8 Accountable Care Organizations Worth Closer Look

ACOs break new ground in healthcare as cost pressures mount for providers.




Critics of healthcare reform might object to the very notion of accountable care organizations, pointing out that hospitals and medical practices always have been held accountable for the care they provide. Although that might be true in principle, many healthcare providers recognize the fact that the fee-for-service model that's currently in use doesn't really encourage clinicians to practice the most cost-effective medicine.

With that reality in mind, the Centers for Medicare and Medicaid Services (CMS), along with several private third-party payers, have laid out a more formal, metrics-driven system to ensure both quality of care and cost containment.

Speaking of reality, although it's theoretically possible to run a successful ACO without the help of an electronic health record system and related IT tools, it's clearly not the best approach. The point was driven home last year when CMS issued the final rule's 33 quality measures. Although not mandating the use of electronic health records (EHRs) and other forms of health IT for participation in their voluntary ACO initiative, the plan for what's called the Medicare Shared Savings Program relies heavily on the ability of healthcare providers to collect and share data. "ACOs, ACO participants, and ACO providers/suppliers are encouraged to develop a robust EHR infrastructure," the 696-page final rule states.

Since those rules were published, CMS released its first list of 27 qualified ACOs that meet the requirements of its Medicare Shared Savings plan. As of July 1, HHS announced that 89 new accountable care organizations have begun serving 1.2 million Medicare patients in 40 states and Washington, D.C.

That's not to suggest that the feds have a monopoly in this space. In total, Leavitt Partners estimates there were 221 private and public ACOs in the U.S. as of the end of May 2012. Some are sponsored by hospital systems and independent practice associations, others by insurance companies.

What most of these organizations have in common can be summed up in one word: risk. Because an ACO is a type of payment and delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients, if the organization fails to keep costs down while improving the health of its patients, it will lose money.

Clearly, the stakes are high. This overview of how eight ACOs are treading these uncertain waters might help inform your own decision.


John Halamka, MD, chief information officer at Beth Israel Deaconess Medical Center (BIDMC), and its ACO, called Beth Israel Deaconess Physicians Organization (BIDPO), says their approach is to speed up health information exchange and continue their existing work on financial and clinical data warehouses.

BIDPO consists of more than 1,800 clinicians, including hospital-based specialists, clinicians who work in BIDMC-owned primary care practices, and other community-based private practices.

The BIDPO Board of Directors mandated that every BIDPO practice have a certified electronic health record system in use by December 2010 as a condition of participation in payer contracting efforts. Those payer contracts require "clinical integration"; in other words, all clinicians must be knit together by IT, Halamka said.

To accomplish this goal, Halamka said that BIDPO offered a cloud-based EHR to each practice that didn't yet have a certified EHR. It requires all practices, whether owned or private, to send a standardized, structured summary of each visit to a central quality registry.

On a broader note, Halamka listed the following as IT essentials for those planning an ACO:

-- universal adoption of EHRs;

-- healthcare information exchanges;

-- business intelligence and analytics;

-- universal availability of personal health records; and

-- decision support services.

The biggest challenge, said Halamka, is defining the care management rules--the conditions, wellness measures, home care interventions, best practices, and evidence that should be incorporated into the point of care and analytic systems. The BIDMC Clinical IT Governance Committee agreed to charter a working group of experts to set those priorities so that their care management strategy is well planned and not a random collection of individual projects, driven by individuals with specific niche requirements.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


Sharp HealthCare ACO currently has 32,000 aligned beneficiaries. The ACO consists of seven hospitals in California, 836 physicians, and 52 mid-level practitioners. It attributes its success to heavy reliance on electronic health record systems, decision support, data warehouse, and population health management tools.

In addition to participation as a Pioneer ACO, Sharp's affiliated medical groups--Sharp Rees-Stealy and Sharp Community Medical Group--are participating in commercial ACOs with Aetna and Anthem Blue Cross. Establishing a primary care relationship for its aligned beneficiaries is the organization's first priority in improving care coordination, Sharp spokesman John Cihomsky said. "Leveraging integrated care management across the care continuum, including improving care transitions, is a key tactic for our success, so establishing a primary care relationship is critical to a beneficiary's overall health and care."

The ACO uses its EHR systems and health information exchange to report on progress in meeting quality measures. Similarly, clinical data analytics identifies areas that need to be improved in quality outcomes, resource consumption, and high-need patients. Sharp's ACO uses predictive modeling, population health registries, and advanced algorithms to uncover clinical gaps in care.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


Sean Gleeson, MD, medical director of Partners for Kids, says the key to the success of Partner's ACO is understanding the cost and quality drivers of its population. "We can't do everything at once, and so understanding the most important things to do first is critical," he said.

