Efficiency is healthy for Accountable Care Organizations

Kentucky’s Accountable Care Organizations are just gearing up analysis of millions of bytes of data on Medicare patients’ health to determine the best preventative care paths. The ACOs’ focus is to move from episodic to pre-emptive care and a continuum of care that, in theory, allows for better clinical attention at a lower cost.

ACOs are intended to create healthier populations both by being more efficient and heading off expensive crises.

Accountable Care Organizations are groups of doctors, hospitals and other health care providers who work together to improve health outcomes, lower costs and improve the experience of care.

“By managing chronic conditions, for example, we can do that,” said Michael Spine, senior vice president of business development for Bon Secours Good Helpcare ACO, which is now serving Kentucky.

The commonwealth needs help. Kentucky ranked dead last among the 50 states in preventable hospitalizations among Medicaid and Medicare patients and 49th for their rate of readmissions, according to a United Health Federation study released in late May.

Bon Secours Good Helpcare LLC, which does business as Good Help ACO, is a new entity the federal Centers for Medicare and Medicaid Services approved to participate in the Medicare Shared Savings Program (MSSP) at the beginning of the year. It is one of five entities approved at that time to serve Kentucky patients. The other four are KentuckyOne Health Partners; Owensboro ACO; Quality Independent Physicians of Louisville; and Jackson Purchase Medical Associates.

The state also has Norton Healthcare, which was part of an Accountable Care Organization pilot program back in 2010 with Humana and the Dartmouth Institute for Health Policy and Clinical Practice.

The Dartmouth Institute and the Engelberg Center for Health Care Reform at the Brookings Institution selected Humana and Norton to partner as one of only five national sites to implement the Brookings-Dartmouth ACO Pilot Project. In 2010-2011 reporting, the Norton Healthcare ACO successfully cut expenditures 5.6 percent below its baseline target. Its 2011-12 spending was only 2.5 percent below baseline target, which was attributed to cost inflation. The 2012-13 reporting cycle statistics were due this month.

The MSSP is part of the Patient Protection and Affordable Care Act of 2010 and is intended to create efficiency by building cooperation among providers to coordinate care to Medicare fee-for-service beneficiaries. The goal is the right care at the right time, avoiding duplication of services and preventing medical errors.

Norton’s Accountable Care Organization model has worked well on patients with chronic conditions and has had early success with renal disease management, said Dr. Steven Hester, system senior vice president and chief medical officer. Two years into the ACO approach, Norton implemented a complete electronic patient record system through EpicCare EMR, providing electronic communication with the physician and same-day lab results.

“This is now fully implemented as of March 1, 2013, and includes our 30 outpatient locations,” Hester said.

Norton is primarily in the Louisville market but will expand its ACO approach into nearby counties surrounding Jefferson this year, which should impact 15,000 patients.

Examining line items for efficiencies

KentuckyOne Health Partners has about 19,000 designated Medicare members and another 10,000 officially outside the ACO but falling within the same mode of managed care this year. By next year, all those numbers will double, said Donald Lovasz, president of KentuckyOne Health Partners.

Nonprofit KentuckyOne Health formed in 2011 in a merger of St. Joseph Health System and Jewish Hospital & St. Mary HealthCare, making it a $1.8 billion entity with 13,000 employees. Then in late 2012, a partnership deal added University of Louisville Hopsital and James Graham Brown Cancer Center and another 5,000 employees. The group touches 10 percent of the 4 million Kentucky residents who get sick each year.

Lovasz said he did not expect to see a great savings from the ACO model in Kentucky this year, but that may be because KentuckyOne Health Partners already spend of about $1,000 less per patient compared to others.

“We may (already) be at an efficient level,” he said.

One cost savings project Kentucky-One Health Partners is working on, Lovasc said, is a bundled payment model for hip and knee replacements. It is focusing on care management in orthopedics to keep the patient experience at the highest level while decreasing return trips to the hospital.

“We’ve flagged looking at hospital patients and showing them the path to home care, educating their families,” Lovasz said. “These type of programs will expand. We want patients and their families to be able to talk to our staff more easily, to avoid coming back to the hospital because they can’t get their medication filled at a pharmacy – or coming back for a walker, as an example.”

An internal homecare company is expected to generate more care coordination, he said. Meanwhile, Kentucky-One is still building its Accountable Care Organizations project plan and is examining 2,000 line items.

