As Aledade celebrates its fifth anniversary, former CMS Administrator Mark McClellan reflects on the past and future of physician-led accountable care organizations.
Five years ago, The Medicare Shared Savings Program (MSSP) was in its infancy, with a handful of optimistic accountable care organizations (ACOs) experimenting with the challenging idea that an innovative incentive structure could successfully contain spending and produce higher-quality results for patients.
Over the past half-decade, that idea has certainly taken off. Now in 2019, there are more than 560 MSSP ACOs across the United States, providing care to over 10.5 million Medicare beneficiaries, CMS says. And although it’s a little harder to track the numbers, commercial insurance companies are investing in ACOs at a similarly brisk rate, bringing millions more lives under the value-based umbrella.
Getting to this point hasn’t been easy, acknowledged Mark McClellan, MD, PhD, currently a professor and the director of the Duke-Margolis Center for Health Policy at Duke University.
As a former FDA Commissioner and former CMS Administrator who served during the genesis of the value-based care movement, McClellan has a unique perspective on the ACO origin story and what it takes to succeed with accountable care today.
Patience, persistence, creativity, and the ability to adapt to the unexpected are all key traits of providers who have made the most of their early entry into value-based care, he told Aledade staff recently at a special 5th year birthday celebration for the company.
McClellan has served as a member of Aledade’s Board of Directors, but recently turned over his chair to Dr. Patrick Conway, President and CEO of Blue Cross Blue Shield of North Carolina.
“It’s really important to remember that revision is a necessary part of creating something new,” said McClellan, who is currently a professor and the director of the Duke-Margolis Center for Health Policy at Duke University.
“The important thing is to stick with the right concepts and revise the technical details as you go along until you get it right.”
Farzad Mostashari, MD, CEO of Aledade and former National Coordinator for Health IT, also believes that policymakers need to be responsive to the fact that putting a big idea like value-based care into practice can result in some unexpected curveballs.
“Sometimes the technical details about implementation, when you really get down to doing it, have to influence policy decisions,” Mostashari observed.
“Not sometimes – I’d say all the time, in healthcare,” responded McClellan.
“Better outcomes and lower costs through better access to innovative care is a pretty good north star to keep following. That’s always what we’ve tried to do.”
About five years before Aledade opened its doors, policymakers and healthcare innovators were starting to mull over the details of launching ACOs and putting value-based care into practice at scale.
At the Brookings Institution, a non-profit think tank, McClellan was preparing to recruit a handful of ACOs for a “competition” to see if the idea of ACOs could really work.
“There was no money involved - no prizes. It was really just a Tom Sawyer approach to healthcare reform,” McClellan admitted with a smile. “We wanted to see what they could do and study how they did it. There was a lot of interest from people across the country.”
One of those interested people was Mostashari, who was working at the New York City Department of Public Health to bring health IT tools, informatics, and quality improvement support to more than 1200 primary care providers in the region.
“I was sitting there in a room with Mat Kendall, who would later co-found Aledade with me, listening to this pitch from Mark on the phone and getting excited about the possibilities,” said Mostashari. “But we were a group of primary care providers. I asked if we could apply, but Mark said, ‘No, you have to have a hospital.’”
“And I said, ‘We don’t have any hospitals. We want to be an ACO, but we only want to have independent primary care providers. Why can’t we do that?’”
Mostashari was “crushed” when McClellan repeated that they would not be eligible without a hospital as part of the ACO.
But the question and its implications stuck with McClellan. Even the earliest ACO prototypes stressed the importance of primary care for preventive care and coordinated patient management. So why not let primary care physicians lead their own ACOs?
McClellan carried this idea with him as he helped to shape components of the Affordable Care Act, which subsequently established the Medicare Shared Savings Program.
He credits Mostashari’s feedback for the provisions in the landmark law that allow physician-led ACOs to exist.
“That call in 2009 really did help us reexamine what is critical for an accountable care organization,” said McClellan. “It turns out that in order to implement the program effectively, we needed to connect it to primary care providers, and we needed to let them lead the way in ACOs. Primary care utilization is also the best foundation for patient attribution, so it just made much more sense.”
As the MSSP program started to ramp up in 2012, the first crop of Medicare ACOs had to get creative in order to deliver coordinated, high-quality, cost effective care, McClellan and Mostashari recalled.
Many of these ACOs found that relatively small and simple changes could be very effective for providers and their patients, said Mostashari.
“I asked Rio Grande Valley ACO in Texas about their secret to success,” he said. “Turns out, it was that the physicians gave patients their cell phone numbers.”
“They would take the patient’s phone, dial their own personal cell numbers so it’s in their contacts, and say, ‘Here’s my number. When you need me, just call me. We’ll help get you whatever care you need.’ That’s the kind of thing you weren’t going to hear anywhere else at the time.”
Other early ACOs around the country were taking similar approaches, turning their new ideas into the best practices that now help save tens of millions of dollars for the health system every year.
“These ACOs were very scrappy, in a good way,” said McClellan. “There would be groups where five physicians would get together on the weekend and figure out how they were going to make things work.”
“That level of physician engagement is very powerful. These are people who know their patients, and now, with the MSSP, they were starting to get access to a mechanism that would let them give those patients better lives.”
The healthcare industry was on the edge of something truly transformational, McClellan said, and interest was starting to build to a fever pitch. But something was missing.
“I would take a look at the landscape, and I felt that if primary care providers could just get a bit more capital into their hands and a bit more support, they could make enormous strides to actually transform care,” he said.
McClellan wasn’t the only one who was starting to think that primary care providers could benefit from a true partner in practice transformation.
Mostashari was seeing the same patterns and formulating his own ideas about how to bring those critical capabilities to primary care providers while helping them maintain their independence.
In what McClellan called “one of his favorite papers,” they published the economic calculations that could underpin the creation of a business model to fund primary care transformation.
“I remember the math we came up with that was first written on a white board at the Brookings Institution,” he said. “If you take 100 primary care doctors with 2000 patients between them, then multiply that by an average of $5000 in medical expenses per patient per year, you’d find that those 100 doctors are managing a billion dollars in medical spend every year. A billion dollars! You get 100 PCPs to work together on that…imagine the possibilities.”
“I said to myself that someone should start a business. I kept waiting for someone to do it, but no one did.”
“I think you knew it was going to be you,” laughed McClellan.
“No, I didn’t,” Mostashari insisted. “I thought it might be, but I didn’t know. But I’m glad it was.”
Five years later, that business is Aledade. The company now has hundreds of primary care partners in 25 states and is still growing fast.
Aledade helps independent primary care providers succeed in all types of value-based contracts, helping participating providers earn more than $25 million in value-based care revenue since its inception.
This is just the beginning for Aledade, Mostashari predicted, and for ACOs in general. As value-based care continues to gain traction over the next half a decade, the healthcare industry is bound to keep changing in many respects.
But community-based primary care providers will still be the essential glue that holds the nation’s health together. And there will still be opportunities for primary care practices to thrive without giving up their independence.
McClellan also sees change over the next five years, and is equally optimistic about the continued importance of independent primary care providers. Success will come to those who stay flexible about implementation while keeping their patients at the center of all they do, he said.
“It’s going to take innovation and leadership to keep going and keep seeing results,” stressed McClellan. “Whether you’re an MD or not, you need to understand and empathize with people and their needs. And then you have to layer in the economics and the policy context around how you actually build out capabilities behind meeting those needs.”
“To me, that’s a very exciting and encouraging prospect, and I can’t wait to see what the next few years will bring.”