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WHITE PAPER

Contributions of Pathologists in Accountable

Care Organizations: A Case Study May 2012

David J. Gross, PhD

Director, Policy Roundtable, College of American Pathologists

College of American Pathologists

325 Waukegan Rd.

Northfield, IL 60093

Tel: 800-323-4040

cap.org

© 2012 College of American Pathologists. All rights reserved.

TABLE OF CONTENTS

Introduction ............................................................................................................................................................... 3

Background .............................................................................................................................................................. 4

Case Study: Specific Ways That Pathologists Are Adding Value in Three ACOs .............................................. 6

Findings—Common Threads ................................................................................................................................... 8

Challenges .............................................................................................................................................................. 13

Conclusions and Policy Implications ................................................................................................................... 15

References .............................................................................................................................................................. 20

Appendix A: Interview Participants ...................................................................................................................... 22

Appendix B: Discussion Guide For Semistructured Interviews .......................................................................... 24

Contributions of Pathologists in ACOs | CAP

INTRODUCTION

Accountable Care Organizations (ACOs) represent the most recent trend in trying to restrain the growth

in US health care spending. With an explicit goal of improving quality of care and health care

outcomes, as well as restraining spending, ACOs are coordinated care systems in which providers are

incentivized on the basis of outcomes rather than the number of services. The Affordable Care Act

allowed for the establishment of ACOs within Medicare, and ACOs (and other coordinated care

delivery systems) exist—and are expected to proliferate—in the private sector as well. The model

represents an attempt to address the problems of a fragmented, largely fee-for-service-based medical

care system that rewards provision of services rather than achievement of outcomes, contributing to

rapid growth in health care spending (now over 17% of GDP) and a system in which as much as 30% of

costs are generated because of overuse, underuse, and misuse of health care services.1

ACOs offer both challenges and opportunities for pathologists. The challenges accrue from substantial

changes that are associated with practicing in an ACO, in particular a movement away from

traditional fee-for-service payment and from an individual approach of practicing toward being part of

a care team. However, with their emphasis on health care quality and population health supported by

electronic connectivity, the ACO model also offers opportunities for pathologists to apply their skills to

help ACOs achieve their goals while finding new ways to show value in an environment where

reimbursement rates are expected to continue their downward trend.

Given these concerns and challenges, the College of American Pathologists (CAP) sought to gain an

understanding of how some pathology practices have been able to take leading roles in ACOs. To

accomplish this, CAP staff visited with pathologists, administrators, and other physicians at three such

health care organizations. These organizations represent diverse models of health care delivery. One,

Geisinger Health Systems, located in Danville, Pennsylvania, is an organization that has long been a

leading integrated delivery system. A second ACO, the Accountable Care Alliance in Omaha,

Nebraska, is a unique collaboration between a community health system (Methodist Health System)

and a university hospital (The Nebraska Medical Center) that has been operating as an accountable

care organization for about two years. The third, Catholic Medical Partners (CMP) in Buffalo, New York,

emerged from a partnership between four community Catholic Health of Western New York hospitals

and a network of associated physicians, CIPA Western New York IPA, Inc.

In this paper, we identify actions and approaches taken by pathology to help the ACO achieve its

goals of improving health care while reducing health care costs by offering more efficient, better

integrated, and more quality-driven health care delivery. Our research identifies ways in which


pathologists used their unique skill set to provide greater rationality to laboratory medicine in a way that

helps clinicians offer better patient care and helps the system to reduce costs. We also identify barriers

that these organizations have identified. Finally, we present a set of potential policy issues that can

enhance the ability of pathologists to achieve the goals of the ACO and of the overall health care

system.

BACKGROUND

What is an ACO? A simple definition of an ACO is that it is a network of health care providers that is held

accountable for the costs and quality of health care services that are provided to a defined group of

patients. While ACOs exist in different forms, the general framework is that it is an organization, physical

or virtual, that takes on the responsibility of reducing health care costs for this population while also

meeting predetermined quality standards for its patient population.2

Collaborative care models, such as ACOs, have emerged in the private sector in recent years, but

much recent attention has been focused on the development of Medicare ACOs. Beginning April 2012,

Medicare contracts with ACOs began operation under the auspices of Medicare’s Shared Savings

Program. This program follows Medicare’s Physician Group Practice Demonstration, the precursor to its

current ACO efforts, which involved 10 health care organizations that were eligible to share in cost

savings they could achieve and would receive bonuses based on their performance along 32 quality of

care measures. In addition, 32 health care organizations with a proven track record in an ACO-type of

model are part of a demonstration project called the Pioneer ACO model. In both of these structures,

the ACOs are eligible to share in savings for reducing costs and meeting quality standards, but in the

Pioneer program they have the opportunity for greater savings but also face financial risk if their costs

are not well managed.2

Key issues around ACO development. A key element to a successful ACO model, at least in theory, is

that health care providers become part of a team. The team—primary care physicians, hospitals,

specialists, and other providers—are jointly responsible for achieving efficiencies and seeking high

quality care for the patient.3 Nace and Gartland identify three interdependent aspects that are

necessary for an ACO: (1) care delivery reform, ie, replacing the current fragmented system of

providing care with a system which features clinical integration and coordination of care; (2) payment

system reform that rewards achievement of a set of quality standards and reductions in cost, rather

than one that rewards provision of services only; and (3) a health information technology system that

allows providers to access information about the patient across different care settings and allows for

implementation of the payment and care delivery reforms.1


While appealing in theory, the practice of operating an ACO is quite complicated. Existing health

information systems often don’t communicate well between providers and practice settings; many

providers are only at the beginning of establishing electronic health records (EHRs) for patients; and

even within a single setting (eg, a hospital) different aspects of health technology may not be

interoperable. Setting up systems of coordinated care requires establishments of health networks and

changes in how providers work together. And, importantly, basing provider payment on savings and

measures of health outcomes and quality standards is challenging, particularly when it comes to

developing measures to reward providers such as pathologists, who provide a large amount of

cognitive and diagnostic services that aren’t easily measured by health outcomes. For example, in a

recent New England Journal of Medicine article, Bruce Landon notes that many of the measures

currently being considered for rewards in ACOs relate to primary care but that incentivization of other

specialties, particularly those that provide cognitive services, has not yet been adequately addressed.4

