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Medicare ACOs in the Trenches: How to Survive in Healthcare’s Changing World (Part 2)

September 9, 2016
by Rajiv Leventhal
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Advocate Health Care’s deep history in value-based arrangements has led to success in the Medicare Savings Program ACO model

Editor’s Note: Part 1 of this two-part series on Medicare ACOs in the trenches, which highlights Atrius Health’s Pioneer ACO story, can be read here.

Advocate Health Care, the Downers Grove-based health system that is the largest in the state of Illinois, with more than 400 sites of care, has been entrenched in value-based care initiatives for years. As such, when the Centers for Medicare & Medicaid Services (CMS) released 2015 financial and quality performance results for accountable care organizations (ACOs) in two federal programs late last month, it was not a big surprise to see Advocate Physician Partners Accountable Care, Inc. as one of the Medicare Shared Savings Program (MSSP) ACOs to generate shared savings for Medicare and the patient care health system.

After all, says Lee Sacks, M.D., chief medical officer and executive vice president of Advocate Health Care, “This has been an evolution,” ever since Advocate made the decision back in 2010 that the health system would focus on value as leadership’s priorities turned to reducing the total cost of care. One way to do this was by making the move to join the Medicare Shared Savings Program ACO model, which serves as one of many of the federal government’s initiatives to move the healthcare system toward one that provides patients with high-quality, cost-effective care.

However, CMS data from the government’s two federal ACO programs have shown a mixed bag of success so far, particularly in terms of participating organizations being able to generate savings. To this end, a Healthcare Informatics visual analysis of how organizations performed in the two models—the MSSP and the Pioneer ACO program—found that financially, many ACOs (69 percent) are struggling to generate shared savings for Medicare and their organization, while a significant amount (48 percent) are finding it difficult to produce any savings at all. For just the MSSP model itself, in 2015, 119 of the 392 organizations (30 percent) earned shared savings, while 83 of 392 ACOs in this model, or 21 percent, earned some savings, but not enough to garner bonuses. Nearly half (48 percent) generated no savings at all last year. As one of the 30-percent shared savers, generating $72 million in financial savings in 2015, Advocate Health Care has been able to experience a level of success that the majority of participants in the program have not.

Lee Sacks, M.D.

One of the biggest reasons why this is, says Sacks, is that Advocate Health Care has increased its value- based contracts in the Medicare Advantage space and the commercial space. “We have a mass of patients and contracts in value-based agreements, and that’s critical,” Sacks says. “That’s a reason why a lot of the MSSP programs have not been successful. For many of them, [value] is just a small piece of their business. It’s hard to treat one group of patients different from another. If the majority of incentives are tied to volume, you won’t succeed in the value arena,” he says.

What’s more, Advocate Health Care has a more than ten-year history in a clinical integration program that was initially tied to commercial PPOs, but has since helped the organization focus on quality and utilization metrics, especially with chronic disease, says Sacks, adding that this is one of the contributors to the strong results in the third MSSP reporting period.

As part of this program, Advocate Health Care has a set of metrics in a number of areas, including clinical outcomes, patient safety, efficiency, and patient satisfaction, as well as the mandatory education programs which physicians get points for. The metrics are specific to their specialties so they get benchmarked against others in that specialty, Sacks explains. “We look for year-over-year improvement, and we tie pay-for-performance dollars to that, and it has encompassed our commercial patients, and now we are using it for MSSP, Medicare Advantage, and for our Medicaid value arrangements too,” he says. “It has created the infrastructure to let our physician practices to do population health management with robust registry systems and links to databases—the clinical data we generate, claims data, data on prescriptions, lab results, and more. It all becomes readily available and it’s used to assess performance,” he says.

Sacks additionally points to the development of a successful series of partnerships for a post-acute network with skilled nursing facilities (SNFs) that provide rehabilitative care for patients following a hospital stay. Here, Advocate Health Care provides advanced practice clinicians supervised by geriatric physicians in 38 facilities, which has led to a significant 25 percent reduction in length of stay, improvements in quality, and no regression with readmissions, Sacks notes. “In our market place, the use of post-acute facilities is way above national benchmarks. There is a big opportunity there, and we are starting to see real changes in those practice patterns,” he says.