Dr. Farzad Mostashari on his startup's newest ACO initiatives, physicians' feedback and the Next Generation ACO model

HHS' former National Coordinator for health IT weighs in on how the startup Aledade establishes ACOs without hospitals, recruits physicians and plans to expand.

Almost one year ago, Farzad Mostashari, MD, former National Coordinator for health IT at HHS, launched the startup Aledade, which helps bring together select independent primary care practices and provides them with the resources, services and technology to form accountable care organizations. In a sense, the Bethesda, Md.-based company is the anti-hospital ACO builder. Aledade cuts out the need for a hospital middleman and makes it simpler for independent physicians to form ACOs.

Since its launch, Aledade has built the Aledade Primary Care ACO and Aledade Delaware ACO, assumed operations of the FamilyHealth ACO and recently announced expansions in four more states.

The company accomplished this with its own team of experts, including executive vice president Mat Kendall, who helped establish a network of regional health IT extension centers while serving at the ONC; CTO Edwin Miller, who has held leadership positions at athenahealth, digitChart and CareCloud; and projects coordinator Anna Marcus, who helped research physician-led ACOs at the Brookings Institution.

Here, we checked in with Dr. Mostashari, who serves as Aledade's CEO, to discuss how Aledade recruits physicians, what strategies the company plans to implement with its recent expansions, current setbacks in EHR technology and his views on CMS' newest ACO model.

Note: Responses have been edited for length and style.

Question: Has anything surprised you with Aledade's first three ACOs and what have you learned from their launch?

Dr. Farzad Mostashari: One of the ways we're approaching recruitment for this next round has been influenced by the idea of selection. Picking the right doctors is so important. Hospitals and health systems are telling primary care providers, "There is this free thing we're doing and we will pay you to join this ACO, but you won't individually share in savings." If the hospital pays the provider, the provider is working for the hospital. If the provider pays us, then we're working for them. That alignment of interests is really important.

We have a nominal membership fee that providers pay to signal their commitment to the ACO. It really helps make sure everyone is committed. That way, we're investing in this and they are too. Our incentives are aligned on the backend, and everyone here is paid on outcomes, not consulting fees. Our business model is based on achieving shared savings. Doctors joining an Aledade ACO know from day one if the ACO achieves shared savings, they will share in those reimbursements

One of the challenges that is harder than I expected and is something of a disappointment to me is the cost of EHR interfacing. The degree to which EHR vendors were unprepared in the field to truly deliver on the intent of what's in the certification requirements — and the idea that in this day and age you still have to pay $10,000 for a CCDA interface to get your own data out of a system you paid licensing fees for — is really troubling to me. It's something that is really a business practice issue, not so much a tech issue, and it's putting a tack on the success of population health activities. We don't want to tell providers they have to rip out all their systems; we want to be able to optimize and build on their EHRs.

Q: What kind of feedback have you gotten from physicians participating in the ACOs?

FM: The one thing that is really moving for me is when physicians say, "We have never seen this before. In 20 or 30 years of practice, we have never had information I knew I could get. I never knew what everyone else was doing to my patients, how much things cost or where my patients were getting care."

The blindfold is falling away, and that is part of the value of the ACO structure as a whole and what Aledade adds for the doctors. They are craving communication. There are no longer doctor's lounges at hospitals. There is no place for doctors to sit together and talk, even though they all practice in the same community. The ACO, for many doctors, is the first time in a long time they can come together and talk about their practices and patients.

We are creating a network of independent, but empowered private practitioners. They see that in this world it is going to become increasingly difficult to stay independent. They don't want to be employed — many of them are old-fashioned in the sense that they want to know their patients and want their patients to know them. They don't want to just be a cog in the big healthcare machine. They want to keep that old-fashioned relationship with their patients, but also be part of something bigger.

Q: Let's talk about the new partnerships Aledade is forming in West Virginia, Tennessee, Kansas and Louisiana. Why did you select those regions?

FM: A lot of it has to do with our analytics. We look for areas where there are a number of independent primary care practices we think would have an opportunity for significant shared savings.

An equally important analysis is the local partners. We bring resources in policy and regulations, data analytics and strategy, and that's all good, but you don't succeed in an ACO without really substantial practice redesign and practice transition. You need local partners who have already built strong relationships with the providers, such as a quality improvement organization or regional extension center.

We looked for local partners in those regions who we felt shared our values around the public health mission we are trying to accomplish, who never stint on patient care and believe in the value of independent practices staying independent.

Q: These partnerships are still in the early stages. What does that look like, and how does Aledade recruit physicians to join its ACOs?

FM: We use a variety of proprietary public use data sets to really understand as much about the individual practices as we can. The real opportunity for savings is for physicians who care for a population of Medicare patients, who have practice patterns and prescribing and referral patterns. They're not the kind of people who are really chasing primary care scans and tests. That's the first screen.

Then we take our list to the local partners to see if there are any practices that should be on it, and we go talk to those practices. About half of the practices we talk to sign up with Aledade. It is pretty amazing for a model that is as new as what we're talking about, and a company that is as new as ours, that we are getting half of the practices we speak with to sign up.

We are looking to add anywhere from four to six [Medicare Shared Savings Program] ACOs to start in 2016, but we don't wait until the performance period starts to begin our work. We are really looking to be at full speed by the time January 1 rolls around. Before the performance period, we put the governance in place, and do the groundwork with EHR interfacing, workflows, running data and bringing in patients. It's a process we've already started in West Virginia.

Q: How has your experience with the past ACOs informed your current ACO recruitment and development strategy?

FM: A lot of it is establishing basics for population health once we've signed up the practices. These are great practices, they are almost all Meaningful Use users, but they haven't really put those abilities to purpose. It's the difference between gym muscles and functional strengths. That's what we're working with the practices on: We ask, what should the patient experience be and how do we make it like that?

We take a look at unnecessary emergency department admissions, for example, and how many happened when the primary care office was open. We look at how to reduce those visits and what messages are coming from front line staff when a patient calls. At one practice, a doctor was so upset when he found out after 2 p.m. the staff was telling people to go to the ER. He had no idea. Without after-hours access, your schedule is always full of people who have called you. We ask, which patients have you called? Who should you be calling?

We want to help open people's eyes and give real direction and energy in what we're trying to achieve. We're much more ready for this cohort in terms of what works and what doesn't for setting up templates in the EHR, setting up contractual negotiations and some of the communication with patients. We weren't the first to do this. I spent a year at the Brookings Institution and saw what succeeded and failed. Our overall strategy has been remarkably robust in terms of our first ACOs and we will roll out this same strategy to the others.

Q: What is your take on the Next Generation model from CMS?

FM: I love some of the features in the Next Generation model. There are some other aspects of it that would've been great for CMS to collect input on from people before it was finalized, but more than anything it shows Medicare is serious about this. They are continuing to implement the program, and that gives me a lot of confidence that we will, over time, evolve this model into a permanent feature of the payment landscape.


More articles on accountable care:

12 recent accountable care, shared savings agreements
Pioneer Program approved for expansion
Pioneer ACOs save $385M in first 2 years

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