ACOs: The New Rx for Health Care Delivery?

Many of the estimated 27 million people in ACOs aren't aware they are in one, but do notice that their doctors and other care providers seem more attentive to their needs. That's because ACOs, entities triggered by the controversial 2010 Affordable Care Act (also known as Obamacare), force hospitals, doctors and other health care professionals to rethink how they deliver care so it is more coordinated, better quality and lower cost.

The federal government will implement health insurance exchanges in the 25 states that are not moving forward, helping the uninsured gain coverage.

Health care providers are working together to deliver better, less expensive care.

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To that end, Steward arranges health care teams that include pharmacists, nurses, social workers, community health advocates, wellness experts and others to work with patients on an as-needed basis to keep them out of the hospital. It also arranges, for example, a 30-day supply of healthy, low-sodium and low-sugar meals for congestive heart failure patients, simultaneously enlisting a nutritionist to work with the patients to help them change their eating habits. "Food is also part of your medication," says Morgan-Solomon.

"I feel like there are people who are around me and are concerned," says Cynthia York, a Thousand Oaks, Calif., Medicare beneficiary whose doctor belongs to physician-led Heritage California ACO, one of the nation's largest ACOs. Thanks to Heritage, she's always reminded of preventive tests and screenings, had pharmacists do safety reviews of her drugs, learned to shop for healthy foods and attends ACO-sponsored social events, which range from breakfasts to exercise classes to bus trips to casinos in California. "I don't feel alone," she says.

"The first order of the day with us is to establish a relationship with patients," says Ian Drew, Chief Medical Officer for Heritage Provider Network, which operates the ACO. Heritage, which has been operating for 30 years in Southern California's risk-based contracting market, sponsors a litany of social events in the regions it serves. Through a combination of sophisticated information technology systems, a network of its own hospitalists, case managers embedded in area hospitals and relationships with hospital admissions departments, Heritage gets almost-instant feedback when a member is admitted to a hospital, allowing them to manage hospital care aggressively. Most patients who go to emergency rooms nationwide are admitted, Drew notes, even though "less than half are appropriate."

Besides coordinated care and social events, ACO patients are getting a range of eyebrow-raising personalized care. At Boston's Partners HealthCare, an ACO sponsored by Massachusetts General Hospital and Brigham and Women's Hospital, patients can schedule same-day doctor appointments via their smart phones and see dermatologists and other on-site specialists at the patient-center medical homes—primary-care doctor offices on steroids. New Mexico's Banner Health Network dispatches hospital-trained nurses to patients' homes to take blood-sugar readings and teach healthy eating habits. OSF Healthcare in Peoria, Ill., even arranged for a new, free roof for one elderly patient with lung problems whose leaking roof led to cough-inducing mold. Other ACO patient perks: outfitting patient homes with talking scales or other biometric devices, letting patients talk to their doctors via e-mail, text messaging or Skype-like apps, and sending safety experts to remove or secure potential hazards (fix dark lighting, securing rugs or attaching handrails by stairways).

All of these upfront efforts are preferable and cheaper to a hospital stay. Of the 250 ACOs Medicare contracts with, Steward and 31 others are deemed "Pioneer" ACOs, organizations experienced in risk-based contracting. Unlike other Medicare ACOs, Pioneers also share in any losses, or the portion of spending that exceeds Medicare's target. Early results are promising.

"These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients," Centers for Medicare & Medicaid Services (CMS) Administrator Marilyn Tavenner said in July when announcing the results for the Pioneers' first-year performance. The elite ACOs performed better than providers in fee-for-service Medicare on all clinical quality measures. And their costs to care for the nearly 700,000 beneficiaries in Pioneer organizations grew more slowly than it did for patients treated in fee for service, saving Medicare $88 million. While all 32 Pioneer ACOs earned quality-related reporting incentives, nearly half produced shared savings—including Steward, Partners and Heritage—and just two had shared losses totaling $4 million.

Corrected, 09/03/13: An earlier version of this article stated that Heritage California ACO sponsors social trips to Las Vegas. The ACO arranges trips to casinos in California, not Las Vegas.

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