Oregon’s Coordinated Care Organizations (CCOs) are a type of accountable care organization (ACO); these multi-sector partnerships accept upside and downside risk for both health care costs and quality metrics. And yet CCOs deviate from the traditional accountable care model. Unlike most ACOs, CCOs were created by state regulation, are geographically defined, and are accountable for the Medicaid population, a group of individuals at high risk for psychosocial challenges that impact health outcomes.
Can CCOs offer a means of transforming the delivery system, eliminating disparities, and improving the overall health of the Medicaid population? Or will Oregon’s CCO legislation turn out to be simply a cost-containment strategy for business as usual?
In 2014, we wrote a Health Affairs Blog post covering results from key informant interviews with leaders at two of Oregon’s CCOs: Health Share of Oregon in Portland and PacificSource Community Solutions in Central Oregon. By January 2015, we had conducted 55 additional interviews.
The following blog post provides an overview of the results of those interviews. Building upon the findings detailed in our original post, we now focus on revealing how CCO challenges, achievements, and strategy have shifted during the first two years. Observations on the trajectory of these organizations as they continue to work toward meeting reform goals could help inform decision-makers in other states and systems to build regional accountable care models.
Use Both Extrinsic And Intrinsic Motivation
Our first round of interviews revealed that health care leaders chose to participate in CCOs based on extrinsic motivators (such as market forces or legislative forces) and also based on intrinsic motivators, such as the desire to build a better system to care for vulnerable populations.
Our second round of interviews found that extrinsic motivation had shifted. Early in CCO implementation, the state legislature was able to exercise significant power to set the rules. CCOs had to abide by those rules or else lose out on the opportunity to cover or care for the Medicaid population.
By our second round of interviews, the landscape had changed. CCOs recognized that the state had a vested interest in their success.
For instance, when asked if there would be consequences for non-compliance with the guidelines regulating community health improvement plans, one CCO employee replied: “I think there would probably be some hand wringing and maybe some wrist slapping, but [the state is] on the hook for making sure that we are successful.”
Since Oregon is being closely monitored by federal regulators, CCO leaders feel more like partners in health care transformation.
CCOs also experienced some financial success in the first two years. Both CCOs in our study received a sizable quality incentive payout, and neither CCO reported budgetary concerns. Several respondents at Health Share of Oregon described being pleased when enrollment related to the Affordable Care Act (ACA) expansion was much higher than expected.
Intrinsic motivators are still driving collaboration; one CCO leader remarked, “I’m not naïve, I know that there’s a competitive side to all of it, but there’s a lot of collegiality and a lot of interest in working with the others to figure out how to do things better.”
When asked about implementation successes, several respondents said that continued collaboration was a significant victory. As one CCO board member put it, “The fact that they’re all still together, and they’re still talking, and they’re still figuring this out, and they’re still committed to it, is really pretty amazing.”
There are three takeaways here. First, when it comes to accountable care, legislative and market forces are still the most powerful drivers of collaboration among traditional competitors. Second, tensions between those traditional adversaries can be smoothed out over time if all partners, including the state, are invested in the success of the model. And third, the shift from extrinsic (they’re requiring us to do it) to intrinsic (we believe we should do it) motivation is facilitated by an organization’s ability to maintain good financial health.
1. Build Relationships Through Quick Wins
In CCO infancy, the formerly competitive but now collaborating partners were uneasy and alliances were tenuous. Leaders reported the necessity of the “quick win” — a successful project often funded through grants. Grant funding for CCOs came in many forms over the past two years, and it was used for innovative experiments or pilots to explore how care for the Medicaid population might be better delivered.
During our first site visit, many respondents pointed to these “transformation projects”—which included interventions aimed at high-utilizers, innovative new sites for care delivery, and resources for data-sharing—as the pride of their cross-sector collaboration.
In our second round of interviews, we observed that the transformation projects are still a point of pride for CCOs, yet respondents were moving away from relying on them as a platform for collaboration and instead were thinking strategically about their impact. Several interviewees described a push for data that would drive decisions about whether or not to continue funding such initiatives.
One CCO employee said, “That’s an interesting problem that we’ve had with the strategic initiatives, those first ones we did. It’s really hard to measure cost savings — like really hard. And so to show that your program works, you’re like, Yeah, it may work, but it may not. We don’t exactly have the data to say for sure.” Another respondent said simply, “I think the verdict is still out on a lot of this work.”
In some cases, respondents describe shifting from the panic of the early days—where much of their time was spent responding to state rules and assembling transformation projects as quickly as possible—to a new phase that allows for more focus or deliberation.
For example, a CCO employee at Health Share told us that the organization’s focus is moving past “honoring the contract with the state.” Now, she said, “it’s great that we’re doing a lot of innovation at the local level, and yet I think there are still some bigger [things we could do] if we’re really going to transform the system. We need to find the balance between lots of little innovative things that are potentially spreadable to a small population, versus really thinking about what’s going to move the dial in a really big and comprehensive way.”
