Accountable Care Organizations in the Wake of COVID-19

^{By Edan Stanley}
Lynn Barr of Caravan Health, sheds light on how COVID-19 has impacted accountable care organizations and offers her thoughts on the potential long-term effects on the health care system.

Please introduce yourself and tell us a bit about your background.

Thank you. My name is Lynn Barr, and I'm the founder and executive chair of Caravan Health. I've got a master's in public health. I started Caravan in 2014 to try and help rural communities participate in accountable care organizations (ACOs) and today, we are the largest aggregator of ACOs in the country.

The National Association of ACOs (NAACOs) recently published a report highlighting several concerns that have been raised due to COVID-19. How has the pandemic affected your organization?

It has had a very dramatic effect. Under a national emergency like this, the idea that we should be sitting there talking about annual wellness visits is kind of crazy, or bring in your patients for annual wellness visits when you could potentially expose them to a disease and also patients don't want to come in for health care right now.

How do we change what we've done. What we've been told by our clients is the fact that we're doing population health today has really helped us to be prepared for what's happening. We've already shifted from a reactive health care system to a proactive health care system.

Having the ability to use all this virtual technology, telehealth, remote patient monitoring, chronic care management—these are all programs we already had in place and now can expand greatly thanks to these opportunities under Medicare. As a company, our focus right now is maintaining the viability of our health care systems is number one, just helping them survive. Their volumes are down 50%, patients aren't coming in.

Sick patients are not getting care or not seeking care, so we're reorienting them to really be very proactive with our chronically ill. In many ways just trying to help them do as much as they can for their patients remotely and then bill for it, so that they can survive financially. Completely different focus from where we were in February.

Obviously, this is an evolving situation, and it's going to continue to evolve as new tests come out, new procedures, etc. What challenges do you expect to arise in the coming months?

Hopefully the government understands that the financial bailout that hospitals are going to need because patients, their bread and butters of elective procedures, the commercial patients are gone.

We're just trying to work with them to create some sort of financial stability and also, when all the dust settles, these chronically ill patients are going to be much sicker than they were when this started because they are actively not seeking care.

How do we prevent that second wave, that second wave of death, disability, and illness that's caused by really the whole healthcare system, patients not accessing healthcare in the way they should?

Can you comment on ACOs' current concerns and what can be done to prepare, if anything, or make up for COVID's negative impact?

First of all, is COVID going to be negative or positive in terms of health care spend? I think the actuaries were all saying, "Oh, costs are going up," but I don't think that's going to happen. I think 2020 will be a historically low year for total health care spend, because the consumers not wanting to get health care. Nothing we can do is going to change that until they feel safe.

This is probably the last place they're going to feel safe, in health care facilities. I disagree with the idea that costs are going to go up. MedPAC issued a letter, a comment letter, it was very short but to the point and it is very telling and basically explains that what is happening now is random.

It is happening community by community, and we see that as well, that all communities are being affected differently. The effect on their volumes is significantly different. CMS should not use 2020 data to calculate shared savings payments, and they should not use 2020 data to calculate benchmarks for 2021. I think that's a fascinating comment, and I think it's absolutely right.

If we just moved forward and pretend that a catastrophe didn't happen, some people get checks, some people won't, it will be completely random. It will have no reflection of how hard a system worked to constrain costs or improve quality, because that's not really what everybody's focusing on right now. You improve quality, that means I have to bring patients in for mammograms. They don't want to come.

I've got to do colonoscopies on patients, and I don't have the PPE to do it. What MedPAC is saying is that it is do-over year—don't do anything. What NAACOs is saying, don't let anybody pay penalties, but it's OK to give people payments whether they deserve them or not. We come in somewhere in the middle of that and say it costs a lot of money for people to be in ACOs, in order to comply with the program.

It takes a lot of effort and we have spent the last 10 years building this program. We're going to start from scratch, like we're going to be back in 2012, starting over with nobody in the program. What can the government do to stabilize the program, because it is a permanent part of Medicare. They can't just say, "You know what? We're going to stop doing this."

I guess they could, but I think it would take legislation for them to do that. What we're thinking about is how should the government deal with the Medicare Shared Savings Program for the next one to two years? This is a great opportunity for the government to figure out how their program works in unusual situations.

It's important that we keep getting data. We keep looking at this and going, is this regional rebasing really working versus national? How does this work in a pandemic situation where you have a lot of local variability based on when and where the virus hit your community? How does all that work against a national benchmark? How does New York impact everyone else's numbers?