Potential pathologist roles in improving clinical outcomes. There is some literature from pathologists

regarding how laboratory medicine can contribute to efforts to improve clinical outcomes and increase

efficiency in the delivery of health care. Schuerch, et al, of Geisinger Health Systems, summarize the role

of the pathologist in improving ―laboratory clinical effectiveness‖ as:

• Sharing accountability for patient outcomes and performance of the health care system

• Providing reliable laboratory measures

• Establishing and using a standardized laboratory database for outcomes research and

health care improvement

• Participating in design of standardized practice algorithms for things such as laboratory test

ordering, test interpretation, and therapeutic recommendations

• Developing patient health information tools that are designed to improve patient care

• Extending laboratory reporting to include improvements in how the data are presented to

clinicians as well as clinical recommendations

• Using information system tools to improve reliability of quality of care in all health care

settings, including the hospital, the clinical, long-term care facilities, and the home

• Providing clinical consultations when appropriate.5

Sussman and Prystowsky, pathologists at the Montefiore Medical Center, recently reported on their

experiences in creating value in a risk-based environment. Their model of how pathologists add value in

such a system has five elements:


• Working with clinical colleagues to optimize testing protocols

• Reducing unnecessary testing in both clinical and anatomic pathology

• Applying personalized therapy to help guide treatment

• Designing laboratory systems to allow quick data mining by pathologists and clinicians

• Administering cost-effective laboratories.

In the future, they say, success will hinge on ability to collaborate with clinicians, and provide education

to those clinicians, in order to manage the appropriate use of high-cost tests while also reducing the

unnecessary use of more common tests.6

Among the many concerns is how pathologists will get paid for these value-added services. Many

pathologists are used to getting paid under a fee-for-service model for outpatient services and under a

contract with hospitals for inpatient/Part A inpatient services, but the services that pathologists would

offer do not easily accrue under such a model. At Geisinger and Montefiore, pathologists are salaried

employees of the institutions, and incentives such as gain sharing and rewards for innovation are easier

to apply. As Sussman and Prystowsky note, however, this is not the same for all institutions.6

Such concerns are not isolated to pathologists. For example, the American College of Radiology (ACR)

recently published the recommendations of a work group it formed with the express purpose of

identifying ways that radiologists can successfully contribute in ACOs. Like pathologists, radiologists are

diagnosticians who apply their expertise to the diagnosis and management of a wide variety of

medical conditions. While not necessarily endorsing the evolution of ACOs, ACR’s recommendations

offer a framework for how radiologists can contribute within that environment as well as strategies for

being financially recognized for their contributions.7

CASE STUDY: SPECIFIC WAYS THAT PATHOLOGISTS ARE ADDING VALUE IN THREE ACOS

In order to get a sense of how some pathology practices are functioning in and dealing with the

challenges and opportunities associated with ACOs, we conducted site visits of three different health

care organizations in which pathologists have successfully integrated into ACO leadership positions.

These organizations, while not necessarily representative of all ACOs in which pathologists have been

active, represent three distinct organizational models as well as distinct histories in the development of

their structure. We conducted our interviews between February 15 and February 27, 2012.

The first ACO we visited, the Accountable Care Alliance in Omaha, Nebraska, is a unique collaboration

between a community health system (Methodist Health Systems) and a university medical center (The


Nebraska Medical Center) that has been operating as an accountable care organization for about two

years. Methodist Health Systems (Methodist), founded in 1982, is a network of hospitals, clinics, and a

nursing and allied health college. It includes Methodist Hospital, a 440-bed facility in Omaha. The

Nebraska Medical Center, which was formed in 1997, is Nebraska’s largest health care facility. With

more than 1,000 physicians, it is the teaching hospital for the University of Nebraska Medical Center.

With facilities statewide, it includes a 624-bed acute care hospital in Omaha.8,9,10

Our second visit was to Geisinger Health Systems, headquartered in Danville, Pennsylvania. Founded in

1915, Geisinger is a physician-run, -integrated, and -coordinated health system that serves more than

2.6 million residents throughout 44 counties in central and northeastern Pennsylvania. Geisinger is an

―integrated delivery system‖ that has a long history of coordinating the delivery of health care across

the continuum of care, ie, preventive, primary, acute, and inpatient care.11,12

The third visit was to Catholic Medical Partners-IPA in Buffalo, New York. CMP emerged from four

Physician Hospital Organizations (PHOs) that were incorporated in the mid-1990s with the Catholic

Health System of Western New York hospitals and a network of associated physicians. CMP has long

held agreements with commercial health plans that hold it at financial risk. With over 900 members in its

network, CMP adopted a ―clinical integration‖ model around 2006 and places a focus on improving

clinical performance, being accountable for patient satisfaction, implementing new health care

information technology, and improving the quality of health care.13

For each of these organizations, the evolution to a coordinated care delivery model was more a

function of natural outgrowth of an existing business model than a reaction to health care reform or the

Medicare Shared Savings Program in particular. That is, they saw the model—whether it was called ACO

or began with another name—as a necessary way to rationalize health care costs while providing

enhanced value for payers and, importantly, for patients. Geisinger Health Systems offers the longest

experience of the three institutions in operating as a coordinated care system. While its original focus

was on primary care, for at least the last two decades it has focused on developing new, cost-effective,

and patient-centered approaches for treating chronic illness. Indeed, Geisinger can be considered one

of the models for ACOs, and it was one of the original 10 CMS Medicare Physician Group Practice sites.

