Examining ACOs In Search Of A Winning Formula
By Greg Bengel, contributing writer
Data analytics and structure-aided savings work for some, while others are leaving the Pioneer program due to financial risk
In a recent article from Modern Healthcare, one successful ACO from the Medicare Pioneer ACO program explains how it saved money by meeting Medicare’s cost targets. The secret for Boston-based ACO Beth Israel Deaconess Care Organization was data analytics tools.
“We use a sophisticated computer algorithm and see who’s at risk for hospitalization,” Dr. Richard Parker, chief medical officer for the ACO, is quoted as saying in the article. “Then we run that data past the primary-care doctors and develop care-management resources as appropriate.”
According to the article, the ACO used data to target high-risk patients for specific services. For example, the article reads, “Its sickest homebound patients who received care in hospital emergency departments benefited from the organization's nurse practitioner home visit program, which involved nurse practitioners seeing these patients at least monthly. Similarly, registered nurses serving as care managers helped the next-lower tier of sick patients through both telephonic and personal visits.”
It is a winning formula. The article says that other successful Pioneer ACOs and experts alike identify data analytics as essential tools in saving money. Don Fisher, president and CEO of the American Medical Group Association, which has many members in the Pioneer program, confirms that several of the successful ACOs are routinely identifying at-risk patients through predictive data analytics.
Beth Israel Deaconess Care Organization was one of only 13 of the 32 Pioneer ACOs that was able to share savings with Medicare. The ACO produced more than $15 billion in shared savings. In 2012, the 13 ACOs together produced $87.6 million in savings in 2012.
Aside from using data to target high-risk patients, there is a focus on structure-aided savings. Also attributing to the success of Beth Israel Deaconess is its pod leadership structure, says Parker. Each of the 21 primary-care pods, or groups, of physicians is led by a physician leader who understands how to bring about patient healthiness on fixed payments, and communicates regularly with physicians within his pod.
Not all Pioneer ACOs met with the same success. Another article from Modern Healthcare looks at one of the ACOs in the model that failed to save money. Atrius Health is one of two ACOs that experienced a financial loss in the first year of the program. Executive director of Atrius’ accountable care programs Emily Brower says that Atrius may owe Medicare $2 million from their unsuccessful first year.
The article quotes Dr. Gene Lindsey, president and CEO of Atrius Health for an explanation. According to Lindsey, the problem was that Medicare had an extremely low budget for ACOs right out of the gate. Atrius already had cost-control measures in place that prevented the organization from achieving savings.
NOTE: CMS released updated results since the publication of the Modern Healthcare article and Atrius Health was actually within the noise, meaning that they did not take a loss or a gain. Following is a statement from Emily Brower, Executive Director of Accountable Care Programs at Atrius Health, clarifying Atrius Health’s standing.
“Atrius Health is pleased to announce that we do not have a shared loss in the first performance year of the Pioneer Accountable Care Organization (ACO) Model. Our loss is small enough that it is considered within the statistical range of error. This news differs from the Centers for Medicare & Medicaid Services’ (CMS) release recently that indicated Atrius Health was one of two Pioneer ACOs (out of the 14 that had a loss of any size) that had a shared loss in the model for 2012. This change is due to the fact that the Pioneer ACO Model results from the first year were released before the numbers for our 12 month performance year were finalized. The financial plan that we selected with CMS for our first 12 month performance period ended on March 2013 and our final numbers show that our loss was .98 percent, not the previously reported 2.1 percent.
“We are pleased to hear this news because the improvement shows that we have made terrific progress into 2013. We are also pleased because our benchmark was more challenging than other Pioneers in our market, since we have a history of providing coordinated care for these Medicare patients. The first year of the Pioneer ACO Model has been an exciting process that has engaged our clinicians and staff and brought us in closer alignment. We have already seen coordinated care improvements and a decrease in our cost trends. Furthermore, our quality scores were amongst the best nationally. We will harvest these results as we move forward with the Pioneer ACO Model to provide better care, better health and lower costs for our patients.”
A recent article from Kaiser Health News shows that while ACOs saw success in many areas related to patient health and cost reduction, many are dropping out of the Pioneer program due to the financial risk. The article lists the nine Pioneers who will be leaving the program. Of the nine, seven are going into the Medicare Shared Savings Program. The article quotes Erik Johnson, vice president of consulting firm Avalere Health who says, “It’s like going down from the major leagues to the minor leagues. You’re going somewhere it’s just a little bit easier to compete because you don’t have to worry about losing money.”