As healthcare facilities in other states grapple with the advent of accountable care organizations, Oregon Gov. John Kitzhaber has been busy forming his own version of ACOs: state-run "coordinated care organizations." House Bill 3650, which passed in the Oregon Legislature by overwhelming margins, will create community-based coordinated care organizations that bring physicians, hospitals and other healthcare providers together to deliver high-quality care at a low cost in the state.
According to the Oregon state website, CCOs will serve as a "single point of accountability for care within a global budget." The organizations may function as single corporate structures or a network of providers organized through contractual relationships, and the goal is that all Medicaid clients in the state will be enrolled with a CCO as rapidly as possible. Since Oregon counties are the local mental health and public health authorities, CCOs will also be required to have a formal, contractual relationship with the county or counties in which they operate, and consumers will play a role in governing the organizations.
Like accountable care organizations, CCOs represent a movement away from fee-for-service payment to reimbursement based on quality and value. The organizations are required to identify cost savings and coordinate the sharing of those savings with providers and practitioners.
According to David Schlactus, board member of the Oregon Ambulatory Surgery Center Association and CEO of Hope Orthopedics of Oregon and Willamette Surgery Center, the Oregon Health Authority hopes to establish CCOs in Oregon by 2014 at the latest, and possibly as early as 2012. This kind of rapidity puts pressure on surgery centers, which could benefit from CCO participation if they can tie themselves to the organizations that establish them.
"Surgery centers are now scrambling to found out how these CCOs will work," Mr. Schlactus says. "Who gets the CCO? If it's a hospital, the ASC is in trouble. If it's a local independent physician association, you need to be thinking about the relationship you have with your local IPA."
Oregon's place on the forefront of this movement puts ASCs in a difficult position, he says. As the state pushes forward with attaining federal approval for global budgets, he suggests four things ASCs can do to prepare themselves for involvement in an ACO-like model.
1. Identify key physicians for leadership. As accountable care organizations and other ACO-like models gain traction, Mr. Schlactus recommends identifying ASC physicians who can serve as representatives for the center. "You really want to make sure you're not excluded or left out in the cold," he says. "You're going to have to get involved with the IPA or the hospital or both to make sure you have representation at their leadership levels."
Identify physicians who go "above and beyond" at the surgery center by involving themselves in operations, participating in strategic decisions and discussing the ASC's place in the future of healthcare. These are the physicians who can represent your ASC to larger healthcare facilities and tout your facility as a low-cost provider.
2. Get involved with your local IPA. Mr. Schlactus says his ASC has assigned two physician leaders to sit on the board of the local IPA. He says this involvement is necessary to make sure the surgery center comes up when the IPA talks about developing a CCO. An IPA may be more likely than the local hospital to work closely with an ASC in developing an accountable or coordinated care model because of the absence of direct competition.
3. Look at ASC referral patterns. If accountable care or coordinated care models are under discussion in your community, Mr. Schlactus recommends looking at your surgery center's referral patterns and determining where your patients come from. For example, the regional nature of CCOs in Oregon means Mr. Schlactus must involve his ASC in CCO implementation or risk losing his referrals.
"In Oregon, I think you'd be hard-pressed to survive without being part of the CCO," he says. "The CCOs will be somewhat regional. There will be one CCO for all of Marion-Polk County, and for us to not be part of a CCO would choke off our volume horrifically." If your referrals come from physicians who will likely not involve themselves in accountable care, on the other hand, your ASC may be able to escape the ACO/CCO furor without losing patients.
4. Designate a physician to serve as a liaison with the hospital. Mr. Schlactus says you should also assign an ASC physician leader to get involved with hospital leadership. "One of them has to be in a pretty high level position with hospital leadership," he says. "We have a physician who sits as the chief of surgical services as the hospital."
While hospitals may be less inclined to involve competing facilities in their coordinated care plans, he says installing physician leadership within the organization will help remind the hospital that the ASC can contribute to cost savings through the CCO.