CIPA Western New York IPA, Inc., the predecessor to Catholic Medical Partners (CMP) began in 1996 as

an Independent physician association (IPA) that jointly negotiated agreements with the health plan,

assuming financial risk and accelerating clinical integration. Over time, its leaders anticipated that

traditional fee-for-service reimbursement would eventually be replaced with something that looked

more like a bundled payment system that would be based on cost savings and provision of high-quality

care. As a result, over the last decade the organization has been evolving into a more coordinated


care model. The TNMC/Methodist collaboration began in 2008 as a joint purchasing pool seeking to

gain leverage with their suppliers in order to get lower costs for both institutions. After successful

negotiations to save money on the purchase of blood products and apheresis services, both

organizations decided they could effectively work together and began to develop other ways of both

saving money and developing methods for improving patient care.

In our interviews, we met with various officials from each institution (listed in Appendix A). We asked

questions about areas such as how the structure of the ACO, how pathologists are able to have an

impact in the organizations, evidence of impacts, and barriers to their successful involvement. These

questions were developed by staff at the College of American Pathologists and were reviewed by CAP

members who are members of the both the ACO network and steering group, some of whom provided

substantive suggestions that led to alterations in the survey instrument(shown in Appendix B).

FINDINGS—COMMON THREADS

Pathologists in these three institutions share a common perspective of the role of pathology in clinical

care. This perspective might be best expressed by Schuerch, et al’s assertion that:

―Pathologists must share accountability for the larger process, extend themselves outside their

traditional boundaries, and engage in activities that improve clinical outcomes. Pathologists

often have special knowledge to contribute in designing clinical pathways, and they have

informatics and communication tools at their disposal that may be used to improve clinical

performance.‖5

Not only have these pathologists adopted this broader perspective about their potential contributions,

but also they have successfully incorporated themselves into ACO leadership and demonstrated the

value that they could bring to the organization. Leaders in the ACOs we visited, such as ACO executive

directors, chief medical officers, and medical directors, asserted that pathology and laboratory

medicine play an integral role in successfully achieving the ACO goals of reducing costs and improving

quality and safety. They recognize the extensive influence of laboratory testing on clinical decision

making and the unique role that pathologists can play in assisting them to meet their objectives—

particularly in the application of evidence-based approaches to eliminate waste and inefficiencies in

laboratory medicine. The importance of pathologists comes in their ability, unique among medical

specialties, to collect and analyze data related to patient testing and diagnosis.


We identified four examples of how pathologists and laboratory medicine have added value in their

institutions:

1. Development of protocols for laboratory ordering

One important way that pathologists in these institutions contribute to ACO goals is by setting up

test ordering protocols for high-cost or high-volume tests. Officials and pathologists at the

institutions we visited told us that clinicians don’t always know or understand which tests are

appropriate for different conditions. There is evidence that, in settings in which care is not

coordinated, ordering protocols for the same condition are not always standardized—protocols

can vary between sites or between physicians at the same site, and that the continuum of

evidence behind those protocols can vary from being well investigated to being developed on

an ad hoc basis.14 Other studies point to the substantial effort needed to ensure that protocols

are consistently updated to reflect medical advances and new information on clinical

effectiveness.15

While pathologist contributions to the development and maintenance of order sets are not

unique to an ACO environment, ACOs are unique in that (1) there is the opportunity to apply

similar standards across a wide range of health care settings, and (2) financial incentives can be

put in place to reward pathologists for this and other contributions to promoting efficiency and

effectiveness in clinical care delivery. As a vice president at Methodist Health System observed,

pathologists are ―uniquely situated‖ to lead the development and maintenance of

standardized, evidence-based order sets in ACOs. Such standards on test ordering can save

money by reducing unnecessary tests and can also improve patient treatment because the

patient is more likely to get the kind of tests that can most efficiently identify (or rule out) a

particular medical condition. This role is expected to be of greater importance with the

expected growth in high-cost genomic tests.

In the institutions we visited, pathologists develop standardized testing protocols in consultation

with other clinicians. In some cases, this consultation is done informally, while in others it is

conducted through more formal mechanisms, such as membership on a laboratory service

advisory committee, and/or other similar activities. Furthermore, the standards may be based on

clinical consensus or may be developed on the basis of evidence-based research.

There are several ways that standardized testing protocols have been implemented in the ACOs

we visited:


Pathologists at TNMC/Methodist and at CMP have developed standards to reduce the use

of tests that are ordered too frequently or high costs tests that are rarely needed. When they

identify such tests, they contact the clinician to determine whether the test is necessary (as

compared to something that might be ―interesting‖ but not clinically necessary). At

TNMC/Methodist, such efforts have resulted in a reduction of proliferating or costly tests

(specific data on cost savings were not available), and efforts are ongoing to develop a

broader ―formulary‖ that would identify appropriate tests for different medical questions. At

CIPA, standards developed by pathologists are designed to provide a more rapid and more

accurate diagnosis for C. difficile colitis—a digestive condition that can have severe impacts

on patients and high costs of care—and to more appropriately test patients who are

suspected of having a thrombosis.

Another TNMC/Methodist effort led by pathologists is to reduce the use of red blood cells

and platelets for patients undergoing orthopedic and other surgery. Based on standards

established in the medical literature, adoption and enforcement of these standards at

Methodist Health System have contributed to roughly a 50% reduction in the cumulative

costs of blood supply over the last few years. It also has reduced adverse reactions to blood

transfusion and results in a reduced length of stay.

A pathologist chairs a multidiscilplinary laboratory utilization committee at Geisinger. Through

the Transfusion Committee, the laboratory has led the development of standard criteria for

transfusions and monitors the utilization of blood products against these criteria. The

laboratory has also provided leadership for a clinical blood conservation program.

Laboratory professionals vetted the standardized order sets of various specialties as they

were built into the EHR.

2. Population health management

Our interviews also identified ways that pathologists have applied their expertise to help ACOs

develop standards for identifying and managing chronic illness among the population enrolled

in the system.

