($300B total spent), On a real per capita
basis spending increased by 0.6% compared to a 3.1% increase in 2009, $898 per
person in 2010, up from $876 in 2006
 The total number of patients starting new treatments for chronic conditions
fell by 3.4 million compared to 2009
(IMS, April, 2011)
$17 Billion In Harmful Medical Injuries
A study published in Health Affairs (April, 2011), looks specifically at measurable
medical errors that harm patients—a subset of medical injuries—and examines direct
medical costs, rather than indirect costs, such as malpractice insurance premiums.
Highlights of the examination include:
 Measurable medical errors that harmed patients cost an estimated $17.1
billion in 2008, or 0.72% of the $2.39 trillion spent in the U.S. on
healthcare that year.
 10 errors are accountable for 69% of the total medical cost for measurable
medical errors, the researchers noted.
 In first place, postoperative infections were the most costly error, totaling
$3.3 billion in medical costs, followed by pressure ulcers at $3.2 billion.
The other eight errors included:
 Mechanical complications of non-cardiac device implant or graft—$1 billion total
medical cost;
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13.  Post laminectomy syndrome—$995 million total medical cost;
 Hemorrhage complicating a procedure—$678 million total medical cost;
 Infection due to central venous catheter—$589 million total medical cost;
 Pneumothorax (collapsed lung)—$569 million total medical cost;
 Infection following infusion, injection, transfusion or vaccination—$566 million total
medical cost;
 Other complications of internal prosthetic device, implant and graft—$398 million total
medical cost; and
 Ventral (abdominal) hernia without mention of obstruction or gangrene—$342 million
total medical cost.
(CMIO, April 19, 2011)
Most Healthcare Is Paid With Other People’s Money
In response to a Paul Krugman's
recent opinion piece in the NY Times
that Patients Are Not Consumers,
Dr. Mark J. Perry, professor of
economics and finance at University
of Michigan, argues that rising
healthcare costs will not be
controlled until we do treat
patients as consumers.
Dr Perry argues that over time,
most of healthcare has gradually
been paid with other people's
money:
 Almost 90% of health care costs are paid by third parties (insurance
companies, government and employers) and only about 11% is paid "out of
pocket" by patients.
 Consumer health models have been successful and we need to look no further
than lasik surgery, retail health clinics, concierge medicine, medical tourism and
cosmetic surgery, to name just some of the successful "consumer-based" medical
services?
(Carpe Diem, April 22, 2011)
Growing Number of People Won’t Have Enough To Retire
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14.  53% of non-retired Americans do
not think they will have enough
money to live comfortably in
retirement, up 40% from 32% in
2002.
 28% say they will retire before age 65 -
down 40%, from 47% in 1995 .
(Marketing Charts, April, 2011)
Most Support Raising Taxes AND Leaving Medi/Medi Alone
The recent national survey of 1,274 US adults by McClatchy-Marist showed:
Overall support for raising taxes rose 5%: 64% approved raising taxes on incomes
above $250,000 – 64% independents, 83% Democrats and 43% of Republicans
supported higher taxes
80% of Americans clearly don't want the government to cut Medicare or Medicaid
-even among conservatives, 68% opposed cuts to these programs.
(McClatchy, April 18, 2011)
Robert Wood Johnson Thinks Economies Of Scale Rather
Than Risk Will Drive Insurance Exchanges
A Robert Wood Johnson brief concludes multi-state insurance exchanges are most
likely to be structured on shared administrative structures and efficiencies rather
than risk. Economies of scale, large metropolitan areas that cross state lines, pooling
across state line and establishing critical mass for stable risk pools are reasons detailed in
the brief. (Robert Wood Foundation, April 2011)
Health Affairs Policy Brief - Improving Quality And Safety Is
Still Glacial 2.3%
Despite multiple efforts since the IOM report a decade ago, quality improvement
throughout much of the US health care system is still proceeding at a glacial
pace, if at all. The recently published National Healthcare Quality Report by the Agency
for Healthcare Research and Quality (AHRQ) reveals that in 2009, while nearly two-
thirds of 179 measures of health care quality did show improvement, the median
annual rate of change was only 2.3 percent. This briefing offers a comprehensive
review of past quality measures and current regulations - a good foundation piece. (Health
Affairs, April 15, 2011)
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15. NEWLY RELEASED - HELPFUL RESOURCES
The Direct Project - Office of the National Coordinator for Health IT (ONC) has
released “The Federal Health IT Strategic Plan: 2011-2015," an 80-page last published in
2008.
