A Health Plan Executive Helps Lead Provider-Payer Collaboration Forward on ACO Development | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

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

August 10, 2012
by Mark Hagland
| Reprints
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?

The business imperative that most CIOs and CMIOs will face is the need to improve their collection and analysis of clinical data. And they should not assume that electronic medical records necessarily give them a major leg up in this area. Electronic medical records are important as records, but you need complementary technology that converts the data into information and the information into actionable information that clinicians can actually use. Second, the CIOs and CMIOs should look very closely at technologies that help convert free-text or unstructured data into structured data. We use a variety of technologies associated with Medicity and other affiliates that help accomplish that conversion.

And you can’t apply a computer very effectively to the art of medicine and have it create the benefits that computerization has created in so many other parts of society. But as you begin to move down this path, you’ll see those sorts of benefits start to apply; and those patient care organizations that first begin to move down this path will see a pretty dramatic competitive advantage.

What are your perspectives on the health information exchange element in payer-provider collaboration?

There are various levels of sophistication in an HIE. The basic level is where the HIE allows you to exchange EMR-based documents, where they can be read by another human being, generally a clinician. Now you’re starting to see the industry become more sophisticated, and they’re adding, beyond a viewing component, a data component to this, and I think you’re going to see a step-wise advancement in that area. For instance, one of our customers had five electronic medical records, and they said, oh, this will be easy for you, because all of our EMRs produce a continuity of care document (CCD), and you can take in a CCD, so this will be easy. But their CCDs failed the federal HIT standard, so that actually made our work almost as difficult as if they didn’t have CCDs.

It’s an area that providers really need to work on?

It’s an area that technology vendors really need to work on, and providers really need to partner carefully with vendors to get the full value out of that element.

Do you have any other advice for our audience?

Even though there’s been significant uptake of the meaningful use funds, still, only about 20 percent of providers have availed themselves of that program. So I think an ongoing emphasis on that program is important; and providers really need to move forward to more tightly bind their clinicians to them, their physicians to them; there are still significant opportunities in that area.

The Health IT Summits gather 250+ healthcare leaders in cities across the U.S. to present important new insights, collaborate on ideas, and to have a little fun - Find a Summit Near You!


See more on