September 2012
Feature Story

Karen Titus

At the bare-bones level, accountable care organizations are—or will be, once they actually launch—about alignment. “Between the provider, the hospital, the insurer, the patients,” says Greg Sossaman, MD, chair, pathology and laboratory medicine, Ochsner Health System, New Orleans.

But alignment is never a given—just watch the Lion Dance at a Tet festival. Or ask Dr. Sossaman. He’s overseeing the laboratory aspect of Ochsner’s move to create its own ACO (it’s part of the organization’s bigger business strategy) and has a few ideas on the subject.

At Ochsner, the preparation resembles a medical version of an open house, getting everything ready to make it appealing to would-be buyers. A large part of that has included purchasing several local hospitals and rolling out standardized IT platforms (HIS, RIS, LIS, etc.) across the system’s hospitals and clinics. In the laboratories, Dr. Sossaman and his colleagues have been standardizing platforms, methods, procedures, and reagents. (See “Creating harmony, step by uncommon step,” CAP TODAY, August 2012.) By leveraging volumes, Ochsner can demand the best pricing from vendors for all its hospitals. Pathology and laboratory medicine will be functioning as a service line, with its own capital budget and CAP system accreditation, says Dr. Sossaman, who shared his experiences and concerns in an Executive War College presentation this spring and in a CAP TODAY interview.

Standardization, like virtue, might be its own reward. But with an eye on the future, Ochsner is hoping it will also smooth the way for an ACO launch in 2013.

Nothing’s guaranteed, of course. Dr. Sossaman notes that he’s read one preliminary report on an ACO where utilization went up. “That’s not good,” he says wryly.

But he’s not worried about Ochsner, which, he notes, has a long history (it was founded some seven decades ago) of strong physician-hospital alignment. It employs more than 850 physicians, which automatically aligns the two groups. “You have a physician group who’s chosen to be employed, who tends to want a more collaborative practice,” says Dr. Sossaman.

Employed physicians are no guarantee of success. Many hospitals and other health care groups have begun to employ physicians, but as Dr. Sossaman says, “Hospitals are used to running hospitals. They’re not used to running physician practices.” Without that experience, they may find it harder than they anticipate to manage the ACO components of utilization, say, or to communicate with physicians.

Even at Ochsner, the physician piece isn’t fully in place. While the main Ochsner campus is a closed-staff model, the aforementioned hospital acquisitions have added hundreds of community physicians to the mix, none of whom are employed, but all of whom need to figure in the ACO equation.

Ochsner doesn’t intend to hire all its community physicians; there’s simply not enough money to do so. Instead, they’ll retain their traditional office-based practices. “It’s an interesting dynamic,” Dr. Sossaman says. In one sense, he says, they’re Ochsner competitors as well as colleagues. On the hospital side of the equation, however, Ochsner would like to have closer ties to these physicians.

What’s Ochsner’s plan?

Dr. Sossaman refers to some of these non-employed physicians as an affiliate group. “They’re not truly part of the ACO,” he says, “but we’re partnering with certain physicians in the community who want to take advantage of our information systems, want to take advantage of the ability to refer to Ochsner.” And—no small consideration—they’ll also earn more money, via the quality bonus pool that will be created from shared savings. It all filters back to the improved efficiencies, including standardization, that Ochsner has embarked on.

For the community physician, the main lure should be access to the Epic EMR Ochsner is rolling out. Those who are interested in a closer affiliation with Ochsner will have access to the Epic system in their physician offices, giving them access to their Ochsner patients’ medical records if the patients are seen at any of Ochsner’s locations. Ochsner’s employed physicians will also have access to those patients’ medical records outside Ochsner. Sharing information like this should improve continuity of care and reduce unnecessary testing, Dr. Sossaman says, as well as help physicians share best practices.

If an internal medicine community physician sees a patient in his or her office, for example, it will be clear from the EMR if the patient has already seen a specialist in the Ochsner system, even if the patient fails to mention the visit. “That gives us quality, and continuity of care for the patient.”