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16. HIE
It remains to seem like the early days for HIEs, parties
still thinking about when, what and which vendor to choose
to reach quality of care goals. Not so obvious are the
concerns for financial sustainability for the HIE after
funding runs out.
KLAS Health Information Exchange Study
An Over view of drivers, HIE vendors and buyers preferences shows:
 32% would choose a HIE vendor within twelve months,
 Only five of 38 vendors mentioned are mentioned more than 10% of the
time,
 Public, Cooperative and Private HIEs are the leading buyers types, each with
their own unique needs,
 Epic is the vendor for HIEs that are planning to include 15 or more
hospitals, Medicity and Axolotl seem to be popular among smaller HIEs,
 Technology (38%) and cost (23%) are the overwhelming leaders in selection
criteria, merely 5% of see meaningful use as a key criterion for HIE vendor
selection, and
 Improving the quality of care (62%) is the main driver for forming an HIEs,
savings (26%) comes in at a distant second
NEWLY RELEASED - HELPFUL HIE RESOURCES
HIE Toolkit by eHealth Initiatives
CMS: Meaningful Use Calculator Measures Steps Taken To
Meet Requirements -
E-prescription Systems Market to Reach $204 million - The U.S.
e-prescription market is projected to reach $204 million, according to a new report by Global
Industry Analysts (GIA). With 4.5 billion prescriptions being written annually, the growth rate
of prescriptions being written, errors and adverse drug events are the major drivers.
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17. ACO
Motivations and expectations of those planning for an ACO
are being pulled by good early results from efforts like
CALPERS and Cigna. On the other hand, the proposition
of an ACO is being scrutinized, if not disparaged, by large
advisory consultancies. Accurate monitoring and analysis
are driven by strong concerns for financial viability and
appropriate population management. Again, I.T. needs are
anticipated to be a challenge and a key ingredient for
success.
The Leap To Accountable Care Organization Survey
An April 2011 Survey of provider management about ACO plans and perceptions by
MedLeaders show that 64% think health quality will improve and 32% think FFS with shared
risk will be the best payment structure. Other highlights Include:
 91% do not have an ACO,
 64% are planning to have an ACO,
 52% have no operational target date, 30% think 2012, and
 48% think the medical staff supports an ACO, 45% not sure.
What will the ACO include:
 80% clinical pathways,
 74% care coordinators & RNs, and
 70% Medical Home.
What are the drivers for an ACO:
 72% better clinical integration,
 60% risk shifting to providers, and
 57% market competition.
What are the barriers:
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18.  43% risk of inadequate payment rates,
 34% lack of good EMR/IT, and
 26% physician resistance.
(HealthLeaders Survey, April, 2011)
NEFM: What Might We Expect From An ACO?
This NEJM perspective article includes asking, "What can we reasonably expect of the
coming wave of ACOs?" Although not all past models of quality improvement and
shared savings have worked as expected, they point to the Medicare Physician
Group Practice (PGP) Demonstration to get some ideas on what we might expect:
 All ten participants in the PGP demonstration met at least 29 of the 32
quality goals, which focused on process measures related to CAD, diabetes,
CHF, hypertension and preventive care.
 60% of the demonstration sites produced savings amounting to $78 million in
Medicare expenditures.
