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A Health Plan Executive Helps Lead Provider-Payer Collaboration Forward on ACO Development

August 10, 2012
by Mark Hagland
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Aetna’s Charles Kennedy, M.D. heads up a company division focused on private-sector accountable care organization development

The Hartford, Conn.-based Aetna has been moving forward assertively to collaborate with hospitals and physicians to develop private-market accountable care organizations (ACOs), which generally match the ACO concept evolving forward under the Medicare Shared Savings Program. As of July, 14 the Aetna Accountable Care Solutions office had created 14 accountable care programs in 10 states. What’s more, supported by a staff of more than 80 people, the health plan is actively working with more than 160 health systems to develop additional programs, says Charles Kennedy, M.D., CEO of Aetna Accountable Care Solutions. The Los Angeles-based Kennedy spoke recently with HCI Editor-in-Chief Mark Hagland regarding his organization’s current work and plans for the future. Below are excerpts from that interview.

How long has your office existed?

Well, Aetna has been working on ACO-like entities for several years now. I joined the company about a year ago (I’m an internist by clinical background); but we already had several ACO-like relationships in place. So we’ve been working on ACO-like agreements for about five years; and the ACO division has been in place now for about a year and a half.

Charles Kennedy

How would you define your organization’s mission?

Our mission is to create collaborative relationships between Aetna and various delivery systems that result in health plan products and services that are market-leading in terms of costs; that offer measurable high-quality care; and that offer clinical innovations that enhance patient satisfaction. So we’re all about the Triple Aim [the concept promoted by Maureen Bisognano, president and CEO of the Cambridge, Mass.-based Institute for Healthcare Improvement, and author Charles Kenney, in the 2012 book Pursuing the Triple Aim: Seven Innovators Show the Way to Better Care, Better Health, and Lower Costs]. And we believe through our clinical innovations that we’ll be able to transform healthcare.

We believe that when a health plan and a provider organization work together collaboratively, we can create things like care coordination and health information technology, to improve care. And when I say health information technology, I don’t mean electronic health records or health information exchanges, though those are very helpful; instead, I’m speaking at the broadest level of innovation in IT. If you’re going to move from a traditional way of operating to an ACO way of operating, the fundamental tenet is that we’re moving away from a focus on volume of healthcare, and moving towards high-value healthcare. And that means a series of things.

First, we’re providing incentives for providers to efficiently deliver care, whereas in the old world, they were punished for being efficient. Second, we help them really work as a healthcare system, working on behalf of their community. In the old world, you had fragmentation, where the physicians weren’t necessarily aligned, whereas in the new world, there’s now structural alignment. And finally, there’s technology alignment. And why is that important? In today’s world, it’s up to the patient to seek care. In the ACO world, you may need to see patients who are ticking time bombs, because they’re not compliant, and have chronic diseases that need to be proactively approached. And technology allows you to go out and find those people who need proactive care management.

You have 14 clients across 10 states. Are they all integrated delivery systems?

Some are integrated delivery systems; others are standalone hospitals, to whose leaders we’ve reached out. Others are various types of medical groups. So it’s really a potpourri of different types of organizations. What we try to do is to meet them where they are and help them to align the elements in their communities.

How are you picking these partners?

We are very diligent about whom we work with. We’ve profiled all the hospitals and medical groups in the United States, and have identified the ones whose financial, operational, or competitive characteristics, give them a good chance at success in the ACO environment; and then we meet with them and look out for elements that will give us a higher level of confidence in them. For instance, we look at their organizational leadership. If they’re not at the point where they want to build their own ACO, we can’t do business with them. So making sure that strong clinical and administrative leadership is in place is key.

What will happen in the next few years in this general area?

We expect to experience rapid growth. And, much as we saw HMOs grow past a tipping point in the 1990s, we see expect to see  a paradigm shift taking place for ACOs in the next few years. And so we expect to see rapid growth, driven by the private-market innovations, as well as the changes in federal policy. We also have over 60 collaborations in Medicare Advantage programs.

So obviously, the affirmation of the constitutionality of the Affordable Care Act by the Supreme Court earlier this summer was important?

It definitely was powerful. We would have been doing this anyway, because it was the right thing to do in the industry. What the ACA added was the power of the Medicare program, and to an extent, the power of the Medicaid program.

What should our audience of healthcare IT leaders be doing right now?