• An Arizona Collaborative Shares in the Savings

    Nov 01, 2012


    From Left to Right: John Friend is executive director, Arizona Connected Care, Tucson; Judy Rich is president and CEO, Tucson Medical Center, Tucson; Jeffrey I. Selwyn, MD, is chairman, Arizona Connected Care, and a partner in New Pueblo Medicine, Tucson (JSelwyn@NewPuebloMedicine.com). 

    Arizona Connected Care is rejecting the traditional power struggle between physicians and hospitals. In its place: an innovative partnership focused on the Institute for Healthcare Improvement's Triple Aim of improving the patient experience, enhancing population health, and reducing per-capita costs of care.  


    In the eyes of the federal government, Arizona Connected Care is an accountable care organization (ACO). But John Friend, its executive director, prefers not to limit the new entity to that description. "We are a collaborative organization that is in the Medicare Shared Savings Program and is taking on commercial contracts."

    Emphasis on "collaborative": The leaders of Arizona Connected Care-which brings together more than 200 physicians, three federally qualified health centers, and Tucson Medical Center-believe that they are creating a model of care that will make them successful in any payment system that rewards improved quality and increased efficiency.

    Arizona Connected Care was initiated by Tucson Medical Center, a 600-bed hospital. "We needed an integration strategy for physicians who were still in private practice and not employed," says president and CEO Judy Rich.

    The partnership puts physicians in charge of creating a new delivery model. "Physicians are able to take responsibility for the care of their patients and be held accountable for it-and that's the way it should be," says Jeffrey Selwyn, MD, chairman of Arizona Connected Care.

    Arizona Connected Care is a hospital-initiated, physician-led organization. What does that mean?

    Selwyn: Tucson Medical Center provided the money for start-up costs, but this is truly a physician-led organization, and everyone recognizes that this is key to its success. Physician shareholders outnumber the hospital by approximately a 3-1 ratio.

    Rich: To achieve our goals, we believe that physicians have to be the leaders. But we also know that the funding has to come from the hospital because nobody is going to go out and get 200 physicians to underwrite this kind of effort.

    Friend: The board of directors that manages the affairs of Arizona Connected Care is indeed physician-led because there are more physicians than any other parties on the board. We knew this would be critical to this initiative since the proactive efforts of physicians are really critical.

    Culturally, we need to let physician leaders in the community change the way they practice. If physicians follow a path of transformation, the clinical services will improve, the patient experience will improve, the financial performance of physician practices will improve, and the hospital will see improvement in efficiency, quality, collaboration and, ultimately, its business.

    In April 2012, Arizona Connected Care was in the first wave of organizations to enter the Medicare Shared Savings Program. How did you prepare to be at the forefront of new payment models?

    Rich: Tucson Medical Center was the first hospital in Arizona to achieve the highest stage (Stage 7) on the HIMSS EHR-adoption scale, which is significant because data sharing will be essential for our success in the Medicare shared savings program. The hospital is also participating in a statewide health information exchange that will launch later this year.

    Finally, in 2009, we were selected to participate in the Brookings-Dartmouth ACO Pilot Program, where we received technical support and guidance for putting together the ACO. The next year, the hospital and the physician groups created a management services organization to provide data collection and care coordination tools and resources for the physician practices.

    What lessons learned can you share with health system executives who want to partner with independent physicians in new ways?

    Friend: The biggest challenge was developing a concise message about what we were proposing while also waiting for Washington D.C. to issue the Affordable Care Act and then the Supreme Court decision. So we had to draw a very clear business plan that showed physicians that they would be at least equal partners in the process. We had to develop a business plan that spelled out the structure of the collaborative partnership, how physicians would participate, the potential benefits, and the work that needed to be done.

    It was a breakthrough moment when we came to conclude as a group that we could really improve patient care. Many initially said, "This sounds like something I heard before, and none of this ever works." But we are to the point now where there is a high degree of excitement around how we can use data and information and collaborate to actually improve outcomes for patients.

    The Arizona Connected Care partnership puts relatively small physician practices in charge of creating a new healthcare delivery model. What gives you confidence this will work?