(NEJM, March 31, 2011)
CALPERS To Expand It’s ACO Pilots Based On Positive
Outcomes – Anticipates $15.5 Million In Savings
CalPERS launched it’s ACO pilot that involves 41,000 members in January 2010 in
partnership with Blue Shield of California, Catholic Healthcare West and Hill Physicians
Medical Group. Early results from the January to October, 2010 period show:
 50% reduction in the number of patients hospitalized for 20 days or more,
 17% reduction in hospital readmissions,
 A 14% reduction in total inpatient days, and
 A half-day reduction in the average length of inpatient hospital stays
As a result of the positive patient outcomes, CalPERS said it expects to expand the pilot
ACO program for Blue Shield enrollees. (California Healthline, April 13, 2011)
Positive Results Drives Cigna To Double It’s ACO Pilots
Cigna has announced plans to double its ACO pilot programs due to good results in
quality improvements and cost cutting since first stared in 2007. Successes at
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19. their Cigna Medical Group of Arizona and since 2008 at Dartmouth-Hitchcock Medical
Center have shown:
 Annual savings of $336 per patient
 11% reduction in the cost of ambulatory surgery
 A rise of 3% in the number of preventive care visits that includes an
increase of 12% for adults and,
 A 10% improvement in closing gaps in care due to the care coordinator
monitoring patients for follow through on appointments and medical tests.
Cigna's model is slightly different than the commonly though of ACO program due
to it being structured on patient-centered medical home tenants and
commitment to frequent and open collaboration and communication. Cigna currently
has 12 initiatives across 11 states, involving 100,000 Cigna customers and 1,800
physicians. (FierceHealth, April 1, 2011)
Deloitte Thinks A Low Percentage Of Beneficiaries Will Be
In An ACO
A critical read by Deloitte Center for Health Solutions of the March 31, 2011, HHS proposed
regulation on accountable care organizations assumed that:
 Only 11% of Medicare beneficiaries would participate in an ACOs, about five
million - on page 352, however, the guidance suggested a lower range of
1.5-4.0 million.
The Center observed that some provider communities will possibly choose to create
clinically integrated delivery systems through other means like episode-based payments
and medical homes and other payment models the new Center for Medicare and Medicaid
Innovation may propose. The Center urged providers considering forming an ACO to
consider three questions:
 "Do you want to create a clinically integrated delivery model in which physicians,
hospitals, long-term care and allied health professionals join together in a formal
structure to assume risk for costs and outcomes?"
 "Are you prepared to make investments in infrastructure and changes in operations to
achieve optimal results?"
 "Do you have the core competencies to manage population-based outcomes and
costs, as well as the associated insurance risk? Or should you outsource these
functions?"
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20. The review goes on to make ten other points about ACO plans that include:
 Savings could exceed estimates: An ACO performing in the 10% is expected to save
0.7 percent on its Medicare expenditures, or $960 million. If an ACO optimizes quality
and savings potential, they could keep as much as 60 percent of savings above a 2%
threshold.
 Although the law states an ACO needs minimum of 5,000 Medicare beneficiaries to
qualify, 20,000 would scale better.
Read the report by the Deloitte Center for Health Solutions on ACOs. (Becker's Hospital
Review, April 5, 2011)
Hierarchical Condition Categories (HCC) Can Under Predict
ACO Expenses
As a follow up to “The ACO Model – A Three-Year Financial Loss?” article in the March New
England Journal of Medicine about Medicare's Physician Group Practice (PGP) ACO
demonstration project that operated from 2005 through 2010, Singletrack Analytics, a
financial consulting group, had a couple of observations about how cost sharing payments
were calculated and where the best successes were found:
 Four practices that received payments and were either affiliated with an
academic center or freestanding physician groups did well.
 Possibly having a hospital as part of the mix was hypothesized as a potential
"deterrent to achieving savings" because of the effect of reductions in
admissions under ACO practices on the hospital’s revenue.
 Those who failed showed a lack of alignment of financial incentives between
managed care organizations and hospitals, similar to the 1990s when this was
the principal cause for the failure of many of these affiliations.
