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Payer Partnerships and Population Health

June 11, 2013
by John DeGaspari
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Premier healthcare alliance shares insights of its members’ accountable care initiatives

A healthy partnership between accountable care organizations (ACOs) and payers is the linchpin for successfully using the ACO model to better coordinate care, improve population health and reduce care costs. That’s one of the main takeaways of “Transforming Payer Arrangements to Align with New Care Models,” a webinar hosted last week by the Charlotte, N.C.-based Premier healthcare alliance. The webinar’s participants discussed lessons learned from Premier’s Partnership for Care Transformation (PACT) Population Health Collaborative, an initiative launched in 2010 to help its member health systems implement ACOs in local markets, and to identify the gaps and capabilities necessary to launching an ACO. During the webinar two Premier member organizations, Fairview Health Services and Mountain States Health Alliance, discussed their experiences developing ACOs and how they worked with payers to develop sustainable ACO models.

As noted by Premier’s senior vice president of public affairs, Blair Childs, payer-provider partnerships are a necessary part of establishing successful ACOs, which require enormous investments in infrastructure and new care models, making it critical for ACOs to capture the savings and get a return on the investment. It’s also important to be able to access the data, to understand the data management and being able to identify the key populations to focus your attention on, he said. Health systems and insurers need is to be able to work together to access and use the data they have, both from measurement and a population analytics predictive modeling standpoints, he said, adding that for providers and insurers should share responsibilities around care management.

Blair Childs

Childs noted that various types of payer arrangements exist from care management fees and infrastructure funding, to bundled payment, shared savings and partial and full capitation. Among the elements for a successful partnership are a solid relationship between payer and provider, an integrated contracting mechanism, collaboration to maintain the population experience, and transparency of information.

Many ACO-Payer Models

Last week’s webinar coincided with Premier’s release of a report on the early experiences of its members that have set up ACOs, and how they have worked with the government and state and commercial payers. Joseph F. Damore, vice president of population health at Premier, noted that the ACO initiative is part of a journey toward population health management. “The organizations we work with are in the process of redesigning care, and they are also in the process of redesigning payer arrangements, in order to support the new care models,” he said.

He said that its members have about 80 value-based contracts across the country, with slightly less than half in the Medicare arena. Other arrangements exist in state Medicaid programs, self-insured major employers, and provider-owned health plans in the commercial market. He said the pace is beginning to pick up on the commercial side.

Regarding shared risk models of its members, the most prevalent arrangement on the Medicare side is a one-sided risk model, with a per capita expenditure target and shared savings with the federal government or with the commercial payer. “Not as many of those have occurred on the commercial side as we were hoping,” Damore said. On the commercial side, the care management model is prevalent, in which the commercial insurer pays a primary care practice a care management fee. There has been very little capitation as yet. About 1.8 million covered lives are under some form of value-based contract; 41 percent of whom are covered under the no-risk shared savings agreement, led by the Medicare Track 1 Medicare shared saving ACO model.

According to Damore, the main reason for the prevalence of the shared savings model is that organizations need to build infrastructure, whether that’s information technology, care management systems, or patient-centered medical homes, as well as gain experience in managing risk. “One-sided risk is a good way to gain that experience,” he said.

Regarding shared saving models on the Medicare side, the most popular shared saving model is a 50-50 shared savings model, or the Medicare Shared Saving Track 1 model, Damore said. On the commercial side, there is a variety of shared savings splits, typically between 50 percent and 75 percent; on the employer side, direct contracts between employers and ACOs with a 50-50 split of shared savings are the most popular.

Damore noted that strategic IT plays a central role in setting up successful population health models. The first step is to develop a predictive modeling program that will allow an organization to analyze historical claims and identify high-risk patients, such as those with four or five chronic diseases. It will also allow an organization to identify patients with a single chronic disease, and to build a registry of those patients who can be enrolled in a chronic disease management program. Second, electronic medical record development and integration across the care continuum is very important to building an integrated platform. The third piece is care management software that will allow the organization to communicate with providers and patients.


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