Disruptive Innovators: Safety-net ACO

Many of the accountable care organizations in the U.S. are hospital or primary care provider networks banning together to provide care. A group of federally-qualified health centers in the Minneapolis area has broken the mold by creating the first safety-net ACO.

The Federally Qualified Health Center Urban Health Network (FUNH) is a Medicaid-based program of 10 federally-qualified health centers (FQHCs) at 40 sites across Minneapolis and St. Paul, Minn. The providers serve 150,000 patients. Beginning Jan. 1, FUNH will serve nearly 23,000 Medicaid patients in the organizations.

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The group is looking to improve care and, hopefully, share in savings they create by bundling resources and working together, instead of as competitors.  

FUNH came out of legislation passed in Minnesota in 2010. The Department of Human Services was tasked with creating a demonstration that would test new systems for delivering healthcare, including ACOs. That same year, the state’s Association of Community Health Centers began looking at how health reform might impact their organizations. They created a task force to analyze ACOs and the FQHCs saw the state’s demonstration project as an opportunity to work under this model.

“We thought, ‘Healthcare reform has walked in our door and what are we going to do with it?’” said Deanna Mills, director of the Community-University Health Care Center in Minneapolis, one of the members of FUNH. “The law’s here and we can embrace it or turn it away. The clinics realized that the path to long-term survival, frankly, is to come together in ways we haven’t before.”

The providers – Axis Medical Center, Community-University Health Care Center, Indian Health Board of Minneapolis, Native American Community Clinic, Neighborhood HealthSource, Open Cities Health Center, People's Center Health Services, Southside Community Health Services, United Family Medicine and West Side Community Health Services – partnered with Optum (a UnitedHealth Group subsidiary), which will provide strategic and operational support, infrastructure and data.

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According to a case study on the project conducted by the Commonwealth Fund, Optum is taking on significant financial risk for FUNH’s infrastructure investments. Minnesota did not provide any upfront or advance funding for the ACO demonstration. 

The ACO is set up as a reward-only, three-year contract. The FQHCs couldn’t afford to share the risk if they don’t meet quality benchmarks, but they will share the reward if they exceed their goals. Mills said there is an automatic 2 percent that has to be saved to the system and after that, beginning in year three, the ACO receives half of the savings to share among its members.

Karen Schoenherr is a health policy fellow at the Dartmouth Institute for Health Policy & Clinical Practice and the lead author of the Commonwealth Fund case study on the project. She said it is too early to tell whether or not FUNH will be able to lower costs, but the relationships being built between the organizations will help them all greatly.

“The board and quality committee meet regularly and these face-to-face meetings have allowed relationships to form,” she said. “They realize there is more for them to gain together than if they continue in silos. The conversations being had around the tables is the biggest benefit.”

Another advantage is a more patient-oriented system. Each of the participating FQHCs will be required to meet criteria for a patient-centered medical home in the state. The patient population of each FQHC in the ACO is dramatically different, but they are typically high users of care. According to the Commonwealth study, 43 percent visited an emergency department, often for nonemergency conditions over a year’s time; of the adult patients, 36 percent have depression, 17 percent have asthma and 11 percent have diabetes.

Brian Nasi, CEO of United Family Medicine, said the new care provided holds the FQHCs more responsible for their patients’ care. When a person previously showed up at their door and was referred to a hospital, the paperwork would “hopefully find its way back to the clinic,” he said. “Now we have much more accountability to the member as far as making sure the encounter trail is there,” Nasi said. “Accountability doesn’t end at the doors of the FQHC.”

They provide more intervention and education and identify patients that are high cost and focus on reducing unnecessary hospital utilization. They work with patients, especially in immigrant populations, on when the right time is to go to the hospital, versus seeing a primary care doctor.

At Community-University, they are focusing on efforts like coordinating patients between their mental and physical health departments. The two areas used to perform very different tasks and had little communication, even when passing referrals. Now, the nurses are being cross-trained so they can work with patients in both areas. They are creating care coordination with a team of nurses and care managers with social work backgrounds.

One drawback is that all of this change takes time. At clinics like Community-University, they receive data from the state, which has a 15-month lag time. Having the amount of data they now receive is “unprecedented” for Community-University, but makes it difficult to track current usage by patients, said Colleen McDonald Diouf, associate director of the organization. 

“We have little data and staff time to focus on some of these things,” McDonald said. “We are providing a lot of uncompensated care and we are so close to the wire, we can’t get pulled offline. It’s like changing the gas while you are flying the plane.”

But McDonald Diouf said she hopes the efforts in the Twin Cities will shine light on the importance of the primary care community, particularly from a safety net capacity.

“The FQHCs have been somewhat marginalized in this big Minnesota high-quality HMO and hospital system,” she said. “We’re looked at as on the edge and a little fragile and not a big player. But this has elevated this model as one that potentially has great ability to do what everyone wants to do in healthcare reform.”