3 Key Insights From Plan Providers on ACOs, PHOs and Shared Savings Arrangements

During a panel discussion at the Becker's Hospital Review Annual CEO Strategy Roundtable, three plan providers offered insight into ACOs, PHOs and shared savings arrangements. 

As the pressure to control healthcare costs increases, the industry is beginning to move toward more integrated, coordinated, value-based care from the traditional, more fragmented fee-for-service system.

During a panel discussion at the Becker's Hospital Review Annual CEO Strategy Roundtable on Nov. 14, Scott Sarran, MD, MM, CMO of government programs for Health Care Service Corp.; Paul Stewart, president and CEO of Sky Lakes Medical Center in Klamath Falls, Ore.; and Phillip Kamp, president and CEO of Valence Health, discussed plan provider efforts in the coming of age of accountable care organizations, physician-hospital organizations and shared savings agreements.

1. Shared vision matters more than size when it comes to hospital-payer partnerships.  Health Care Service Corp. — the largest customer-owned health insurance company in the U.S. and the parent of Blue Cross and Blue Shield divisions in various states —doesn't dismiss hospitals as potential shared savings partners on the grounds they might not be able to take on the risk, Dr. Sarran said.

"We're able to put boundaries or bumpers on the amount of risk we transfer in these arrangements," Dr. Sarran said. "We have no interest in promoting further consolidation either vertically or horizontally. We are very conscious about being able to effectively work with hospitals of any size."

It all goes back to both parties sharing the same worldview, especially in terms of the cost of care and making health plan products attractive to a variety of purchasers, he said.

2. Providers need to take on more risk. Mr. Kamp — whose company specializes in helping providers transition to value-based care — said hospitals and health systems must look into risk-based arrangements and contracts going forward.

"The problem we have in the health system right now is the providers are trying to do more because they get paid fee-for-service, and the payers are at risk for the dollars," he said. "From our perspective, we hope to see providers move further into risk. The management of the dollars and the marketplace has to be done that way. We've got to move providers into assuming the risk."

3. Population health is the primary focus. Sky Lakes Medical Center qualifies as a Coordinated Care Organization in Oregon through its one-third ownership of the managed healthcare company Cascade Comprehensive Care, which administers ATRIO Health Plans in Klamath County. Mr. Stewart said his biggest concern about that arrangement isn't financial. The bigger reason Sky Lakes got involved is to develop skills to improve the community's health, he said.

"In our community, it's a relatively unhealthy population," he said. "We're trying to engage people in a bigger vision."

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