Over the last 20-plus years, Karen L. Smith, MD, has come to understand why so many physicians have chosen hospital employment over private practice. But that’s not a step she’s willing to take, at least as long as she can make the numbers work at her solo family medicine practice in rural North Carolina.
“There is a reason why I do not work for a health system, and that reason is autonomy,” Dr. Smith said, noting that, for her, autonomy is the lynchpin in the patient-physician relationship. “But having a Medicaid and Medicare payment base, the practice cash flow has always been an issue.”
So when the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) created the Quality Payment Program, Dr. Smith didn’t just take note, she took action. She worked with her state medical society to create an accountable care organization (ACO) and adopted a value-based care model.
The problem she and other practices ran into, however, was that value-based care arrangements are often quite complex and can require costly investments in new and highly specialized business functions.
Dr. Smith soon switched to a new ACO, and that one looked to an “aggregator” for help. Aggregators are specialized private entities that can help physician private practices address the many issues related to value-based care—including data processing and analytics—without having to fully invest in requisite solutions.
The AMA has published new guidance for physician practices on contracting with aggregator entities (PDF). Such entities also are called by a variety of other names: enablers, facilitators, contracting organizations or value-based service organizations. This timely resource helps physician leaders—including those at doctor-owned private practices—identify the core business considerations to think through when evaluating potential relationships with a value-based care aggregator.
Not all aggregators are the same
The AMA guide advises physicians to rigorously evaluate aggregators’ offerings vis-a-vis their practice’s capabilities and goals to make informed business decisions. The first aggregator Dr. Smith worked with wasn’t the right fit for her practice and many others in her ACO, and that even led to the ACO's dissolution.
One reason was the organizational structure. The aggregator had multiple ACOs under one umbrella.
“It was set up so that the savings were achieved by only some of the ACOs. The savings did not transfer over to the one I was in,” she said.
Another reason was lack of interoperability.
“We didn't really have a way to communicate the data,” she said. “They did establish a single platform, but the EHR systems were not necessarily integrated into that platform. It then became a requirement that your EHR be integrated into that platform, but a lot of the smaller entities didn't have that capability.”
This lack of alignment wasn’t something the aggregator could resolve, and by the third year, Dr. Smith’s practice was losing money on the deal.
“It was a horrible experiment, and we ended up with very large losses,” she said. “It took me three years to pay back what other systems were writing off.”
But it wasn’t long until she found the right aggregator. As that ACO was dissolving, Dr. Smith was approached by an aggregator about helping to set up a new ACO in North Carolina.
“They knew of the work that we had done in starting an ACO in the earlier years,” Dr. Smith said.
This AMA resource on aggregator entities is part of a broader set of value-based care resources, along with the new AMA Business of Medicine education program, which includes additional resources on ACOs and evaluating various contractual agreements.
First, know what’s possible
The new technology-based, physician-led ACO “came in with something very different from what I just described. They came in with an understanding of interoperability,” Dr. Smith said. “They came in knowing that most physicians have not optimized greater than 30% of their EHR, and that there's 70% of that EHR not even being utilized. They knew what they were dealing with.”
For the first year with the new aggregator, Dr. Smith “traveled around the state and met with practice leaders, from the Piedmont to the Coastal Plains to the Raleigh area to the Mountains. We were able to bring on an amazing number of practices within that year.”
Part of what appealed to practice leaders was that the aggregator was set up with commercial payers.
“We now had the commercial mix in addition to the Medicare and Medicaid mix. That was the major difference” that separated the aggregator from other ACOs, Dr. Smith said, noting that this fostered transparency and data sharing. “We had never had that. It was always: This is my data, and that's yours, and no way are we coming to the middle."
The aggregator also had experience, having set up ACOs in the Northeast and the South.
“They understood what it is to be in a rural community,” Dr. Smith said. “They identified the resources that worked well in one market, and they would bring it to another.”
Perhaps most importantly, the aggregator prioritized education.
“Having a regional medical director, having a local medical director working with the physician champions, that's common. I see that in many of the ACOs,” she said. “But how do you do it in such a way that you're not going in and beating up a practice, but instead saying: We see that you're having some issues. How can we work with you so that you could do better?”
Another AMA playbook highlights voluntary best practices to advance data sharing in value-based care (PDF). The document looks at five categories of best practices, including creating an interoperable data ecosystem and improving data collection and use to advance optimal health for all.
Next, think long term
With nearly 10 years’ experience implementing value-based care and working with aggregators, Dr. Smith has some tips for practices just beginning the journey.
“I think it's very important that you avoid being motivated solely by the bonus payments. You have to also look at the components of the relationship that will help you remain competitive,” she said.
One way to do that is to perform a SWOT (strengths, weaknesses, opportunities and threats) analysis.
“What are the strengths of your relationship with your ACO, and how can you use that to offset your practice’s weaknesses? Also, look for opportunities to grow with that ACO. And then look at the threats,” she said. “Many of our ACO’s practices, mine included, see that the hospital systems are constantly coming into our territories and marketing our patients away from us. How can my ACO help me address those threats? Is it even willing to do that?"
Read more about how value-based care can work for private practices, and learn about the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice so that physicians who choose to practice in that setting can provide compassionate personal medical care for their patients.
