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Evolution and Revolution: What Medical Group Leaders Are Learning through their Federal ACO Participation

September 29, 2014
by Mark Hagland
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Participation in the Pioneer ACO Program and the Medicare Shared Savings Program is turning out to be game-changing for many medical group leaders

In the annals of the history of medical group management in U.S. healthcare, some industry observers may well look back on the years 2012 through 2014 as a turning point for medical groups. That’s because it was during that period of time that a number of large medical groups entered into the Medicare Shared Savings Programs for accountable care organizations (ACOs)—either the regular Medicare Shared Savings Program (MSSP), or the Pioneer ACO Program. At the same time, too, many medical groups nationwide entered into ACO contracts with private health insurers; indeed, a large number began participating in both one of the Medicare programs and one or more private-sector programs. (As of May 2014, there were 338 MSSP ACOs and 23 Pioneer ACOs.)

“How hard is it?” is the inevitable question many would like to ask. The answer, of course, depends on whom one asks—and perhaps even on what day one asks the question. Certainly, participating in these kinds of programs is not easy; indeed, in the last week of August 2014, the news went public that Sharp HealthCare had dropped out of the Pioneer ACO program. As reported online in California Healthline, executives from the San Diego-based integrated health system had actually informed the federal Centers for Medicare and Medicaid Services (CMS) of their decision to pull out of the Pioneer program on June 29; but the announcement was not made public until late August.

Alison Fleury, CEO of Sharp’s ACO, attributed the organization’s decision to drop out mostly to the financial model of Pioneer ACOs, telling California Healthline that, “Because the Pioneer financial model is based on national financial trend factors that are not adjusted for specific conditions that an ACO is facing in a particular region (e.g., San Diego), the model was financially detrimental to Sharp ACO despite favorable underlying utilization and quality performance.’”

What’s more, Sharp HealthCare’s departure follows by one year the departure of nine other original participants, among 32, in the Pioneer program. The other nine had left the program all at the same time, in July 2013, at the same moment that CMS had announced publicly that while all original 32 participating organizations had improved the quality of care, only about one-third had lowered costs significantly enough to create shared savings.

The Sharp departure seemed to signal an inflection point for the Pioneer program, and certainly led to industry commentary about the rigors of the Pioneer program, at least. Yet behind the scenes, a more complex landscape was becoming clear, one involving more nuance than at first met the eye.

[EDITOR'S NOTE: On September 25, after the print edition of the October issue of HCI, which included this cover story, had gone to press, it was announced that three more organizations participating in the Pioneer ACO Program--the Franciscan Alliance, Genesys PHO, and Renaissance Health Network--had dropped out of the Pioneer program, with two shifting to the MSSP program and one of them--Renaissance Health Network--dropping out of federal ACO participation entirely.]

A continuous learning organization in Massachusetts

Indeed, for all the challenges facing Pioneer ACO and regular MSSP program participants, some leaders of larger medical groups participating in those programs are feeling confident these days; and most of all, they are using the opportunity to participate in one of the two Medicare programs in order to engage in conscious learning. A great example in that regard is Atrius Health, a non-profit alliance of six community-based medical groups in Massachusetts. With more than 1,000 physicians and more than 2,100 other staffers, the six medical groups, based in Newton, Massachusetts, are taking care of 35,000 Medicare beneficiaries in the Pioneer program.

Emily Brower

In joining along with the other 31 Pioneer organizations in January 2012, “We had very specific goals when we started,” says Emily Brower, executive director of accountable care programs at Atrius. “One goal was to move towards a population-based approach, and a single model of care for the Medicare population, which was population-based, as opposed to thinking about patients being in different service models. What being in the Pioneer ACO did for us was to help us think about the entire Medicare population in the same way clinically—we take an approach that serves that entire population.”

The other goals, Brower says, had to do with aligning all clinicians to work together, Atrius-wide, on care delivery improvement. “We want to think of ourselves as a system of care where we can share best practices, and to replicate, wherever we can find it, across all of Atrius Health, to create systems of care,” Brower says, and working within the Pioneer program is giving her and her colleagues the opportunity to do just that. “That’s been incredibly rewarding. We have a team of about 50 people who are working on our population health strategy, testing [strategies]; we call it our ACO team. It includes our Pioneer population, our Medicare Advantage population, another 30,000-40,000, and our dual-eligible population of about 5,000.”


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