    Selwyn: Many of us have proven to ourselves and our payers that we can use EHR technology and other things to change our practices and improve the way that we take care of our patients, and we are motivated to share our ideas with each other. In my own practice, for example, we have been in a gainsharing contract with United Healthcare, and we have found a lot of ways to use healthcare IT to be very successful. For example, when EHR data showed that New Pueblo Medicine physicians only had a 43 percent rate for colorectal cancer screenings, new reminders were put in place-and the average now is 85 percent (compared to the U.S. average of 65 percent).

    We offer same-day appointments, which help keep people out of the emergency department, and we have created new staff positions, such as nurse care advocates, so we can offer more of a team approach. That improves the way patient care is managed and it allows us to see more patients. We also reorganized so that one of our physicians works full-time as a hospitalist. She helps manage our patients' care in the hospital, which shortens their hospital stays, and helps ensure they get appointments at the office right after they leave the hospital.

    Our CEO and COO at New Pueblo have important roles in Arizona Connected Care, and they will help disseminate a lot of best practices to the other physician practices.

    How do independent physicians who are competitors work as partners in Arizona Connected Care?  

    Selwyn: The only way we succeed as an organization is if we all take good care of our patients, so we all have an incentive to share best practices. And the only way physicians can succeed individually is if they perform in a way that makes the organization successful.

    All physicians who participate in Arizona Connected Care are held accountable to 33 quality measures-such as the percentage of eligible patients who receive breast cancer screenings and cervical cancer screenings-that we spent a lot of time agreeing on. We will be measured quarterly and anyone who does not meet the benchmarks will not be eligible for the annual shared savings distribution.

    Just having the opportunity to discuss things together is an unbelievably positive learning opportunity. For example, those of us in private practice have not had any experience with federally qualified health centers. We never knew what they did. Having three of these health centers in Arizona Connected Care has helped us learn from them. It turns out they have been doing disease management and care coordination for years.

    How do hospitals succeed when physicians are in charge of the organization and get most of the shared savings? What does "winning" look like from Tucson Medical Center's perspective?

    Rich: We get paid for many of our patients at the DRG rate, which means the more efficient we are and the better we take care of them, the better our bottom line is. So "winning" for us means getting patients out of the hospital quickly and not re-admitted.

    Also, we should see more physicians wanting to come to our hospital and be a part of this opportunity. There's a lot of cynicism on the part of physicians in this country who feel they have been asked to work harder and harder for less and less money. They have seen their own incomes drop, and they have a lot of frustration with the healthcare system.

    So "winning" for us is when doctors say, "This is a place where I can be a part of something that is going to put us on a different path, and something that is going to help me to succeed as a physician."

    Are there opportunities for specialist physicians to partner in Arizona Connected Care?

    Rich: A challenge for us is the fact that Arizona Connected Care is primary care-centered, and most of the physicians who come to the hospital every day are specialists.

    Friend: There are some specialists who will collaborate with us, but they may not be members with distributive rights. In other words, they will not be sharing their data for quality purposes to earn a shared savings distribution, but they will be preferred recipients of referrals because their quality and efficiency makes them stand out.

    Based on what you see in the Tucson market, do you think there will be any straight fee-for-service contracts in health care a decade from now?  

    Friend: We entered into a three-year shared savings contract with United Healthcare that started in March 2012, and most of the significant payers in our community are at least engaged in dialogue about alternative payment approaches right now. Participation by a very high percentage of payers is expected in the fairly short term, two to three years at the outside.

    Payers are at different levels of engagement, so we are talking about different types of arrangements with different payers. For instance, you might be able to get patient-centered medical home support under one payer, whereas another payer might prefer something else.

    What motivated Tucson Medical Center to be on the forefront of new payment models?

    Rich: If you continue to think that life is going to be the same, you are probably going to talk yourself out of this kind of risk. I believe that the future is not going to look like the past, and that has been a strong motivator for me to say, "How do we work with physicians differently than we have before? And how do we share in the opportunities and the successes in a different way than we have before?"

    Friend: ACOs may have a way of redefining markets and collaborations within marketplaces. I think it's no longer the time to be waiting for the perfect answers about the future to emerge because the answers are going to look very, very different in different communities.

    It's time to get engaged in the conversation-at a minimum. A lot of people have been sitting on the sidelines, and there may come a time when they wait too long and certain opportunities may evaporate.