Accountable care organizations will provide improved care, better health and lower costs, executives from Vermont’s three ACOs told lawmakers Wednesday during a joint meeting of the House and Senate health care committees. They said their organizations’ purpose dovetails with the state’s health care reform goals.
“This is provider-led change … that we think aligns fully with Vermont’s vision and is in the best interest of its citizens,” said Todd Moore, CEO of OneCare Vermont, the largest of the three ACOs in the state.
OneCare includes Fletcher Allen Health Care, Dartmouth-Hitchcock Medical Center, and Vermont’s 13 other hospitals, several federally qualified health centers and rural clinics, and hundreds of private physicians and specialists.
An ACO, such as OneCare, is the governing body for a provider group. It allows members to sign up for shared savings programs offered by payers in the health care system, meaning Medicare, Medicaid and commercial insurers.
The ACO and the payer negotiate quality standards and the expected cost of meeting those standards for a given population. If the population can be cared for at a lower cost, the savings are split between the payer and the ACO.
Members of an ACO, such as a hospital or doctor, agree to take responsibility for meeting the quality standards and covering the total cost of care for a portion of that population.
“We’re hoping that this model will provide an incentive to change delivery systems and improve care,” said Richard Slusky, director of payment reform for the Green Mountain Care Board.
Many of the services delivery changes that ACO members are experimenting with resemble the medical home model piloted by Vermont’s Blueprint for Health, whether the members are part of that program or not, said Barbara Walters, chief medical officer for OneCare.
The idea is to build a team of clinicians who work together to care for patients, she said.
Medicare began offering a shared savings program to ACOs nationwide a year and half ago, and Brattleboro Memorial Hospital, a member of OneCare Vermont, is a participant.
To meet the goals set by Medicare, the Brattleboro hospital is focusing on decreasing hospitalizations, emergency room visits and readmissions, said Dr. Kat McGraw, the hospital’s chief medical officer.
The hospital has begun practices such as daily interdisciplinary hospital rounds, morning huddles for staff to discuss the needs of their Medicare patients and improving patient education, McGraw said.
Those efforts are guided by claims data provided by ACOs to their members. Members scrutinize that data to learn how best to treat patients, McGraw said. Previously, the data available to hospitals was limited to its interactions with a particular patient.
Thus far there is only six months of data, but McGraw said her hospital is already learning from it. The integrated claims data from the ACO showed Brattleboro’s Medicare patients have a higher incidence of diabetes than she expected. That knowledge can inform how they allocate resources, she said.
“It does seem to be somewhat counterintuitive to ask a hospital-based organization to reduce hospital admissions,” said Sen. Anthony Pollina, P/D/W-Washington.
He asked for some assurance that the ACOs will pass some of the savings they get from payers on to patients and that the savings will be realized throughout the health care system.
“It is somewhat counterintuitive,” McGraw said. “We are all here not to keep this machine afloat called the hospital system … the purpose of the hospital is to provide the care to the patients to get them to a much better state of health.”
If it turns out that can be achieved with fewer providers, then that’s a reality hospitals are prepared for, she added.
The Brattleboro hospital currently has close to 2,200 in its ACO patient population, said McGraw. Medicare will pay it roughly $9,500 per patient per year to cover the entire cost of that population’s care, according to Moore.
If Brattleboro can meet the quality measures set by Medicare — such as care coordination, patient satisfaction and management of chronic conditions — for those patients for less than that, OneCare will get a percentage of the savings.
The ACO determines how its portion is distributed among its members. Vermont’s ACOs haven’t settled on the formulas they will use to divide up the money.
What those formulas look like will be crucial to changing the incentives for providers in Vermont’s health care system, said Dr. Paul J. Reiss, medical director of the Accountable Care Coalition of the Green Mountains.
That organization is the ACO created by Healthfirst, a group of independent physicians working to protect the interests of Vermont’s private medical practices.
He warned if ACOs decide to give more of the savings to hospitals that bill more claims, the ACO model won’t do anything to move Vermont toward a pay-for-performance system.
His ACO is still in the process of developing that formula, and its board has an entire subcommittee dedicated to developing one that will move its members away from the fee-for-service model, which rewards volume of care, he said.
The ACO model requires upfront investment from the providers to change how they deliver services with no guarantee that the additional savings will materialize, Reiss said.
The risk involved in accepting responsibility for a patient population has convinced his ACO not to participate in the Medicaid offering, because of uncertainty about the quality measures, he said, despite the fact that his members have many Medicaid patients.
Medicaid and the commercial insurers offering health care through Vermont Health Connect are in the process of launching their own programmatic offerings to ACOs.
That means the number of patients receiving care as part of an ACO will increase greatly in the coming year.
The commercial offering to ACOs is going to start with a pilot for the two insurers offering care through Vermont Health Connect, Blue Cross and Blue Shield of Vermont and MVP Health Care.
“There’s only so many opportunities to lower costs, and this one we’re hopeful about,” said Bill Little, vice president of MVP. “I think people need to understand that this isn’t going to be a quick process, it’s something that’s going to take time.”
The Green Mountain Care Board will have some oversight of that pilot, and the board will vote on a set of quality standards to determine the eligibility of ACOs.
Trinka Kerr, the state’s health care advocate, said she’s concerned the incentives to drive down cost will overshadow the push to improve quality.
There needs to be a strong consumer voice as ACOs expand to ensure the quality measures remain the top priority and the interests of patients are protected, Kerr said.
