EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL A FIELD REPORT ON IMPROVEMENTS IN HEALTH CARE DELIVERY Sharon Silow-Carroll and Jennifer N. Edwards march 2013 Health Management Associates The Commonwealth Fund, among the first private foundations started by a woman philanthropist—Anna M. Harkness—was established in 1918 with the broad charge to enhance the common good. The mission of The Commonwealth Fund is to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults. The Fund carries out this mandate by supporting independent research on health care issues and making grants to improve health care practice and policy. An international program in health policy is designed to stimulate innovative policies and practices in the United States and other industrialized countries. EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL A FIELD REPORT ON IMPROVEMENTS IN HEALTH CARE DELIVERY Sharon Silow-Carroll and Jennifer N. Edwards Health Management Associates march 2013 Abstract: Based on interviews with clinical and administrative leaders, this report describes the experiences of seven accountable care organizations (ACOs). Despite gaps in readiness and infrastructure, most of the ACOs are moving ahead with risk-based contracts, under which the ACO shares in savings achieved; a few are beginning to accept “downside risk” as well. Recruiting physicians and changing health care delivery are critical to the success of ACOs—and represent the most difficult challenges. ACO leaders are relying on physicians to design clinical standards, quality measures, and financial incentives, while also promoting team-based care and offering care management and quality improvement tools to help providers identify and manage high-risk patients. The most advanced ACOs are seeing reductions or slower growth in health care costs and have anecdotal evidence of care improvements. Some of the ACOs stud- ied have begun or are planning to share savings with providers if quality benchmarks are met. Support for this research was provided by The Commonwealth Fund. The views presented here are those of the authors and not necessarily those of The Commonwealth Fund or its directors, officers, or staff. To learn more about new publications when they become available, visit the Fund’s website and register to receive email alerts. Commonwealth Fund pub. 1673. CONTENTS ABOUT THE AUTHORS..........................................................................................................................................6 ACKNOWLEDGMENTS........................................................................................................................................... 7 OVERVIEW..............................................................................................................................................................9 OUR METHODOLOGY ..........................................................................................................................................9 THE EXPERIENCES OF EARLY ADOPTERS .......................................................................................................... 10 PAYMENT MODELS: SLOWLY INCREASING RISK......................................................................................... 11 WORKFORCE AND CULTURE: ADDRESSING SHORTAGES AND EMPHASIZING SHARED GOALS ............13 TRANSFORMING CARE DELIVERY: CENTRALIZED AND ONSITE SUPPORTS ........................................... 16 PROMISING EARLY RESULTS .............................................................................................................................. 19 NEXT STEPS: BUILDING CAPACITY, NETWORKS, CONTRACTS, AND RISK ...................................................... 20 POLICY RECOMMENDATIONS.............................................................................................................................21 CONCLUSION...................................................................................................................................................... 22 APPENDIX. PROFILES OF EARLY–ADOPTER ACOS..............................................................................................23 NOTES...................................................................................................................................................................35 LIST OF EXHIBITS EXHIBIT 1 ACCOUNTABLE CARE ORGANIZATIONS AND AFFILIATED HOSPITALS AND HEALTH SYSTEMS EXHIBIT 2 KEY CHARACTERISTICS AND ACTIVITIES OF THE SEVEN ACOS ABOUT THE AUTHORS Sharon Silow-Carroll, M.B.A., M.S.W., is a managing principal at Health Management Associates. She has more than 20 years of experience conducting research and analysis of local, state, and national health system reforms; strategies by hospitals to improve quality and patient-centered care; public– private partnerships to improve the performance of the health care system; and efforts to meet the needs of underserved populations. Prior to joining Health Management Associates, she was senior vice president at the Economic and Social Research Institute, where she directed and conducted policy analysis and authored reports and articles on a range of health care issues. Ms. Silow-Carroll earned a master of business administration degree at the Wharton School and a master of social work degree at the University of Pennsylvania. She can be emailed at ssilowcarroll@healthmanagement.com. Jennifer N. Edwards, Dr.P.H., M.H.S., is a managing principal with Health Management Associates’ New York City office. She has worked for 20 years as a researcher and policy analyst at the state and national levels to design, evaluate, and improve health care coverage programs for vulnerable populations. She worked for four years as senior program officer at The Commonwealth Fund, directing the State Innovations program and the Health Care in New York City program. Dr. Edwards has also worked in quality and patient safety at Memorial Sloan-Kettering Cancer Center, where she was instrumental in launching the hospital’s patient safety program. She earned a doctor of public health degree at the University of Michigan and a master of health science degree at Johns Hopkins University. 6 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL ACKNOWLEDGMENTS The authors thank Anne-Marie J. Audet, M.D., vice president for health system quality and efficiency at The Commonwealth Fund, for guidance and very helpful suggestions on this study. We also thank the following individuals from the organizations studied for sharing their time and information: Mike Bankovich, operations director, NewHealth Collaborative Eric Bieber, M.D., chief medical officer, University Hospital Case Medical Center Jim Canedy, vice chair, Nebraska Medical Center Jeanette Clough, M.H.A., R.N., president and chief executive officer, Mount Auburn Hospital Maggie Custodio, senior director, Mount Auburn Cambridge IPA Nick Fitterman, M.D., medical director, group health management, North Shore-Long Island Jewish Health System Glenn Fosdick, chief executive officer, Nebraska Medical Center Stephen Goldstone, vice president, accountable care, Cheyenne ACO Michael Goran, M.D., managing director, OptumInsight, Optum Rodney Ison, M.D., board chair and participating physician, NewHealth Collaborative Richard Johnson, M.D., medical director, Arizona Connected Care, TMC Healthcare Armand Kirkorian, M.D., medical endocrinologist, associate medical director, University Hospitals Accountable Care Organization James J. La Rosa, M.D., vice president, managed-care organization development, population health management, North Shore-Long Island Jewish Health System John Lucas, M.D., chief executive officer, Cheyenne Regional Medical Center Irina Mitzner, R.N., vice president, group health management, North Shore-Long Island Jewish Health System Gerri Randazzo, vice president, case management, North Shore-Long Island Jewish Health System Jeff Selwyn, M.D., New Pueblo Medicine, board president, Arizona Connected Care, TMC Healthcare Barbara Spivak, M.D., president, Mount Auburn Cambridge IPA Charles Vignos, chief operating officer, NewHealth Collaborative Editorial support was provided by Sandra Hackman. www.commonwealthfund.org7 OVERVIEW start them. Covered populations include formerly In the continuing drive toward a higher-performing fee-for-service Medicare patients, a health system’s health system, and to reposition themselves in a chang- own employees, enrollees in commercial health plans, ing health care marketplace, hospitals and physicians Medicaid beneficiaries, or a combination. are forming accountable care organizations (ACOs). Based on interviews with leaders of hospitals In so doing, they are forging contractual relationships and physician groups, we explore the changes in health with payers that reward achievement of shared goals for care delivery and payments that ACOs have pursued, health care quality and efficiency. the challenges they face, and their expectations for next The Affordable Care Act established ACOs— steps. We describe the strategies for clinical integra- initially a private-sector innovation—as a delivery tion and practice management that ACO administra- system option for Medicare. As of January 2013, more tors view as most promising, and present some early than 250 ACOs have contracted with the Centers for results. We also identify lessons for other organizations Medicare and Medicaid Services (CMS) to cover more considering embarking on an ACO. Finally, we suggest than 4 million Medicare beneficiaries.1 A small but insights for policymakers seeking to learn how public growing number of state Medicaid programs are also policies and incentives can spur hospitals and physician implementing or exploring ACO-type arrangements, groups to participate in accountable care programs. to coordinate care and restrain cost growth as they pre- pare to expand eligibility under the health reform law.2 Though the total number of ACO arrangements in the OUR METHODOLOGY We selected ACOs for this study based on responses to private and public sectors is difficult to estimate, recent the Health Research and Educational Trust (HRET) findings from surveys and evaluations suggest that the 2011 Care Coordination Survey.6 (HRET is a division U.S. health care system is at the beginning of the ACO of the American Hospital Association.) Among the adoption curve.3 1,672 hospitals that responded to the survey, 3.2 percent While specific arrangements vary, the basic (53) reported that they were participating in an ACO. ACO model involves a provider-led entity that con- HRET contacted these early ACO adopters tracts with payers, with financial incentives to encour- and asked permission to share their contact informa- age providers to deliver care in ways that reduce overall tion and survey responses with Health Management costs while meeting quality standards. ACOs rely on Associates for in-depth interviews. Eight hospitals assignment of enrollees to primary care medical homes, (about 15%) replied that they would be willing to par- communication among providers, strong management ticipate in a follow-up study. Two of these hospitals par- of high-risk patients across the continuum of care, and ticipate in the same ACO, so our study included seven extensive monitoring of performance measures.4 separate ACO-type entities (Exhibit 1). Although ACOs are in their infancy, early Health Management Associates completed results suggest modest savings and significant prom- semistructured interviews with individuals associ- ise. Health care researchers and planners are therefore ated with the seven ACOs, including clinical and stressing the importance of learning from early adopt- administrative leaders and board members, clinical and ers—particularly how they are transforming the delivery administrative leaders at participating hospitals, and of care, designing incentives and sharing rewards with physicians with practices participating in the ACOs. providers, and tackling a multitude of challenges.5 Because the selection was based on hospitals’ self- This report describes the experiences of seven reported participation in an ACO (and the survey did hospital–physician organizations that have created not strictly define an ACO), the organizations encom- ACO-type entities and begun risk-sharing arrange- pass a wide range of programs, payer arrangements, ments with public and private payers, or will soon providers, and stages of development. However, all are www.commonwealthfund.org9 EXHIBIT 1. ACCOUNTABLE CARE ORGANIZATIONS AND AFFILIATED HOSPITALS AND HEALTH SYSTEMS ACO Hospital or Health System Location Nebraska Medical Center and Accountable Care Alliance Omaha, Neb. Nebraska Methodist Hospital Arizona Connected Care TMC Healthcare Tucson, Ariz. Cheyenne ACO Cheyenne Regional Medical Center Cheyenne, Wyo. Mount Auburn Cambridge IPA Mount Auburn Hospital and Mount Cambridge, Mass. Pioneer ACO