• ACOs: Results from the Front Lines

    Lola Butcher Nov 04, 2014

    Early ACO results are mixed, but that has not diminished the enthusiasm of ACO leaders who are committed to figuring out the formula for success. Here are insider tips from two different ACOs: One headed by a physician practice and another led by a big hospital system.

    Still in its infancy, the accountable care movement has yet to find its legs. It is growing rapidly, experimenting constantly, stumbling frequently—and unsure of exactly how things are going to work out. But the number and range of provider and payer organizations that are joining the movement shows that accountable care intends to make a stand in America’s healthcare history.

    As of May, at least 626 accountable care organizations (ACOs) across the country were responsible for more than 20 million lives. Currently, nearly 6 million Medicare beneficiaries are attributed to an ACO: 5.3 million to organizations in the Medicare Shared Savings Program and 669,000 in Pioneer ACOs. Meanwhile, Medicaid ACOs in three states cover 2.1 million lives, and commercial ACO contracts account for 12.4 million lives (Peterson, M., et al., Growth and Dispersion of Accountable Care Organizations: June 2014 Update).


    The government is the most prolific accountable care sponsor. Only 210 health systems or physician groups have commercial ACO contracts, while 329 organizations are in accountable care contracts for Medicare or Medicaid patients.

    Early results have been mixed. The Centers for Medicare & Medicaid Services recently touted that its ACOs—both the Pioneer and Medicare Shared Savings Program—saved the Medicare Trust Fund $372 million in savings through Dec. 31, 2013. The provider organizations involved earned $445 million in shared savings payments during that time. Moreover, on average, the ACOs have improved on many quality measures. However, 13 of the original 32 ACOs in the Pioneer program have dropped out, some of the Pioneer ACOs have been unable to hit their financial targets, and quality improvement has been uneven.

    While all ACOs share the goal of improving the value of care delivery, the organizations that are forming around the country are structured in different ways. The experiences of two ACOs demonstrate that there are multiple paths to ACO success. Coastal Carolina Quality Care, Inc. was created by a small medical practice, while the huge Banner Health Network is working with nearly 3,000 employed and independent physicians:

    Coastal Carolina: Success by Increasing Access

    Coastal Carolina Quality Care is participating in the Advance Payment/Medicare Shared Savings Program, a government initiative to encourage physician-led ACOs in rural areas with underserved communities. The ACO, based in New Bern, N.C., is owned by Coastal Carolina Health Care, a multispecialty practice that consists of 44 physicians and 20 mid-level practitioners who work in 11 locations across five counties. The practice also has an urgent care center. All Coastal Carolina clinics feed into a single hospital that is unaffiliated with the practice.

    The group chose to participate in the federal ACO program because the physicians who own Coastal Carolina fundamentally believe that care can be improved and costs controlled in a way that rewards high-value providers. “If the government shares that savings with us, it will help us financially,” says Kenneth Wilkins, MD, president of the medical group. “This promises to be a really good thing for everybody concerned—the country, the providers, and the patients.”

    pg12-feature-1-wilkinsMore than 11,000 Medicare patients are attributed to the Coastal Carolina ACO, accounting for about 30 percent of the medical practice’s patient population and nearly 50 percent of its revenue, says CEO Stephen Nuckolls. The ACO is responsible for all Medicare Part A and Part B claims, including post-acute care such as skilled nursing facility utilization, durable medical equipment, and hospice services.

    Putting staff and services in place. The government’s Advance Payment ACO initiative is designed to help relatively small physician practices and rural providers participate in the Medicare Shared Savings Program even though they may not have the capital needed to adopt the ACO model. Through the Advance Payment program, Coastal Carolina ACO received approximately $3 million in advance payment funds over a 27-month period that ended in June. Eventually, the ACO will need to repay the advance payments out of the shared savings that it earns through the program.