Geisinger Health System’s experiences offer several examples of how population based analysis

can be applied. Geisinger has implemented standards under its ProvenCare programs, which

establish clinical guidelines and offer guarantees to patients and third-party payers that they

would not have to pay for readmissions due to care that should not have been needed. The

laboratory standards for this program are based on applying clinical data trends that identify

the most effective treatment, and that use the EHR to notify physicians (and patients) of when


certain treatments are required. Among the results of Geisinger’s application of this approach

are:

Reducing the median days it takes for renal patients on EPO to reach a target hemoglobin

level, from 62.5 days to 35 days, and saving about $2,200 per patient per year.

Effectively following standardized guidelines for treatment of diabetic patients, resulting in a

one-third increase in the percentage of these patients who received flu vaccines, a 40%

increase in pneumococcal vaccination, a 50% increase in patients who met goal measures

of HgbA1c levels, and a 46% increase in meeting goals for blood pressure.

3. Improving physician access to actionable data from the laboratory

As noted earlier, access to electronic patient data is a foundation of an ACO’s ability to

effectively coordinate care. As EHRs and HIEs become more common, a key role for

pathologists is to design the format for lab results in the EHR and HIE, making the format as

―actionable‖ as possible. As ―owners‖ of the laboratory data, pathologists in these organizations

either have taken, or are looking to take on, a leadership role in making data more accessible

and more actionable by physicians. Pathologists at CMP are working on how they can use data

to improve care management. For example, they are looking at how to use the EHR to identify

diabetic patients who had not been getting the HgA1cb tests that are needed to determine

whether their disease is under control. The medical director of Univera Health Plan, a health plan

that covers many of the ACO members with which CMP has a contract, has been favorably

disposed toward such efforts, and it expressed a desire for pathologists and the laboratory

community to give extra help to primary care physicians and other ordering physicians on when

follow-ups are needed (eg, following diabetics who aren’t getting their tests).

Pathologists at Geisinger Health Plan stated that the report to the treating physician is the most

important product that a pathologist can produce. Indeed, pathologists at Geisinger explicitly

stated the view that their job does not end when the data is provided to the clinician; rather,

they see all aspects of lab enterprise analytics as their responsibility, including how the data are

used and how they are communicated to the patient. In an environment where the LIS and the

EHR are well-integrated, as at Geisinger, laboratory staff are working toward a goal of designing

laboratory reports that makes it easier for the clinician to act faster and more efficiently: more

clearly communicating test results, providing simpler test interpretation in order to reduce the

burden on the clinician, increasing the probability of the information getting to the patient, and

clearly identifying actionable contents of the report. This type of activity is welcomed by other

providers in the organization, some of whom expressed a desire to have improvements such as


electronic prompts to the physician identifying when patients need particular tests or when they

need particular follow-up.

4. Greater collaboration with other clinicians

Both pathologists and nonpathologists agreed that pathologist leadership and collaboration

with other physicians and with ACO leaders are major contributors to their success. As they

note, many clinicians do not understand the analytic role that pathologist play or the expertise

of pathologists in understanding the most effective applications of laboratory medicine. As a

result, it is easy for pathologists and for laboratory medicine to be overlooked during the

development of ACOs.

The opportunities for pathologists to collaborate are varied. Already mentioned is their role in

establishing guidelines for laboratory medicine and for improving treatment of chronic disease.

Pathologists can provide post-test consultation for complex tests such as

coagulation/hemostasis work-ups; cancer diagnosis with ancillary genomic/proteomic results;

pharmacogenomic testing; and follow-up disease-risk genomic testing.

Pathologists in the three institutions we visited achieved their leadership roles by proactively

asserting their ability to help the ACO meet its goals. In each organization, there is an

established culture of pathologists working in a coordinated and integrated manner with other

clinicians. For example, the pathology department at Methodist Health System had nearly one-

half century of leadership by pathology department chairs that focused on applying data and

evidence toward medical practice throughout the hospital. Geisinger’s pathology leadership

for the last two decades has been at the forefront of coordinated care, and has been in an

institution where coordination is part of the culture. At Geisinger, the lab has an integrated

presence in every owned clinic site, providing phlebotomy, performing on-site testing, and

ensuring seamless services and information flow into the EHR. A close partnership with

pharmacy is the foundation of a system of coagulation clinics serving about 16,000 patient

encounters per month. The lead pathologist at CMP has also been a leader for over a decade

in pushing his institution to incorporate clinical effectiveness guidelines from pathology and

laboratory medicine into efforts to improve outcomes and reduce costs.

Interviewees also noted that pathologists would have a much harder time implementing

recommendations without strong support from ACO leadership. Lacking such support, it would

be difficult both to get resources for pathology to develop guidelines, but more importantly

there may be reduced incentives for other clinicians to follow pathologist advice.


CHALLENGES

Despite their successes, pathologists in these organizations, as well as the organizational leadership,

continue to face challenges relating to achieving the greatest possible value from improving laboratory

medicine. One of the most important problems they face is how to pay for pathologist contributions. As

noted earlier, others—such as the American College of Radiology and Landon—have cited the difficult

issues associated with paying for such services under a bundled payment model. One difficulty is that a

traditional fee-for-service model may not be appropriate because adoption of guidelines and

measures promoted by pathologists may actually decrease the volume of laboratory tests (and

therefore the income derived from fee-for-service payments). In addition, many of the ways in which

pathologists add value to the ACO are not related to the provision of particular services to specific

patients, but to the development of systems (such as EHR coordination with laboratory) and guidelines

that globally reduce costs and potentially improve patient care.

Payment. The institutions we visited have had differing degrees of success with determining how to pay

pathologists and how to allocate to them gains from greater efficiency in health care delivery.

Geisinger, with its two decades of experience working in a coordinated care environment, has

developed a system under which all providers are salaried and are eligible for substantial incentive

payments for areas such as cost savings and development of care innovations. Pathologists at

Nebraska Health Center and Methodist Health System are salaried, and the pathology department gets

a bonus that is based both on cost reductions and on achieving quality targets. While pathologists will

be among the medical specialties eligible for sharing in cost reductions from greater efficiencies under

shared savings agreements in the physician hospital organization in which the pathologists at Methodist

participate, the share going to pathologists and all other PHO physicians had not been determined at

the time of our visit.