Auburn Cambridge IPA (MACIPA) NewHealth Collaborative Summa Health System Akron, Ohio North Shore-Long Island Jewish Population Health Management* Great Neck, N.Y. Health System (North Shore-LIJ) University Hospital Case University Hospitals ACO Cleveland, Ohio Medical Center * This organization is not an ACO per se, but models patients’ health care risks, handles contracting, and administers North Shore-LIJ’s full-risk employee health plan. For simplicity, we include the North Shore-LIJ risk arrangements when we refer to ACOs. physician–hospital partnerships (that is, the sample does practices, helping them become medical homes, and not include physician-only ACOs). (For profiles of the building networks and relationships with other service seven ACOs, see the appendix on page 23.) providers. The small sample size precludes us from gen- Some of these ACOs also meet the require- eralizing our findings. However, we present common ments for participating in the CMS Medicare Shared lessons and promising strategies for overcoming bar- Savings Program (SSP). These include the ability riers to creating ACOs. These lessons and strategies to share savings on health care costs (upside risk), may be helpful to hospitals, physician practices, and share losses (downside risk, when that component of others embarking on or contemplating accountable care Medicare SSP begins), and establish, report on, and arrangements. comply with criteria for health care quality. Most of the ACOs are building internal capacity through a clinical arm or a separate management services organization THE EXPERIENCES OF EARLY that is developing clinical standards, offering care man- ADOPTERS agement and disease management programs, and devel- Of the seven organizations we studied, five have entered oping other tools and supports for providers. into risk-based contracts with Medicare or private pay- Despite being at different places on the path to ers. Three are or soon will serve as the ACO for their becoming fully functioning ACOs, the seven organiza- own health system’s employees. And two are planning to tions reveal commonalities as well as differences in their enter into risk-based contracts. Cheyenne ACO, which efforts to build a foundation and develop strategies to does not yet have any risk-based contracts, is beginning reduce costs and improve quality. As they move into the a pilot involving patient-centered medical homes with unfamiliar territory—for most—of tying payments to wraparound services, to build infrastructure and experi- better outcomes, the ACOs are taking incremental steps ence for potential future ACO contracts. toward riskier financial futures. All seven organizations are still building their The next section summarizes the payment capacity to fulfill key ACO functions. These include models of these ACOs: how they structure risk-based modeling the health care risks of patient populations, contracts with payers and then distribute savings to contracting with payers, developing data-based tools participating providers. We discuss a key management and health information technology, recruiting physician focus on attracting and retaining a qualified cadre of 10 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL providers who buy into this risk and performance- and patient safety, preventive health, and at-risk improvement environment. We then describe the range populations.7 of services and supports these ACOs are using to trans- Under an upside risk option, NewHealth could form the delivery of care in hospitals and physician receive up to 50 percent of savings (capped at practices (Exhibit 2). 10 percent of total reimbursements). Arizona Connected Care, now with upside risk, expects to Payment Models: Slowly Increasing Risk add downside risk after gaining experience. ACOs entail two levels of risk and incentives. The first • Pioneer ACOs: Mount Auburn Hospital and involves the contract defining how a payer reimburses Mount Auburn Cambridge IPA (MACIPA) the ACO for care provided to a covered population, participate in a Medicare Pioneer ACO, which with the ACO accepting some degree of risk for the entails higher rewards and risks than Medicare SSP. cost and/or quality of that care. The second level con- MACIPA (and Mount Auburn Hospital, through a cerns how the ACO reimburses providers, particularly contract with MACIPA) has 12,000 Pioneer ACO physicians. The latter type of risk-based payments is in patients. earlier stages of development. Both organizations earn a bonus if they can meet a savings target of 2.7 percent. The Pioneer program Risk Arrangements with Payers is a five-year initiative. If the ACO achieves The most common approach with payers is a shared- early savings, payment in year three shifts toward savings model, in which ACOs receive fee-for-service capitation or partial capitation. An ACO may also payments plus a portion of the savings if total spending move from upside risk only to both upside and on the covered population is below a target. This model downside risk (with greater potential rewards) in has only upside risk: the payer is responsible for any 2013, which would be consistent with MACIPA’s costs in excess of the target. commercial contracts. Although the incentives to reduce overall costs can be modest, these arrangements allow ACOs to • Medicare Advantage plans: Four of the ACOs develop their systems for managing patients and coordi- studied—NewHealth, North Shore-Long Island nating care, and to invest in infrastructure, without risk Jewish Health System (North Shore-LIJ), Arizona of financial loss. After some experience with upside risk, Connected Care, and Mount Auburn Hospital/ some more mature ACOs are adding downside risk, MACIPA—are part of Medicare Advantage which entails financial penalties for failing to meet an plans or provide care through contracts with such overall spending target. plans. These private health plans receive capitated The ACOs are now contracting with a variety payments from CMS to provide medical and of public and private payers and health plans, each with hospital services, and sometimes pharmaceuticals, unique risk arrangements, or are planning to do so. vision services, and other benefits, to enrollees. These payers include: NewHealth has an arrangement with SummaCare Medicare Advantage plan to receive 60 percent • Medicare Shared Savings Program: Three of the of any cost reductions, based on spending targets ACOs—NewHealth, Arizona Connected Care, reflecting past experience. and University Hospitals ACO—are participating in the Medicare SSP, and two others are exploring ACOs expect to take on elements that many this program. It reimburses an ACO on a fee-for- Medicare Advantage plans have been implementing service basis, plus awards shared savings if the ACO for years, such as care management, management meets cost goals and 33 quality goals related to of provider networks, preventive care, and financial patient and caregiver experience, care coordination www.commonwealthfund.org11 EXHIBIT 2. KEY CHARACTERISTICS AND ACTIVITIES OF THE SEVEN ACOS Compensation Key Physician ACO Hospital/ Structure/ Programs and Payment Model Model with ACO-Level Practice Health System Governance Payers with Payer Physicians Activities Transformations Accountable Care Limited liability Commercial (under Anticipate only Exploring three Population health Standardization Alliance organization created negotiation) shared savings models: full management of selected care Nebraska Medical by two hospital (upside risk) at first employment, program with practices Center and systems and three contracts with screening and early Nebraska Methodist physician groups performance diagnosis; Hospital, Omaha, standards, and home medication Neb. independent management physicians with common protocols and performance monitoring Arizona Connected Physician-led limited Medicare Shared savings; 75 percent of Predictive modeling Evidence-based Care liability corporation, Advantage, expects to adopt savings shared tool; targeting guidelines; team- TMC Healthcare, partnered with TMC Medicare Shared downside risk after with primary of patients with based patient Tucson, Ariz. Healthcare system Savings Program gaining experience care physicians, congestive heart management (SSP), commercial specialists, and failure, COPD, or plans; Medicaid hospital, based on acute myocardial health plan under number of patients infarction; care negotiation and quality and coordination; nurse efficiency metrics care managers, educators, and coders working with clinics; EHR interface; sharing of best practices Cheyenne ACO Limited liability Delaying application Considering Not yet determined Implementing EHR EHR adoption; Cheyenne Regional company—a to Medicare SSP Medicare risk in medical practices; patient-centered Medical Center 50–50 partnership one year; models, others helping them medical homes; (CRMC), between CRMC and beginning patient- become medical team-based care Cheyenne, Wyo. physician group; centered medical homes; partnering managed by CRMC’s home pilot with community Wyoming Institute services; pursuing of Population care and EHR Health integration across state MACIPA Pioneer IPA and hospital Medicare Advantage Upside and Physicians receive Health information Embedded nurse ACO negotiate payer and other capitated- downside risk fee-for-service exchange providing case managers; Mount Auburn contracts jointly, but risk contracts, arrangements a shared community “pod leaders” Hospital and Mount do not have a joint commercial plans, record; home spread information Auburn Cambridge legal structure Medicare Pioneer visits by nurse and data; medical IPA, practitioners and homes; high-risk Cambridge, Mass. pharmacists; nurse patients (those case managers in with physical physician practices and behavioral challenges) targeted NewHealth Physician-led limited Medicare Shared savings; self- Surplus savings Helping PCPs Becoming Collaborative liability company, Advantage, health insured distributed to become medical patient-centered Summa Health part of Summa system employee physicians—50 homes; heart failure medical homes; System, Akron, Ohio Health System plan, Medicare percent based clinical model; EHR adoption; SSP; may add on financial disease registries/ clinical guidelines commercial plans performance, 50 data repositories; and disease and Medicaid percent on quality reports on high-risk management measures patients, robust call programs; receive center reports on high- risk patients and inpatients; report Medicare SSP measures; care teams 12 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL EXHIBIT 2. KEY CHARACTERISTICS AND ACTIVITIES OF THE SEVEN ACOS, CONTINUED Compensation Key Physician ACO Hospital/ Structure/ Programs and Payment Model Model with ACO-Level Practice Health System Governance Payers with Payer Physicians Activities Transformations Population Health Limited liability Health system Self-insured; upside Will vary to include Care management Care managers in Management company, wholly employee and downside risk; fee-for-service, protocol; large practices; North Shore-Long owned subsidiary of plan; Medicare bundled payments; partial risk, full risk, coordinated virtual patient- Island Jewish Health North Shore-LIJ Advantage; anticipating and population inpatient, postacute, centered medical System, Great Neck, Medicaid managed- additional risk management and long-term homes; EHRs N.Y. care organization; arrangements care management; Medicaid Health telemedicine, Home; bundled outpatient payments; exploring interdisciplinary commercial plans team; population stratification data analysis University Hospitals Legal entity under Health system Self-insured; shared No payment ACO University Hospitals employee plan; savings if approved incentives for University Hospital health system applied for Medicare for Medicare SSP practitioners at this Case Medical SSP time Center, Cleveland, Ohio risk. Not surprisingly, many early ACOs emerge payment for each patient based on his or her from or are providing these services for such plans. age, sex, and health status, adjusted for inflation • Bundled payments: CMS approved North Shore- annually. That payment covers primary, specialty, LIJ to bundle payments for entire episodes of care, hospital, and subacute care that Mount Auburn and including inpatient and postacute or outpatient the IPA provide to Blues members. All providers services, for six diagnoses. are part of the same risk pool, and the hospital/IPA partnership has been very successful in bending the • Private payers, including self-insured companies, cost curve.8 commercial managed care organizations, and employers: Three ACOs that are part of integrated • Medicaid: The more established ACOs are now systems that self-insure—NewHealth, North providing care for Medicaid populations, or are Shore-LIJ, and University Hospitals ACO—are exploring ways to do so, by contracting