The launch last month of a company called Aledade was national news of note in the health care industry, reported by Bloomberg, Politico, Crain’s Health Pulse, Becker’s Hospital Review, Modern Healthcare and others.
Aledade is what’s called an ACO, an accountable care organization, a relatively new type of entity established by the Patient Protection & Affordable Care Act for the purpose of improving health care quality while controlling unnecessary spending. Aledade’s CEO is Dr. Farzad Mostashari, a fellow of the Brookings Institution in Washington who is best known (if at all) as the man who coordinated the national implementation of electronic medical records for the U.S. Department of Health & Human Services.
Aledade — a play on alidade, the part of an astrolabe navigation tool that points toward the North Star — raised $4.5 million in venture capital on the day it launched in June.
So what does this have to do with Arkansas? Just this:
Mostashari and Aledade have teamed up with the nonprofit Arkansas Foundation for Medical Care to bring their idea for an ACO made up of independent family practitioners to the Natural State as well as Delaware, Maryland and New York City.
The deadline for applying for ACO status is July 31, and Aledade needs to round up 30 to 50 Arkansas primary care docs who have at least 5,000 Medicare patients between them.
“Is it possible to get better health and lower cost?” Mostashari asked during a recent visit to Little Rock. “The way we’ve been paying for health care is part of the problem, and changing the way we pay could be part of the solution.”
Enter Aledade, which, like other ACOs, will share financially in the documented savings that its members achieve for Medicare patients. But unlike most other ACOs — there are two already established in Arkansas — Aledade is looking specifically to enlist primary care physicians who are not affiliated with bigger health care systems and to give them the tools to choose the best and most efficient specialists for Medicare referrals.
Physicians representing 5.3 million Medicare patients are already participating in ACOs around the country, Mostashari said, and in the first year of operation, 25 percent of those ACOs achieved shared savings for their patients and the Medicare system.
In some cases, he said, the savings was achieved by simply rethinking referrals and approvals that had become almost automatic. But Aledade, with its CEO’s expertise in medical recordkeeping and its partnership with AFMC, is promising its physician members the kind of big-data information that has only recently become available.
Mostashari gives this example: The drug his mother needs for treatment of macular degeneration can range in cost from $400 to $4,000 per dose. Same drug, same dose. The difference, he said, is whether the doctor chooses to use small, expensive single-dose vials of the medication for each Medicare patient or larger, cheaper, multidose vials. Medicare, forbidden by Congress to negotiate pharmaceutical prices, reimburses the ophthalmologist either way.
But primary care doctors are not forbidden to recommend efficient operators to their patients. In fact, they are being encouraged to do just that, especially under Aledade’s business plan.
Aledade ACO members will be provided with detailed data on specialists in their geographic area so that they can see whether they are referring to high-dollar operators. If so, they can either change their referral patterns or encourage high-dollar operators to adopt common sense cost-saving habits in order to keep the referrals flowing, and the ACO members will get a piece of the total savings that the organization manages to squeeze out of the system.
“These providers need to be asking themselves if they are on the right side of history,” Mostashari said.
Aledade is marketing itself as a way to achieve the two things that Mostashari said primary care physicians desire most: better patient care and respect for the front-line doctors who touch more patients and yet are generally paid less than the specialists they refer to.
There are disadvantages and pitfalls to placing the burden of success squarely on the shoulders of PCPs, he said, including the chance that the doctors won’t actually make use of the data Aledade compiles because they aren’t fully committed to the kind of change that is necessary. Setting up an ACO, especially one that will provide its members with a steady flow of updated data on the treatment, is an expensive proposition that will depend on the diligence of those members to be viable.
Aledade Arkansas will be set up as a limited liability company with a 12-member board made up of nine physicians, a physical therapist and two Aledade managers.
The program will be administered in Arkansas by AFMC, the Little Rock nonprofit headed by Ray Hanley that worked with Mostashari and some of his colleagues in the Aledade startup to help 1,600 Arkansas doctors get set up on electronic medical records.
“Arkansas was an incredibly strong player,” Mat Kendall, co-founder of Aledade, said, because physicians in Arkansas already know and trust AFMC.
AFMC will be paid by Aladade, of course, but Hanley said he preferred the word “partner” to “vendor.” Working with the ACO “has the position to meet our mission very, very well,” he said.