He’s certainly seen the downsides of not sharing information. As he and his colleagues have been standardizing information systems and testing platforms among various hospitals, clinics, and physician groups, it’s become clear that results are not necessarily comparable across the board. Ditto for aligning test menus and agreeing on test utilization. And while perfect uniformity might seem appealing, Dr. Sossaman is learning that not one size fits all. “Sometimes you ban a test,” he says. “Sometimes you need to do physician education.”

The hardest part, he says, has been figuring out physicians’ test-ordering practices on the legacy information systems, which haven’t been fully replaced yet. Once that difficult piece of the puzzle is put in place, utilization should improve, he says.

While the ACO isn’t Dr. Sossaman’s primary concern, he says it’s something all labs should at least have on their radars. “If I look at my lab as a service line, how does it affect my business? How can I be prepared to provide information?”

“Getting information out of your computer system is a key piece” of participating in an ACO, he adds. Most of what Ochsner plans to offer through its ACO will rely on data. “Where do you think that data comes from?” Dr. Sossaman asks. “I would argue it’s the laboratory.”

In fact, one of the reasons Ochsner is moving to a new LIS is that insurers have been approaching the organization to ask for detailed information about lab testing. If the lab is looking to renegotiate rates—and it is—then it needs to be able to provide quality metrics that prove it is indeed offering competitive cost, services, and quality of care.

Insurers are asking for the hemoglobin A1C levels for the diabetic patients for whom they provide coverage, for example. “They’re saying to us, ‘We don’t want to just know from the claims that you measured it,’ ” says Dr. Sossaman. “They want to see the data.”

Maybe that information is available from the EMR. But if it isn’t, the lab needs to be prepared to do that data mining. “Information like that can be a multimillion-dollar pickup, just based on renegotiating a rate with an insurer,” says Dr. Sossaman. “You didn’t do anything different other than give them information they needed.”

The lab has always provided much of the information that goes into the medical record, obviously. But until recently, it’s been mere data, a lump of clay waiting to be transformed. “We’ve never been good about looking at the value-added for that data,” Dr. Sossaman says.

The EMR may have other limitations. While affiliated physicians have access to Ochsner’s EMR, “We’re not necessarily asking them to send all their samples to our lab,” Dr. Sossaman says. Many will or do send samples to other labs, such as Quest or LabCorp; it’s not clear, says Dr. Sossaman, how best to accommodate these outside test results within the EMR.

“That’s a big concern,” he says. “I’ve been working quite a bit with our Epic team on how to make sure that gets segregated out.”

He extends that concern to the health insurance marketplaces, or exchanges, under the Affordable Care Act, which will include the ability to exchange data between EMRs. “Everybody believes that this is a wonderful thing, and I don’t disagree,” Dr. Sossaman says. “But nobody seems to be talking about tests that shouldn’t be compared. That worries me.”

The benefits of a widely used EMR should appeal to payers, Dr. Sossaman predicts. With community physicians linked via the EMR, they’ll be more aligned with Ochsner’s hospital goals than they would otherwise be. That, in turn, should enable Ochsner to further contract with insurers for better rates. Coming full cycle, that will lead to the bonus pooled, to be shared with the community physicians.

Ochsner, for its part, should reach a broader patient population, with reduced fragmentation of care. Payers should find that appealing.

That group includes insurers, naturally, but Dr. Sossaman envisions a bigger pool of payers. Ochsner is also looking at ways to partner directly with local employers, perhaps through corporate wellness programs and other initiatives. He says area firms are already familiar with the quality of care Ochsner delivers. “Now let’s show we can provide quality at a better price than others can provide, to help them take care of their employees and lower their health-insurance–related costs.”

Physicians, hospitals, payers. So far, so good. And what about patients?

That may be another reason why organizations might find it difficult to create a successful ACO, Dr. Sossaman predicts.

Physicians will readily assert their interests are already aligned with patients, says Dr. Sossaman, who’s not going to disagree. “But then you can also make a case that many physicians practice defensive medicine, and maybe order more tests than are strictly necessary.”

In other words, this may be yet another reason why, when it comes to alignment, the players involved might find themselves adrift, rather than easily lining up. It’s not that Dr. Sossaman’s skeptical about the ACO concept. “But I think ACOs are not going to be as easy to do as a lot of groups believe,” he says.