 The four PGPs that earned cost-sharing payments in the second year showed
that they operated at the same level as pre-demonstration period - they
were 'winners' before the project even started.
The article goes on to discuss how under the PGP project, the targets were set based on
HCCs, which are common payment adjustments currently used for reimbursement and
very likely to be utilized for ACOs. A previous study found that HCCs under-predict
the expenses of Medicare beneficiaries with both CHF and osteoporosis by about
30%, and by about 20% for patients with CHF alone. The amount of under-
prediction increased as the functional status of the patients decreased.
Singletrack Analytics went on to recommend that groups having a large proportion
of patients with multiple chronic conditions risk being underscored for those
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21. patients. Such groups may be "born losers" having little opportunity for financial
success in an ACO. (Becker's Hospital Review, April 1, 2011)
ACOs May Negatively Impact Medically Underserved
Communities
A report by The George Washington University School of Public Health and Health Services
advocates that when it comes to ACOs, underserved communities are at a disadvantage
because the Affordable Care Act prohibits health center-formed ACOs from partaking in the
Medicare Shared Savings Program and the assignment of Federally Qualified Health
Centers (FQHC) Medicare patients to ACOs for shared savings reasons.
According to the report, the Accountable Care Act negatively impacts the poorest
beneficiaries who are often at the highest health risks, penalizes medically
underserved communities that lack primary care physicians, discourages health
centers' affiliation with hospitals and specialty practices and impacts the ability
of health center patients to participate in other shared savings programs, such as
Medicaid and CHIP.
(George Washington University School of Public Health, April 20, 2011)
AMGA Puts Some Distance Between It And Proposed ACO
Regs
The American Medical Group Association takes credit for getting accountable care
organization provisions included in the Patient Protection and Affordable Care Act
- it is now distancing itself from the proposed ACO regulations recently issued at
the end of March 2011 by the CMS. The association claims to actively formulating
formal comments and urges members to submit comments of their own to the CMS.
Heritage Foundation Thinks ACOs Will Fail
In a long briefing, The Heritage Foundations states that given the complexity of
healthcare, ACOs will not only fail , but most likely exacerbate the very problems
they are trying to fix. In their view, the guidelines are untested and vague and fall short
because they:
 Do not empower consumers to be stakeholders in their own care.
 Do not encourage provider accountability.
 Create an unfair competitive advantage for large organizations.
(The Heritage Foundations, April 18, 2011
Six Technology Essentials for ACO Infrastructure
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22. A General overview of what IT infrastructure is needed for an ACO including:
 Financial Infrastructure: Validate budget goals based on beneficiary population,
track performance payments received and administer chosen payment methodology
(such as shared savings) to participating providers,
 Reporting Infrastructure: Monthly performance reports, population management
trends such as disease and case management, and utilization and practice variation
reports,
 Performance Management: Disease-specific dashboards, comparison of actual
results to benchmark data and performance targets, and adherence to evidence-
based medicine,
 Data Aggregation: Aggregation and sharing of administrative and clinical data from
disparate sources, and shared disease registry accessible and enriched by all
participants,
 Clinical Data Exchange: Hospital shares detailed procedure information and
discharge plan with a patient's primary care physician, and physician shares
outpatient care history with the admitting hospital, and
 Role-Base Security: Access to aggregate cost and quality trends by governance and
project teams, secure repository for shared aggregate and detailed data, and sharing
of patient-specific clinical data between responsible caregivers.
(Becker Hospital Review, April 27, 2011)
Advisory Board: Buyer Beware Of Vendors Claiming Full
Featured ACO Systems – “Lots Of Kool-Aid Going Around”
Jim Adams, managing director at the Advisory Board Company consultancy and
veteran leader of HIMSS Analytics, thinks that even hospitals at the most
developed stage of healthcare I.T. are not ready for ACOs. He sees ACOs will
require a lot more I.T. horsepower than just a working EMR. Strong
connectivity; data warehousing, analytics and predictive modeling technology
supporting disease, care and utilization management applications are essential.
