Smashing Old Boundaries: Phoenix's Banner Health Network Moves Forward with Aetna on Accountable Care | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Smashing Old Boundaries: Phoenix's Banner Health Network Moves Forward with Aetna on Accountable Care

March 5, 2013
by Mark Hagland
| Reprints
The leaders at the Phoenix-based Banner Health are learning a lot already, as they collaborate with a division of health plan behemoth Aetna to create an unusual initiative that incorporates IT development into payer-provider contracting

Banner Health, an integrated health system based in Phoenix, operates 23 hospitals and other healthcare entities in seven states. In Arizona, Banner Health leaders have created the Banner Health Network, expressly designed to take on accountable care organization (ACO) development both through the Medicare Shared Savings Program (MSSP) for ACOs, and via collaborative contracting with health plans in Arizona.

On the federal side of the ledger, Banner Health Network is one of the pioneer ACOs working with the Medicare program in the Pioneer ACO Program. On the private side, leaders at Banner Health Network have been building a groundbreaking collaborative initiative with the Hartford, Conn.-based Aetna, through its Accountable Solutions from Aetna division. Unusually, that division has developed and is implementing a range of IT solutions to support such collaborations, meaning that Accountable Solutions from Aetna is essentially at the same time both a contracting entity for one of the nation’s largest health plans, and an IT vendor.

On March 5 at the HIMSS Conference, being held at the Ernest N. Morial Convention Center in new Orleans, Tricia Nguyen, M.D., chief medical officer of Banner Health Network, and Bruce Henderson, head of integrated solutions at Accountable Care Solutions from Aetna, sat down with HCI Editor-in-Chief Mark Hagland, to talk about their unusual collaboration, and what they’ve learned so far from it. Below are excerpts from that interview.

To support this collaboration, as well as several others with health systems around the country, you and your colleagues at Aetna have developed or acquired a number of IT solutions in such ACO-related areas as population health management and business analytics, as well as helping your provider partners to strategize around such areas as plan design, correct?

Bruce Henderson: Yes. Everything that we’ve created technologically is encompassed in our partnership with Banner Health Network. Banner Health is a very progressive health system, very forward-thinking, and were looking for a partner to help them transform the model of care and truly change things towards quality and efficiency.

Bruce Henderson

From the Banner Health and Banner Health Network standpoint, how did this all come about?

Tricia Nguyen, M.D.: This is probably the deepest payer-provider partnership that we have. We are also in a joint venture with Blue Cross Blue Shield of Arizona—we sold them half of our Medicare Advantage Plan, because we wanted to broaden our Medicare Advantage network. But we have a very different and unique collaboration with Aetna. We signed the contract with Aetna in November 2011 to get away from a fee-for-service model and towards a quality-based model. And that opened the door for us to bring the core competencies of a health plan to be able to do data analysis and claims analysis and the ability to manage populations, to a provider that wanted to do population health. Banner could have done this more individually and purchased individual elements like reporting solutions, population registry solutions, an analytics engine, and an HIE [health information exchange] capability, and chosen to integrate all these disparate data sources, itself. But we chose to purchase the ActiveHealth Technology Set from Aetna, which provides a one-stop shop of solutions for us.

The reality is that EHRs [electronic health records] don’t have the capability to integrate claims data together with the data we have as a provider. So this gave us the opportunity to use a single integrated suite of solutions to work with a partner like Aetna. That having been said, Aetna will not see any payment from us for their technology and services unless they can help us achieve savings. No vendor downstairs [in the HIMSS13 exhibit hall] will do that [and that is significant]. We recognize each other’s strengths. So this is a payer-provider-vendor partnership, and it’s unusual.

Tricia Nguyen, M.D.

Henderson: We are also transforming ourselves. This is a new business model for Aetna. It’s a new approach to the market, it’s new technology, new services, but our senior leadership and board are absolutely committed to facilitating the transformation of the industry, not only through these relationships with providers, but also internally within our organization, to adapt to the new future.

How did you convince the clinicians at Banner, but most especially the most recalcitrant physicians, to engage in this area and move forward with you on an accountable care collaboration with a health plan?