Partners For Kids is responsible for over 300,000 children in central and southeastern Ohio who are part of the Medicaid program. The ACO is jointly owned by Nationwide Children's Hospital and by 800 physicians.

Appropriate analytics allows the organization to understand what clinical issues drive the outcomes, what common characteristics in its patient population clinicians need to address, and which providers can do the best job, said Gleeson.

Gleeson said Partners For Kids was created to remove the burden of overhead created by the normal tension between providers and payers.

Partners receives a capitated payment from the Medicaid Managed Care health plans. There's a contractual arrangement between the ACO and the plans that is not officially sponsored by any of the regulatory initiatives at the federal level.

Rather than a one-size-fits-all case management/care coordination program, the ACO targets specific populations using the clinical staff already serving those patients. A shared medical record helps eliminate duplication of care. The EMR from Epic is a combined record across all the inpatient and outpatient sites within Nationwide Children's Hospital, and accessible to providers outside of its system when they share responsibility for the children. When care is provided within the Nationwide Children's network, doctors get access to a deeper level of data available through the electronic medical record.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


Plus, an ACO partnership between North Texas Specialty Physicians (NTSP) and Texas Health Resources (THR), uses a formula that relies heavily on information technology, according to Natalie Wilkins, director of operations of the Pioneer ACO. Plus serves approximately 19,000 patients in North Central Texas.

Fourteen Texas Health Resources (THR) facilities are participating in the program.

Formed in 1997, THR is one of the largest faith-based nonprofit healthcare delivery systems in the United States and the largest in North Texas. The system's primary service area consists of 16 counties in north central Texas, home to more than 6.2 million people.

SandlotConnect, the largest Health Information Exchange (HIE) in Texas, supports the ACO by allowing physicians, hospitals, and certain community providers to access the HIE's real-time patient information.

As a result, Plus-participating physicians can see more complete medical histories, giving them the tools they need to identify health risks, reduce unnecessary testing, review recent lab results, and improve medication reconciliation.

Another unique feature of the Plus ACO: All of the EHRs in use across the communities can connect to SandlotConnect, which pulls data from these EHRs and feeds it to the physicians and other providers that need it. Connecting these EHRs to a centralized information hub that can process the data and disseminate it to where it's needed is essential, according to Wilkins. "It's great to have a car, but if you don't have roads that make connections to your destinations, it doesn't solve your transportation problem," she said.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


The success of any accountable care organization, according to David J. Shulkin, MD, president of Atlantic Accountable Care Organization and Morristown Medical Center, depends upon three factors: Clear goals and objectives to reduce unnecessary spending and improve quality; aligned financial and clinical incentives; and data to direct performance and share care coordination efforts.

AAC, established in 2010, has 50,000 Medicare beneficiaries, six hospitals, and 1,400 physicians, as well as home care and hospice services. "IT plays an important role in information sharing of clinical and financial data and in the coordination of care to avoid duplicative testing and improve care planning among our clinical teams," Shulkin said. He added that getting involved in an ACO is imperative because the current healthcare model is unsustainable and that things are moving rapidly toward a value based reimbursement system.

The Atlantic ACO began as part of the Medicare Shared Savings Program. It has plans to add several commercial ACO contracts. How does it eliminate waste? "Our ACO is led by physicians and we have teams of doctors and nurses now looking at practice patterns and engaged in the re-design of clinical care paths," said Shulkin.

The organization is now working toward three goals: identify and reduce duplicate testing, eliminate testing that is not supported by evidence-based guidelines, and coordinate care plans.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


On July 26, 2012, Aurora Health Care, a not-for-profit healthcare provider based in Milwaukee, Wis., joined forces with Aetna Inc., to form a new commercial accountable care organization. The Aurora Accountable Care Network, which will become effective on Jan. 1, 2013, will offer a price guarantee to employers built upon a healthcare model that it says will improve quality, outcomes, and the patient experience.

Aurora believes that with this model, employers will see big savings in what they spend on healthcare as a result of improved patient outcomes and greater efficiencies. Cost savings will be specific to each employer with the potential for an average 10% reduction based on the employer's past claims expenses, according to Aurora. The Aetna plans that the Aurora Accountable Care Network will offer have been designed for small and mid-size businesses in Wisconsin. Other plans target large, self-funded employers. The plans are fully insured and feature two tiers of benefits and copays. The ACO designed them to provide a more-coordinated, personalized experience for patients; lower co-pays for seeing Aurora Accountable Care Network providers; and better healthcare outcomes.