with providing care for employees of the systems and Medicaid MCOs or the state directly. North Shore- their families. NewHealth receives 50 percent of LIJ has begun a state Medicaid Health Home any savings it achieves. program that will incorporate risk-sharing in 2014.9 Nearly all the seven ACOs have contracts with commercial insurers and managed care Sharing Savings and Risks with Providers organizations (MCOs), or are negotiating or The second level of incentives concerns how an ACO exploring such contracts, and two ACOs are compensates physicians and other providers. ACOs planning to contract directly with large employers. provide base reimbursements and some offer “gain- sharing”—paying a portion of the savings the ACOs Mount Auburn Hospital/MACIPA have nearly earned (after covering their own costs) to hospitals 23,000 covered lives in commercial, capitated- and physicians that meet cost or quality benchmarks. risk contracts similar to but predating ACOs. An ACOs may also require providers to contribute to “alternative quality contract” with Blue Cross Blue ACO expenses or a bonus pool, thereby accepting some Shield of Massachusetts includes both upside and downside risk as well. downside risk based on extensive quality indicators. The ACOs we studied are cautious, however. The risk portion of the contract provides a global Given that they need to recruit physicians, and that www.commonwealthfund.org13 many physicians are averse to accepting financial risks, and Information Set) measures, patient satisfaction, ACO administrators are wary of overburdening physi- adherence to a care model, completion of health risk cians or reducing their income during a transitional assessments, and physician participation in educa- phase, when care coordination and quality reporting tional programs. Specialists have similar quality goals, may add to practices’ workload. These ACOs are still and must also follow up with PCPs within seven days mostly reimbursing physicians and other providers on after seeing a patient. Hospital quality goals are also a fee-for-service basis, and beginning to incorporate similar, and they must further aim to reduce readmis- quality bonuses for agreed-upon performance measures. sions. Based on an actuarial model, the distribution also (Physicians employed by partner hospitals are paid on rewards more reliance on primary and specialty care, a salary basis.) However, these ACOs plan to move and less reliance on hospital and pharmacy services. toward greater risk-sharing with practitioners. Nebraska Medical Center is exploring various Arizona Connected Care keeps 25 percent of options for paying providers, including full employ- savings earned through its Medicare SSP to fund its ment (salaried), contracts with physicians that include management services organization, which provides case performance standards, and sharing data and practice management, coding, and other support services to standards with independent physicians. practices. The remaining 75 percent is placed in a pool The ACOs are still working on their incentive for distribution to participating primary care, specialty programs for providers. Challenges include the time lag care, and hospital providers, based on the number of between their work and incentive payments, which can patients they handle and quality and efficiency metrics. be as long as two years, and the difficulty of attribut- Clinics and practices, in turn, distribute the savings to ing care to a particular doctor among patients who see individual physicians. Specialists and hospitals similarly an array of providers. Finally, ACOs are concerned that distribute funds to individual practitioners. incentive payments may be too small to get the atten- At Mount Auburn Hospital/MACIPA, pri- tion of providers. mary care physicians (PCPs) and specialists are eligible for bonuses based on quality. PCPs must show that they Workforce and Culture: Addressing Shortages manage care—for example, when the ACO sends a list and Emphasizing Shared Goals of patients needing follow-up, physicians respond—and The early-adopter ACOs are actively working to build meet performance targets. Specialists must implement a their staff and networks of providers. Some are facing quality-improvement project. Contracts include down- shortages of primary care and other key providers, as side risk: if the IPA loses money, it can pay physicians well as apprehension among physicians about changing less. However, the MACIPA would tap reserves before the way they practice and accepting financial risk. doing so, and has not yet reduced provider payments because of a loss. Creatively Tackling Workforce Shortages Physicians participating in the NewHealth Some of the ACOs face shortages of PCPs and care Collaborative contribute 2 percent (Medicare managers equipped to serve complex cases—two critical Advantage) or 1 percent (Medicare SSP) of their components of effective ACOs. These organizations are fee-for-service rates to help cover ACO expenses. finding creative ways to stretch capacity, such as using NewHealth distributes surplus savings to providers after nurse practitioners as primary care “extenders.” covering its costs, including new investments, such as Arizona Connected Care is implementing creating a call center. Half of the distribution reflects a team-based model in one hospital-owned clinic, financial performance, and half reflects quality. wherein nurse practitioners and clerical staff perform Quality goals for NewHealth Collaborative clinical and administrative tasks previously done by PCPs include HEDIS (Healthcare Effectiveness Data physicians. These role changes, which allow personnel 14 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL to work at the “top of their license,” require a shift in the ACO model, according to early adopters. An ACO physicians’ mind-set, but interviewees report that most must nurture trust and a sense of shared goals between physicians are ultimately relieved to let go of certain physicians and ACO administrators while emphasizing tasks. “Team huddles” occur daily, and plans are under the need to adjust clinical practice. This is a slow pro- way to roll out this approach to another facility along cess, as physicians often begin with the view that—as with lessons learned. Arizona Connected Care is also with traditional health plans—their priorities differ pursuing multiple strategies to expand its PCP base, from those of management. such as by helping physicians form private clinics and According to these early-adopter ACOs, culture join larger multispecialty clinics. change requires: 1) a consistent message from physician Cheyenne ACO and hospital leaders are tack- leaders that “this is the right thing to do”; 2) education, ling workforce challenges by shifting more physicians to training, and tools; 3) financial incentives (only upside salaried status. These leaders find it easier to transform rather than downside risk in early stages); and 4) mini- health care practices and culture among employed phy- mizing new burdens. All the ACOs also underscore sicians. They are introducing team-based care to both that providers—specifically physicians—should drive stretch physician capacity and improve care. The teams the design of the ACO and its health care delivery and may include a nurse practitioner or physician assistant, payment protocols, to ensure that quality and cost go health coach, dietitian, and specialist in behavioral hand in hand, and to promote that message. The ACOs health. therefore emphasize physician-majority leadership on ACOs’ emphasis on actively managing the care their boards, steering committees, and operating com- of high-risk patients spurs demand for care managers mittees, and allow physicians to shape clinical standards, with expertise in both behavioral and physical health quality measures, financial incentives, and other compo- and their interplay. One ACO leader cited the need to nents of the model. hire more specially trained nurse practitioners for spe- The ACOs vary in the degree to which they are cific mental health and substance abuse cases. Initially encouraging or requiring physician offices and clinics to lacking such capacity in-house, the ACOs are partner- change the way they deliver care. NewHealth’s approach ing with community-based care management services, is to identify a leader in each practice (office manager, and developing curricula to train their own staff to physician, or other, depending on the dynamics of the manage specialized care. North Shore-LIJ’s Center for practice). The ACO then teaches that leader about Learning and Innovation, for example, has developed health risk assessments, care management resources, curricula for training and certifying care managers, and clinical standards, patient education, and new electronic is considering an externship program to enable new tools. The ACO also instructs that leader on how to RNs to develop those skills. teach his or her office colleagues, although NewHealth The ACOs are also stretching capacity by leaders noted that this approach can yield inconsistent sharing resources. Population Health Management is behavior among those colleagues. NewHealth plans to assigning one case manager to two or three partici- increase its own staff to allow it to train all employees at pating practices, for example. (See below for more on participating practices. shared services.) Finally, some ACOs have found care The ACOs have found that monitoring health management software an important tool for maximiz- care quality and cost and providing feedback to pro- ing the capacity and effectiveness of such work. viders are essential to managing incentive payments and encouraging changes in care delivery. While most Strategies for Changing Physician Culture physicians in large group practices are already measur- Recruiting physicians and changing care delivery are the ing performance, the ACOs can offer resources such as most critical requirements and difficult challenges of user-friendly reporting software to help them comply www.commonwealthfund.org15 with new requirements. For physicians in smaller includes nurses, a social worker, resource specialist, practices or remote settings, measuring performance navigator/outreach coordinator, behavior specialist, requires a mind-set shift, as well as new tools and rules and psychiatrist, and offers in-person and virtual such as clinical standards, electronic health records meetings with providers. (EHRs), reports on quality measures, and feedback on • Practice standardization: With significant provider performance. input, ACOs determine best practices and create ACOs’ emphasis on engaging patients also guidelines for inpatient and outpatient settings. requires a culture change among most physicians. The • Community partnerships: The ACOs ACOs have found that they must enlist physician forge relationships with community-based leaders who can convince their colleagues that better, organizations—such as agencies serving people patient-centered care means giving up a little individu- with developmental disabilities, and those providing alism to adopt clinical guidelines and share decision- housing—to increase patients’ posthospitalization making with patients. stability and reduce readmissions. Transforming Care Delivery: Centralized and • Enhanced medication management: The ACOs Onsite Supports use generics and formularies, review medication lists All seven ACOs cited ways in which they are trans- for contraindications and avoidable side effects, and forming the patient and provider experience, either educate patients about medication use and when through centralized support services (the ACO level) side effects should trigger a visit to a PCP. At least or at care sites (the hospital or practice level). Many one ACO has added a pharmacist to care teams. ACO-level interventions focus on using information • Investigation of nursing home transfers: After technology to identify and manage high-risk patients discovering significant variation in hospital and improve communication, and on engaging patients readmission rates among nursing homes and other in their care. postacute–care facilities, one ACO is identifying and addressing contributing factors. Centralized ACO Activities Centralized, management-level ACO initiatives and Using Information Systems to Identify High-Risk priorities include: Patients and Alert Physicians • Shared care management, coding, and support Most of these early-adopter ACOs have developed services: The ACOs have or plan to build their data-mining tools—through their EHR or claims data- capacity to provide the services of nurse care bases—to identify patients at risk of high health care managers, social workers, coders, technical experts, costs, and therefore good candidates for early inter- and others to participating practices. Some ACOs vention. The ACOs also encourage physicians to refer