    While some ACOs are built around a tight alignment of hospital and outpatient providers, that is not the case for Coastal Carolina; in fact, it has no contract with the local hospital. Rather, its strategy is to limit hospital utilization by keeping patients healthy and increasing access to outpatient care.

    About 85 percent of the ACO’s budget has been used to hire staff: 10 registered nurse (RN) care coordinators, a supervisor for the care coordination team, and a part-time physician who provides clinical leadership to the care coordinators. Each care coordinator is assigned a group of patients. If an assigned patient enters the hospital, the coordinator works with hospital discharge planners to help the patient successfully transition to home or another post-acute care setting. Care coordinators visit patients in their homes, if needed.

    Providing care in the most appropriate setting. Beyond that, Coastal Carolina has made several changes to support the move from fee-for-service incentives to accountable care. For example, to reduce hospital referrals, Coastal Carolina upgraded its urgent care center. Lab tests can now be performed, and urgent care staff can provide intravenous fluids and antibiotic infusions to patients.

    “In a fee-for-service world, when we can’t make a margin on a patient’s lab test, we send those patients to the hospital,” Nuckolls says. “But, as an ACO, it’s very expensive to send patients to the hospital because we get hit with the facility fees and everything else. Plus, if I was a patient, and I could be seen quickly in an outpatient setting, that’s what I would prefer.”

    pg11-feature-1-nukollsThe practice also set up a 24-hour triage line that encourages patients to call a nurse rather than head to the emergency department (ED). The triage line is staffed by RN care coordinators who can access patients’ medical records via iPad or computer so they can respond to patients’ requests—even while working at home. The nurses are also supported by triage software, which provides standardized care recommendations for specific symptoms.

    In addition, Coastal Carolina increased the hours at its urgent care clinic. At every opportunity, the practice reminds patients that they can get next-day appointments as an alternative to seeking ED care. An RN care coordinator from Coastal Carolina is also stationed in the hospital’s ED during busy hours to remind the physician of that option. “We point out to the ED physician that we can offer a next- day appointment in lieu of admission, if that’s what the doctor chooses to recommend to the patient,” Nuckolls says.

    Outside the ACO budget, the physician group hired extra staff to help the primary care teams, freeing up clinicians’ time for patient care and clinical quality improvement activities. This included hiring scribes— generally medical assistants or nurses—who document patient visits in the electronic health record (EHR), allowing physicians to spend more time interacting with patients and less time on administrative work. Nurse practitioners were also hired to help with annual wellness visits, which are important to eliminating gaps in preventive care that keep patients healthy.

    “As we added resources to the primary care teams, the physicians were able to expand their schedules to see a few more patients a day,” Nuckolls says. “And by expanding their schedules, we were able to pay for additional clinical personnel, which made this a self- funding proposition.”

    Upgrading technology. In addition to hiring staff, Coastal Carolina used its Advanced Payment funds to upgrade its EHR system to support population health management. For instance, the ACO is able to sort EHR data to generate lists of patients who are due for preventive care, such as colonoscopies and mammograms. The lists are sent to each practice site, and staff devote time to calling patients to schedule preventive care appointments.

    Nuckolls’ staff can also use the EHR’s advanced reporting capabilities to create reports that document each clinician’s performance on quality metrics. “When you start comparing their performance, the doctors definitely become more engaged,” he says.

    The EHR also has a point-of-care dashboard, which makes it easy for physicians to see how to improve their performance. The dashboard provides a daily list of the patients each clinical team will see, along with pertinent quality measures and prompts, such as a reminder that a diabetic foot exam is overdue.


    In addition to the daily view, clinicians can sort their patient data to see, for example, a list of patients with coronary artery disease who have not been prescribed a daily low-dose aspirin. “Just sitting at my desk now, I can find patients who are not getting the care they should be getting and take steps to make sure that gets changed,” Wilkins says.

