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Digging Deeper: Lessons from an ACO Success Story

October 7, 2013
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We all know that the word “Obamacare” elicits immediate emotion from a good chunk of the American public. Thanks to late night TV host Jimmy Kimmel, and a media poll or two, we know that the words Affordable Care Act (ACA) do not elicit the same kind of emotion.

Given that there is a percentage of the population that doesn’t even recognize that the two are one and the same, it’s probably fair to surmise that certain elements of the law are not as newsworthy or as controversial as others.  It’s a pretty big law and it would be crazy to think that every Tom, Dick, or Harry would know of every nook and cranny of the law.

I would say accountable care organizations likely fall into the category of lesser known elements of the law. Although Reuters and a few mainstream outlets have covered ACOs in light of the amped up Obamacare coverage, it’s definitely not at the same level as what we’ve seen on the insurance exchanges and Medicaid expansion.

Yet, even though this is the case, Medicare ACOs remain relatively controversial. I wrote a blog a month and a half ago detailing some of the main criticism lobbed at ACOs after nine CMS Pioneer ACOs dropped out of the program and only 13 of 32 in the program reported decreased costs.

The Reuters piece from above has some legitimate critical analysis of ACOs as well concerning the capital that it takes to establish one. No doubt, this is referring in part to the IT infrastructure investments that are a necessity to get an ACO going.  For the nine ACOs that dropped out of the Pioneer program, I’m guessing there were a variety of reasons why that specific model wasn’t quite working for them.

One, Seton Health Alliance, said it had to do with administrative strategy involving ACOs.  I spoke with another, Ed Marx at Texas Health Resources, who said his organization wanted to avoid paying a penalty, but was still focusing on ACO efforts. 

I doubt that any of those organizations are swearing off ACOs altogether, but what’s clear is that it’s been a challenge. Even those who are finding success in the model are detailing the struggle that it takes to get one off the ground and into full gear. Recently, I had a chance to speak with Jonathan Gluck, senior executive and counsel at the Heritage Provider Network, a Northridge, Calif. physician group, whose Heritage Provider ACO was one of those 32 CMS hand-picked Pioneers.

While specific numbers have yet to be released, Heritage was one of the ACOs in the Pioneer program that achieved shared savings in the first year of the program. They are staying on for year two and are “all in on the program.” I asked Gluck, who has also talked to me about the organization’s efforts to solve preventable readmissions with predictive analytics, to share some of the lessons learned thus far, from the perspective of someone who is all about the Pioneer program.

  • Lesson 1:  “Our model of healthcare has been for 30 years to really do what the Pioneer ACO wanted done, we believe and always have that the primary care physician (PCP) is the individual best situated to coordinate the care of that member. They are the one who understands the whole health of that individual.  They see everything from the primary care physician visit and, through the Pioneer ACO, we have the data to let those providers know when their beneficiary is in the hospital or a specialist. The focal point has been the primary care physician, that’s what we believe will lead us to success in the ACO population.
  • Lesson 2: “It’s not as easy as it sounds. It sounds simple – let’s get all the data, coordinate the care, and we’ll save a bunch of money. I don’t think people understand the detailed work that is necessary to effectively coordinate the care of an individual who may have a bunch of different chronic conditions. I don’t think people appreciated it’s really a mindset change that they have to undergo if they want to be successful.”

The physician alignment element for Heritage was not without its bumps. The organization dealt with media blowback when physicians who were only partially affiliated with Heritage were upset that their patients received letters stating their doctor was participating in the ACO. That has since been resolved, says Gluck. Additionally, he went on to detail the various investments into data management the organization has made, including self-developed systems. Those kinds of investments took time, money, and resources.

Mostly though, in our conversation, Gluck kept coming back to the changing mindset mentioned above. To manage and coordinate care against the budget in this capacity, he says, “takes a completely different mentality.” As we understand what’s going on in healthcare at large, I can’t help but hear Gluck’s words over and over again.