Accountable Care Organizations (ACOs) have long been considered one of the potential linchpins of healthcare reform, but they are still very much a work in progress, with many questions yet to be answered.
Recently, in his new role as a visiting fellow at the Brookings Institution, former ONC director Farzad Mostashari, MD took a close look at one of the ACOs, the central Florida-based Physicians Collaborative Trust ACO, LLC (PCT-ACO), that is participating in CMS’ Advanced Payment Model ACO demonstration.
What makes this organization particularly interesting is that it’s an attempt to help smaller, rural providers collaborate more successfully, while also helping them remain independent from larger provider networks. As Mostashari explains, “When compared to larger, hospital-sponsored ACOs, rural and small physician-led ACOs face a tough challenge, because despite limited resources they need to come up with substantial upfront capital and infrastructure investment to establish a strong ACO foundation.”
With that as the backdrop, Mostashari asked Larry Jones, PCT-ACO’s CEO, to describe the steps he’s taken in the first year of the CMS program. For starters, Jones explained that he was able to bring his cohort of physicians — 35 PCPs managing 13,500 Medicare patients across 18 independent practices — on board by using a savings distribution model that “allows ACOs to recoup a share of the savings if expenditures for beneficiaries are below target cost benchmarks.”
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In short, they would get paid for saving money.
Next, “Jones asked the physicians to identify the highest-risk patients among the 13,500 in their network. Physicians identified approximately 300 patients based on high emergency department (ED) use, inpatient admissions, hospital readmissions rates, presence of chronic conditions and other factors. Once the claims data became available, physicians were able to identify the 10 percent of patients driving 60 percent of the practice’s entire costs (many of whom were already flagged by the clinicians) . . . With these high cost patients identified, providers and (newly hired) health coaches were able to begin their more targeted efforts to reduce ED visits and chronic disease management.”
While there’s still a ways to go for ACOs like that managed by Larry Jones to be successful, it seems reasonable to be encouraged by his organization’s experience. To be sure, as Mostashari repeatedly notes, “redesigning practices and organizational change for a small proportion of patients is incredibly difficult,” but that doesn’t mean it’s impossible.
Date: March 28, 2014