Payers, providers follow varied ACO path

Some accountable care organizations started long before the term was coined, with providers and payers forming risk-sharing agreements to improve outcomes and reduce costs.

Participants in these legacy ACOs, like Fairview Medical Group in Minneapolis, can provide a snapshot of progress for other providers and payers just starting the ACO journey.

[See also: 5 tips for a successful ACO]

Fairview moved rapidly to avoid a long interim period between fee-for-service and value-based models, said Patrick Herson, MD, the practice’s senior executive medical director. He said the medical group has delivered some measurable clinical quality improvements at a lower cost.

For example, in 2009-2011, Fairview improved optimal vascular care measures to 48.9 percent from 35.1 percent, as well as patient experience scores, with 88.1 percent of patients surveyed saying they would recommend its health facilities. Inpatient utilization also fell 13.7 percent in 2009 to 2010, compared to 2010 to 2011 hospital use.

“While we started earlier than some, Fairview’s healthcare transformation journey is far from over,” Herson said at a recent Premier healthcare alliance briefing, adding that Fairview continues to refine its data analytics capabilities and care processes.

Early on, Fairview shared risk with a local Medicare Advantage plan and later in 2009 entered into an ACO contract for shared savings with commercial payer Medico. Then Fairview negotiated similar agreements with other area payers. In 2012, it became a Pioneer ACO member.

[See also: Pioneer ACOs show savings]

Herson explained that the speed of Fairview’s ACO implementation was driven by a need to align the clinical and population health model with the payer and business models. He said some providers were concerned about a drop in patient volumes.

Fairview is a large and diverse organization, and the speed of transformation was difficult, but it had been “like we were between two operating systems with our business and clinical models,” Herson said. It was important to stop straddling different payment models so the clinical model could be built on population health. Focus and senior leadership from the CEO on down helped move Fairview where it needed to go, Herson said.

“By having the payer partners involved, once we got contracts and different kinds of financial arrangements, it became imperative that our operations realign their work and make sure it got done in a way that would be profitable for our payer partners and for Fairview Health Services as a whole,” he said.

The Long View

Todd Sandman, vice president of strategy and customer engagement at Presbyterian Healthcare Services in Albuquerque, N.M., said his organization offers a longer view of what’s possible when sharing risk. The provider launched it’s own health plan 27 years ago.

“Because we share the same perspective as a provider and a payer, it changes the way we think about the changes in healthcare,” Sandman noted.

“What it allows you to do is mitigate payer swings over time and deepen relationships with the patients and members. Where we find ourselves three decades into this is very low utilization rates compared with the rest of the country,” he said. “We haven’t seen a proliferation of fee-for-service business models, specialty facilities or joint ventures – things that are hard to unwind and contribute to variation in care and cost.”

In the last few years, Presbyterian has driven down unnecessary utilization of emergency departments (EDs) and found those patients primary care homes. “Because we are integrated, and because we’re bearing the same payments, we can make a decision as a system to forego that higher revenue, higher reimbursement ED visit,” he said.

A recent study by Premier found that that some specialists are leery about accountable care contracts, as they’re concerned that Medicare will emphasize reduced use of specialist physicians. On the payer side, a common issue is readiness, said Joe Damore, vice president of population health management at Premier.

“In many markets across the country, commercial payers are not ready to participate in value-based contracts yet,” he said. Currently, there are more than 250 commercial ACO arrangements. Many payers are still unwilling to share claims data with providers.

A rapid pace of ACO implementation increases financial risk. With a slower transition to the new care model, care management of patients and other cost reduction programs eventually are passed on to non-participating payers, who have not shared in their funding, Damore said.