ACOs are not new to Aurora. The healthcare system also has a Medicare Shared Savings Program Accountable Care Organization. Aurora's Lakeshore Medical Clinic works with Centers for Medicare and Medicaid Services to provide Medicare fee-for-service beneficiaries with service and care, with the goal of reducing the growth in Medicare expenditures through better care coordination. The Lakeshore Medical Clinic accountable care organization includes 10,000 Medicare patients, with a focus on evidence-based medicine.

Aurora executives say that many healthcare purchasers focus on unit price, seeking to save money with the lowest-cost provider for diagnostic testing, X-rays, office visits, or surgical procedures.

Aurora claims that these initial savings are deceiving, because they don't take into account the most significant element of the healthcare cost equation: how healthcare services are used. True savings, they assert, come from lowering the cost of care per diagnosis. Aurora shares these savings with employers who are enrolled in the Accountable Care Network through their insurance carrier.

Why ACOs? Aurora officials said that it has demonstrated that coordinating care in a fully integrated medical network committed to continuous clinical improvement can lower health costs. As an employer, Aurora manages 48,000 lives. Its per-member-per-month costs went down 2.4% in 2010 compared to the national average, which have been rising 10% to 12% annually.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


Hackensack Alliance ACO is a partner with Hackensack University Medical Center. It currently has about 120 physicians in its program, approximately 10,000 Medicare patients, and about 30,000 commercially insured patients. Not all of these patients are contracted as ACO patients. However, the ACO policy is to treat all patients equally.

Morey Menacker, DO, president of the Hackensack Alliance ACO, said they've created a small group of primary care physicians who understand the need for comprehensive patient care. "It is necessary to eliminate duplication of services, unnecessary tests, and inappropriate hospitalizations," Menacker said. He emphasized the need for continuous monitoring of a patient's condition, and compliance with recommendations and medications.

The ACO accomplishes those aims by using patient care navigators, nurses who see patients in their homes, call them frequently, and develop a relationship with them. Physicians supervise the nurses and follow up in their office or in the hospital. Menacker said that the only way to manage such a system is with a comprehensive electronic health record, accessible by the navigator, the physician, and any consultant that the patient might require. The system needs to be seamless and integrated via a cloud-based health information exchange.

"We decided to take the ACO route once it was learned that a sea change was coming to healthcare reimbursement," said Menacker. "A decision was made to be part of the solution, the cutting edge. The alternative was to ignore the need for change and be told what to do in the future."

The current payment model at Hackensack varies. It includes a fee for service component, a shared savings component, and a-per-patient per month management component.

Care coordination is a major spoke in the ACO wheel, said Menacker. "Our plan is to identify the high-risk patient, and concentrate our attention on preventing complications and hospitalizations in this population. We are in the process of implementing a patient care software program which will integrate with our various EMRs and gather all the data for reporting." That would allow ACO personnel to analyze the effectiveness of its coordinators as well as physicians and continue to implement processes to streamline and improve care, said Menacker.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements


What's the holy grail of healthcare? For HealthCare Partners (HCP), a physician-led organization with staff-model medical groups and independent practice organizations (IPAs) in California, Nevada, and Florida, it's been providing high-quality patient care while controlling medical costs for more than two decades.

According to Greg Mason, VP of application services for HealthCare Partners Medical Group, based in Torrance, Calif., HCP has pursued that goal through a commitment to both clinical excellence and coordination of patient care. "HCP, in each of our markets, was selected in December 2011 to participate in the Pioneer Accountable Care Organizations (ACO) Program, an initiative of the Center for Medicare and Medicaid Services (CMS)," said Mason. "HCP believes the ACO model, which focuses on care coordination across providers and healthcare settings, is a compelling approach. That is essentially what we have been doing with our Medicare Advantage population for many years. "

Mason said that although many community HIEs and other mechanisms of sharing data between providers and patients have failed to realize the vision that has been in place for years, organizations that are excelling in providing coordinated care "have created their own versions of HIEs as a necessity for ensuring that the full spectrum of care providers have as much information in their hands at the time of care to reduce redundant and inappropriate utilization practices and support best practices."

HCP serves a patient population of almost 65,000. To address elimination of waste, duplicative testing, and poor medication reconciliation, Mason said that HCP has a strong analytics team to support its clinicians. To keep track of data, such as the 33 quality measures outlined by CMS, including hemoglobin A1C, and blood cholesterol, HCP uses clinical dashboards with a focus on improving their performance on those clinical dashboards.

Recommended reading:

Accountable Care Organizations Step Up to Medicare's Challenge

ACOs Need Better Data Transparency, Management

Why Doctors Won't Like ACOs

EHRs Need Accountable Care Features

Accountable Care Lives Or Dies On Performance Data

Care Management Software Vendors Scramble To Meet Requirements

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