    Reducing costs. ED visits and hospital admissions in Coastal Carolina’s ACO population fell by at least 10 percent between 2011 and March 31, 2013, which was the end of the program’s first interim reporting year. Furthermore, costs for Medicare/Medicaid dual-eligible patients declined by 19 percent, or $2,635 per patient, during that same time period. Meanwhile, the percentage of diabetic patients with high blood sugar levels fell from approximately 18 percent to just 8 percent.


    The practice showed savings during the first evaluation period, but not enough to receive a shared-savings check. Nuckolls attributes that to the way Centers for Medicare & Medicaid Services (CMS) benchmarks ACO performance.

    He considers the Coastal Carolina ACO a financial success to date. Another ACO operating in the same market as Coastal Carolina saw its costs increase by 7 percent during the first interim evaluation period, despite efforts to control costs. “I would argue that CMS saved a lot of money because of our participation in this program,” he says. “If we had not done this, I believe our costs would have been much higher.”

    Nuckolls believes Coastal Carolina ACO’s high-touch delivery model is sustainable even now that the advance payments have stopped. “These payments have been adequate for our ACO and could have been lower for a commercial contract covering a healthier population of patients who do not require as much care coordination,” he says. This suggests that payers that offer upfront financial support will be rewarded by cost containment in the long run.

    Medicare also plans to begin paying physicians monthly care coordination fees—$41.92 for each patient with two or more chronic conditions—in January 2015, according to the proposed 2015 Physician Fee Schedule. Nuckolls is hopeful the care coordination payments will help the ACO break even, even if it does not receive shared-savings payments.

    Banner Health: Focus on Inpatient Utilization

    Banner Health Network is an ACO that is governed jointly by its four partners:

    • Banner Health, which includes 13 Arizona hospitals
    • Banner Medical Group, comprised of employed physicians
    • Two independent physicians associations

    Altogether, the three physician groups include nearly 3,000 physicians who contract together with the health system and share risk in value-oriented contracts.

    Aiming for more risk. Banner Health Network participates in the government’s Pioneer ACO program and has risk-based contracts with four Medicare Advantage plans and six commercial health plans. Together, those contracts—which include full capitation, shared savings/losses, and limited risk arrangements—account for about 10 percent of Banner Health’s total business.

    And it is just getting started, says Chuck Lehn, CEO of Banner Health Network. The ACO is preparing for more risk-based contracts with higher levels of risk and reward—and for more experiments with different care delivery methods that can help the ACO succeed in those contracts.

    “We’re not there yet, but we’re pretty bullish on the care delivery capabilities that we are developing,” he says. “We’re trying to drive more of our insurance contracts to include significant financial risk because that allows us to succeed through reducing high-cost utilization.”


    The enthusiasm among Banner leaders is based not on having figured out the complete formula for ACO success, but rather its commitment to keep trying until it does so. “It is important to realize we are in a transformational period and that an open mind will be needed,” says Nishant “Shaun” Anand, MD, medical director. “There will be strategies that lead to great success, and others that simply will not work. It is important to not allow history—how we have always done it— be a limiting factor.”

    In the first year of its Pioneer participation, Banner generated $13 million in shared savings, thanks largely to managing two key metrics: Avoidable admissions fell by 18 percent during the year, while its all-cause, 30-day readmission rate fell from 18 percent to 12.8 percent. Furthermore, average length of stay decreased by 14.4 percent and the use of radiology services by 6.7 percent.


    Intensifying ambulatory care. The network’s first goal is to get patients bonded with a primary care physician (PCP) to reduce urgent care and ED use. Using lists of patients provided by health plans, the ACO calls members who have not had a primary care visit to ask them to establish a relationship with a PCP. For those patients who have not seen their regular PCP in some time, the PCP is expected to proactively schedule an annual visit.

    Banner Health analyzes claims data to identify subsets of patients who might benefit from disease management, case management, home health, or other targeted services. “We have a whole plethora of approaches for helping patients manage their health conditions,” Lehn says. “We call it an air traffic control system—trying to watch and figure out what kind of resources you need to put with what kinds of patients.”

