US CTO Aneesh Chopra Makes the Case for ACOs

[Reprinted from March 2011]

At HIMSS 2011 there was much insight to be gained… for those able to see past the multicolored booths, neon lights, walking golden suits of armor, contortionists, magic shows, free beer, luminaries gathered behind closed doors to forecast the future. Just after dawn on Monday morning, several of these luminaries gathered in the Peabody Orlando Hotel for a panel hosted by Intel Corporation to address the future of Accountable Care Organizations (ACOs). Among these experts were Eric Dishman, Intel Fellow and Global Director of Health Innovation & Policy, Michael Young, President & CEO of Grady Health System, Dr. Steven Waldren, Director of the Center for Health IT for the American Academy of Family Physicians, and Aneesh Chopra, CTO of the United States.

At the outset Chopra voiced the question begged in any discussion of ACOs. Will America solve the healthcare value crisis by traveling back to the ‘90s HMO risk sharing model, or by encouraging a bold, grass-roots, provider-centric transformation? Fundamental changes in our incentive system can enable the delivery ecosystem to meet the country’s need, Chopra asserted, as a more aligned payment and information infrastructure shifts the focus from volume to innovation, from billing to value, and from silos to collaboration. Here, Chopra says, the Center for CMS Innovation can take a lesson from private-sector technology management and create an innovation pipeline founded on experimentation, prototyping and scale. Moreover, relative autonomy from Congress will encourage “a safe place in data-driven evidence-based prototyping,” within which the Innovation Center can catalyze intelligent ACOs.

It will be, Chopra predicts, a “kumbaya party with commercial payers,” a system where new ideas don’t just come from vendors, they come from the customer base, from solo practitioners, from large IDNs, from nurses and specialists and patients. Far from revisiting the ‘90s, this ACO version 2.0 environment can leverage increased customer technical expertise to create an apps economy that is infused with interoperability. There will not be a single killer app, but instead a platform enabling providers to act as spec manager for the IT requirements of this innovation engine. This arrangement will renew the focus on consumer-directed apps that better connect the family and caregivers, and give patients tools that integrate into their activities of daily living. With more than 40% of Americans on smart mobile devices, smart providers with aligned incentives will dream up new applications interoperating into Facebook and freeing data that reaches beyond resource-constrained primary care physicians. No matter how penetrated health IT may become, better patient engagement in the process will support the shift to the ECO – the Enlightened Care Organization – facilitated by sites like that surround the patient with community. This new world, Chopra says, is “not about forcing people to be educated on what’s possible, but about tools to make [the possibilities] seamless.”

Yet with increased regulatory scrutiny on HIT apps and the accelerating speed of obsolescence, questions remain about how to incentivize development while ensuring the benefit of new apps exceeds their risk. How, the audience asked, can developers accelerate the pace of the evidence base? Interestingly, the luminaries on the panel predicted a limited role for prospective randomized controlled trials (RCTs). With applications completed now in days that in the ‘90s would have taken years, a mechanism is needed to show value quickly. Instead of prospective RCTs, the pundits predicted that it may be more effective for applications to leverage pilots that gather data via retrospective observational field studies. After all, once the Meaningful Use incentive horizon has past, HIT apps will win with customers by keeping patients out of the ER, identifying earlier those at risk for chronic disease and reporting the value added to payers and patients. Yet while the question of how to achieve this mechanistic shift using observational data in a manner compliant with regulatory constraints is critical, it seemed less pressing than the question of globalization. Given the scale with which apps leveraging health data sets are developed in the EU and BRIC regions, Chopra asks is “will the American economy be an importer, or an innovator and & export [HIT] systems around the world?”

A culture of “frugal engineering,” is what is needed, according to our nation’s CTO. A lean, adaptable technological evolution aimed at the bottom of the delivery pyramid is critical given that fewer than 10% of hospitals in the US have more than 400 beds. “We’re in the ‘good enough’ business,” Chopra says, hoping that this foundation of systematic innovation pipeline development will make healthcare sufficiently adaptive to respond to changes driven by biotechnology breakthroughs, budget crises, IT adoption and a generation of aging baby boomers. “This,” he says of the policy framework opening the door for a new generation of accountable care organizations, “will be the spark.”

Stuart Kamin

MBA/MPH Candidate 2012
Haas School of Business
University of California, Berkeley

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