This document summarizes a presentation by Kevin Riley on building a framework for sustainable Accountable Care Organizations (ACOs). Riley argues that for ACOs to be sustainable long-term, unlike previous managed care models, they require investment in three key areas: patient engagement to improve the healthcare experience, care delivery to boost provider performance, and data analytics to enable cost control and risk sharing between insurers and providers. The presentation outlines how focusing on these elements can help create better value in healthcare by improving outcomes while reducing costs.

1. Building a Framework for Sustainable
ACO Enablement
a presentation by Kevin Riley
for the Opal 2013 ACOs Summit
January 15, 2013

2. Synopsis
Topic: A framework for sustainable ACO enablement
Insurers and Providers must first agree on how to share risk. After that,
begins the hard part. For ACOs to last, unlike managed care in the 90's,
they will need a sustainable framework to achieve cost, quality, and
patient experience. In this session, learn about the essential ingredients
in a value-based ACO framework that support your risk-sharing
contracts long-term.
Key takeaways include:
• What is the role of informatics in ACOs?
• What does improved care delivery mean?
• Can you create a winning care consumption experience?

3. Who am I?
Principal at Kevin Riley & Associates | Health Model Innovation
• former chief innovation officer of Florida Blue (Blue Cross Blue Shield of
Florida) and founder and former president/CEO of GuideWell
• entrepreneur, health care executive, business model innovator, and pursuer
of experiences that drive behavior, and ultimately action
Kevin started Kevin Riley & Associates | Health Model
Innovation consultancy in 2006 to help companies with the
convergence of health care and the consumer. He founded
and was CEO of a national health care retail company,
played leadership roles for several national retail health
start-ups, and served as the first Chief Innovation Officer of
a major insurance plan. Kevin holds a Masters of Business
in entrepreneurship and marketing from Rice University.
follow me on @kevineriley, linkedin, slideshare

4. What is Health Model Innovation?
Producing value though profitable and sustainable
business models made by creating and/or realigning the
activity systems that improve member experience, boost
provider performance, and enable payer cost control.

5. What is value?
“Value” is the patient health outcome achieved
per healthcare dollar spent.
So more value is achieved when you get:
1. improved patient engagement
2. improved patient experience
3. reduces aggregate cost of care
Source: Porter ME. What is value in health care? N Engl J Med 2010; 363:2477-81. (10.1056/NEJMp1011024).
http://www.nejm.org/doi/suppl/10.1056/NEJMp1011024/suppl_file/nejmp1011024_appendix1.pdf.

6. What is the problem?
Health care reform, while providing access to more
consumers, does not address the underlying problems of
escalating costs. How do we create better value?
Mass. medical spend increased ~ 7% YOY”
Source: Forbes
“53% of consumers are oblivious to costs”
Source: Deloitte Center for Health Solutions

7. What is the premise?
1. ACOs are necessary for the sustainably of healthcare
2. ACOs start with good risk-sharing
3. ACOs require investment in enabling capabilities for:
• Patient engagement (consumption)
• Practice workflow management (care delivery)
• Data collection and analysis (data analytics)

8. Minimal
Traditional Fee-for-Service
Episodic Cost
Pay-for-Performance
Bundled Payments
Shared Savings
Accountability
Shared Savings
Continuum of Payment Models
Partial Capitation
Total Cost
Full Capitation
Substantial

9. Healthcare Care Loop
Patient Need Provider Engaged Diagnosis Communicate Solution
Resolved?
Resolved? No
Care Management Yes
Rewards & Incentives Prevention & Wellness

10. 1. Create a positive consumption experience
Think of it as patient relationship management, or creating
engagement models that uses carrots and sticks to get
members to comply with evidence based protocols, and
enrich ties with their provider.

11. 2. Focus on improving care delivery
This is not just the view of the plan, this means the provider
believes they are practicing better medicine, and most
importantly the patient confirms it.

12. 3. Start with a foundation of data analytics
At the heart of risk control is intense investment in
informatics. Imagine a hedge fund with the same level of
risk tools and insight as payers and providers have now?

13. Questions
Kevin Riley & Associates
Business Model Innovation for Healthcare
kevin@healthmodelinnovation.com
www.healthmodelinnovation.com