Identifying opportunities to reduce costs, disseminate payment and calculating shared
savings the goal. Adams estimates that t will take four years of intense ACO building to get
the needed data analytics and five years for predictive modeling. (Health Data
Management, April1, 2011)
ACO Accreditation Standards Due In July
Ten healthcare organizations have finished a month long pilot to test the National
Committee for Quality Assurance (NCQA) accreditation program for accountable care
organizations (ACOs) and is the final step before issuing standards in July. (CMIO Aprils
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23. 19, 2011)
FTC And DOJ Call For ACO Comments Due By May 31
On March 31, the U.S. Department of Health and Human Services issued rules for ACOs, to
be formed by hospitals, insurers and doctors. In a separate act, the U.S. Federal Trade
Commission and the Justice Department will conduct antitrust reviews of proposals to form
networks under the new health-care law, ending for now a discussions which agency will
have the responsibility. This now opens public comment on the two agencies jointly
proposed policy guidelines articulating how ACOs can serve Medicare beneficiaries
and patients with private health insurance without raising competitive concerns.
The policy statements include:
 The types of ACOs to which it will apply,
 How and when the FTC and DOJ will apply particular antitrust analyses to those
ACOs,
 Describe ACO antitrust safety zones,
 Outline the CMS-mandated antitrust review process for certain other ACOs,
 Procedures for ACOs to gain additional antitrust clarity if they fall outside the safety
zone but below the CMS-mandated antitrust threshold.
Comments are to be submitted electronically here by May 31, 2011. (Bloomberg, March 31,
2011; HealthLeaders, April 1, 2011)
Antitrust Surveillance Of Health Systems By DOJ
Department of Justice is increasing efforts to police hospitals and insurers it believes are
illegally blocking fair competition. In the first case of its kind since 1999, the DOJ has sued
United Regional Health System in Wichita Falls for allegedly encouraging health
insurers not to do business with competing hospitals. That practice allowed United
Regional to keep its monopoly, according to the lawsuit, while it also became one of the
most expensive hospitals in the state. The hospital disputes that its practice created a
monopoly and became one of the more expensive hospital in Texas, but agreed to a
settlement requiring it to change how it contracts with private insurers.
At the same time these enforcement efforts are increasing, federal antitrust authorities
have issued guidance that offers a more flexible response to providers that form
accountable care organizations - ACOs will initially make up only a tiny fraction of
the health care market. The tactic that got the Texas hospital in trouble, will
remain illegal for ACOs. Case detail are in the article. (Kaiser Health News, April 5,
2011)
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24. NEWLY RELEASED – HELPFUL ACO RESOURCES
Easier 213 Page ACO Proposed Regulations - Issued by HHS as a 429
page document, an easier to read and navigate product version is available in hard copy
and MS Word format and was reduced to 213 pages.
The Patient’s Role In ACOs
FTC Proposed Antitrust Enforcement Policy Statement
Special Edition – Expert Commentary On ACOs - SPECIAL EDITION
April 2011:Expert Commentary on the CMS, FTC/DOJ, IRS and OIG ACO
Regulations/Guidance (Accountable Care News, April, 2011)
The Commonwealth Fund & National Academy For Health
Policy: State Roles In Promoting ACOs February 2011
Accountable Care Organizations – American Hospital
Association Research Synthesis Report. The American
Hospital Association.
Brooking-Dartmouth ACO Toolkit
PWC Designing A Health It Backbone For ACOs
Essential Population Management Tools For ACO - A 60-page
guidance for healthcare providers preparing for Medicare's payment system change from
fee-for-service and episodic care to Accountable Care Organizations has been both
scattered and expensive to date.
eHealth Initiative Reports
Evolution Of Care Delivery- Accountable Care Organizations
And Preparing For Implementation
SEC/ 3022. Medicare Shared Savings Program
American Association Of Family Practice: The Family
Physician’s Blueprint For Success
George Washington University Hirsh Health Law And Policy
Program Brief A good Implementation Brief providing an overview of the April 7th
proposed rule, as well as the Proposed Statement of Antitrust Enforcement Policy and the
initial policies related to participation by nonprofit health care corporations and waiver of
federal fraud and abuse laws.