“There is a complexity that this is taking on,” Lovasc said. “We are doing it for a national company, and everything from how we build our website to patient alerts to the tracking of patient satisfaction requires action and support – often from vendors.”

Marriottsville, Md.-based Bon Secours is a $3.3 billion Catholic nonprofit with roughly 57,000 Medicare patients in its five states: Kentucky, Maryland, New York, South Carolina and Virginia. Its key Kentucky facilities are St. Claire Regional Medical Center in Morehead and Our Lady of Bellefonte Hospital in Ashland. The 60,000 Medicare patients its 750 physicians serve make it one of the larger ACOs in the country.

Including nurse practitioners and physician assistants, Bon Secours (it means “good help/relief”) has more than 1,000 providers. There are 71 in Ashland and 33 in Morehead with 7,288 Medicare recipients, representing 12 percent of the Good Help ACO beneficiary population.

The average annual cost per Medicare patient is about $10,000. Eastern Kentucky Health Coalition’s guiding board of physicians is overseeing administration for Bon Secours in Kentucky.

Metrics track health, not just care

There are roughly 250 Accountable Care Organizations across the country. Focus is going to key services like diabetes prevention programs and wellness checkups to identify problem areas. Administrators and managers are examining how patients are referred and the entire patient care lifecycle.

ACOs are getting financial incentives to change patient and physician behavior. Performance- and evidence-based medicine is now rising in credibility and developing new approaches for desired outcomes. One in 10 U.S. citizens is already enrolled in an ACO. A Medicare booklet available online since 2011 shows how preventive care such as cancer screenings will become more important. (Visit medicare.gov/Pubs/pdf/10110.pdf)

“There are no overnight successes with the ACO model,” said healthcare attorney Betsy Johnson of Stites & Harbison, who is a former Kentucky Department of Medicaid Services commissioner. “It requires changing the mindset of patients and how they access the healthcare delivery system and defining what should be true coordination of care.

“There needs to be a clearer understanding of the basics, including what prescriptions a patient is on. This will lead to a change in even the issuing of certificates of need in the state. We’ve already seen the impact to physician practices and their acquisitions by hospitals here.”

Other organizations in the state are gearing up to support ACOs, like Imperium Health Management LLC, with a new Louisville headquarters and 11 employees. The company, which also operates in Arizona, Florida and Illinois, provides payor contracting; care coordination; utilization management; ACO development and organization; performance tracking and analytics; disease management and chronic condition support; and other reporting services to its clients.

ACO support companies get tax incentives of as much as $500,000 for up to 10 years to hire up to 40 employees. The Centers for Medicare and Medicaid Services has established 33 quality measures for ACOs regarding care coordination and patient safety, appropriate use of preventative health services, improved care for at-risk populations, and how patients and caregivers experience care.

Roughly half of ACOs are physician-led organizations serving fewer than 10,000 beneficiaries. Rural hospital, clinic and physician providers benefit from an advanced payment model allowing for greater investments in staff and electronic health record systems. Jackson Medical Associates, led by Dr. James Long, indicated its shared savings will be distributed 60 percent to Accountable Care Organizations participants – primary care professionals, not the specialists or hospital in the area – and 40 percent to reinvest in infrastructure.

Pie getting smaller unless outcomes improve

Bon Secours sent letters to its designated Medicare patients welcoming them into the program; patients can opt out. Claims history for the last three years will be available in the next 90 days to Bon Secours, for example, to help its administrators begin assessing how to improve clinical care going forward.

Employers eventually will be involved in the process, Spine said. This will come after Good Help tests various programs to determine the types that will work best.

But meanwhile, all eyes are on ACA state health benefits exchanges such as the one Kentucky is creating, since these will market to smaller populations that have small-business types and Medicaid populations that include the dual-eligible.

“We will watch how that impacts the ACO and where we will be asked to get involved with the sickest of the sick,” Spine said.

Accountable Care Organizations across the country are already sharing best practices and information on where to get started, including Bon Secours and Norton Healthcare in Louisville.

“The ACO model does not change how patients are billed or how monies are collected; the savings is from quality metrics,” Spine said. “The real issues for hospitals are coming surrounding the $1.3 trillion that is expected to be cut from the entire healthcare system between 2013 and 2023.”

At KentuckyOne, Lovasz said there is interest in sharing ACOs’ knowledge across Kentucky, but they so far have talked only with Quality Independent Physicians LLC. KentuckyOne expects its parent company Catholic Healthcare Initiatives and national trade groups to help in sharing best practices with all the players.