The top-performing ACO in the Medicare Shared Savings Plan netted CMS $57.83 million in savings thanks to its creativity and clever use of technology. Other organizations had a tougher time paring costs.
The secret sauce in Memorial Hermann ACO success in besting 219 other physician groups in the federal shared savings sweepstakes announced Tuesday may be the fact that they're based in Houston.
"The benchmarks are high in this market," acknowledges Christopher Lloyd, CEO of the physician ACO, meaning there was a lot of low hanging fruit to pick. High-cost ACOs in historically high utilization areas such as Florida, New York, and Texas have an edge because the algorithm used to calculate savings compares spending for assigned beneficiaries with concurrent Medicare spending elsewhere in that region.
But the Houston group's success also hinges on its creativity and technology, Lloyd says. For example, the accountable care organization's physicians used a tool to analyze claims data to find highest risk Medicare beneficiaries, then gave them iPads to communicate with them in their homes.
These enrollees "are automatically hooked up with a network that allows us to touch base with them three or four times a day to see if they're eating properly, for example, if they're a diabetic. We look in their refrigerator," Lloyd says. A care manager asks the enrollee to focus the iPad's camera inside the refrigerator affording a check on its contents. Likewise for other issues, like appropriate use of medications.
It may sound drastic, but that's the kind of thinking that allowed the Houston ACO, with 34,000 attributed lives, to save Medicare $57.83 million in the first year of the three-year program. The ACO gets to keep roughly half of that, minus what is reinvested for program support and the 2% federal sequester reduction.
By focusing on post-discharge care, it avoided costly hospital admissions and readmissions that would have raised costs.
The Centers for Medicare & Medicaid Services on Tuesday released a score sheet showing winners and losers in its Medicare Shared Savings Program, one of three federal ACO models now underway. There weren't many winners—only 53 of the 220 MSSP participants earned any savings.
The tone of the news release was upbeat, however. CMS reported that combined with 23 participants in the Pioneer ACO model, MSSP participants saved $372 million and generally improved 33 measures of quality embedded in the program.
The Pioneer ACO results are expected to be released by those groups on their websites by the end of the week.
But many observers and participants aren't sure that the program is a success, because only about a quarter of the MSSP participants earned any savings. And with infrastructure costs per year estimated at between $1 million and $2 million per ACO—and more perhaps for startup—many organizations' rewards might seem comparatively miniscule.
Besides Memorial Hermann's ACO, others in the MSSP winners' circle include
- Palm Beach Accountable Care Organization in Florida;
- Catholic Medical Partners Accountable Care IPA in Buffalo, NY;
- Southeast Michigan Accountable Care Inc. of Dearborn;
- Nevada Primary Care Network ACO in Las Vegas;
- Triad Healthcare Network LLC in Greensboro, NC
Combined, these six brought in more than half—$193 million—of the $372 million saved.
On the other end was Dean Clinic and St. Mary's Hospital Accountable Care Organization, LLC of Madison, WI. It was the only MSSP ACO that cost the program money, about $10 million.
"According to the CMS report, Medicare members in the Dean/St. Mary’s ACO have become healthier over time and our cost of care has remained well below the national average. However, due to the complex payment methodology in the Medicare Shared Savings Program, we were unable to meet all of the necessary benchmarks," said Paul Reber, DO, Dean ACO's medical director.
Erik Johnson |
Is It a Failure?
So with 115 groups not showing savings, one showing a loss, and 16 others still to be decided, should the ACO model be considered a failure?
"It's too early to say that," says Erik Johnson, senior vice president for the consulting group Avalere Health. "But that's not to say I think it's going to be a raging success anytime soon, either.
"When you think of all the things hospitals and other providers are being asked to do right now, ensuring their spots in health insurance exchanges, absorbing cuts in the Affordable Care Act, and the sequesters—on top of all that, to take on the ACO model which fundamentally upends the whole volume-based economics of healthcare for the last 50 years is asking a lot," Johnson says.
"It shouldn't come as a surprise," he says, "that it's taking a while for these groups to figure out how to make this model work, and those that did tend to be in states like Florida and Texas that have historically high Medicare spending. They can clear a lot of inefficiencies out of the system."
Continuous Improvement
The problem with the model, however, is that each ACO has to continue improving above itself each of the three-year program. "At some point, at least in the way CMS has structured the MSSP, it runs out of gas. Everybody gets more efficient. You can't go back to the well year after year."
Dennis R. Horrigan |
The ACO also has to be better than the national scorecard, and throughout the country, multiple other Patient Protection and Affordable Care Act incentives and penalties, such as the readmission program, the federal Partnership for Patients projects, and private efforts such as BOOST are cutting costs through reduced healthcare utilization.
Johnson adds that because of these tall goals, many expect that the biggest savings to get were those in the first or second year.
Premier healthcare alliance, which operates a collaborative with 20 ACOs around the country, says fundamental changes are essential for a robust MSSP, including requirements for programs to absorb downside risk in the program's second year and a change in the way beneficiaries are "attributed" to a particular ACO, it said in a news release.
"We commonly hear from members that only about 75% of their population remains the same from one year to the next," making interventions hard to sustain.
Catholic Medical Partners Accountable Care IPA of Buffalo, NY was the third biggest saver in the MSSP's first year results, with $27.92 million, $13.98 million of which the group gets to keep. Its 750 physicians had 26,000 assigned Medicare enrollees, and reduced their costs in major ways, says President and CEO Dennis R. Horrigan.
"We got very hands on with our doctors," Horrigan says. They had to go through office-based process improvement training and received instruction on reducing emergency room visits and admissions, "providing doctors with feedback to understand performance in their practices."
"There were goals, like a 5% reduction in unnecessary ER visits." How did they achieve that?
"You can have your answering service be more responsive. You can have same-day appointments. You can educate your patients who are high utilizers and encourage them to use your office. You can hire a care coordinator, who will remind patients to call a number before they hit the ER. There's a lot you can do."
Horrigan says the second year will be more of a challenge, especially because in western New York, annual costs, at $8,800 per beneficiary, were already lower than other parts of New York where they were as high as $13,000 or $14,000.
Adaptability is Key
"So we're working with our doctors on interoperability, exchanging information about patients in real time," he says. That means teaching them how to use HISP, a health information service provider EMR system that allows doctors to send clinical records securely.
"Organizational adaptability is the critical component," Horrigan says. "If you stick your head in the ground during a time of transition, you wind up in as a dinosaur in a museum. Everyone will eventually figure this out and adapt. But there will be people along the way who won't. And their organizations will deal with the consequences.