The newest savings areas that have emerged for the ACO are in post-acute care, dialysis care, and overutilization.


Sept. 1—A comprehensive and evolving approach was the key reason why the most successful accountable care organization (ACO) was able to garner the most shared savings last year, continuing its streak of three consecutive years of shared savings.

The Houston-based Memorial Hermann ACO, which garnered nearly $42 million in shared savings in 2015, was the most successful of the 120 Medicare Shared Savings Program (MSSP) participants that earned a return from the program. Only 31 percent of the 392 MSSP participants earned shared savings in the 2015 program year, according to recently released results.

The latest payments brought the Memorial Hermann ACO’s three-year shared savings total to nearly $200 million.

Nishant Anand, MD, physician-in-chief at the ACO, credited care management, coordinated care, and better data use for the savings. Specific cost reductions were derived through reduced year-over-year admissions and emergency department (ED) use, for example.

Key Areas

The specific care management benefits came from health management programs focused on the most vulnerable patients, who also had the greatest disease burdens. That 5 percent of the 50,055 patients they serve accounted for about 50 percent of healthcare spending, the ACO’s leaders found.

“We’ve supported them with care managers, diabetes educators, health coaches, just to name a few programs,” Anand said in an interview. “Rather than waiting for them to get sick and end up in the hospital, we really wanted to take a proactive approach. So, we reached out to them early and worked with their primary care physicians to get care plans developed. And that’s been one of our keys to success.”

Anand also credited having a group of physicians committed to a holistic approach to care instead of the traditional fee-for-service approach, which disallowed clinicians from seeing patients’ “total picture.”

A third key area for the ACO’s success was obtaining the best use of data and technology.

“We have built a lot of tools along the way that have helped us to be successful,” Anand said. “Having the data, the claims information, along with our electronic medical record, helps us identify who are the most vulnerable patients, who have the highest need.”

That technological capability allowed the ACO to target its interventions appropriately and before conditions degenerated. Specifically, the data were used to remind providers when patients’ care gaps were identified that could be addressed early on. The technology allowed the ACO to push out all of the available data for each ACO enrollee to the providers, instead of them needing to query and wait for it.

Among the tools that provided critical data for the ACO was DocbookMD, a HIPAA-secure mobile app specifically designed to improve communications between its physicians.

Saving Obtained

Among the areas where the ACO was able to reduce expenses was among year-over-year hospital admissions, ED visits and avoidable admissions—especially for some chronic conditions, like emphysema and chronic bronchitis.

New savings are emerging from the ACO’s increasing focus on post-acute care, dialysis care, and overutilization.

Specific post-acute care (PAC) initiatives that have helped include enhanced partnerships with skilled nursing facilities.

“Really, that whole post-acute area is one we’d like to integrate much more closely,” Anand said. “That’s going to help us be successful.”

Additionally, the ACO’s data analytics have identified savings opportunities from better care coordination among nephrologists treating dialysis patients.

Analytics also identified the potential for savings from addressing overutilization of imaging—both CAT scans and MRIs. The savings challenge was addressed through a panel of physicians who designed clinical guidelines—based on the research literature and best practices—that were spread throughout the system’s physician network.

“For example, back pain seems to be a case where MRIs are often overutilized,” Anand said. “So we developed clinical guidelines around that.”

Importantly, savings came not just from moving to lower-cost sites of care but from reducing overall utilization.

“I think we’re attacking from every angle: sites of care; moving patients from inpatient to outpatient services; savings from avoidable admissions among high-risk patients; and a focus on patients with chronic conditions—like diabetes or high blood pressure—to avoid future costly complications,” Anand said.

Costly Effort

The infrastructure needed to make the ACO successful was costly.

“When you look at the care services that we are providing with case managers catching patients before they get sick, that’s a huge departure from the way we were compensated,” Anand said. “We’re making these up-front investments, and we’re not just using it for the MSSP population. We have value-based contracts with most of the payers in the community. So, with the scale, that helps to offset the cost.”

The “pretty substantial” $200 million in shared savings over three years has helped offset a lot of costs, but the ACO is continuing to make infrastructure investments.

“There’s not going to be a simple ‘Here’s our breakeven point,’” Anand said. “We’re doing well from the savings amount that we are receiving.”

The ACO is preparing for coming changes to MSSP. In June, CMS finalized rules to allow ACOs to benchmark their results to regional Medicare spending, rather than national spending. Anand said the benefits from the changes for the Memorial Hermann ACO were limited because it did not alleviate the challenge of finding savings to meet an annually reduced benchmark.

“The benchmarks are going to be reset lower, so we’re going to need to dig deeper for that,” Anand said.

The ACO hopes future changes to MSSP will include either a new lower-risk category than the MSSP Track 2 or 3, or allowing MSSP Track 1 providers to change tracks before the 2017 start of the Medicare Access and CHIP Reauthorization Act, otherwise known as MACRA.

“We have started a second agreement period, so we are locked in for the next three years,” Anand said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, September 01, 2016