Payment issues are particularly important for organizations such as CMP, where pathologists are not

employees of the hospitals or ACOs and therefore are not directly compensated for the quality

improvement services that they provide. Instead they contract with the hospitals for inpatient/Part A

services and receive fee-for-service payments from payers for outpatient services. Under their IPA

arrangement, pathologists were eligible for incentive payments based on performance measures.

Under CMP, the formal ACO, how pathologists should be paid for efficiency gains is a work in progress

and not yet fully resolved conceptually or specifically.


Improving the capabilities of Health Information Technology (HIT) systems. A second important issue is

the extent to which ACOs’ HIT systems are bi-directional, ie, allowing laboratory pathologists easy

access to patient data across the patient’s EHR and allowing other clinicians easy access to readable

and actionable data from the laboratory. Such data are used in several ways, including implementing

population health management programs (such as those used at Geisinger), communicating and

assessing the effectiveness of standardized laboratory order sets, and presenting laboratory results in a

way that makes it easier and more efficient for the clinician to provide appropriate care to the patient.

In their current operations, pathologists typically utilize laboratory information systems (LIS) and

anatomic pathology information systems (APIS) that enable them to receive test orders, track test status,

and report test results and provide interpretive reports. These test results and interpretive reports are then

typically transmitted by interface to the EHR. However, in many organizations without a single electronic

medical record (EMR), physicians often are not able to access complete ambulatory and hospital due

because of complex interface barriers. At least one expert with whom we spoke believes that these

problems eventually will be corrected but require both more time and more resources. The lack of a

single EMR also makes it much more difficult for the treating physician to access actionable data from

the laboratory record (eg, automatic prompts that a patient is due for a test; electronic versions of

testing protocols associated with a particular patient condition or symptom; or information about

whether the patient has already had a particular test—particularly a costly genetic test for which results

would not change in a patient’s lifetime). It often falls to the clinical laboratory to solve EHR interface

problems, so as to establish robust mechanisms to link laboratory testing and results to the patient’s

clinical record. Such high functionality is required to ensure timely delivery of test results to providers, to

avoid duplicative testing, and to ensure coordinated management of patient testing and therapeutic

management by the patient’s treating physician(s). Pathologists are key to ensuring the quality of

laboratory tests by collecting, surveying, analyzing, and using patient population clinical results to guide

therapy, best practices, and safety for individual patients and patient populations.

Among the organizations that we visited, Geisinger Health System has the most integrated HIT networks,

but even officials there say that such networks take years to develop and requires continuous

improvement efforts. At the other institutions, however, integration is still far from complete. TNMC and

Methodist Health System have interoperability in their LISs, enabling pathologists in one institution to see

what tests have been run (and results found) in the other institution, but the institutions use different EHR

systems. As a result, they need to work on ways to integrate these systems so that the two hospitals can

access patient data from one another. In addition, Methodist Health System’s LIS is still not fully

integrated with its EHR. CMP is able to access clinical information through HEALTHeLINK, a regional

health information organization (RHIO) operating in Western New York state that offers access to patient

records at different institutions. While this system provides a physician with access to the broad menu of


care that a patient may be receiving, officials with whom we spoke told us that data is not easy to

extract.

Difficulty of culture change. Finally, officials and pathologists at all three institutions agree that moving to

an ACO model takes a substantial amount of time, effort, and behavior change. Specific to pathology,

it requires changes in how clinicians and administrators see the role of pathologists, and in how

pathologists view themselves. In organizations that are moving to a collaborative care model,

pathologists who are not used to such active collaboration may need to be retrained in how they

practice, how they communicate with other providers, and what kinds of role they can play in

increasing their value. As CMP’s David O. Scamurra, MD, FCAP noted, it will take retraining of

pathologists to show them new ways of adding value. And because other clinicians typically are not

aware of the contributions and capabilities of pathologists, it requires retraining and methods for

providing continuing education to reinforce how pathologists can enhance patient care and reduce

institutional costs. As Dr. Scamurra said, pathologists need to continuously identify and stress the

importance of pathology, or they will be left out of the discussion.

CONCLUSIONS AND POLICY IMPLICATIONS

The growth of collaborative care models such as ACOs presents challenges to pathologists, particularly

those who have relied on traditional methods of payment and of practicing laboratory medicine.

Pathologists—particularly those in independent private practice—may face pressures to show their

―value added‖ or could face an environment where the ACO views their services as a commodity to

be purchased from the lowest bidder rather than as a service that can help the ACO achieve its quality

and cost-reduction goals. But, for those pathologists who are seeking an expanded role in applying their

skills as diagnosticians and integrators of health data, they also pose a dramatic opportunity. In

addition, in an era of continually falling reimbursement rates for pathologists operating in a fee-for-

service environment, roles in collaborative care may offer a growth opportunity for pathology and

laboratory medicine. As one of the pathologists we interviewed said, one cannot stand still in this

environment because payment systems are bound to change. And, because of the unique capabilities

that pathologists bring in data management and testing, they offer important opportunities to help

ACOs achieve their goals of providing better care while rationalizing the costs of that care.

These three case studies of very disparate ACOs show distinct ways in which pathologists within those

organizations have been able to add value and become leaders in their institutions. They have been

able to implement collaborative approaches that reduce costs without reducing—indeed, often while

enhancing—patient safety and health care outcomes. Admittedly, implementing these approaches is


not easy. And success requires vision and leadership from pathologists, from administrators, and from

lead clinicians in the institution. Success may also hinge on reorienting both pathologists and other

clinicians to work better together and on successful use of interoperable electronic connectively both

to provide the data and to make best use of the analysis and feedback which pathologists provide.