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25. MEDICAL HOME
Patient Centered Medical Home practices continue to rack
up savings and acceptance by the patient. Still, the need
for strong I.T. infrastructure is called for to help
specialty practices adapt.
Patients Have Not Heard Of Medical Home (PCMH), But They
Like The Ideas
According to The Patient Poll, a survey of Pennsylvania adults conducted by the Institute for
Good Medicine at the Pennsylvania Medical Society, the public isn’t exactly sure what
a "patient centered medical home" is and that only 9.6% had heard of the term.
However, respondent found the principal ideas of PCMH were appealing or very
appealing at high rates including:
 91% stated that having their own team of health professionals,
 90% like the idea of PCMH teams being led by physicians,
 93% better communications and access via phone, email, and extended hours,
 91% liked better attention to their future health needs
 94% liked improved quality of my health
(Pennsylvania Medical Society, April 24, 2011)
Medical Home Model Save $333 Per Medicaid Patient In The
First Year.
Savings of more than one million dollars in the first year of the Chemung County, NY
Medicaid medical home that cares for 3,000 of their 19,000 Medicaid patients. Using a
computer program to monitor and find cost savings, savings of $150K were enjoyed by
seeing patients in the clinic instead of the ER. Using this as a model, official estimates
are ranging up to $2 million. In this small county about 70% of property taxes
goes to pay for their share of Medicaid. With proven saving to date, 1000
additional patients using the clinic is the goal for the end of the year. (wetmtv,
April 19, 2011)
Physician Office-Based Health Coaches Produce 400%
Returns For Medical Home Model
Physician Office-based Health coaches (POHCs) have play a key role in patient
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26. engagement, cross-continuum care management, additional outreach, and other important
functions in the new model of care. Mercy Clinics has exceeded a 400% return on
investment in its own health coaches by relieving physicians of clerical and nursing
work, increasing the number of office visits, allowing the clinics to bill higher
levels of service, increasing testing revenue, and supporting pay-for-performance
initiatives.
The Advisory Board Company--a research, consulting, talent development, and technology
services firm partnering with over 2,900 of the world's leading health care organizations--is
collaborating exclusively with Mercy Clinics to further develop and market an enhanced
POHC training program, as well as other medical home-related training programs. Since
2008, over 100 health coaches have received POHC certification. (The Advisory Board,
April 14, 2011)
Medical Home Practice May Lower Use Of Diagnostic Tests
Recently a pioneering oncology practice in Philadelphia received NCQA certification
as a medical home practice. Although the NCQA medical home program focuses
on primary care, a few specialty practices have gained medical home recognition
and can be seen as a threat. Pathologists, clinical labs and other diagnostic services
may loose business in that other medical specialties may decide to be a medical home
practice and become more careful users of tests under standardize evidence-based medical
guidelines.(Dark Daily Clinical Lab News April 21, 2011)
America Academy Of Pediatrics Calls For Robust IT For
Medical Home
A policy statement from the American Academy of Pediatrics' Council on Clinical
IT in the Journal of Pediatrics emphasized that portable and comprehensive
electronic health records are necessary to support a medical home model for
children's primary care. The policy statement also listed some of the most important IT
capabilities for a pediatric medical home, including:
 Data security,
 Comprehensive records,
 Maintaining secure and comprehensive patient records that includes a patient's family
health history, immunizations, medical care and prescriptions in an easily accessible
database,
 Monitoring treatment outcomes,
 Educating and sharing information with patients and their families, and
 Data aggregation and analysis for research and quality improvement.