place a care manager in each outpatient setting, or patients they believe would benefit from such outreach. enable a few small practices to share a care manager. The ACOs expect that connecting these For example, Arizona Connected Care sends patients with case management and other targeted a nurse care manager to clinics to review with interventions will help avoid emergency room (ER) a provider or office manager a list of high-risk visits, and hospital admissions and readmissions. The patients to recruit to disease management or ACOs are using several tools for these efforts: health education programs. Population Health • Adoption of EHRs: The first step for many Management is creating an interdisciplinary team physician practices joining ACOs is to switch from to assist PCPs with complex patients. The team paper records to EHRs, and to improve connectivity 16 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL among providers. However, information-sharing • Quality reporting: Besides helping to identify across inpatient and outpatient settings is evolving. high-risk patients, some electronic systems can None of the ACOs has a comprehensive EHR report on quality measures required by CMS. for all inpatient and outpatient settings. Most are • Building on state health information exchanges: transmitting information on an inpatient stay to the Cheyenne ACO and Arizona Connected Care PCP in a static format such as a PDF. The ACOs are tracking the progress of state information are working to expand EHRs and interface software exchanges, and expect to tap them to share data to improve communication across care sites, and with pharmacists, labs, and physician offices. between PCPs and care managers. • Alerts on high-risk patients: Electronic data Engaging Patients in Their Care collection combined with software tools allow Some ACOs are trying to educate patients and engage the ACOs to identify patients with chronic them in their care by helping them adopt a medical conditions or at high risk of hospitalization, and home and understand their disease, treatment plan, and alert their physicians and care managers. Arizona medications. For other ACOs, patient engagement is a Connected Care uses ImpactPro10 and data from longer-term goal. Strategies include: health care claims for this work; NewHealth uses algorithms based on past claims. These patients are • Financial incentives: The Accountable then referred to disease management programs, Care Alliance pays members to complete a education, or counseling. The most common comprehensive health risk assessment (a paper targeted diseases are congestive heart failure, form and physical screening), or to improve their chronic obstructive pulmonary disease (COPD), score. The assessments enable the ACO to identify diabetes, and acute myocardial infarction. patient needs, inform the PCP of opportunities for care management, and contact patients before At Arizona Connected Care, the information a condition worsens. Patients in the family plan of system also identifies patients not complying with the University Hospitals ACO can earn up to $600 treatment, and alerts PCPs about support services when they identify a PCP, and up to $600 more for appropriate for particular patients, although the participating in health screenings. PCP has discretion on next steps. At Mount Auburn Cambridge IPA, sophisticated algorithms • Postdischarge follow-up: Some ACOs send health use health records to identify patients in need of care professionals to postacute–care facilities and more support services and case management. patients’ homes after hospital discharge, to review follow-up plans, answer questions, and discuss any • Disease registries and data repositories: concerns. At Arizona Connected Care, a transition NewHealth uses the EHR and claims data to track nurse sees patients both in the hospital and at patients with hypertension, cardiovascular disease, home after discharge, reviews medications and diabetes, tobacco use, and cancer screenings; create diet, answers questions, interfaces with the PCP if reports on those high-risk patients; and alert necessary, and identifies extra needed services. physicians and patients (see more below). At Population Health Management, an outpatient • Inpatient updates for PCPs: NewHealth uses care manager visits patients approved by CMS for electronic alerts to inform PCPs when patients have bundled care before they are discharged from the been admitted to the hospital, and provide status ER or an inpatient floor. The manager develops updates. This information—often not otherwise a care plan with the inpatient care manager, and available to PCPs—allows the practice to contact conducts home visits after discharge, followed by the patient and arrange postdischarge care. telephone outreach. www.commonwealthfund.org17 • Community education: Arizona Connected Care The ACOs do not yet have a mechanism for sends nurse educators to clinics and senior centers soliciting feedback from enrollees. Leaders of Arizona to teach patients with diabetes about self-care. Connected Care are assuming that enrollees will notice • Telemedicine: North Shore-LIJ plans to use that PCPs are more actively engaged in their health, but a Skype-type mechanism to provide physical, will not necessarily recognize the ACO as the change occupational, or speech therapy and exercises to agent. bundled-payment patients who have had strokes or joint replacements. If this reduces the need for Transforming Care in Physician Offices subacute care, the ACO will expand the strategy to The ACOs are working to standardize common clinical other populations. practices and provide physicians with better informa- tion, care coordination, and other supports in their • Patient Engagement Committee: Arizona offices and clinics. ACO leaders are sensitive to keep- Connected Care has an active Patient Engagement ing the “hassle factor” low. However, they felt that most Committee that works with a community relations practices have begun to change their culture, and that expert on outreach to enrollees, including Web most physicians are motivated to adopt best practices. design. Changes in the delivery of care in physician offices and • Personal health records, patient portals, and Web clinics promoted by the ACOs include: access: Some ACOs provide extensive clinical • EHRs and interconnectivity: ACOs are information to patients electronically, including supporting the adoption of EHRs by physician educational materials and personal health records, practices, or trying to connect existing EHRs to which offer guidance and allow enrollees to track care managers and other providers. NewHealth is their health. Mount Auburn Hospital/MACIPA rolling out EHRs to all practices. has a patient portal, and plans to educate patients about services and encourage them to actively • Standardized guidelines: Clinical guidelines and engage in their care. NewHealth is developing a treatment alerts from ACOs are enabling and patient portal. And North Shore-LIJ employees encouraging physicians to move their practices have online access to a confidential personal health toward standardized, recommended care. record, as well as tools for managing prescriptions, • Care management and supports: Practices may claims, and medical conditions. use the care management, social work, coding, • Call centers: NewHealth is launching a robust call information technology, and other services offered center to answer patient questions and help triage by some ACOs. As noted, for example, Arizona concerns. The Accountable Care Alliance’s nurse Connected Care places nurse care managers call center is heavily used by enrollees. in clinics or enables small practices to share a care manager. University Hospitals ACO helps • Benefit design focused on health and wellness: physicians meet goals for diabetes management and The North Shore-LIJ full-risk employee health plan cancer screening. offers free or discounted supports and resources to enrollees. These include full reimbursement for Mount Auburn Hospital and MACIPA jointly completing WeightWatchers at Work if a member fund case management services for patients with achieves weight-loss goals; discounts at fitness diabetes and other chronic diseases. A pharmacy centers or gyms; free, customized tobacco cessation team tracks patients with multiple medications, programs and medications; and an onsite employee intervening to prevent drug interactions and other health and wellness center offering annual health adverse events. Under a new program, registered assessments, screenings, and immunizations. nurses will visit patients in nursing homes or at home to ensure that their needs are met. 18 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL • Efficiency of patient flow: NewHealth helps of hospital discharge planners, and patients complained practices create front-office “care teams,” which that too many people were calling and visiting. prepare patient information, medication lists, and “We’re working with hospital and other services standard orders for physicians, streamlining each to stop duplication for some patients, and find those visit. patients who fall through the cracks,” said Richard • Medical homes: NewHealth’s goal is to have Johnson, M.D., medical director for Arizona Connected all 60 participating practices qualify as patient- Care. This has led to a much closer working relation- centered medical homes in the next two years. ship between the ACO’s transition nurses and the hos- Cheyenne ACO is working to transform practices pital’s case managers, and reportedly improved patient into medical homes and to create a “patient- care. centered medical home neighborhood”—a platform supporting coordinated care in the community. PROMISING EARLY RESULTS Population Health Management is linking two or The ACOs that have been at financial risk long enough three practices and assigning one case manager to to see results have cut costs, primarily from reduced form a virtual medical home.11 hospitalizations, lower spending per hospitalization, and The efforts of ACOs to help practices become reduced spending on specialty and ancillary care. Newer patient-centered medical homes are particularly ACOs lack enough financial data to cite concrete beneficial in regions where physicians can earn results, but some have seen improvements in utilization bonus payments for achieving medical home rates, such as fewer inpatient days, lower length of stay, standards. and greater patient engagement. • NewHealth Collaborative (Summa Health System), Transforming Hospital Care for example, lowered its costs by 8.4 percent in its The hospitals we examined are pursuing a range of first year as a Medicare Advantage ACO, largely initiatives to improve the quality and efficiency of care because of reduced hospital use, including a 10 and reduce readmissions. For example, most hospitals percent reduction in readmissions. identify high-risk patients for early care management, • Growth in health care costs for North Shore- to assure safer transitions after discharge and reduce LIJ employees under a full risk, self-insured plan readmissions. dropped to less than 2 percent in 2011; they However, hospital interviewees could not fully anticipate similar slow growth for 2012. distinguish efforts introduced or facilitated through • Mount Auburn Hospital and MACIPA report ACOs from those that were already under way. One that care management programs for enrollees in hospital leader noted that numerous changes in hospital Tufts Medical Plan—their Medicare Advantage practice are part of the health system’s evolution toward plan—may have had an impact. In 2012, for a risk-based and population health management model. example, Tufts reported 252 inpatient admissions Even hospitals that could identify ACO-inspired strate- per 1,000 enrollees, compared with 390 admissions gies usually apply them to all patients, not just ACO for Medicare fee-for-service patients. And Tufts members. enrollees had nearly 50 percent fewer inpatient One exception is Arizona Connected Care’s days: 1,146 per 1,000 enrollees, compared with transition nurses, who work solely with ACO members 2,027 per 1,000 Medicare fee-for-service patients. to discuss follow-up care and connect them with their Admissions to skilled nursing facilities improved PCP. This effort produced an unintended consequence: somewhat: Tufts reported 120 admissions per 1,000 the work of the transition nurses overlapped with that www.commonwealthfund.org19 enrollees, compared with 130 admissions among with their PCP. Of 120,000 in the program, 90,000 Medicare fee-for-service patients. are in regular contact with the health management • The Accountable Care Alliance and Nebraska process, including the call center, educational Medical Center found that costs for enrollees in videos, or their provider. their population management program rose just 4.2 • One ACO