Related Articles on Surgery Centers and ACOs:
9 Observations on the ASC Market
Surgery Centers & Accountable Care Organizations: Q&A With Dr. Michael Goran and Mark Malloy
Role of Surgery Centers Under the Accountable Care Organization Model: Q&A With Scott Becker of McGuireWoods
According to the Oregon state website, CCOs will serve as a "single point of accountability for care within a global budget." The organizations may function as single corporate structures or a network of providers organized through contractual relationships, and the goal is that all Medicaid clients in the state will be enrolled with a CCO as rapidly as possible. Since Oregon counties are the local mental health and public health authorities, CCOs will also be required to have a formal, contractual relationship with the county or counties in which they operate, and consumers will play a role in governing the organizations.
Like accountable care organizations, CCOs represent a movement away from fee-for-service payment to reimbursement based on quality and value. The organizations are required to identify cost savings and coordinate the sharing of those savings with providers and practitioners.
According to David Schlactus, board member of the Oregon Ambulatory Surgery Center Association and CEO of Hope Orthopedics of Oregon and Willamette Surgery Center, the Oregon Health Authority hopes to establish CCOs in Oregon by 2014 at the latest, and possibly as early as 2012. This kind of rapidity puts pressure on surgery centers, which could benefit from CCO participation if they can tie themselves to the organizations that establish them.
"Surgery centers are now scrambling to found out how these CCOs will work," Mr. Schlactus says. "Who gets the CCO? If it's a hospital, the ASC is in trouble. If it's a local independent physician association, you need to be thinking about the relationship you have with your local IPA."
Oregon's place on the forefront of this movement puts ASCs in a difficult position, he says. As the state pushes forward with attaining federal approval for global budgets, he suggests four things ASCs can do to prepare themselves for involvement in an ACO-like model.
1. Identify key physicians for leadership. As accountable care organizations and other ACO-like models gain traction, Mr. Schlactus recommends identifying ASC physicians who can serve as representatives for the center. "You really want to make sure you're not excluded or left out in the cold," he says. "You're going to have to get involved with the IPA or the hospital or both to make sure you have representation at their leadership levels."
Identify physicians who go "above and beyond" at the surgery center by involving themselves in operations, participating in strategic decisions and discussing the ASC's place in the future of healthcare. These are the physicians who can represent your ASC to larger healthcare facilities and tout your facility as a low-cost provider.
2. Get involved with your local IPA. Mr. Schlactus says his ASC has assigned two physician leaders to sit on the board of the local IPA. He says this involvement is necessary to make sure the surgery center comes up when the IPA talks about developing a CCO. An IPA may be more likely than the local hospital to work closely with an ASC in developing an accountable or coordinated care model because of the absence of direct competition.
3. Look at ASC referral patterns. If accountable care or coordinated care models are under discussion in your community, Mr. Schlactus recommends looking at your surgery center's referral patterns and determining where your patients come from. For example, the regional nature of CCOs in Oregon means Mr. Schlactus must involve his ASC in CCO implementation or risk losing his referrals.
"In Oregon, I think you'd be hard-pressed to survive without being part of the CCO," he says. "The CCOs will be somewhat regional. There will be one CCO for all of Marion-Polk County, and for us to not be part of a CCO would choke off our volume horrifically." If your referrals come from physicians who will likely not involve themselves in accountable care, on the other hand, your ASC may be able to escape the ACO/CCO furor without losing patients.
4. Designate a physician to serve as a liaison with the hospital. Mr. Schlactus says you should also assign an ASC physician leader to get involved with hospital leadership. "One of them has to be in a pretty high level position with hospital leadership," he says. "We have a physician who sits as the chief of surgical services as the hospital."
While hospitals may be less inclined to involve competing facilities in their coordinated care plans, he says installing physician leadership within the organization will help remind the hospital that the ASC can contribute to cost savings through the CCO.
Related Articles on Surgery Centers and ACOs:
9 Observations on the ASC Market
Surgery Centers & Accountable Care Organizations: Q&A With Dr. Michael Goran and Mark Malloy
Role of Surgery Centers Under the Accountable Care Organization Model: Q&A With Scott Becker of McGuireWoods