(iHealthbeat, April 28, 2011)
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27. NEWLY RELEASED - HELPFUL MEDICAL HOME RESOURCES
AAFP: Guidelines For Health Exchanges Include PCMH
Endorsements - The American Association of Family Practice (AAFP) has created a
set of eight principles designed to help member chapters address insurance exchange
issues with state legislators and regulators under the Patient Protection and Affordable Care
Act. The document includes quality, eligibility and PCMH endorsements. (AAFP, April 27,
2011)
Community Health Accreditation Program - Created in 1965, and
through “deeming authority” granted by the Centers for Medicare and Medicaid Services
(CMS), CHAP has the regulatory authority to survey agencies providing home health,
hospice, and home medical equipment services, to determine if they meet the Medicare
Conditions of Participation and CMS Quality Standards, it has more than 5,000 agencies
currently accredited nationwide.
Patient Centered Primary Care Collaborative: Medical Home
and Diabetes Care - "Practices in the Spotlight: The Medical Home and Diabetes
Care" lays out the intersecting quality priorities of structured, high-value diabetes care
management and the principles of the medical home.
National Academy For State Healthcare Polity - “State Multi-Payer
Medical Home Initiatives and Medicare’s Advanced Primary Care Demonstration” - Briefing
by the National Academy for State Health Policy. February 2010
Grants From The Cautious Patient Foundation - This outreach and
educational arm of PatientAlwaysFirst, a nonprofit organization committed to educating and
empowering patients, announced that over the next twelve months, CPF will grant out
$100,000 ranging in size from $2,000 to $7,000 to support projects proposed by individuals,
groups or nonprofit organizations. They have found that by providing individuals with the
right tools and information to effectively interact with their own healthcare system, patients
begin to experience better quality of care. (News Medical April 19, 2011)
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28. PHYSICIAN & PROFESSIONALS
Physicians are stepping up to the challenge of reducing
healthcare costs.
Brand Awareness and Strong SEO key to attracting
Physicians Online
According to a March, 2011 comScore/ImpactRx
Physician Behavioral Measurement Solution study:
 Most US physicians’ seeking online sources of
health information in Q3 2010 were driven
primarily by direct, non-referred access and
natural search,
 Paid search referred visits represented a
relatively small percentage of physicians’ overall
traffic to health-related sites
 80% of online users look for healthcare
information, ranks third behind email and
search.
comScore advises that this underscores the importance of building brand
awareness and effective SEO strategies in order to reach physicians online.
(MarketingCharts,.com April, 2011)
Bain Survey Of Physicians – Physicians Actively Moving To
Control Costs
A new survey of 500 US physicians from Bain & Company shows that physicians
believe that part of the burden of lowering healthcare costs rests directly on
their shoulders.
 80% of physicians agree or strongly agree that it is part their responsibility
to bring healthcare costs under control,
 35% of physicians say that compared to 5 to 10 years ago, they are less
likely to try new products,
 Physicians are also cutting costs by limiting the practice of defensive
medicine, according to the report,
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29.  Physicians are increasingly becoming more comfortable with standards of
care, because they are a defensible position in case of litigation, and
 33% of physicians anticipate being a part of an ACO or medical home in the
next two years.
As the reimbursement world moves away from a time when they were paid for activity to one
of delivering wellness, physicians are recognizing that a systemic change is under way.
(PharmExec.com April 20, 2011)
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30. CONSUMER & CAREGIVER
Although mixing social media and healthcare presents a
promise for the distant future, caregivers have a strong
appreciation for what I.T. can do for them - devices and
communication technology will raise the quality of their
lives and the patient’s.
Social Media Not So Powerful for Online Retail
Attention marketers - if you are rushing to increase your social media spend take note: A
new collaborative study between Forrester Research and GSI Commerce, analyzed
data captured from online retailers between November 12 and December 20,
2010. The research shows that social media rarely leads directly to purchases
online:
 Less than 2% of orders were the result of shoppers coming from a social network.
The report found email and search advertising were much more effective vehicles for
turning browsers into buyers.