representative noted that the ACO is percent over the past five years, compared with 27.4 seeing slow changes in health care culture. Each percent nationally. The number of patients whose meeting on care transitions starts with a story of health care costs exceeded $30,000 a year also fell. how providers helped someone navigate the health The partnership between Nebraska Medical Center system. and Nebraska Methodist Hospital also allowed each to save $5 million the first year after they began contracting jointly for dialysis, insurance, and NEXT STEPS: BUILDING CAPACITY, pharmacy services. NETWORKS, CONTRACTS, AND RISK • University Hospital Case Medical Center changed Though the ACOs are at very different places, they management companies after its first year in an have similar agendas for the coming months and years: ACO, delaying the availability of information on to build contracts, capacity, and risk. They are not wait- costs. However, the medical center reported a drop ing to have all elements fully in place before they begin in ER use and length of hospital stay its first year, their ACO contracts, but plan to learn, expand, and as well as more attention to wellness. Data from the evolve over time. first quarter of 2012 will soon be available. Only one of the seven (Cheyenne) is still weighing the value of moving forward with ACO Information on improvements in health care implementation. That organization is working with quality is limited at this point, and some interviewees consultants to determine the actual cost of care for noted that where patients received care before joining Medicare beneficiaries based on a 5 percent sample— an ACO can affect such outcomes. Still, some ACOs and thus whether to develop a Medicare SSP model. shared quality improvement highlights: Next steps for these ACOs include: • At University Hospitals ACO, 70 percent of • Add contracts: The ACOs are aggressively pursuing enrollees have designated a PCP. The pre-ACO arrangements with commercial health plans, and in figure is not available, but was “quite low,” some cases Medicaid and Medicare. One hospital because employees and their families could seek expects its ACO business to grow from about 10 care anywhere in the system. Ensuring that all percent in 2012 to about 50 percent by the end of patients choose a PCP was a high priority because 2013. Another expects to have 100,000 to 200,000 that step allows better patient management and patients under risk contracts by next year. communication between PCPs and specialists. The ACO’s leaders also believe that a physician–patient • Expand the provider network: The ACOs are relationship is essential to spur patients to change building and solidifying their network of primary health behaviors. care practices, specialists and subspecialists, and other providers across the care continuum, such as • One ACO reported improvements in rates of nursing homes and home health agencies. health care screening, though not yet in clinical outcomes, such as glycated hemoglobin (HbA1c) • Enhance tools and services for coordinating and low-density lipoprotein (LDL) levels. care: The ACOs will continue to hire and train case managers/care coordinators (nurses or social • Patients in the Accountable Care Alliance have workers, depending on the patient population), improved their health scores and are in closer touch 20 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL or contract with community-based services. They POLICY RECOMMENDATIONS will also continue to purchase case management Differences in market dynamics and culture across software and implement and improve health risk regions suggest the need for more than one ACO assessments and risk stratification tools. NewHealth “model.” For example, health care planners in Wyoming Collaborative is launching a call center with access said they had difficulty integrating care because of a to medical records to conduct triage, reduce the sparse population spread across a large geographic area, burden on PCPs, and help coordinate patient care. and little history of managing quality or chronic care. Arizona Connected Care plans to use volunteers to These leaders also cited a conservative anti–managed- assist with outreach to patients. care culture, a lack of competition among providers, and • Expand EHR use and connectivity: The ACOs low Medicare spending and reimbursement that leaves will be adding EHRs to ambulatory sites that are little room to cut costs as barriers to change. still using paper records and vet vendors that can Yet these planners realize if they do not coor- provide interoperability across providers. Cheyenne dinate care more effectively and change incentives, they Regional is using a $14 million Health Care will lack the resources to provide health care to the Innovations Award from CMS to build a statewide entire population. Understanding differences in envi- EHR network to promote care coordination and ronment and resources across the state, they are explor- integration. It is first linking hospital-employed ing a shared-savings ACO approach in the Cheyenne physicians and then rolling out the EHR to the rest region and an advance-payment ACO model for rural of the state, while pursuing telehealth for large rural physicians and critical-access hospitals in western regions. Wyoming. The advance payment model would provide front-end capital and extra operating funds for coor- • Pursue performance measurement and dinating care and implementing health information standardization: The ACOs are developing systems. uniform metrics to measure performance across Despite our small sample size, the experi- the continuum of care, developing clinical ences of these ACOs have implications for public guidelines and incorporating them into EHRs, and policy. Among the ACOs participating in Medicare standardizing processes as they develop primary programs, Pioneer and bundled-payment enrollees are care patient-centered medical homes. not restricted to the ACO system that is ostensibly • Take on more risk: The ACOs are developing managing their care. Interviewees noted that this open capabilities to evolve toward downside as well as access reduces their ability to control—and therefore upside risk, and away from fee-for-service toward improve—patients’ care. CMS has been responsive to population-based payments, such as bundled feedback as Medicare ACOs have developed. The agen- payments and capitation. cy’s continued consideration of concerns that arise as One challenge to ACO expansion is the time early ACOs gain experience should help foster success lag in gaining access to reports on cost savings and and encourage more organizations to pursue risk-based quality improvements. As noted, one leader cited a arrangements. time lag of six months to see outcomes based on medi- Other challenges have implications for state cal claims data, and about 18 months until it could and local policies on behavioral health. ACOs serving reward providers. The ACOs need such information patients with such challenges face “overly bureaucratic” to promote contracts with both commercial payers and mental health agencies, and uncoordinated rules on cov- providers. erage and benefits. ACOs are also finding duplication of some services across programs and barriers to efficient and timely care, exacerbated by a lack of communication www.commonwealthfund.org21 between behavioral health and physical health provid- high-risk patients, and care management; and integrat- ers. These challenges exist outside of ACOs, of course, ing rather than competing with outpatient providers. but the ACO focus on population health highlights the By forming ACOs, these organizations expect urgent need to address them. to recoup some revenue losses from reduced hospital ACOs’ emphasis on assessing patient risk, use by sharing in overall savings. They also see form- ensuring access to a continuum of services, and promot- ing ACOs as a way to improve care—enabling them ing communication across providers and care manag- to attract both physicians and payers and increase their ers suggests that the Medicaid population may do well market share. “Risk-based care is the future, and we under the ACO model. One of the ACOs we studied must respond now to be prepared—otherwise, we’ll be has contracted with federally qualified health centers, left behind,” said Eric Bieber, M.D., chief medical offi- and notes that these centers’ experience with low- cer for University Hospital Case Medical Center. income populations has made them valuable partners in Among the entities we studied, ACO readi- serving Medicaid beneficiaries. ness appears to depend primarily on leadership, culture Although only a handful of states are now shifts, and financial resources. The needed investments implementing ACO-like contracts for Medicaid clients, in health information technology and data analysis many more could examine these models as they con- are costly, and planning, managing, and administering tinue to face budget constraints while seeking to ensure ACOs and recruiting providers takes time. quality and accountability. Such efforts could build on Integrated systems of hospitals, physician state leadership in developing patient-centered medical groups, and other providers have easier access to capi- homes, especially as many states shift Medicaid ben- tal for starting an ACO, and a network of providers eficiaries into traditional MCOs, and expand Medicaid across at least part of the continuum of care. One leader eligibility under federal health reform. reported that his ACO does not yet have the resources to coordinate care—it hopes to build that capacity in year two. Other interviewees noted that providers can CONCLUSION forge relationships to provide a continuum of care even The seven early-adopter ACOs we examined vary in without a corporate umbrella. the populations they cover, payers, risk and payment With mounting pressure from payers and arrangements, capacity, and stage of development. Yet consumers to improve health care quality and contain we found striking similarities in the challenges they spending growth, we anticipate experimentation and face, the strategies they are using to transform their variation in risk-sharing arrangements to accelerate. delivery systems, and the lessons that are emerging. As ACOs gain experience, evaluating the impact of the These hospitals and health systems under- reforms in care delivery and payment at the practice, stand that the health care market and environment hospital, and ACO levels—and sharing lessons and are changing and demanding value. These forward- best practices with providers and policymakers—will be thinking organizations are seeking to survive and thrive critical. by improving efficiency; focusing on best practices, 22 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL APPENDIX. PROFILES OF EARLY–ADOPTER ACOS Accountable Care Alliance Nebraska Medical Center and Nebraska Methodist Hospital, Omaha, Neb. Structure/ Limited liability company created by two hospital systems and three physician groups. governance Board is composed of five physicians and the chief financial officer of each hospital system. Program, payers, Blue Cross Blue Shield Nebraska “narrow network” expected to serve patients by end of 2012. and size Discussions among providers initiated in January 2010. 