The ACO model relies on innovation by private actors, notably physicians and hospitals. Even the

Medicare ACO model is designed to allow models to emerge under a broad set of regulations that

merely set the financial and quality ground rules. Nevertheless, our site visits suggest some potential

areas where public policy changes can establish an environment that would enhance opportunities for

ACOs to be more effective:

1. ACOs should establish an advisory board that evaluates and monitors clinical laboratory testing

protocols and guidelines. Given the fundamental role played by the clinical laboratory in

allowing the ACO to achieve its health outcomes while reducing costs, it is vital that the

laboratory provide diagnostic protocols, including optimized order sets, that are evidence

based and designed to make sure that the patient gets the right test at the right time. Several

institutions, such as the Mayo Clinic and the institutions we visited, already have advisory boards

that identify areas for standards that are evaluated by providers and are based on strong

medical evidence. Currently, about half the states have considered ACO legislation that would

allow these entities to function under state law. The Massachusetts Society of Pathologists (MSP)

is advancing legislative language, to be included in anticipated legislation, which would require

each ACO to establish a clinical laboratory testing advisory board, charged with

recommending guidelines or protocols for clinical laboratory testing in the ACO. According to

an undated MSP legislative memorandum in support, the MSP proposal would require the

board’s membership to include at least one physician who is both a member of the ACO and

the medical director of a CLIA-certified clinical laboratory. It is important to note that such

legislation not establish the guidelines themselves. Rather, it would require the ACO to establish

such an advisory board, including a CLIA-certified laboratory director physician who is a

member of the ACO, as part of the approval process for any ACO.

2. CMS guidelines for ACOs should, at a minimum, strongly encourage that patient EHRs allow for

bi-directional exchange of data between the laboratory and other patient information. The EHR

is, in effect, the central nervous system of an ACO. EHRs should enable all relevant providers—

including pathologists—to have the ability at any points in the decision-making process to

access the information on the patient’s health status, the health care plan, and results. Such

information helps to avoid medical errors, unnecessary duplication of services, and underuse of

appropriate services.16 This access is particularly important because patients may be getting


care at different sites within the ACO. For example, they could be getting care at two different

hospitals and from several different physicians. All of the experts we interviewed expressed the

importance to ACO success of pathologist access to data in the EHR in order to correctly assess

patient needs and to implement programs that promote appropriate care.

3. CMS should study the extent to which patients and smaller health care practices in rural areas

are able to take advantage of any cost and quality improvements that may be associated with

ACOs. The ACOs that we visited are all well established and had experience operating in an

organizational capacity (eg, hospitals, major regional health centers, large physician practice

organization). But patients receiving care from such organizations should not be the only ones to

benefit from coordinated care models. In some markets, particularly in rural areas, starting an

ACO poses not only major logistical problems but also financial problems (particularly for the

required investments in common EHR systems). They also face greater risk because there is

uncertainty about whether ACOs in rural areas can achieve savings.17 Similarly, the smaller

pathology practices typical of such rural areas may lack the financial capital needed for

startup. This could be particularly important where such practices are the only ones available in

the community.7 CMS has recognized the issue of barriers in establishing ACOs in smaller

communities, particularly in their financial ability to build an EHR system, and established the

advance payment program to give such ACOs access to future shared savings in order help

fund startup costs without any net government contribution. However, these payments only

address start-up costs and do not reflect the potentially greater risks that ACOs face in these

communities. In addition, there is concern that the eligibility requirements do not reach all

necessary communities, and while the funding accrues to the ACO, it is not clear that the ACO

would distribute the funds in a way that would provide needed investment funds to specialists

such as pathologists, who would need to make investments in data integration. Inadequate

distribution of funds would diminish the effectiveness of the ACO in achieving the types of gains

that can be achieved in larger markets.

While adoption of these policy measures would enhance pathologists’ ability to contribute in an ACO, it

would be naïve to think that all—or even most—pathology practices are able to immediately provide

coordinated care systems with the kinds of laboratory-based contributions that have been highlighted

in this analysis. These are particularly true for small- and medium-sized practices, which still employ the

majority of practicing pathologists in this country. If coordinated care systems such as ACOs become a

more dominant part of the health care delivery system, practices seeking to participate as leaders in

those systems must address the following issues:


Many of the potential roles for laboratory medicine in ACOs require expertise in laboratory

medicine, but smaller practices often have focused their current staff expertise in anatomic

pathology. In order to be a leader in the ACO, a pathology practice needs to have sufficiently

broad expertise to allow them to be leaders in all areas of pathology, including the laboratory

medicine areas of clinical chemistry, hematology, medical microbiology and transfusion

medicine, equally with anatomic pathology.

Similarly, ACO administrators may be looking to pathologist for standards and protocols in

emerging areas of diagnosis, including molecular testing. Again, some practices may not have

sufficient staff expertise in all the areas where such protocols might be needed.

Relatively few pathologists have the training and skills in health care informatics that are

required to acquire and analyze the data needed for population health management. Even

though not every pathologist would need these skills, many small- and medium-sized pathology

practices do not have sufficient staff expertise in this area.

If pathology practices beef up their staffing to enhance their value to existing or future

coordinated care delivery systems, the question remains of how to pay for this enhanced

staffing. Pathology practices may be unable (or, at a minimum, reluctant) to invest in these

resources when there is no established basis for payment by an ACO for the savings and

improvements in quality that these staff would bring to the ACO.

That being said, ACOs are still in their formative stages in most parts of the country, and this analysis

suggests ways that pathologists can best avail themselves of the opportunity to be part of this new

world:

Be proactive. As noted earlier, individual pathologists can be proactive in reaching out to ACO

organizers in their communities, explaining the potential for pathology and laboratory medicine

to contribute to ACO goals, and offering to take a leadership position by participating in the

ACO and joining ACO committees. Working with local ACO leaders and administrators, and

getting an early ―seat at the table‖ is vital for pathologist, particularly in an environment where

roles, procedures, and payment mechanisms are still being invented.