 5% to 7% of purchases are influenced by social media outreach making it somewhat
effective for distributing news about short-term deals.
(Mashable.com, April, 2011)
NOTE: In a March released study by Capstrat-Public Policy Polling survey, 85% said they
would not use social media or instant messaging channels for medical
communication if their doctors offered it. (Healthcare IT News, March 24, 2011)
Consumers Think Social Media May Impact Their Medical
Decisions
Americans think highly of the usability of social media but are tempered in crowning it the
premiere source of health care information when considering all options.
 25% of respondents said social media was likely to impact future health care decisions.
 32% said they had a high level of trust in social media sites. Only 7.5% said they had
very low trust.
 50% preferred heath provider websites to any other source. 14% preferred combining
hospital websites and social media. Just 3% preferred only social media.
Those with a household income of $75,000 or above were more likely than lesser
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31. earners to look to social media sites for health information.
O nline Social Networks Can Help People Make Healthier
Lifestyle Choices
Consumers 50+ are the fastest growing segment on social media sites. This
demographic is increasingly seeking and sharing health info because of the
correlation between age and chronic conditions. In addition to Facebook, Twitter and
YouTube, online patient communities include:
 PatientsLikeMe.com. Lets patients share symptoms and treatments with each other.
80,000 members incl. 10,000 public profiles.
 Basis. Tracks biometric data via a Bluetooth watch.
 MotherKnows.com. Allows parents to track and share their children's immunization and
medical history, plus growth chart and developmental milestones.
Social pressure has been shown to help people make healthier lifestyle choices.
C aregivers See Big Benefits From Information Technology
The National Alliance for Caregiving and United Healthcare survey found that
caregiver’s anticipated benefits from the use of information technology included:
 77% would save time,
 76%making caregiving easier logistically,
 75% make the patient feel safer, 74%increase feelings of being effective,
and 74% stress reduction.
Caregiver interest in specific applications include:
 Personal Health Record - 77% would use to track health history, symptoms,
medications, and test results, in a PHR,
 Caregiving Coordination - 70% a master electronic calendar for scheduling of tasks
and appointments for multiple care givers,
 Medication Support - 70% would use medication reminders, alerts, dispensing and
administration directions.
 Patient Monitoring - 70% want to send data like blood sugar or blood pressure
readings to a doctor or care manager,
 Interactive Games - 62% want a TV-based devices to aid in fitness and mental
conditioning,
 Videophone - 61% want Telepresence to see who they are speaking with, and
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32.  Smartphone - 69% thing smart phone apps could be helpful.
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33. OVERSIGHT & INFLUENCE
Oversight continues to tighten in the face of new health
delivery models - this could be counter productive to
modernization and drive cost up.
Need For Home Care Requires Face To Face Consultations –
Could Drive Costs Up
“Only after the physician visits and has a face-to-face encounter with potential
patients” – is the hallmark of new CMS regulations for physicians continuing the
need for home health care under Medicare. These regulations were delayed due to
serious concerns about physicians' readiness to comply and the impact that the requirement
will have on severely ill patients. Given that physicians are not compensated for travel time
to see homebound patients, they're more likely to choose the easier and more costly route -
keep patients in the hospital or refer them to another institutional care setting. (The Hill,
April 4, 2011)
IRS: Tax Exempt Hospital And ACOs Briefing
The Internal Revenue Service (IRS) indicated that it is considering how existing
tax exemption applies to tax-exempt hospitals that will be participating in the
Medicare Shared Savings Program (MSSP) through accountable care organizations
(ACOs). The IRS recognizes that the promotion of health has long been recognized as a
charitable purpose, but it then goes on to quote several authorities indicating that promotion
of health alone does not ensure tax-exemption. (The National Law Review, April 27, 2011)
If you’ve read this far then we have been successful in giving you some
value. Please reciprocate and let me know your thoughts or if you don’t
see something that you would like to, then just drop a line to - jim@iag.co –
thank you.
Jim Bloedau
Managing Partner
Information Advantage Group
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