10,000 to 20,000 enrollees expected. Participating Two hospital systems, each with three hospitals. providers Three physician groups: one at each hospital, and academic physicians affiliated with Nebraska Medical Center. Payment/risk model Not yet decided, but anticipate only upside risk at first. between ACO and Even before the ACO starts, providers have incentives to use generic drugs and reduce payer readmissions. However, payments are modest and made two years later. Compensation and Exploring three models: full employment, contracts with performance standards, and independent shared savings with physicians with common protocols and performance monitoring. physicians ACO-level activities Population health management program with screening and early diagnosis (program is also an add-on benefit sold to insurance plans). Patient must complete a health risk assessment, including an onsite exam and blood work. A personal health record is created. Educational videos, email reminders, and online communication to encourage engagement. Patients can earn a financial incentive to improve their health score. Of 120,000, 90,000 are in touch weekly with population health management process (e.g., nurse call center, educational videos). Program is passive for physicians. The program sends information to PCPs, or they can use a login to view it. Home medication management. Kaufman Hall is providing ACO management services. Hiring an executive director, medical director, and others. Changes in care Standardizing selected care practices. delivered by physician practices Changes in care Standardizing and automating order sets. delivered by Consolidating vendors. hospitals Nurse practitioner evaluates patients before discharge to reduce quick readmissions from nursing homes. Challenges Buy-in from physicians. Integrating information. Costs of reporting on quality (self-measurement). Time required for planning/management/administrative functions. Exchange of information between inpatient and outpatient settings. (EPIC, an EHR, launched for one health system’s inpatients on August 4, 2012, but the other system is not buying it, and outpatient providers can choose.) Results Use of population management led to cost increase of just 4.2 percent per patient over five years, compared with national average of 27.4 percent. Fewer patients with expenses exceeding $30,000 than national average. Anticipate better patient outcomes, though too soon to report. Collaboration with Nebraska Methodist has saved each hospital $5 million through joint contracting for dialysis, insurance, and joint/bulk pharmacy purchases. Employer-sponsored medical home staffed by one physician group has lowered costs by 12.5 percent. Next steps Launch ACO. Sources: Glenn Fosdick, CEO, Nebraska Medical Center; Jim Canedy, vice chair, Nebraska Medical Center. www.commonwealthfund.org23 Arizona Connected Care TMC Healthcare, Tucson, Ariz. Structure/ Physician-led limited liability company, partnered with TMC Healthcare system. governance Board of directors includes physician majority, plus representatives from hospitals, community, and technology provider. Contracts with Innovative Practices and Optum for day-to-day ACO activities, including building networks, contracting, coordinating care, analyzing data. Was a Brookings-Dartmouth ACO pilot site. Programs, payers, Medicare Advantage (United Healthcare), began January 2012. and size Medicare Shared Savings Program (SSP), began April 2012. About 15,000 enrollees (only 7,200 with a PCP) as of July 2012. At least 20,000 expected by end of contract in 2015. Commercial MCO/insurer: multiple under negotiation, one with January 2013 start. Medicaid: negotiating with a Medicaid health plan. Participating Hospital: Tucson Medical Center. providers Clinics: three large federally qualified health centers (FQHCs). Primary care providers: about 180, some hospital-employed, others in FQHCs, large group practices, or small independent practices (one or two physicians). “Active equity members”: surgeons, hospitalists, pediatricians. Specialists: cardiologists, cardiac surgeons, orthopedists, and neurologists partner with hospital and participate in Arizona Connected Care. Referral services: various community providers. Pursuing agreements with broader range of providers and services. Payment/risk Medicare Advantage: shared-savings arrangement with United Health plan. model between Medicare SSP: Shared savings; expect to add downside risk after gaining experience. ACO and payer Compensation ACO keeps 25 percent of Medicare savings to pay for management services (Innovative Practices) and shared and administrative costs; 75 percent distributed to equity partners, including primary care, savings with specialists, and hospital. Clinics and practices distribute primary care fund to individual physicians physicians, based on number of patients and quality and efficiency metrics. Specialist and hospital funds similarly distributed to individual practitioners. ACO-level Use Impact Pro predictive modeling tool and claims data to identify high-risk Medicare Advantage activities and Medicare SSP patients and sort by provider or clinic; contact providers to discuss services that could help those patients. Target patients with congestive heart failure, COPD, acute myocardial infarction in past year; also target patients with any of nine diseases in past two years, and those not complying with treatment. ACO plans to analyze data on claims and diagnoses. Contract with Innovative Practices includes contracting, practice transformation services, care coordination for patients at highest risk who are transitioning from acute-care facility to skilled- nursing facility or home, data analytics, quality reporting; funded by 25 percent of savings. Nurse case manager review list of high-risk patients with provider or office manager; practice helps diabetic patients enroll in chronic disease management program, take classes, or meet with educators; planning similar activities for patients with COPD and heart failure, and a chest pain clinic. Patients identified by risk score and provider knowledge. Nurse educators go to clinics and senior centers to provide education on diabetes self-care. Coders teach how to code for “risk adjustment factor” to obtain maximum reimbursement, and to use EHR problem lists. ACO works closely with state health information exchange to achieve EHR interface across practices, hospitals, and other providers statewide. Shares best practices. Efforts to transform practices include promoting “lean” principles, working with prototype hospital- owned clinic to achieve high efficiency through low variability; having all staff at practices work at top of license to relieve physicians of administrative tasks, improve quality, and reduce costs; planning to train trainers to spread these approaches to other sites. Examining ways to combine small physician practices for economies of scale. 24 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL Changes in Use of agreed-upon evidence-based guidelines to reduce variation. care delivered Team-based approach to managing patients: medical assistants track health maintenance and by physician chronic-disease patients and known interventions, freeing providers to work with patients on practices challenges requiring their expertise. Physicians treat all Medicare patients as if they are in the ACO. Changes in care ACO transition nurse sees high-risk patients in hospitals and homes after discharge, reviews delivered by medications and diet, answers questions, interfaces with PCP if necessary, identifies other needed hospitals services or ensures that family can provide. Hospital does not differentiate ACO patients, except that it provides transition care only for patients with physicians participating in the ACO. Challenges Lack of EHR interface across providers. Not enough PCPs. Medicare SSP expected to begin with 12,000 enrollees, but CMS attributes only 7,200. Costly startup. Concern about overburdening practices with reporting and complying with new government programs. Culture change: physicians need to delegate so all can work at top of license, and move away from defensive medicine. Results Medicare Advantage: per member per month rate has increased because of efforts to code more correctly. Next steps Negotiate with self-insured employers and create specialty contracts such as Medicaid plans. Build primary care foundation, and expand network to subspecialists and providers across continuum of care, including home health nurses, social workers, and volunteers. Sources: Richard Johnson, M.D., medical director, Arizona Connected Care, TMC Healthcare; Michael Goran, M.D., managing director, OptumInsight, Optum; Jeff Selwyn, M.D., New Pueblo Medicine, board president, Arizona Connected Care, TMC Healthcare. www.commonwealthfund.org25 Cheyenne ACO Cheyenne Regional Medical Center, Cheyenne, Wyo. Structure/ Cheyenne ACO is a limited liability company. governance Managed by Wyoming Institute of Population Health, a division of Cheyenne Regional Medical Center (CRMC). Focus on to developing patient-centered medical homes and technology infrastructure, and expanding network to cover continuum of care. CRMC and WINHealth Partners (HMO) participate in Premier Partnership for Care Transformation (PACT) ACO Readiness Collaborative.12 Programs, payers, Submitted letter of interest to Medicare SSP; delaying application by one year to build and size components to support ACO and determine whether to pursue Medicare SSP or Pioneer ACO. Beginning patient-centered medical home pilot; plan to provide broader continuum of care for potential ACO, including nursing homes, other long-term care, nutrition counseling, and social services. Institute of Population Health is advising state on developing ACO model for Medicaid. Participating Cheyenne Regional Medical Center. providers Southeast Wyoming Preferred Physicians—includes some 60 physicians employed by the hospital, plus 100 community-based physicians. Hospital has home health, is negotiating with a nursing home, and plans to partner with social services for ACO continuum. Payment/risk Not yet determined; first building medical homes among CRMC’s employed physician model between practices. ACO and payer Considering Medicare risk programs, others. Compensation Not yet determined. and shared savings with physicians ACO preparation Completing implementation of EHR (EPIC) in practices. activities Helping practices become medical homes with team-based care. Partnering with community services to support continuum of care. With federal grant, pursuing integration and information technology statewide. Changes in Adopting EHRs. care delivered Using TransforMed13 to build primary care practices into patient-centered medical homes; by physician implementing EHR to exchange data between (future) case managers and providers; practices introducing team-based care. Changes in care None associated solely with ACO. However, hospital is adopting elements of accountable delivered by care: care managers coordinate care for high-risk patients, manage medication; make hospitals follow-up appointments before discharge and call all patients within 24 hours after discharge; call every former ER patient to check on medications and follow up with physicians; identify frequent ER visitors. 26 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL Challenges Lack infrastructure for ACO to succeed; sparse population and large geographic area make care integration and coordination difficult. Poor coordination and follow-up after hospital discharge; no history of managing quality and chronic care. Changing culture of hospitals and physician practices: younger and salaried providers more apt to adopt new technologies and practices; community-based physicians generally older, averse to changes that may increase workload; recruiting for patient-centered medical homes and ACO is challenging. Conservative anti–managed-care culture among public and state government. Care “leaks out” to border states; if care not coordinated within state, it will lack resources to care for population. Little competition, low utilization, and low Medicare spending and reimbursement levels, so not much room to cut costs. Results n/a Next steps Develop elements needed for ACOs: medical homes (team-based care, EHR, patient portal, patient registries, case management), information systems, physician engagement, and data analytics for 33 ACO quality measures. Developing tightly managed network anchored by 10 certified patient-centered medical homes; will evaluate potential for converting to ACO for commercial, Medicare, and Medicaid members. Working with Premier and Milliman to determine cost of care for 5 percent sample of Medicare beneficiaries, to decide whether to proceed with Medicare SSP. Using $14 million CMS Health Care Innovations Award to build statewide EHR network to coordinate care; starting with employed physicians and rolling out to rest of state; also pursuing EPIC Connect telehealth to promote medication management by rural physicians. Wyoming Integrated Care Network: 17-member hospital network integrating physicians, coordinating care, and fostering quality and efficiency; constantly recruiting and engaging physicians, talking with other hospitals about ACO-like risk pools, and providing opportunities to share savings by reducing unnecessary use of care. Sources: John Lucas, M.D., CEO, Cheyenne Regional Medical Center; Stephen Goldstone, vice president for accountable care, Cheyenne ACO. www.commonwealthfund.org27 Mount Auburn Cambridge IPA Pioneer ACO Mount Auburn Hospital and Mount Auburn Cambridge IPA, Cambridge, Mass. Structure/ IPA and hospital jointly negotiate payer contracts, but do not have a joint legal structure. governance Medicare ACO contract is with Mount Auburn Cambridge IPA (MACIPA). Program, payers, and Medicare Pioneer ACO (12,000 patients). size Capitated-risk contracts are similar to ACOs but not called ACOs (and predated ACOs). Medicare Advantage (3,700 patients). Most commercial plans in region, including Blue Cross Blue Shield of Massachusetts (BCBSM), Harvard Pilgrim Health Care, and Tufts (22,763). Mount Auburn Hospital and MACIPA have cosigned risk contracts for 20 years. BCBSM Alternative Quality Contract helped prepare for Pioneer contract. Participating providers Mount Auburn Hospital. MACIPA; majority of PCPs’ patients are in ACO/risk plans; probably fewer than half of specialists’ patients are in