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Little Known Ways to Create ACO Infrastructure

November 9, 2011
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Aligning physicians, IT, and payment models for accountable care

One message that struck me a few weeks back at MGMA11 was that culture is not created overnight. This rings especially true now that healthcare organizations are digesting the final rule for the accountable care organization (ACO) shared-savings program on that was released Oct. 20 and figuring out how to move forward. This thought about investing in culture creation was brought up by Mark Shields, M.D., senior medical director, Advocate Physician Partners; vice president, Advocate Health Care, during his presentation on how his organization integrated its physicians, IT, and payment models to develop its ACO infrastructure.

Advocate Health Care, based in Oak Brook, Ill., has 12 hospitals and more than 250 sites of care in North Illinois. Advocate Health Care has a joint venture with its physician group, Advocate Physician Partners (APP), which has 3,900 physicians, with the average practice size of 2.5 physicians, on the medical staffs of Advocate hospitals.

Shields said that Advocate structured its ACO collaboration among APP physicians and Advocate hospitals to create an active and ongoing program designed to improve quality and efficiency, while jointly contracting with managed care organizations in order to accelerate these improvements within healthcare delivery. He said the first key step toward this collaboration was bringing the physicians together across specialties to create what he called a “membership” that had a shared identity and common values. Shields said that creating a culture of engaged physicians requires physician engagement in governance and leadership development. By that token each local Advocate Physician Hospital Organization (PHO) has their own physician-led board. Shields also said it helped to have physicians be led by the medical director, rather than the CEO in recognition of the collaboration’s goals of quality and efficiency.

To align physician and hospital incentives, Advocate has 147 individual performance measures for primary and specialty care in five performance domains that include clinical outcomes, efficiency, medical and technological infrastructure, patient safety, and patient satisfaction, which are organized around local physicians and their hospital. These measures are the same for the hospital management teams and for ambulatory physicians. All new performance measures are refreshed and determined by physicians on a yearly basis. System leadership scans external organizations for new measures, and talk with insurance companies and PHOs. Advocate then develops a tentative list in the spring that is vetted in the summer; and tools are developed in fall for any newly added measures.

Advocate physicians and their practices receive quarterly report cards posted online so there is a transparency of results and physicians can see how they stack up against peers. “It creates really important conversations and new dialogues across specialties,” Shields said. Every practice has its own incentive payout fund. Individual incentives account for 70 percent of payout, and group incentives make up the other 30 percent. The group incentives have a three-tiered structure based on the individual physicians’ scores. In 2010, Advocate Physicians paid out $50 million in incentives. Advocate shares these quality metrics with employers, insurance companies, and the public.

Shields says that success factors for this quality improvement program lie in the fact that it is physician-driven, and same it’s the same metrics across all PHOs and payers. The value for physicians is that they have better alignment with the hospital, marketplace recognition, and incentives to compensate additional work.