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Friday, September 16, 2011

Medicare Advantage took the next dance from ACO's

Accountable Care Organizations (ACO's) were one of the more eagerly anticipated part of health reform. Well, they were eagerly anticipated by policy wonks and larger provider groups but the general community probably the ACO was a ligament in your knee.

ACO's were going to reward provider groups based on outcomes not volume of care. Provider groups would organize into ACO's, be assigned patients by the Center for Medicare (CMS), and receive additional payment if they managed costs well or penalities if they manged costs poorly. Providers responded since new revenue opportunities in a post-reform world are about as rare as moderate Republicans. They organized different provider structures, explored risk management software, and different techniques for population health management.

When the ACO rules were released by CMS, someone switched the dance music to the polka. Nothing's wrong with a good polka especially with my new lederhosen but it was the wrong dance beat. Providers were disappointed at the requirements and low likelihood of receiving additional revenue. What followed was like a hangover as providers were irritable and nauseous.

However, providers had already organized into structures that could manage population health and a global budget. They were also becoming successful at managing costs as Medicare increases were cut in half in 2010. Now they were looking for a payer partner to be compensated for their success. Although Molly Ivins says that you've got to dance with them that brung you, providers had a new dance partner. The much maligned, overpaid Medicare Advantage (MA) plans filled out that dance card.

Medicare Advantage plans typically pay providers more than Medicare or if they pay the same or less, they offer captive volume through networks that don't cover health care from providers that don't contract with them. MA plans are also accustomed to offering the same type of reimbursement methodology as ACO's without the additional requirements. As a result, large provider groups are starting to look for MA partners who can offer this type of reimbursement and starting to close their offices to patients with original Medicare and the ACO. Providers can negotiate with Medicare Advantage plans but not with CMS.

These relationship also reflect what is happening in the merger and acquisition world. MA plans are purchasing provider groups to build this arrangement. I guess that's an example of dance partners getting married. I hope the babies are cute. For provider groups who have a higher criteria for dance partners, may only want to dance with MA plans that receive a 4 or 5 star rating from CMS. Those plans get a 5% to 10% higher reimbursement from CMS and that bonus comes out of the pockets of 2 or 3 star MA plans. That's more revenue to share with providers. Since the star ratings are mainly driven by the better health outcomes for a plan's membership, this alignment makes a lot of sense.

This was the intended result of the ACO. Provider groups would be rewarded for moving from being paid on volume to being paid based on better outcomes. The surprise was that it's Medicare Advantage plans that are achieving this result while ACO's are still looking for dance partners.

Friday, September 2, 2011

The TV Show that Best Mirrors the MBA Admissions Process

Some would guess the Apprentice or Survior are more reflective of the MBA admissions process given their cutthroat nature, latent sexual tension, and winner take all mentality. For those who are curious about that list, yes, despite a 2:1 male/female ratio, one can generally cut the sexual tension in an MBA classroom with a food processor. However, that's a common mistake MBA applicants make. For a guide to how to approach the MBA admissions process, there is no better show than the Glee Project.

The Glee Project is a singing, acting, and dancing competition where the cast member wins a spot on the TV show Glee. It is generally assumed that the winner will play a socially awkward, downtrodden character who is an underdog who dares to dream and fight for the dreams. While most MBA applicants would like to identify with the cooler kids in school, in truth they have a lot more in common with the members of the Glee club. Thus, it makes sense that the selection process for both is a parallel as opposed to a paradigm shift (One always gets a bonus in MBA school for using buzz words like paradigm shift). Here is an episode by episode example:

  • Vulnerability: In this episode, characters are expected to exhibit their vulnerability in one word. It requires introspection and brevity which are two things that are difficult for the average MBA applicant. The vulnerability is important because it shows the real side of the candidate (for both Glee and MBA programs) and allows both admissions committees a chance to understand more about them as a person. Everyone is vulnerable and has issues. The candidate who presents themselve as having never failed and expects the evaluation to be a victory lap is an incomplete candidate. The introspection that comes with identifying vulnerabilities also shows an ability to indentify true career passions and goals. This is an MBA candidate that will not have a herd mentality and truly take advantage of the program.

  • Pairability: In this episode, the Glee Project cast pair up to perform and in some cases, kiss. MBA programs involve teams or pairs to manage work and projects. This is not exactly a stretch nor should be a surprise. The message for MBA candidates is that better essays should demonstrate team work and ability to work in teams rather than a desire to work independently and be a lone wolf.

  • Believability: Characters were critiqued for trying to put on appearances and not being themselves and inviting the audience in. For the TV show, this was about connecting with the audience, creating believable characters, and not being one-dimensional. Diva-esqe characters were encouraged to show other sides, the scrappy underdog was encouraged to show that he can be a leading man, the cool, dread-locked cast member was encouraged to try using a different facial expression. The cast member who tried to be perfect was told that no one believed that she was perfect. That is an especially important message for MBA candidates as admissions will never believe that a candidate is perfect so no one should position themselves accordingly. Successful MBA candidates will show multiple sides of their personalities in their essays.

  • Damian: Damian is not an episode but a cast member from Ireland with a great Irish accent and incredibly mobile eye brows. When he was really nervous, his eye brows looked like they were going to jump off his face. He was clearly identifed as not the most talented and had to scrap to not be eliminated in the final song in almost every episode. Yet he was one of the two winners in the Lake Wobegone-esque season finale. His personality was very clear and enthralled everyone despite not having the same level of talents as others. This a key lesson for MBA applicants which is the importance of showing your personality in essays. A talented personable candidate will trump a more talented candidate who comes across as too perfect.

All the cast members of the Glee Project were very talented with resumes that included long histories of acting, singing, and dancing competitively. Some were also ridiculously good-looking. Some had really bright blue eyes that were kind of innerving. In summary, they mirrored the MBA admissions pool for top schools (except for the bright blue eyes).

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