CCO partners are better able to participate in conversations around budgeting that had previously been the source of significant tension. For instance, at both CCOs it has been easier to talk about sharing risk than it has been to talk about shifting revenue streams. Nevertheless, one CCO leader observed that accountable care could shift dollars from physical health to behavioral health.
“These become discussions about doing something different with the global budget,” she said. “Do we really need to invest differently in some services, [knowing that we won’t achieve cost savings] for five years? Are we really, really willing to have those kinds of discussions? And those are tough conversations to have.”
While our first round of interviews pointed to grant-funded pilot projects as quick wins that built trust among new partners, this second round of interviews indicates that those quick wins don’t make up the comprehensive structure of transformation. However, these innovative pilots allowed CCOs to test new care delivery strategies while building relationships that could withstand systemic change.
2. Build A Realistic Timeline
The first round of interviews highlighted the aggressive timeline for CCO implementation; organizations had only months to build infrastructure before patients were enrolled. The frantic pace served as both a facilitator of success and as a notable challenge. While the timeline forced decisions that might otherwise have been argued in a boardroom indefinitely, CCO leaders expressed a desire for ample time to weigh options and design a thoughtful strategy.
The “ready, fire, aim” timeline had implications that were apparent during our second site visits. First, when stakeholders were asked to detail accomplishments and successes, most said that the creation of the CCO—building the organizational infrastructure—had been the biggest success to date. That these organizations were successfully operational was apparent; round two interviewees spoke less about how to create a CCO and more about what kind of CCO they wanted to be.
Nevertheless, the frantic pace had lingering challenges. Many CCO leaders mentioned staff burnout and turnover as a result of the pace of change. Further, many early decisions were based on assumptions that never came to fruition; for example, one CCO leader described having to abandon plans to leverage data to reduce utilization because they had never been able to successfully build the integrated data-sharing system as they had hoped.
Lastly, there is evidence that the pace drove a myopic focus on state requirements. One stakeholder mentioned that CCO leaders were caught off guard when Medicaid expansion hit and they were suddenly faced with provider shortages, even though “everyone knew the ACA was coming.”
One year later, it is still unclear whether the timeline will drive or undermine the success of Oregon’s accountable care model.
3. Incentives Drive Strategy
The first phase of our case study underscored the heavy influence that incentives had on CCO strategic planning and efforts. Despite the struggles of building new organizations, both Health Share and Pacific Source were able to meet quality standards and receive their incentive dollars in Year One.
Stakeholders were happy to have earned the extra capital, yet expressed concerns that the current incentive system was too “prescriptive” and limited their ability to think more progressively about how to meet the Triple Aim. One CCO employee said that the quality incentive metrics were at odds with the state’s stated intention that CCOs reduce health disparities:
“If we’re being paid for population outcomes, eliminating health disparities is not our business. We have to have policy-level incentives and requirements for CCOs to eliminate health disparities….And it’s really difficult for us to feel very empowered to do this [equity] work when there are no financial penalties or rewards on a policy level and it’s not our job.”
After observing CCOs form workgroups around certain incentive metrics and allocate funding for pilots that target those metrics, it’s clear that the most effective way to get CCOs to perform a certain way is to operationalize measures and offer incentives for meeting benchmarks.
The global budget is providing needed flexibility when it comes to aligning payment streams for integrating care and implementing alternate payment methodologies — like capitated payments for hospitals at Pacific Source. But Medicaid dollars in Oregon are still, for the most part, supporting the identical care delivery models that were funded through fee-for-service.
As one CCO employee put it, “In terms of strategies none of those dollars—outside of the administrative carve-off that we take to support my salary and the budget for our community advisory panel—support specific strategies. We don’t carve off a certain amount of money for prevention. And in some ways, achieving consensus on specific prevention strategies and carving off money off the top isn’t an appropriate thing to do for this collaborative at the moment. And whether that’s a good strategy or not is to be seen.”
It’s clear that incentives drive CCO organization, staffing, and financial models. We can therefore predict that if the metrics demand more transformative actions and the incentives are in place to reward those activities, system-level transformation will happen more quickly and more effectively.
Further Questions
Two years into Oregon’s Coordinated Care Experiment, CCOs have stabilized despite ongoing and new challenges. Oregon has succeeded in shifting risk for Medicaid costs to these regional collaboratives, and many CCO leaders are enjoying the work. Nevertheless, key questions remain:
- Will CCO quality incentive metrics incentivize the care delivery transformation necessary to improve community health and reduce health disparities?
- Will CCOs use the global budget to fund new strategies and activities, or will Medicaid dollars go towards supporting the existing model of care?
- Will Oregon regret not giving CCOs time to develop long-term integration strategies?
We’ll continue to watch the evolution of these new health care organizations.
Author’s Note
The authors would like to acknowledge Bruce Bayley, Lucy Savitz, and Jill Rissi for their contributions to this post.
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