    For very high-risk patients—about 500 patients at any given time—Banner Health uses what it calls intensive ambulatory care. A non-licensed health coach visits these patients at home every day to ensure they are taking medications properly, have scheduled needed medical appointments, and are not deteriorating. Meanwhile, telehealth technology connects the high-risk patients to RNs who track the patients’ vital signs, and allows PCPs to visually connect with the patients every day.

    In addition, Banner places case managers—nurses or social workers—in EDs to identify appropriate community resources that can help patients avoid hospitalizations. “We consider an unplanned hospitalization to be a failure,” Lehn says.

    “Another significant challenge in accountable care is managing patients who are not engaged partners, or are generally non-compliant,” Anand says. “It is definitely possible to support the future health of these individuals, though it may be difficult.”

    Sidebar: Aetna’s Accountable Care Approach

    Different ACOs, Different Needs

    The ACO leaders interviewed agree that two elements—good data systems and physician engagement—are essential for the accountable care model to deliver its promise of better patient outcomes at lower costs. But exactly what makes a data system effective or what gets physicians to embrace a new way of practice differs according to the type of ACO.

    Data quandaries. “A lot of vendors say you must merge clinical data and claims data,” says Nuckolls, CEO of the physician-led ACO in North Carolina. “There may be some benefits of doing that, but we have not seen them.”

    At his 50-provider practice, the EHR system serves as the central database for monitoring patients and physicians, and it drives most performance improvement activities. That said, Coastal Carolina uses claims data to inform some quality initiatives.

    For example, a claims review found that many Coastal Carolina ACO patients who had fractures were not receiving optimal bone health therapy. That is because those fractures were treated by orthopedists, who assumed that PCPs would prescribe the therapy. But many times the PCPs did not know that a fracture had occurred. So the group is beginning to use the claims data to identify the patients who have suffered fractures and is setting up reminders that show up on the point-of-care dashboard when the patient visits his or her PCP.

    By contrast, an enterprise data warehouse that includes claims data is central to Banner’s population health management activities. That information allows Banner to stratify patients into three categories that reflect the intensity of healthcare resources they have used in the recent past. “If you’re in the top 5 percent of utilization, we try to make sure that you’re covered by case management and that you have the right support systems so you get care in the right setting and can avoid hospitalization,” Lehn says.

    Other protocols are in place for the second highest utilizers (i.e., those that fall in the top 5 percent to 20 percent of resource use) and for the 80 percent of patients who use few resources but need preventive care to maintain good health.

    Physician participation. Seeing an unplanned inpatient admission as a “failure”—as opposed to a revenue- generating resource that helps patients recover from illness—is one of many huge changes that physicians are being asked to embrace. Traditionally expected to work independently, they now must collaborate with others to find the best solutions for their patients.

    “The way to succeed as an ACO is also the biggest challenge. That is, to engage the other physicians who are not the leaders,” Wilkins says.

    Although he and his colleagues practice in 11 Coastal Carolina locations, they saw themselves as a single group long before the ACO concept emerged. “We make decisions together. We have one electronic record. Just the whole culture of being one group has been a big thing for us,” he says. “If you had disparate groups using different systems, it would be much more difficult to pull this off.”

    That is Banner Health’s situation. Its 3,000 physicians are spread among three large groups working in dozens of sites. The primary engagement strategies have been providing physicians with data that allow them to improve patient care and creating a pay structure that supports the ACO’s goals.

    “Aligning the economic incentives as best you can is a longer-term, harder thing, but having a plan for that is important,” says Lehn, the Banner Health Network CEO. “It’s not always just an incentive that works. Sometimes it requires a different way of getting paid. If we want physicians to spend more time doing a comprehensive annual exam—which is going to take the equivalent of two or three regular office visits—then you’ve got to finance it appropriately.”

