Q&A: Proven ACO Strategies for Enhancing Care Quality and Generating Savings

With nearly 1,000 commercial, Medicare and Medicaid accountable care organizations (ACOs) covering 32 million members nationwide, value-based contracts continue to grow at a steady rate while the Centers for Medicare & Medicaid Services (CMS) continues to develop additional risk-based program options.

While increasing in popularity, ACO results have been mixed. For example, of the 432 Medicare Shared Savings Program (MSSP) ACOs, only 31 percent earned shared savings in payment year (PY) 2016, according to CMS.1 Organizations looking to better manage their populations and accept more financial risk can benefit from learning from ACOs that have been successful in increasing patient quality and lowering costs.

Tenet Healthcare, a Dallas-based health system, is recognized as a national leader in care innovation, operating ACOs that cover nearly 1 million patients in 80 percent of its markets. Its ACOs participate in more than 85 CMS innovation programs and contract with the largest national payers. Tenet’s Medicare ACOs reported more than $135 million in shared savings from 2012-16.

But organizations that rely exclusively on hard numbers to measure ACO success don’t see the complete picture. Rick Watson, Tenet’s Senior Director of Managed Care Finance and ACO Analytics, knows the winning formula is about more than savings.

“We have a huge focus on quality, which comes from our deep involvement with Medicare,” Watson said. “Our focus on three key areas builds the foundation on which Tenet enhances the quality of care for our members, and in turn, improves our ACOs’ chances of success.”

Position Your ACO for Optimal Success

  • Improve quality, efficiency and coordination of care
  • Increase collaboration and common quality goals among physicians and hospitals
  • Establish innovative relationships with payers, employers and patients

In the following Q&A, Watson elaborates on Tenet’s successes and discusses its proven strategies for delivering on these objectives within its ACO networks.

What’s your risk strategy for your ACOs and how do the changing regulations and environment affect this strategy?

Watson: We take a hospital-by-hospital approach to decide whether we’ll move into certain risk models and bundles. Before making that decision, our risk strategy has been to ensure alignment of the capabilities necessary to succeed under the chosen payment model and our core competencies. Once we determine that we’re aligned, we then leverage our core capabilities to move forward.

One of the biggest factors driving our risk decisions, as with most large health systems, is the Medicare Access and Chip Reauthorization Act, or MACRA, which is driving an increase in the number of ACOs and other advanced alternative payment models. The recent CMS changes, for instance, namely allowing optional participation in certain bundled payment programs, can have a major effect on how a hospital prioritizes its strategy.

How is Tenet adapting to CMS’ decisions to cancel mandatory bundled payment models and make changes to the existing joint replacement bundle?

Watson: A challenge with mandatory bundles is that you’re forced into downside risk, regardless of whether the service line is a core competency of the hospital. The voluntary programs allow us to take a look at our entire portfolio of hospitals while reviewing all of the new bundled payment program options, and then select the ones that align with the hospital’s investments and core competencies.

For example, if we have a particular hospital that is focusing on its cardiac program, and they have good results and believe they would perform well in that kind of model, that hospital is a candidate for the voluntary program for that particular bundle. That’s really the power of voluntary programs and why I think you’ll see organizations performing much better in those programs compared to the mandatory bundles.

We’ve also utilized Conifer Health Solutions’ Bundled Payment Analytics platform that provides detailed insight into cost and quality performance and enables us to identify and address areas for improvement.

Tenet has ACOs in multiple markets and is recognized as a national leader in care innovation. What best practices are you deploying across your health system that contribute to your success in improving quality of care, access and outcomes for patients?

Watson: Everything we have is set up centralized for the health system, then we roll out our processes to the markets. When we expand into a new market, it’s our robust and scalable model that supports our strong understanding of what is needed to hit the ground running. This enables us to focus our time and energy on identifying and addressing unmet needs in the new communities we serve.

With a standardized ACO model in place, we’ve been able to successfully roll out the same model and many of the same processes across our markets. We centralize the ACO operations using Conifer Health technology. We have seen fixed cost per member per month go down year over year and the centralization allows us to scale and roll out new programs more effectively.

Our value-based arrangements are structured to deliver an improved, more comprehensive and cost-effective care experience. We are able to do this by deploying best practices across the company and rewarding physicians and hospitals for quality care improvements. We provide the clinical and operational infrastructure, as well as payer contracting best practices, to help our ACOs be successful.

Can you share the success of one of your ACOs and contributing factors that have made it successful?

Watson: Baptist Health System ACO in San Antonio has been a great success. That market is in the MSSP tracks 1 and 3, as well as a commercial clinically integrated network. We generated 7.4 percent savings in the MSSP program in PY 2016, more than doubling the 3 percent savings we generated in PY 2015.

We have engaged physicians in that market also, and they’re willing to provide insight into the tools that we are exploring as we move forward. We also collaborate with payers in that market to ensure we’re leveraging our capabilities and getting the most out of our risk-based contracts. For instance, our payers expressed to us the importance of an emergency room program, so we created one for them. It’s all about establishing innovative relationships with our stakeholders, and increasing the collaboration and alignment throughout our system.

As the value-based care movement continues to undergo significant regulatory changes, how do you envision growing and evolving your ACOs to meet the needs of your population?

Watson: A focus for our ACO models is the primary care provider (PCP). We know that care delivery and reimbursement is impacted with each regulatory change, but within that framework the goal of our programs and initiatives stays the same: to provide the member a seamless experience across the various parts of the continuum of care that enhances quality and coordination while reducing cost.

We consistently ask ourselves, “How do we make the member feel like they’re within the same family of providers as they rotate within a variety of different ancillary care providers?” This is a concern, especially for members who traditionally feel like they’re going to multiple, completely different and unconnected providers.

We’re creating that connection among all constituents by focusing on care coordination and care management. And we’ve created models that reinforce the PCP relationship, even when a formal relationship doesn’t exist.

How are you using data and technology to identify at risk patients and develop care management protocols?

Watson: We use Conifer Health’s Population Health Intelligence tool to stratify risk, identify gaps in care and promote coordination among network providers. And now that we have integration within our EHR, population health data can be accessed at the point of care and within our providers’ workflow.

Our collaborative relationship with Conifer Heath enables us to create solutions to fit our specific needs. For instance, we have many patients in our system that require complex care management, so we work together to configure episodes of care to track the member all the way from scheduling to a post 90-day period, to in-home care. This solution allows us to more effectively manage our populations across the risk spectrum.

What is your advice to a provider organization considering forming an ACO or is much earlier in its journey to risk?

Watson: If an organization is considering entering into a risk model or increasing its risk, I would recommend these guidelines.

  • Look closely at who you hire, and hire the right people. Our teams include folks from other ACOs, not just from the provider side, because we value their insight and trust their direction. It’s very important to choose the people who can help you because it’s all about the team: Collaboration is the key to working together to solve problems.
  • Don’t jump into risk too quickly. Make sure you have your value-based care strategy defined first. Get some experience with pilot programs and then figure out your roadmap to risk. Know what’s working and what isn’t working. Then bring in the right tools to enhance your capabilities.
  • Know and understand your audience. Physicians aren’t going to listen to you if you have too few members in your population. And payers aren’t going to listen to you if they don’t feel that you’re doing things efficiently. Make yourself relevant to physicians, payers and patients to bolster collaboration, buy-in, and ultimately, the success of your ACO.
Need help developing or managing your risk-based contracts? Here’s how Conifer Health helps organizations succeed under new payment models.
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