Document value. Once a laboratory is in an ACO, it is important to document ways that its

actions have contributed to enhanced outcomes, more appropriate care, and cost reductions

for the ACO. Examples such as we heard, where a pathologist was able to talk to a clinician

about the reasons for not ordering a requested $1,500 test—which the clinician noted wasn’t

vital but would just be ―interesting‖—need to be identified and highlighted. Conversely, there

should be an opportunity to identify the specific value of ensuring that appropriate testing is

done at the appropriate time, with appropriate interpretation and follow-through.


ACOs and coordinated care models also offer opportunities to the profession of pathology as a whole.

In particular, pathologists—working with other clinicians—have the opportunity to apply their substantial

laboratory-based information and expertise to develop evidence-based guidelines for optimal use of

laboratory tests to monitor the health status of patients with chronic disease, detect illness in patients at

risk for health problems, and facilitate initiation of treatment interventions. Admittedly, this may be a

new and perhaps controversial area for pathologists to explore. But the need for such standards came

up repeatedly among ACO administrators with whom we met, at least one of whom cited similar

standards that have been developed for radiology. The CAP should consider whether it would be

appropriate and useful to follow the example set by the American College of Radiology to develop

criteria for testing.18 Such an action could potentially raise the visibility of pathology and lead to

improved—and potentially less costly—outcomes for patients.

________________

David J. Gross, PhD is director of the Policy Roundtable, College of American Pathologists (CAP). The

author acknowledges the contributions of his CAP colleague Sharon West, who participated in the

ACO site visits and whose expertise on ACOs helped to frame the issues addressed in this paper as

well as to provide the basis for substantial comments throughout the paper’s development. The

author also received valuable comments from John Scott and John Olsen, MD, both of CAP;

members of CAP’s Policy Roundtable Committee, including Richard C. Friedberg, MD, FCAP; James

M. Crawford, MD, PhD, FCAP; W. Stephen Black-Schaffer, MD, FCAP; Thomas M. Wheeler, MD, FCAP;

and Michael B. Cohen, MD, FCAP; as well as from Donald S. Karcher, MD, FCAP, who chairs the

CAP’s ACO Network. The author accepts responsibility for any errors or omissions. Any opinions

expressed herein are solely those of the author and do not necessarily represent the policies or

positions of the College of American Pathologists.


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http://www.strategiestoperform.com/volume5_issue2/. McKesson/Relay Health white paper.

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2012. http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=61. Accessed April 17,

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an academic medical center. Hum Pathol. 2012;43(5):629–631.

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radiologists in the era of health care reform and accountable care organizations: a report from

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8. About the partners. Accountable Care Alliance website.

http://www.accountablecarealliance.com/partners/. Accessed April 18, 2012.

9. About us. Methodist Health System website.

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March 14, 2012. Accessed April 18, 2012.

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www.ehealthinitiative.org/resources/. Published March 8, 2012. Accessed April 19, 2012.

17. American Medical Association. Accountable care organization (ACO) principles. Policy

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American Medical Association, San Diego, CA, November 6-9, 2010. http://www.ama-

assn.org/ama1/pub/upload/mm/399/aco-principles.pdf. Accessed April 23, 2012.

18. ACR appropriateness criteria®. American College of Radiology website.

http://www.acr.org/secondarymainmenucategories/quality_safety/app_criteria.aspx..

Accessed April 19, 2012.


APPENDIX A: INTERVIEW PARTICIPANTS

CAP staff interviewed the following individuals as part of its research for this white paper:

The Nebraska Medical Center

Steven H. Hinrichs, MD, Professor and Chair, Department of Pathology and Microbiology;

Director of Microbiology and Virology

James L. Wisecarver, MD, PhD, FCAP, Professor and Vice Chair, Department of Pathology and

Microbiology; Medical Director, Clinical Laboratory; Medical Director, Molecular Diagnostics

Jodi Garrett, MT(ASCP)SM, Director, Clinical Pathology

Methodist Health System

Ken Klaasmeyer, Vice President, Managed Care

Anton Piskac, MD, Vice President, Performance Improvement

Thomas L. Williams, MD, FCAP, Medical Director, Methodist Pathology Center

Gene N. Herbek, MD, FCAP, Medical Director, Methodist Women’s Hospital & Transfusion

Services

Josie Abboud, Vice President, Ancillary and Clinical Services

Laura Block, Laboratory Service Executive

William Shiffermiller, MD, Vice President, Medical Affairs

Geisinger Health System

Conrad Schuerch, MD, FCAP, Chair, Laboratory Medicine

Therese A Snyder, Vice President, Operations, Laboratory Medicine

David P. Gingrich, Operations Director, Customer Support

Jay B Jones, PhD, Director, Chemistry; Director, Geisinger Regional Laboratories

Harold H. Harrison, MD, PhD, FCAP, Director, Clinical Pathology

Al Shulski, Director, Laboratory Information Systems

Beth Amarose, Supervisor, Ancillary Services

Jeffrey W. Prichard, DO, FCAP, Director, Surgical Pathology

Fan Lin, MD, PhD, FCAP, Director, Anatomic Pathology

Albert Bothe Jr., MD, Executive Vice President and Chief Medical Officer

Jonathan Darer, MD, MPH, Chief Innovations Officer

Thomas R. Graf, MD, FAAFP, Associate Chief Medical Officer, Population Health Chairman,

Community Practice Service Line


Catholic Medical Partners

Dennis R. Horrigan, President and CEO

Mike Osborne, Vice President, Finance (Non-Acute Ministries), Catholic Health

Lisa Cilano, System Vice President, Finance/CFO, Acute Care, Catholic Health

Richard Vienne, DO, Vice President and Chief Medical Officer, Univera Health Care

David O. Scamurra, MD, FCAP, Eastern Great Lakes Pathology PC


APPENDIX B: DISCUSSION GUIDE FOR SEMISTRUCTURED INTERVIEWS

1. Being a leader in the Organization

Current model/market:

o How long has the clinical integration/collaborative care model been in existence at your

facility/practice?

o Please describe this model currently (# of physicians, hospitals, other facilities), including

any relevant changes since inception as well as any changes in your involvement over

time. Please also include any relevant information on your local market (managed care

penetration, competitive environment, etc).

o How is your ACO/integrated model governed? (physician representation on board,

committee structure, etc)

o Do you or other pathologists have a leadership role (official or unofficial) in the ACO’s

governance structure and/or management of the ACO? If so, please describe the

current role and how it came to be? Did the organization reach out to you or did you

initiate contact/involvement initially? Were you and/or other pathologists serving in a

leadership capacity prior to the formation of the integrated system?

