The number of accountable care organizations continues to grow despite the uncertainty over their financial and clinical potential as well as the future of the healthcare delivery system generally after the November election. Leavitt Partners, the healthcare market consultancy formed by former HHS Secretary Michael Leavitt counted some 324 public- and private-sector ACOs in its database as of late November. That’s up nearly 47% from the 221 ACOs the firm counted just five months earlier in June. Among them are at least 154 ACOs contracting with the Medicare program.
What are recently-formed ACOs experiencing as they create this new system of care? What are their early challenges and successes, both for their operations and their patients? Two ACO leaders share their experiences with Better Thinking for Better Health.
Dr. James Fanale is president of the Jordan Community ACO, formed by Jordan Hospital, a 155-bed non-profit community hospital in Plymouth, Mass. Edwin F. Estevez is the chief operating officer and administrator of RGV ACO Health Providers, Weslaco, Texas.
BTFBH: What has been the most difficult thing about getting an ACO going?
Fanale: Setting up the infrastructure, management processes, organizing the physicians, and the application to Medicare. CMS has been responsive and answered questions, but the application is long and arduous.
Estevez: It is almost like you are starting a new company. We’ve had to work on maximizing the use of and access to information about patients without compromising privacy. We’ve increased the awareness of the importance of care coordination. We’ve had outside groups come in and give customer service training.
BTFBH: And the easiest?
Fanale: Nothing is easy! But physician engagement is less difficult than you might think. Physicians really want to work together to integrate healthcare delivery. It’s not difficult to buy-in to the basic philosophy of ACOs, which is to manage populations and improve outcomes.
Estevez: Physicians want to participate. They are excited about being part of something new and exciting.
BTFBH: What have been biggest upfront investments so far?
Fanale: People have had to take on new functions in addition to their old ones. People on the hospital side of the business are now working across many sites. We have added personnel. We’ve invested about $1.5 million in setting up the ACO.
Estevez: We’ve taken advantage of the CMS advance payment program to get $1.2 million upfront to set up the ACO. We are using the money to purchase information technology, train our six doctors and other personnel. The application to CMS was a large upfront investment. We had seven to eight committees and the application was 725 pages long.
BTFBH: Has anything surprised you?
Fanale: With the Medicare ACO Shared Savings Program, the attribution method is not as precise, meaning we aren’t entirely sure which patients are assigned to us. However, we are assuming all the Medicare patients arriving in the offices of our primary care offices are ACO patients. Medicare, in general, has provided a good level of support to us during the process. They don’t always have all the answers but they’re trying.
Estevez: I don’t think anything has surprised me. Nothing glaring. One challenge is that there is a need for lots of health information technology to implement an ACO, and there aren’t enough tools right now.
BTFBH: What will success look like?
Fanale: Improved outcomes, improved quality of care, but lower costs. We will have some idea by the end of the year how we are doing.
Estevez: Improved delivery of healthcare and quality of healthcare and reduced cost. We have to do this economically.
BTFBH: What is your advice to others starting ACOs?
Fanale: Be prepared. It is the right thing to do, the very right thing given that healthcare quality and costs are major concerns.
Estevez: Get on it, get with it, get moving.
About these interviews:
Both the Jordan Community ACO and the RGV ACO were among the first 27 ACOs approved by the Centers for Medicare and Medicaid Services (CMS) to participate in the agency’s Medicare Shared Savings Program (MSSP). The program is designed to reward ACOs that lower the growth of the health care costs of their Medicare patients and hit performance targets that make care more cost effective. Part of the MSSP program includes access to upfront payments, which is designed to encourage the formation of smaller, physician-led and rural ACOs.
The Jordan Community ACO, headed by Dr. Fanale, includes about 100 physicians and 6,000 Medicare beneficiaries. The RGV ACO includes six primary group practices and roughly the same number of Medicare beneficiaries as the Jordan ACO.
Better Thinking for Better Health will check in with these and other ACOs periodically to chronicle how this brand-new way of organizing and delivering health care is faring.
In September 2012, McKesson acquired MedVentive, which offers tools to support an organization’s transition from a fee-for-service payment environment to risk-based contracting, and provide the clinical integration/population management infrastructure necessary to be successful under this new model. MedVenture currently serves several Medicare Shared Savings Programs (MSSP) and Pioneer ACOs.