With payouts riding on patient outcomes and value, ACO providers will welcome innovative services that clinical labs and pathologist could provide that improve patient outcomes
Both private health insurance companies and employers are betting on value-based insurance as the key to improving healthy behavior in patients. This will require more patient engagement in managing their chronic conditions. It will also include motivating patients to consider less expensive treatment options, particularly when the more expensive treatment path has limited benefits.
In this way, accountable care brings the patient into picture. It is a trend that opens the door for innovative clinical laboratories and anatomic pathology group practices to develop medical laboratory testing services that payers and employers recognize as contributing to improved patient outcomes—and for which they will adequately reimburse the laboratories providing these services.
Private Health Insurers Have More Flexibility in Design of Health Plans
Although it was Medicare that launched the concept of accountable care organizations (ACO), private health insurers have more flexibility to design benefits that give patients a bigger stake in their own healthcare. This includes incentives to encourage members to adopt positive behaviors that improve health status, according to a story published in Modern Healthcare.
Because the reimbursement providers earn in an ACO is linked to improved patient outcomes, providers view insurer incentives—and sometimes penalties—designed to encourage healthy behavior in patients as a path to better outcomes. These are proactive programs. Where implemented, they are generating credible evidence that patients participating in these programs do accept more responsibility for managing their own health. In turn, this produces measurable benefits in key health metrics.
One factor in this development are new rules under the Affordable Care Act (ACA) that specifically allow employers to increase the size of monetary and other incentives associated with programs that target unhealthy lifestyle choices among their employees, such as smoking.
Banner Health Care at the Forefront of ACO Movement
In Arizona, for example, the Banner Health system has aggressively moved to enter ACO contracts with providers. It is negotiating with large employers for ACO contracts to begin next year. Tricia Nguyen M.D., MBA, Chief Medical Officer of the Banner Health Network, Banner Health’s ACO, told Modern Healthcare that administrators in her health system are working with employers and insurers to incorporate changes in the design of health benefit programs that will “drive and incentivize positive behavior.”
Banner was among 32 organizations initially selected by Medicare to the test the ACO concept in its pioneer ACO program. Recently, both Cigna and Aetna have signed ACO contracts with Banner. One goal of both payers is to provide beneficiaries with lower-cost health plans that encourage patients to seek out higher-value medical services provided by ACOs.
“Half of the equation is the patient taking on accountability,” stated Nguyen, noting in the Modern Healthcare story that the patient’s role in health and wellness is often overlooked in such contracts. The hope is that the success with Banner delivered with its Medicare ACO can be replicated in its participation with Cigna and Aetna ACOs.
Early results for Banner’s Medicare ACO indicated an increase in patient visits to primary-care doctors, but fewer hospital hospitalizations than in prior years. Hospital admissions decreased 8.5% among about 51,000 Medicare beneficiaries in Banner’s Medicare ACO. Visits to primary care physicians rose 1.1%, while specialty visits dropped by 3.9%.
Behavioral Economics Playing Staring Role in Designing Health Plans
Even before private insurers adopted the accountable-care concept, employers were increasingly taking stock of “behavioral economics” as a way to improve employee health and lower the cost of providing employees health insurance. A 2011 article published by Dark Daily reported that Council 31 of the American Federation of State County and Municipal Employees, an Illinois labor union representing 360 employees, offered two healthcare options to their members. One was a standard PPO plan that cost employees 3% of their salary. The second option was a “health improvement plan” that is free for employees and only costs 1.5% of their salary for spouses. The free choice required participants to sign up with a primary-care physician, undergo a health-risk assessment, and participate in an annual health-learning course. (See Dark Daily, “Behavioral Economics Likely to Push Up Utilization of Clinical Pathology Laboratory Tests,” January 28, 2011.)
ACOs Set Example by Incentivizing Their Own Workforce to Improve Health
What will be of interest to pathologists and clinical laboratory executives is the fact that a number of hospitals and health systems operating ACOs have included incentives to improve the health of their own workforce. ACO administrators are optimistic that employers will see the improved outcomes from these incentives and thus amend their own health benefits plans in similar ways.
Lee Sacks, M.D., Chief Medical Officer for Oakbrook, Illinois-based Advocate Health Care, was among these ACO executives. He told Modern Healthcare that his organization is now looking at structuring its benefit plans to steer patients toward providers participating its ACO. When patients are confronted with higher out-of-pocket costs, Sacks noted, they are less inclined to shop around for providers who are ready and willing to deliver unnecessary services, even when research suggests the service is not needed.
A 2011 survey of the largest U.S. insurers engaged with ACOs found that some had lowered premiums or copays for patients choosing ACO providers, noted the Modern Healthcare report. But these benefit options generally are included at the request of the employer.
For example, Cigna has nearly 60 accountable care contracts. But agreements to offer incentives to improve health are at the discretion of employers, not providers, noted the Modern Healthcare article. Employers negotiate with Cigna for specific health benefit activities that reward employees for healthy behaviors.
ACO Growth Offers Innovative Laboratory Professionals Opportunities
ACOs are increasingly partnering with private insurers to offer incentives that steer patients toward value-based decisions. This creates the opportunity for clinical laboratories and pathology groups to offer innovative medical laboratory testing services to ACOs and their beneficiaries. In particular, it may be smart for labs to offer services that directly engage patients and provide them with not just access to their medical lab test results, but also relevant information about the meaning of these test results.
As well, clinical laboratories might offer screening services for employee wellness programs where specimens are collected at the employer’s offices and facilities. Similarly, pathologists and laboratory scientists could offer expert medical consultations to individual employees to help them understand their test results and how to improve their health metrics, particularly those with chronic conditions.