For Baylor Health Care System, an integrated delivery system in the Dallas/Fort Worth area, establishing an ACO is the next step toward a transformation that began more than a decade ago.

"Clinical transformation is about delivering safe, timely, effective, efficient, equitable, and patient-centered care-or hardwiring the six aims from the Institute of Medicine," says Joel Allison, Baylor's president and CEO. "In 2000, all of the boards across our system adopted a resolution that Baylor would not only meet-but exceed-high standards relative to quality and safety."


This case study appears in the Leadership report, Creating Value for Patients for Business Success.

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The system is currently working toward its Vision 2015, a set of seven goals that documents Baylor's commitment to patient-centered care, or orienting healthcare delivery around the needs and preferences of patients (see the exhibit below).


 sec1_baylor-pathways

"Every part of our system is in some form of re-engineering to better support what we refer to as a fully integrated population health model of care," says Allison, referring to Baylor's goal of coordinating patient care across hospitals, outpatient sites, home care, and elsewhere in the continuum. "I think this is a great opportunity, and we see the future as being very bright because we can create these new models of care that are better for the patient."

That enthusiasm does not suggest that the trans-formation will be easy. Baylor, which serves a huge metropolitan area through 15 acute care hospitals and six short-stay hospitals, has 18,000 employees who must be trained in a new way of doing business.

More daunting, perhaps, Baylor employs only 485 physicians. The other 3,000 physicians who refer patients to the Baylor system are independent.

That is why the health system must change through collaboration, not by command. Leading the ACO initiative is senior vice president William L. Roberts, who was until recently also president of HealthTexas Provider Network, Baylor's employed physician group.

"Fostering accountable care is very different in markets with looser affiliations of providers than in markets with tightly integrated healthcare systems," he says. "In more traditional markets like ours, we have to be very careful that we don't move ahead without including the perspectives of all other providers along the care continuum."

Preparing the Ground

Baylor's quality focus was institutionalized in 1999 when it hired a chief quality officer. Two years later, the Best Care Committee was formed to identify and implement evidence-based care throughout the system.

Today, the Best Care Committee is made up of more than 100 voting members, including clinical and administrative leaders from throughout the organization, who determine what constitutes "best care" and how it will be implemented. The committee is co-chaired by the system-level chief medical officer and chief nursing officer.

When the committee decided to participate in the Institute for Healthcare Improvement's Saving 100K Lives Campaign, Baylor's board of trustees passed a resolution establishing a target of reducing inpatient mortality by at least 4 percent in FY05. In fact, Baylor reduced risk-adjusted mortality by 17.2 percent during FY05 and FY06, and it declined by another 16.1 percent during the next two fiscal years.

Taking the Next Step

One of the components of Baylor's vision is to develop an ACO by 2015. The organization-called the Baylor Quality Health Care Alliance (BQHCA)-is a joint venture of Baylor, independent physicians, home health agencies, and other members of the care continuum. BQHCA will operate as a wholly owned subsidiary of Baylor Health Care System.

Roberts and Allison anticipate that BQHCA will participate in the Medicare Shared Savings Program. In addition, BQHCA is working with private insurers and self-funded employers to negotiate capitated contracts for managing the health of specific patient populations. The payers, in turn, will design benefit packages that incentivize their employees/members to engage in BQHCA's prevention and disease management efforts.

"With commercial payers and larger employers, we are able to have the full scope of conversation that we really need to talk about-how we document quality, how we work with a defined population, how we bring resources to the table to better manage the health of their employees," says Allison. "We think there is as much opportunity on the commercial side as on the government side."

A key to success for an ACO, Allison says, is a shared governance model that gives physicians and other stakeholders responsibility for working together to provide high-quality, low-cost care. The majority of BQHCA board members are physicians. The membership also includes a nursing executive, a community layperson, and health system representatives.

Starting with Medical Homes

As the road to a full ACO is being paved, some of the primary care practices in the HealthTexas Provider Network, the Baylor-owned physician group, have already been certified as patient-centered medical homes by the National Committee for Quality Assurance (NCQA). "Every employed primary care site has a goal to become NCQA-certified by the end of our fiscal year, which is June 2011," says Roberts.

Baylor has received some grants from private payers to fund the transition from fee-for-service care to the medical home model.

"Moving from volume-based reimbursement to population health payments requires some investment from the healthcare system and some investment from the payers to fund that conversion," says Allison. "I think most payers understand this, and those that we have worked with have been, frankly, quite good at partnering with us."

Another critical component is the creation of an ambulatory electronic health record (EHR). As detailed in Section 3, on page 35, Baylor is ensuring all caregivers have simultaneous access to patient information.

Understanding the Challenges

Baylor executives worry about having the capacity to meet anticipated demand, if the number of people with insurance increases as expected because of health reform. So the health system is reengineering its approach to caring for patients with chronic conditions.

For example, Baylor invested $15 million to open the Diabetes Health and Wellness Institute to serve patients in an area of South Dallas that has historically had a diabetes-related death rate more than double that of the Dallas metropolitan area. The program uses education, individualized self-management plans, and increased access to physicians and other caregivers to improve patients' health status and head off serious complications.

In another reengineering effort, physicians in patient-centered medical homes are being taught to manage midlevel practitioners, care coordinators, and regional pharmacy managers. In the medical home model, primary care physicians are expected to expand their patient panels by effectively managing a team. "We have some physicians who get this right off and others who are learning it more slowly," he says. "This is the kind of change that will take some time."

Another challenge: paying physicians in a new way. Although Baylor has paid bonuses based on quality and patient experience measures for some time, the fee-for-service system is still in place. "We still have to move toward a model where primary care physicians are paid by the number of patients attributed to them and specialists are paid by episode of care or some other means," says Allison.

The keys to success in the accountable care era, he says, are well-known: Making the delivery of evidence-based "best care" the standard, using EHR technology to improve care delivery, coordinating care across the continuum, and focusing on value rather than volume.

"It takes a lot of what I call emotional capital," he says. "Never underestimate the need to have good, clear, candid, open communication with your partners, particularly your physicians."

Even though, compared to many organizations, Baylor is barreling into the pay-for-value world, Allison says the pace of change must be measured.

"This takes patience," he says. "It is going to take time to understand what we're hoping to achieve, and to get everyone working in the same direction. As long as we keep our focus directed toward improving care for patients, then we'll be OK."

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Publication Date: Thursday, April 28, 2011