― What precipitated your decision to join the ACO? How did you conduct an

evaluation that led you to this decision? Do you engage counsel or a consultant

to assist with this evaluation? (Note: not applicable for employee model)

o Does your organization have collaborative care agreements with private payers? Does it

plan to participate in the Medicare Shared Savings Program (MSSP) effective 4/1/2012 or

7/1/2012 or other CMS program? If the MSSP, track 1 or track 2?

o Is your group the only one providing laboratory/pathology services to the ACO?

Receptivity to your Involvement

o What was the receptivity to your role and collaborative care efforts within your

organization?

o What resistance, if any, did you meet from administrators and/or other providers?

o What resistance, if any, did you face from pathologists (or others in the laboratory)?

o How did you address this resistance?

o How long did it take to overcome this resistance, and what do you think did the trick for

you?

2. Adding value

How does the role of pathology in your integrated model differ from the role/practice of

pathology in a nonintegrated environment?

as this the way it always was, or did you need to make changes in the way pathologists work?


Can you give us some examples of how pathologists have made an impact in the following

areas (and are there studies or supporting evidence/data)?

o Utilization: Reducing use of unnecessary tests and procedures, and increasing the use

where appropriate.

o Quality Measurement: Using laboratory data to help the organization meet its quality

measure reporting obligations (eg, helping other physicians/your organization

demonstrate they achieved laboratory measures such as hemoglobin A1c and other

testing/monitoring for diabetes). It has been our observation that many of the quality

measures for health care outcomes derive partially or entirely from clinical laboratory

diagnostic testing;

o Test Selection: Providing guidance and direction to practitioners to ensure the correct

tests are being ordered for diagnosis, prognosis and monitoring therapy/assisting

providers with appropriate test selection

o Personalized Medicine: Interpreting laboratory-derived, genotypic information on which

personalized health care relies heavily and engaging in collaborative consultations on

diagnosis and therapy with other physicians. Advancing new methods of molecular

analysis that provide for better management of an individual patient’s disease and

predisposition toward disease including tests to more precisely diagnose subsets of

diseases and more importantly, the selection of therapies best suited to patients with

specific genetic characteristics.

o Data Integration/Population Management: Serving as integrators of laboratory data and

information for the ACO/integrated entity. Identifying high-risk patients, employing

pattern recognition, risk factor identification and other clinical judgments and utilization

observations, including peer comparisons to assist with chronic disease management

such as diabetes, detection of other diseases such as cancer, and overall population

management.

3. Have technological advances (molecular and genetic testing, digital pathology, etc) enabled you

to play a more collaborative (rather than reactive) role in patient care and underscored the

importance of pathologists serving in this capacity? To what extent is this perspective regarding

collaboration with pathologists shared by other providers?

4. How are pathologists’ performance and contributions on the collaborative care front measured?

Are there pathology performance measures included in your organization’s model?

Is ongoing reporting on your performance provided? If so, is it at the individual or group level?


5. Barriers

What barrier, if any, do you face (from other clinicians, administration, technology, or

organizational structures) that prevents you from providing even more value to the ACO?

Does your health system/integrated model have an EHR? If so, do you have adequate access to

the EHR? Is your system’s EHR integrated with the laboratory’s information system (LIS)? What

problems, if any, do you encounter regarding your systems electronic connectivity (laboratory

reporting, etc)? Do you have the following?

o Bi-directional interface with LIS?

o Anatomic pathology reports fully incorporated electronically in the EHR?

o Laboratory/pathology data in a format suitable for population/community analysis?

Does the system have computerized physician order entry (CPOE),

6. Evidence of results (or lack thereof)

Are there any data on how you’ve added value (eg, patient safety, costs, medical errors,

number of procedures, outcomes, etc)? Has there been any way to estimate or even

demonstrate/quantify how this affects downstream or related nonpathology costs?

Are there data to show that reductions in tests or treatments (eg, transfusions) have not led to

adverse or undesirable outcomes?

What kind of impact are you having on health care quality?

What is the role of evidence-based research, and what advantages do pathologists bring in

developing such information?

7. Effects on the practice of pathology

How do you think your practice of medicine is different, as a result of being in the ACO, from the

traditional way that pathology has been practiced outside of an ACO environment? How have

you had to change your thinking about how you practice? Have you seen a similar change in

thinking amongst other physicians?

Are there new kinds of services that you provide?

Are there services you no longer provide?

To what degree have other pathologists with whom you work open to/resistant to these

changes?

Has your interaction with patients and collaboration with other practitioners increased?

8. Payment

How are savings achieved globally by the ACO?

What changes have there been in how you get paid for delivery system contributions?


o Are there other financial incentives (shared savings distribution or other mechanism) to

provide collaborative care and/or achieve measures for those in your delivery system?

o Are pathologists eligible for such payments? If not, are other specialties eligible? Are

different specialties financially incentivized for their ACO efforts in different fashions or

under different models?

What changes might be on the horizon?

What changes would you like to see?

9. Lessons learned

If you were starting over again, what would you do differently?

What would you recommend to other pathologists who want to become leaders and/or raise

their visibility in ACOs?

What would you recommend to other pathologists who are facing resistance or indifference to

their efforts to be more active in ACOs?

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