    More Lessons Learned

    Leaders at Coastal Carolina and Banner Health Network share some other challenges they are finding their way around:

    Team and individual incentives help. After Coastal Carolina staff spent several months improving patients’ blood pressure levels, they saw performance start to plateau. So the practice introduced a formal carrot-and-stick incentive program to encourage the use of appropriate interventions and follow up with hypertensive patients.

    Every month, each department creates an incentive compensation pool. The pool is used to provide incentives to departments and individual physician/nurse/scribe teams. The goal is to reward individuals and teams for following agreed-to clinical pathways.

    The top five physician/nurse/scribe teams are recognized and given movie tickets. Departments that perform at average have their pool contributions returned, while departments that perform below average lose money to those that do well. “Doctors are competitive by nature so they want to make sure that their numbers look good,” Nuckolls says.

    Data must be usable. With numbers pouring into its data warehouse, Banner risks becoming “data-rich and information-poor,” Lehn says. Careful analysis is needed to know what data is actionable and when it should be presented.

    “We must be able to tell physicians information about their panels of patients: Who hasn’t had office visits? Who has gaps in care and risk factors that aren’t being addressed?” he says.

    “The importance of getting the data flow right and turning data into information that’s useful for the clinicians—I just couldn’t stress that enough.”

    Printouts are sometimes needed. Just because data is readily available in the computer does not mean busy physicians will use it. When administrators at Coastal Carolina discovered that clinicians were not accessing their performance data on desktop computers, they produced paper reports that allowed physicians to compare their own performance over time and with the performance of their colleagues.

    Similarly, ED physicians—contracted by the hospital, not Coastal Carolina—are often too busy to check a patient’s EHR data, even though they have access to it. That’s why the ACO’s RN care manager, who is embedded in the ED, prints out relevant patient data to give to the ED physicians. “If somebody hands them a med list or another piece of information, it makes their job easier,” Nuckolls says.

    Strategies need to be flexible. Banner originally sought to convert all its primary care practices into patient-centered medical homes that used a team—physician, advanced practice nurse, case manager, social worker, and quality specialist—to deliver care. While that works well for large practices with sophisticated management, small physician offices struggled. “We backed off that in favor of providing more centralized support services,” Lehn says.

    For example, one case manager may be assigned to support five practices, and a quality specialist might cover three sites. “Practices adopt change at different speeds, so we have to balance what we expect to have at the practice and what we need to provide in centralized services,” Lehn says.

    Incremental changes add up. Rather than insisting that all physician practices adopt new protocols in lock step, Banner found that some care delivery changes are best implemented in bite-sized chunks with centralized support. For example, to reduce avoidable readmissions, Banner wants hospitalized patients to see their PCPs within five days of discharge. To ensure this happens, the ACO offers financial assistance to the PCPs.

    “We say to the physicians, ‘We are going to send an email to let you know which of your patients have been hospitalized, and here’s the assessment tool that we want you to complete for each patient,’” Lehn says. “And, if you do that, here’s a payment for that. That is a good way to start to get everybody going, but it takes time.”

    The Way Forward

    At the helm of Banner Health Network, one of the largest ACOs in the country, Lehn does not think the size of an ACO is important to its success. What matters, he says, is a culture of commitment.

    “Some things we have done have worked, some things haven’t, and you have to adapt accordingly,” he says. “But we believe that the current system is not sustainable, and we need to find the path to sustainability. So that’s what motivates us—this is for the long-term, not today.”

    Lola Butcher is a freelance writer and editor based in Missouri and a contributing writer/editor to Leadership.

    Quoted in this article:
    Nishant “Shaun” Anand, MD, is medical director, Banner Health Network, Mesa, Ariz.
    Chuck Lehn is CEO, Banner Health Network, Mesa, Ariz.
    Stephen Nuckolls is CEO, Coastal Carolina Quality Care Inc., New Bern, N.C.
    Kenneth Wilkins, MD, is president, Coastal Carolina Quality Care, Inc., New Bern, N.C.

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