Nguyen: That’s why we developed Banner Health Network, with 12 acute-care hospitals, and a network of 2,600 providers: Banner Medical Group, an owned medical group that employs one-third of those providers, as well as an a IPA [independent practice association] and a PHO [physician-hospital organization]. So we formed Banner Health Network with strong physician representation on its board, to drive one care model, one service model, and one financial and incentive model for the physicians. The financial arrangements we have with Aetna will be different from those we have with Cigna or other payers in our market.

In other words, you consciously chose to ask physicians to agree to put themselves in the position of having more ‘skin in the game’?

Nguyen: Yes, the physicians do have more skin in the game, in this governance model. In fact, 75 percent of the physicians on the Banner Health Network are physicians, and half of those are not employed physicians.

How do you think you got that level of engagement and commitment?

Actually, Phoenix is a healthcare market with lot of singletons [physicians in solo practice]; in fact, the largest clinic group in this metro market has only 20 physicians. The doctors here are mostly all practicing in ones and twos. But the ones in our network are actually very mature in that they’ve participated in the PHO and IPA at Banner Health for up to two decades, managing risk. And that’s probably one of the reasons we were chosen as one of the pioneer ACOs under Medicare, after we applied for participation in that program.

What has the timeline been for the Banner/Aetna collaboration?

Nguyen: The Banner Health Network was formed because we wanted to go down the path of becoming a pioneer ACO. And then that allowed us to partner with Aetna and others. And so for us, we’ve building the infrastructure for two-and-a-half years, aligning the physicians, developing the care models, and then once we identified that we needed the technology, we did the formal RFP [request for proposal], and then inked the contract with Aetna in the first quarter of 2012. So we spent 2012 evaluating and looking at the IT options with Accountable Care Solutions from Aetna. We’ve implemented the patient registry as a pilot in 2012, and now we’re fully implementing it now in 2013, mainly to one-third of the network, so about 800, who are PCPs [primary care physicians]. The second component that we’re implementing in 2013 is the case management/care management component for patients across the continuum of care.

What lessons have you learned so far, and what have been the biggest challenges to date?

Nguyen: There have been lots of challenges, and lots of lessons learned. For one, not all the EHR vendors are the same; everyone’s CCD [continuity of care document] is different; also the EHRs are not all interoperable. And there’s a difference between the claims data and EHR data, and because of that difference, there is data that is not being used. What’s more40 percent of the PCPs in Banner Health Network are still on paper right now. That’s why one of our network performance standards is that everybody has to be on an EHR. Recently in one meeting, one doc stood up and said, ‘So that means if I’m not an EHR, I can’t participate?’ And I said to him, ‘Look at the requirements. And if you can’t be on an EHR within the next three years, you can’t be in the network.’ As our CEO Chuck Lehn has said, ‘We’re going to have to have adult conversations.’

On one level, it’s rather obvious that participating in any accountable care initiative is simply not possible on paper, without an EHR, correct?

Henderson: It’s obvious, but it’s still hard [moving forward towards automation].

Nguyen: The challenge is around culture: you can have the best strategy and the best-laid plans, but culture will eat strategy every day. So it’s about the adoption of the tools, and moving forward on the case and care management. The doctors are slowly changing, and finding the value that we’re bringing as an ACO to them, to help them to be successful. And the case managers are dedicated to their practices, and the doctors are starting to see that value. And doctors have historically said, ‘deliver the best care, and I know what my outcomes are.’ But the reality is that they really don’t know what their outcomes are, and they need the support that case and care management can provide.

Is there anything that you’d like to add?

Henderson: We are incredibly excited about this partnership, and about what we are offering to our new partners, and we’re very excited about the opportunity to produce results; that’s what it’s all about. All this stuff only matters if you achieve results; and we’re totally committed to this path.

Nguyen: At the end of the day, if we’re going to be successful, it’s going to require provider behavior modification. We’ve all read the Clayton Christensen article that provided a naysayer’s view about provider behavior. What you need to do is to change culture, and you have to relieve the doctors of some of their administrative headaches. And the way to relieve that is to have one care model for all care, with one resource for their practice. We recognize that there’s a lot of complexity in healthcare, and in essence, there’s a lot of waste and duplicative spending because of administrative inefficiency, and that we must eliminate and streamline healthcare processes.

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