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Putting value of care above volume of care

Posted 4/12/16 (Tue)

By Amy Robinson
Farmer Staff Writer

The winds of change in the way healthcare systems treat Medicare patients are sweeping across the United States. In the past, healthcare systems were paid by how many times a patient was seen and treated, not by the quality of the care that was provided. But what would happen if that payment process was reversed? Would patients receive better care and be healthier? And would healthcare systems be able to make money by putting value before volume?
The McKenzie County Healthcare Systems (MCHS) will soon find the answers to those questions as it joins a national pilot program aimed at providing better, more cost-effective care to Medicare patients.
“Really, there are not many rural facilities doing this,” stated Michael Curtis, chief administrative officer for MCHS. “In many ways, this kind of program isn’t designed for us. But it parallels with our new facility and a new approach to medicine. So, if you are a Medicare patient, what you’ll see is more proactive care trying to help you, not waiting for you to get sick and then acting.”
The National Rural Accountable Care Consortium, with their pilot program, is aiming at providing better care, a lower per capita cost, and improving financial performance for the rural medical facilities that are a part of their Accountable Care Organization (ACO).
According to Curtis, MCHS is part of an ACO that has 13 separate rural medical facilities throughout both North Dakota and California.
“It’s part of Obamacare - emphasizing paying for value rather than volume,” explained Curtis. “They pay you to keep people healthy rather than having patients continue to go through the revolving door. It’s a huge process and part of their focus was to create the ACO. The idea is to pay an ACO (or network) an amount to keep a certain patient healthy or pay for their health. The minimum requirement, however, to enter into an ACO is that you have to have 5,000 Medicare patients.”
Of course, MCHS does not have 5,000 Medicare patients. So to make this pilot program possible for the local healthcare system, the pilot program offered a stipulation. In order for rural healthcare facilities to move in the direction of ‘value’ not ‘volume,’ the pilot program allowed for multiple healthcare facilities to join forces under one ACO. By doing so, they would reach the 5,000 Medicare patient requirement.
“Over the last several years, only larger rural area hospitals have been pursuing this,” stated Curtis. “They’ve been looking for a way for smaller rural areas to move toward this. But the cost of it was pretty much insurmountable. So they started this pilot program.
 According to Curtis, the pilot program had several solutions attached to it, which would make it possible for MCHS to be a part of it.
First, he said the pilot program had grant money attached to it, which would pay for the up-front costs. Secondly, it allowed hospitals to join together. And lastly, it took away MCHS’ risk if it cost too much to treat the patient. They wouldn’t have an additional cost, which is achieved by the hospital getting paid the same as always for the duration of the three-year pilot program. Curtis says that if they happen to achieve savings through this pilot program, Medicare will split it with them.
“Technically, there are four obstacles,” Curtis stated. “But the pilot program is offering solutions to all of them. For the number of Medicare patients to treat, they are joining other hospitals together. The up-front cost is taken care of by the grant money. The risk of losing money is solved by paying us the same way while we learn it.”
“And there’s an enormous and steep learning curve, that a vast number of rural healthcare facilities don’t have, which is solved by the National Rural Accountable Care Consortium,” added Curtis. “Basically, they are the ones working to develop the pilot project. So for example, if we need a different database, they’ll set up the contracts to get it. Or, if we need training, they’ll provide the trainers. For rural facilities to even attempt to do this is a huge statement.”
Curtis says that the intent of the pilot program is to keep people healthy rather than treat them when they get severely ill. He adds that even though this is starting with Medicare, the healthcare industry trend is moving toward this, even with private payers.
“At the end of the three years, we aren’t forced to do it longer, but we could if we want to,” says Curtis. “Whether its called an ACO or it’s linked to Obamacare is irrelevant, because the industry is headed there anyway. This is our way to learn how to do it.”