such plans. Cambridge Health Alliance. Payment/risk model Pioneer: first-dollar savings shared if ACO achieves 2.7 percent savings or more; downside between ACO and payer risk starts in second year; Pioneer allows only one signer, so contract is with MACIPA, and MACIPA and the hospital have separate agreement; high degree of trust. BCBSM, Harvard, and Tufts have both upside and downside risk linked to extensive quality measurement; for BCBSM, all providers are in same incentive pool; Harvard and Tufts have separate risk pools for hospital, physician, and pharmacy services. Compensation and Risks taken at practice level, not physician level; physicians paid fee-for-service. shared savings with physicians ACO-level activities Developing a health information exchange that provides a “community record” for providers (also apply to risk to share. contracts) Compass Program: nurse practitioners provide support in nursing homes and patient homes to reduce risk of readmission. Pharmacists may also go to patient homes after discharge to assist with medication management. Generics substituted for name-brand drugs. Nurse case managers go to practices to assist with psychosocial needs. Nurse case managers work with larger primary care practices to identify patients who would benefit from care management; precise model (such as number of patients per nurse) still evolving. Changes in care Embedded case managers (registered nurses) in larger practices help manage sickest patients. delivered by physician PCPs belong to a pod of 8–12 physicians; pod leader participates in meeting of physician practices organization and spreads info and data to PCPs in pod. Rolling out medical homes in several larger practices. Helping physicians identify high-risk/high-cost patients through data analysis, and supporting them in population management (including outreach for appointments and follow-up care). Identifying patients with depression and other mental health challenges to provide support services. Changes in care Embedded nurse case managers. delivered by hospitals Infection control for all patients as part of longstanding strategies to reduce hospital stays and costs; central line infections are rare; private rooms for all patients help reduce infections; aggressive flu campaign. 28 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL Challenges Difficult to achieve patient-centered medical home among small practices and those without EHR. Open access for Pioneer patients reduces control over care. Multiple EHRs across the system. Concern about overloading physicians by constantly asking them to do more. Time lag between changes in health care delivery and financial rewards. Results MACIPA’s Tufts patients had 252 admissions per 1,000 patients in 2012, compared with 390 for Medicare fee-for-service. MACIPA Tufts patients had 1,146 inpatient days in 2012, compared with 2,027 for Medicare fee- for-service. No financial results ready to share. Next steps Certification of patient-centered medical homes. Rollout of behavioral health program. Patient education and engagement. Sources: Jeanette Clough, M.H.A., R.N., president and CEO, Mount Auburn Hospital; Barbara Spivak, M.D., president, Mount Auburn Cambridge IPA; Maggie Custodio, senior director, Mount Auburn Cambridge IPA. www.commonwealthfund.org29 NewHealth Collaborative Summa Health System, Akron, Ohio Structure/ Physician-led limited liability company, part of Summa Health System. governance Participates in national Premier ACO Collaborative. Programs, payers, SummaCare Medicare Advantage plan: began January 2011, 12,000 members. and size Self-insured: SummaCare (provider-sponsored health plan, part of Summa Health System) began January 2012, 7,000 Summa employees/dependents. Medicare SSP: began July 2012 with 22,000+ members. Examining/pursuing arrangements with other commercial plans and Medicaid. Participating Hospitals: seven owned by or in joint venture with Summa Health System. providers Primary care providers: 75 employed physicians; 120 community-based PCPs. Specialty physicians: 200 specialists, about half employed directly by Summa Health System, half in affiliated medical groups. System has access to home health and other services that SummaCare already owns or has contracts with; pursuing agreements with nursing home and other community-based services. Payment/risk NewHealth receives fee-for-service plus shared savings, with targets based on past experience. model between Medicare Advantage: 60 percent savings to NewHealth, 40 percent to payer. ACO and payer Employee plan: 50/50 split. Compensation Physicians contribute 2 percent (Medicare Advantage) or 1 percent (Medicare SSP) of fee-for-service and shared rates to cover NewHealth costs and services. savings with NewHealth distributes savings to providers after covering its costs, including those for new physicians investments (e.g., call center); 50 percent based on financial performance, 50 percent on quality; pool for each type of provider based on actuarial model, with shift in some funds from inpatient and pharmacy to primary and specialty care. Primary care has four categories of quality: HEDIS measures and implementation of care model; patient satisfaction; health risk assessments for each Medicare patient; education/good citizenship (physicians attend educational sessions and conferences). Specialists: similar; must also report back to referring PCP within seven days of seeing a patient. Hospitals: similar; plus measure of readmissions rates. Other providers: no financial incentives yet. ACO-level Helping PCPs become medical homes. activities First year focused on clinical model for treating heart failure (standard guidelines and patient education, developed by NewHealth cardiologist based on national guidelines); year two focusing on diabetes, call center, and care coordination. Disease registries/data repositories tied to EMR and claims: hypertension, cardiovascular disease, diabetes, tobacco use, cancer screenings; physicians receive alerts on disease-specific tests and programs; provides better data than claims alone. Creating high-risk reports, collecting and reviewing data. Launching robust call center. Changes in PCPs are becoming patient-centered medical homes. care delivered Participating practices must have or be adopting EHR (many different types are in use). by physician Practices must adopt clinical guidelines for treating heart failure. practices Heart failure, hypertension, and other disease management programs offered by SummaCare health plan now available to physicians and patients. Physicians receive EHR alerts for tests due, programs for patients with certain conditions, daily inpatient reports, reports on high-risk patients (at risk of admission within 12 months based on claims; physicians refer patients to disease management programs). Medicare SSP requires practices to report on 33 measures (many were already reporting on some measures). Developing care teams: front office prepares patient info, medical checklist, and standing orders for tests, and readies patients for physicians on all visits. 30 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL Changes in care First year focused on heart failure program and discharge planning. delivered by Daily inpatient reports sent to PCPs. hospitals At admission, PCP is contacted to allow scheduling of follow-up appointment. Care manager gets to know patients; after discharge can do home assessment and be contacted if problems occur, until patients return to physicians. Challenges Developing care teams requires practices to shift roles. Establishing mechanisms for coordinating care without reimbursement/funding. Different practices and hospitals have different EHRs, so unable to share information and coordinate care. ACO trying to add other commercial payers, but six months needed to show outcomes based on claims, and about 18 months to reward providers. Developing trust and shared goals: physicians traditionally view health plans as having different goals; address by being transparent and putting physicians in charge: board chair, 75 percent of board and committees; progress slow. Payers formerly were gatekeepers and controlled data; need to recognize that providers are getting into this arena; some payers responding by buying hospitals, primary care groups, and other provider organizations. Hospitals and practices have a variety of EHRs, so developing a plan for each patient that allows interface is challenging. Limited resources for case management; adding case managers but working on how to deploy them—to assist ACO patients only, or all patients in a practice? Even among employed physicians and within one practice, physicians lack a single goal and culture. ACO has limited staff to teach office managers and physicians new approaches, such as health risk assessments and how to educate patients; staff at each practice teach colleagues, but too much inconsistency. Results First-year results from Medicare Advantage: Financial: 8.4 percent savings, mainly because of reduced hospital use and costs; primary care costs rose, those for specialty and ancillary care declined slightly. Quality: Readmissions fell by about 10 percent. Blood pressure screening rates rose (attributed to outreach program and disease registry report). Greater physician engagement, attributed to financial incentives, education, supports, understanding of value of participation, especially EHR. No changes in patients’ HbA1c, LDL cholesterol levels. ACO refunded physicians’ 2 percent investment after first year, but nearly half of ACO savings geared to physicians not distributed; those who did not meet all goals received partial payments. Next steps In development: internal health information exchange to provide data on patients at point of care; robust call center with access to patient medical records, used to conduct triage, reduce burden on PCPs on call—viewed as step toward care coordination. Continue rolling out practice changes: having all practices adopt EHR, and all 60 practices certified as patient-centered medical homes. Examining/pursuing arrangements with other commercial plans, employers, and Medicaid. ACO expects to evolve toward downside as well as upside risk, and from fee-for-service to population-based payments, over 10 years. Hospital business now accounts for about 10 percent of ACO revenue; expected to increase to about 50 percent by end of 2013. Sources: Charles Vignos, CEO, NewHealth Collaborative; Mike Bankovich, operations director, NewHealth Collaborative; Rodney Ison, M.D., board chair and participating physician, NewHealth Collaborative. www.commonwealthfund.org31 Population Health Management North Shore-Long Island Jewish Health System, Great Neck , N.Y. Structure/ Population Health Management (PHM), LLC, a wholly owned subsidiary of North Shore-LIJ, was governance created to conduct risk modeling and contracting, develop database management tools, and provide analytic, administrative, and operational resources for multiple health system initiatives. The latter includes Group Health Management (the health system’s care/case management entity), Clinical Integration Network IPA, Montefiore’s Pioneer ACO, Health Home; PHM also managed contracts for long-term care, risk, and self-insured employers, unions, and government agencies. PHM also administers North Shore-LIJ’s full-risk employee health plan. North Shore-LIJ will be obtaining insurance licenses to facilitate various risk and other types of contracts. Programs, payers, Health system self-insured full-risk employee plan with 46,000–50,000 members. and size Oxford PHO Medicare Advantage with some 4,500 patients, began in 1999. Partnership with Montefiore Medical Center to extend Pioneer ACO into Long Island and Staten Island in January 2013. HealthFirst (Medicaid MCO and Medicare Advantage plan): some 4,000 Medicare and 25,000 Medicaid patients, with North Shore-LIJ at full risk. Medicaid Health Home began in January 2013; about 15,000 members expected; will incorporate risk sharing in 2014. Bundled payments (models 2 and 4) for about 48 diagnostic categories approved by CMS for January 2013; now building infrastructure to administer. Shared savings and pay-for-performance commercial/Medicare programs based on quality metrics. Expect to have approximately 100,000 at-risk patients by early 2013. Application pending for managed long-term care plan (HMO license). United Health Care–North Shore-LIJ Advantage Plan. Participating Clinical Integration Network IPA (CIIPA) has 7,500 providers, including 2,400+ employed physicians. providers Premium IPA (new model for care integration) includes employed physicians and selected voluntary physicians who agree to certain quality measures, data-sharing, and use of North Shore-LIJ facilities (where clinically and geographically appropriate). All North Shore-LIJ facilities. Payment/risk Oxford Medicare Advantage plan: North Shore-LIJ receives partial premium from insurer and is at model between risk for actual costs, network maintenance, quality initiatives, and aspects of care management. ACO and payer HealthFirst plans: all functions performed by HealthFirst; PHM will supplement care management for at-risk members of North Shore-LIJ.14 Medicaid Health Home (state Medicaid coordinated-care initiative): system will assume some risk- sharing in 2014. Bundled payments for inpatient and outpatient care for designated diagnoses. Anticipate more kinds of risk-sharing arrangements, including shared savings with providers if quality and other metrics are achieved. Compensation As risk models evolve, compensation for practitioners will vary to include fee-for-service, partial risk, and shared full risk, and population management. savings with physicians 32 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL ACO-level North Shore-LIJ is implementing numerous changes as it evolves toward a risk-based and activities population health management model; all patients are and will be treated the same regardless of payer or contract or no insurance. Extensive clinical information is available electronically to guide PHM, which is establishing protocols for care management. For bundled-payment initiative, implementing coordinated inpatient, postacute, and long-term care management for designated diagnoses. Now in limited use: telemedicine to increase access to care, provide physical, occupational, and speech therapy for stroke patients and joint replacement patients via Skype-type mechanism. If successful and reduces need for subacute care in select cases, will expand to other populations. Developing outpatient interdisciplinary team with care/case managers, physicians, nurses, social workers, resource specialists, navigator/outreach coordinators, behavioral health specialists, and pharmacists; team and intervention depends on disease severity; in-person or virtual meetings. North Shore-LIJ’s Center for Learning and Innovation has created curricula for training and certifying care managers, and the system is considering an externship program for new RNs. New initiatives: daily inpatient rounds by multidisciplinary team, including physician, RN, case manager, pharmacologist; hospital-based transition coaches to work with postacute care providers to ensure discharge protocols are met; palliative and compassionate care programs; medication management and reconciliation programs to coordinate patient therapies and avoid conflicting drug interactions. Focus on total integration of care delivery and the continuum of care: care coordination effort will start by using specific population stratification data analytics to identify high-risk patients. Changes in Placing continuum of care managers in large practices to assist providers and help patients care delivered navigate system. by physician Linking two to three practices and assigning case manager to form virtual patient-centered practices medical homes. Implementing EHRs in offices. Challenges Culture change: getting everyone to adopt a new way of doing business. Ensuring health system support at highest levels for both employed and other providers. Developing quality standards across the spectrum of care. Integrating data on clinical initiatives, including hospital and outpatient information. Continuing to implement EHR. Expanding primary care provider network. Facilitating patient-directed goals for care and ensuring satisfaction. Ensuring physician input on care coordination, patient-directed care, clinical outcomes, and satisfaction. Ensuring care manager capacity with broad and specific experience for various clinical situations, such as behavioral health, substance abuse, mental health, and HIV care. Embracing patients with behavioral health needs, and coordinating all needs under Medicaid Health Home, Managed Long-Term Care Plans, new Medicaid initiatives. Results For North Shore LIJ’s self-insured plan, employee health care costs grew by less than 2 percent in 2011; similar low rate expected for 2012. Next steps Standardizing processes. Developing uniform metrics to measure performance across continuum of care. Expanding network/partnerships to more PCPs and continuum of care; forging relationships with community-based organizations. Vetting vendors to allow existing EHRs to communicate, implementing EHRs in facilities that still use paper, and developing portals for community-based physicians; looking at ALL Scripts case management software to enable tracking, reporting, and interface among care managers, physicians, and a local or regional health information organization. Examining outpatient risk-stratification tool. Considering a contractor to review data across inpatient and outpatient continuum, including failed transfers to skilled nursing facilities, to identify opportunities for improvement. Analyzing potential for bundled payments that include postacute care; data are difficult to decipher now. Sources: Gerri Randazzo, vice president, case management, North Shore-LIJ; Nick Fitterman, M.D., medical director, group health management, North Shore-LIJ; Irina Mitzner, R.N., vice president, group health management, North Shore-LIJ; James J. La Rosa, M.D., vice president, managed care organization development, population health management, North Shore-LIJ. www.commonwealthfund.org33 University Hospitals ACO University Hospital Case Medical Center, Cleveland, Ohio Structure/ University Hospitals ACO incorporated as legal entity. governance Participating providers Two critical-access hospitals, six community hospitals, cancer center, children’s hospital, and women’s hospital. 1,400 employed physicians provide 74 percent of the ambulatory care in the ACO. 1,700 to 1,800 additional providers. Participating payers Just themselves as self-insured employers (24,000 employees and family members), began 2011. Applied to CMS to be part of Medicare SSP. Payment/risk model As a self-insured entity, no external risk. Success in managing care could mean losing between ACO and payer hospital revenue. Medicare SSP would be a shared-savings model. Compensation and No payment incentives for practitioners at this time. shared savings with physicians ACO-level activities Hired third-party administrator (APEX, part of SummaCare) to help change health care delivery systems and reduce costs. Hired care managers, outreach coordinators, and physician liaison. Working on bundling care and managing population health (e.g., through diabetes screening and colorectal health). Driving patients to select a PCP and engage in their care; family can earn $400 by identifying PCPs, and another $600 by participating in screenings. Focusing on high-cost claimants, frequent ER users, care transitions, and care gaps (such as enrollees not screened for cancer or getting flu shots). Cannot embed care navigators in practices because health system is geographically dispersed, but lack of face-to-face contact has not been a problem. Changes in care Physicians are working to achieve a “diabetes bundle” (whereby they receive credit for delivered by physician completing nine components of recommended diabetes care) and perform cancer practices screening—the first two initiatives. Encouraging providers to use checklists to focus on highest-priority patient needs. Considering team-based approaches. Challenges ACO switched third-party administrator in 2012, slowing data collection and analysis, so impact of initiatives is difficult to report definitively. Results ER use and length of hospital stay declining, and attention to wellness increasing; figures for first-quarter 2012 forthcoming, delayed by transition to new third-party administrator. 70 percent of enrollees have designated a PCP (baseline is unavailable, but was “quite low”); allows ACO to provide information to providers, helps them manage patients, and motivates patients (for example, smoking cessation takes many months; without such a relationship it is nearly impossible). Next steps Expanding contracts with payers. Implementing EMRs at all ambulatory sites. Coordinating with health system to reduce readmissions. Sources: Eric Bieber, M.D., chief medical officer, University Hospital Case Medical Center; Armand Kirkorian, M.D., endocrinologist, associate medical director, University Hospitals ACO. 34 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL 7 NOTES Participating ACOs may elect to contract with 1 Medicare for one-sided or two-sided risk-sharing. These include 222 ACOs in the Medicare Shared The latter would start in the second year, and earn Savings Program, 32 ACOs in the Pioneer ACO the ACO a higher percentage of savings if pilot program, and the six Physician Group achieved. Each ACO must have a plan to lower Practice Transition Demonstration organizations. growth in expenditures for the beneficiaries it See http://www.cms.gov/Medicare/Medicare-Fee- serves. ACOs are encouraged to adopt EHRs, for-Service-Payment/sharedsavingsprogram/News. engage patients, promote evidence-based medi- html. cine, and manage the care of high-risk patients 2 See S. Silow-Carroll, J. N. Edwards, and D. Rodin, with multiple chronic conditions. ACOs must also Aligning Incentives in Medicaid: How Colorado, meet targets for 33 quality measures in the second Minnesota, and Vermont Are Reforming Care Delivery or third year to receive a bonus payment. and Payment to Improve Health and Lower Costs 8 See http://www.hfma.org/Templates/Print. (New York: The Commonwealth Fund, March aspx?id=18693. 2013). 9 3 Section 2703 of the Affordable Care Act created an A.-M. J. Audet, K. Kenward, S. Patel et al., Hospitals optional Medicaid State Plan. Under that on the Path to Accountable Care: Highlights from a approach, states establish health homes to coordi- 2011 National Survey of Hospital Readiness to nate and integrate all primary, acute, behavioral Participate in an Accountable Care Organization health, and long-term services for Medicaid clients (New York: The Commonwealth Fund, Aug. 2012). with chronic conditions. See http://www.medicaid. 4 A recent evaluation of ACOs participating in the gov/Medicaid-CHIP-Program-Information/ Premier Health Care Alliance’s Accountable Care By-Topics/Long-Term-Services-and-Support/ Collaborative identified six core components of an Integrating-Care/Health-Homes/Health-Homes. ACO, but noted that no existing ACO had deployed html. all of them. The components were patient engage- 10 Impact Pro™ is an episode-based predictive mod- ment, health homes, an integrated network of pro- eling tool designed to help care management viders, population health management with data teams use clinical, risk, and member profile infor- use, an innovative management structure, and mation to target health care services to high-risk partnerships with payers. See A. J. Forster, B. G. patients. For more information, see http://www. Childs, J. F. Damore et al., Accountable Care optuminsight.com/content/attachments/ Strategies: Lessons from the Premier Health Care ImpactProforCareManagement.pdf. Alliance’s Accountable Care Collaborative (New York: 11 The Commonwealth Fund, Aug. 2012). For more information, see http://www.guidedcare. 5 org/. See C. H. Colla, D. E. Wennberg, E. Meara et al., 12 “Spending Differences Associated with the The Premier Alliance was created and owned by Medicare Physician Group Practice some 200 hospitals and health systems. Its ACO Demonstration,” Journal of the American Medical Readiness Collaborative, launched in 2010, works Association, Sept. 12, 2012, 308(10):1015–23; and to develop the organization, skills, team, and tools D. M. Berwick, “ACOs: Promise, Not Panacea,” needed to pursue a coordinated-care delivery Journal of the American Medical Association, Sept. model, and ultimately to implement that model. 12, 2012, 308(10):1038–39. 13 A subsidiary of the American Academy of Family 6 Audet, Kenward, Patel et al., Hospitals on the Path Physicians, TransforMed helps practices become to Accountable Care, 2012. patient-centered medical homes by providing online tools and resources, best practices, training, audits, gap analysis, workflow guidance, and other services. For more information, see http://www. transformed.com/index.cfm. www.commonwealthfund.org35 14 Healthfirst is a not-for-profit managed care organi- zation participating in government-sponsored health insurance programs, including New York State’s Child Health Plus and Family Health Plus programs, Medicaid, and Medicare Advantage. Healthfirst uses a hospital-sponsored business model, returning savings from operating efficien- cies to its hospital sponsors, including North Shore-LIJ. For more information, see http://www. northshorelij.com/NSLIJ/Insurance+- +Healthfirst+(PHSP). 36 EARLY ADOPTERS OF THE ACCOUNTABLE CARE MODEL One East 75th Street 1150 17th Street NW New York, NY 10021 Suite 600 Tel 212.606.3800 Washington, DC 20036 Tel 202.292.6700 www.commonwealthfund.org