Taking a close look at an ACO

Accountable care organizations today mainly exist as a concept – a high-minded concept to be sure, but a concept just the same. The elements required to make the concept a reality remain largely elusive to many provider groups as they search for cohesion, cooperation and machination.

The idea behind the ACO is to forge a business model by which providers assume clinical and financial risk for patient care either through managing an entire patient population or through bundled payments where providers assume responsibility for everything a patient needs from admission to discharge. Making the ACO work requires a seamless flow of information across the healthcare continuum from providers to payers to patients.

“Big challenges require big changes – easy to say, hard to do,” said Jeff Rideout, MD, senior vice president of cost and care management and chief medical officer for Greenwood Village, CO-based TriZetto. “It requires a change of mindset and that is the most difficult part.”

Some organizations have gained traction with it, however. Already working in a capitated payment environment for several years, Atrius Health in Newton, Mass., has transitioned into the ACO format rather smoothly.

Formed in 2004, Atrius is an affiliation of six medical groups providing care to approximately one million people in Massachusetts. The organization is comprised of more than 30 sites, 1,000 physicians and 1,500 related providers.

Atrius has a distinct advantage, chief medical officer Rick Lopez, MD, said because it is accustomed to operating under capitation.

“We have a long history of being under capitated global payments,” he said. “So moving into an ACO with shared risk is a ‘back to the future’ type of thing for us.”

The infrastructure needed for an ACO was already in place, Lopez said, including governance, IT infrastructure, scheduling, billing and registration systems along with a web portal for patients called MyHealth.

ast year when the Center for Medicare and Medicaid Innovation looked for 32 advanced organizations for its three-to-five-year pioneer pilot project, it selected Atrius as one of five worthy provider groups in Massachusetts. The criteria included having established infrastructure and at least half of all revenues coming from global capitated payments.

“There is a heavy emphasis on ‘how to do it’ and best practices,” said Lopez. “This program allows for greater degrees of risk and reward and places a big expectation on learning for the organizations that were chosen.”

Beyond the walls
Emily Brower joined Atrius as executive director of accountable care programs to evaluate opportunities coming out of healthcare reform and select those that best fit the organization’s strategic goals. Her job now is to serve as ambassador for the organization, taking the Atrius model and figuring out how it can furnish the best network, services and experience of care for patients.

“We need to develop strong relationships with others beyond our walls,” she said. “While we have the infrastructure in place, the Medicare population uses many of those outside services. We’re looking across the spectrum at skilled nursing and rehab facilities to form good strong partnerships with clear expectations.”
Pittsburgh-based Lean consulting firm Simpler North America worked with Atrius on its ACO pilot and president Michael Chamberlain is impressed with their performance so far.

“Keep your eye on Atrius – their quest for continuous personal improvement is going to make a big splash,” he said.

Transforming care

In Chamberlain’s view, too many healthcare organizations seek ACO status for the wrong reasons. He said the first question he asked Atrius CEO Gene Lindsey was why they wanted to become an ACO.

“They want to transform care, which is the right reason,” he said. “But if you’re just in it to chase dollars, it will not be sustainable.”

Not having a hospital at its core has worked in Atrius’ favor because it has freed them up to focus on their role of being “navigators of care,” said Chamberlain.

“Their model is already established where they are navigating people through the system and even avoiding the hospital where warranted,” he said. “They are comfortable working in a capitated market and understand the incentives involved.”

Still, hospitals are an integral part of the Atrius ACO model, said Lopez, as long as they live up to the standards set for them.

“We are working to be more deliberate about what are ‘preferred’ and ‘non-preferred’ hospitals,” he said.

“They need to be clear about our expectations of what it takes to be a preferred hospital. Coupled with that, we created a series of metrics that function as a scorecard, including readmission rates, patient satisfaction, quality indicators, emergency services and discharges.”

Working with Atrius has been a symbiotic relationship, said Chamberlain, with both sides learning from the other.

“We are process experts and they are healthcare experts,” he said. “The journey has been about how the tools and techniques apply to delivering value focused on the patient. They help us understand their short- and long-term needs and how it can be integrated into the ACO model of the future.”