What we're proposing the government do is say, last year in 2018, the government saved I think it was $1.7 billion. They made shared savings payments out of that, net of shared savings payments they still made about a billion dollars. Why don't we just take the savings we made in 2018 or 2019, we haven't seen those numbers yet.

We saved more than $130 million. Why don't we just take those numbers, create an national average savings for Medicare, and just pay the providers half of that, or based on their quality score times their quality score, so that every provider would get paid something, as long as they report quality and they meet minimum standards.

It keeps everybody in the program so that it offsets their costs, keeps them going till the end so that we can reorient. If the government wanted to, they could say we could ratchet that savings up. If you get 15% of your patients in chronic care management, national average right now is 3% or 4%. We've got to get virtual care going.

I think there's ways the government could use this program to improve care under COVID and to keep the providers whole, to keep them moving forward, not lose the momentum, but I'm not in favor of the idea of we'll take the upside, forget the downside, because it's a completely random event which is MedPAC's point.

The government needs to recognize it, say whatever program you're in right now, you can just stay in there for the next one to two years till we figure this out. We'll pay you national average savings to be in the program and continue to participate, as long as you meet the needs of your community.

That is an interesting point because there has been a lot of news saying that 2021 is going to be crippling to health plans and consumers, because it's going to be so expensive.

That's an important point that the assumption is everybody's sitting there and they're just going to come running back. That's a big assumption, and we have not been good at calling the consumer's actions. No one anticipated the consumer would avoid health care facilities during this time.

No one thought that. We need to rethink. It's all going to be driven by the consumer, and one of the things the consumer learned in all this, is that watchful waiting actually works well.

What do you see as worst-case scenario for 2021 perhaps? For ACOs, or for health plans dealing with all of this?

I have been amazed by the number of renewals we have received from our clients in the last several weeks. We had some deadlines out there, but it's not like the program's going to go away. We may be, if there is no sort of relief, we probably could go to half the size. We could lose maybe 50% of our participants.

Right now we're about 600,000 Medicare beneficiaries. We could see something as catastrophic as maybe a 50% drop in the program if they don't do something to help it make sense to people.

At the end of the day people have to remember these are human beings making decisions. If I'm standing up in front of my board saying, "I want to continue in this program," and they say, "But it doesn't make sense," I have to be able to defend that.

That's where the government's going to have to step in and make it easy for people to say if you stay in this program, we'll pay an average of a hundred dollars a patient, per year, to keep you in the program. That will keep people going, and everyone will stay in if they do something like that. If they leave it as it's totally random, we don't know what's going to happen and it's going to be a lot more difficult.

The good news about Caravan is that we will put them all in one big ACO if we're forced to. If there's no other types of relief from the government, the best thing we can do is just put everybody into one ACO so we have got hundreds of thousands of lives in one ACO, we look just like the national average.

We'll be able to wash out the noise, but all these little ACOs out there that have their individual case mix? It's going to be completely random for them about whether they win or lose, and I don't see providers tolerating that.

Is there anything that I haven't asked you about, or anything that you'd like to add?

I'm reading that there's interest in extending these virtual visits and telehealth visits as permanent parts of legislation. I think the waivers of copays on care, all of these things have been incredibly helpful in this crisis. They are the only things that are allowing us to function at all. I'm hoping that the government will think about these policies and extend them into the future.

That would be a great way to keep people in ACOs, is to say if you're in an ACO in a risk or no risk, you can do telehealth with patients, direct to patients, forever, and bill for it. That's the kind of thing that's going to improve health care. The other thing to think about is we really are seeing a kind of total collapse of fee-for-service. Fee-for-service worked great until COVID.

Some people would argue it was not that great, but it worked pretty well. Our costs were high, but our outcomes were not quite as good. It was a system that everybody understood, sort of, and it worked. That system doesn't work in a situation like COVID, so what's next?

This isn't our last pandemic, and I've never been a big fan of single payer because of the difficulty of trying to create some sort of equal playing field when Medicare's paying too little, and Medicaid doesn't pay anything, and commercial overpays, how does all that work?

I think that right now, we should be putting all of our physicians in the country on an average salary based on their specialty, and that should be subsidized by the government, and all the hospitals should be cost-based reimbursed and subsidized by the government.

They pull the money from the payers so they can say, "Give me all your premiums and we're going to pay everybody until we're out on the other side of this," because I just can't imagine that our hospitals are going to be able to survive this, and I can't believe what we're doing to our physicians in terms of income, so I wonder what happens next?