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Farzad Mostashari

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An upbeat look at physician-owned practices


There are grounds for optimism about the future of physician-owned practices as seen in the AMA’s most recent Physician Practice Benchmark Survey, says Aledade co-founder and CEO Farzad Mostashari, M.D., in a post in Healthcare Dive. Among his remarks:

“First, probably the most interesting quantitative and qualitative points of the report came in a section on hospital ownership. In 2014, the survey found that about a third of physicians were either directly employed by a hospital or in a hospital-owned practice. In 2016, that share had not changed.”

“Not only had the proportion of physicians in hospital employment flatlined, but the rate at which hospitals were buying up practices had slowed. In 2014, 24.5% said that a hospital had purchased their practice in the past five years. In 2016, that dropped to 21%.”

“Hospital acquisitions have flatlined. Most physicians are working in small practices. Physician ownership is still the dominant model. And this is good news for our healthcare system’s movement to a value-based payment future.”

“Small, physician-owned practices offer more personalized care and are more responsive to patient needs. They have lower average costs per patient, fewer preventable hospital admissions, and lower readmission rates than large, hospital-owned practices. And primary care doctors can influence up to 85% of downstream costs in our nation’s healthcare system.”

“The simple fact is that the data from AMA shows that small, physician-owned practices are neither irrelevant nor are they going extinct. In fact, they’re in the best position for a new era of better healthcare at lower costs. ”

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Looking at the future evolution of the MSSP


In HealthcareDIVE,   Farzad Mostashari, M.D., and Travis Broome write about the continuing evolution of the Medicare Shared Savings Program. Dr. Mostashari is founder and CEO of Aledade Inc., where Mr. Broome is the lead policy person. Dr. Mostashari is the former national coordinator for health information technology at the U.S. Department of Health and Human Services.

”{M}ore investment and more fine-tuning will be required if we are to strengthen the MSSP and use it to help power the transformation of Medicare to a value-based system.

”First, CMS needs to tailor the risk for MSSP ACOs so that it is enough to motivate, but not sink a small practice. It’s critical that the risk small practices take on bears some relationship to the financial resources of the ACO and its members. If it’s too much so that a bad year that happens because of an external event – such as an epidemic or disaster – can sink even the most well-intentioned practice, then no one will enter into an ACO arrangement.”

“”Second, we need an accurate way to measure whether or not an MSSP ACO creates value. The best way to do that is through a difference-in-difference approach. In this, the key question asked is: Did a Medicare beneficiary get better care at lower cost in the ACO than if that same Medicare beneficiary had not been in the ACO? To get closer to this difference-in-difference approach, CMS needs to move away from national inflation updates and artificial risk-scoring methodologies to regional inflation updates and direct risk scoring.”

”Third, CMS should continue to seek to simplify the program. For example, while we appreciate the work that was done in Track 1+, it is quite possible all of the same benefits could have been accomplished by adding just a few lines of changes to Track 2 without the need to create a whole new track. This would have been both simpler and created a better business case for physicians to move towards risk.”

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Experts applaud ‘Next Generation’ ACO’s



Experts applauded the Centers for Medicare & Medicaid Services’ “Next Generation” Accountable Care Organization (ACO) plan, which asks participants to take on more financial risk in return for more  potential reward. The aim is to move away from fee for service to capitation as payers push healthcare industry toward a value-based reimbursement system.

“It’s a real effort to move away from shared savings or limited risk models. On both counts it’s an important step,” said Mark McClellan, M.D., a former CMS administrator,  told FierceHealthcare.

Larry Kocot,  a visiting fellow in the economic-studies program at the Brookings Institution, agreed. “I do think CMS should be credited for thinking creatively to extend the model to meet the needs of providers no matter what stage they are at within the ACO program,” he told the news service.

Farzad Mostashari, M.D., former national coordinator for health- information technology, told Clinical Psychiatry News Digital Network that the new model will likely suggest how CMS will structure other ACO’s.  “This is directionally, absolutely where the Medicare Shared Savings Program (MSSP) is headed.”

“We are hopeful the changes they proposed and the comments received that they will make the MSSP program more accessible and more friendly to a number of providers,” said Kocot, who also served as a senior administrator of CMS.

FierceHealthcare reported that Kocot said he’d like the CMS to establish a ”fourth track that would lead to full capitation. He recommends tracks that reflect a continuum of ACOs that may begin with little risk and end with the full capitation model.”

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