In terms of infrastructure, there is no silver bullet for a successful accountable care organization, yet there are some general similarities among existing ACOs. For instance, they usually cover a defined region. The National Rural ACO, however, is breaking that mold.
The NRACO became a Medicare Shared Savings Program ACO in 2014 and is comprised of nine hospital members, but they are in three states — Indiana, Michigan and California. Members include the following rural providers: Margaret Mary Community Hospital in Batesville, Ind.; Memorial Hospital in Logansport, Ind.; Alcona Health Centers in Lincoln, Mich.; Mammoth Hospital in Mammoth Lakes, Calif.; McKenzie Health System in Sandusky, Mich.; Northern Inyo Hospital in Bishop, Calif.; Southern Inyo Healthcare District in Lone Pine, Calif.; Ridgecrest (Calif.) Regional Hospital and John C. Fremont Healthcare District in Mariposa, Calif.
This model allows these rural providers, some of which are critical access hospitals with 25 beds or less, to collaborate on how to transition from volume to value-based care. It also gives them the requisite base of 5,000 Medicare beneficiaries, which individual hospitals in the NRACO would not have been able to garner alone, since they are in small downs with small patient bases. Additionally, ACOs have high start-up costs — starting an ACO can cost $2 million in the first 12 months — and few of the NRACO's members could have afforded to go it alone.
The NRACO construct also lends the resources, bandwidth and expertise that individual rural hospitals likely do not have on their own, with the help of partnerships with Stratis Health and Inland Empire Health Information Exchange to enable data exchange and care coordination efforts.
While being successful in the MSSP ACO model is important for the NRACO, it is not the end goal of the organization, says founder Lynn Barr, MPH. "It's really only a means to an end," she says of the ACO model, with the end goal being that the experience gained in an ACO will allow these hospitals to eventually offer insurance products.
Critical access hospitals have faced targeted cuts to reimbursements, and rural facilities have to find new ways to create revenue, Ms. Barr says. The ability to carry an insurance product for their communities could be a large solution to this challenge — and the ACO model provides a stepping stone to that final goal.
"It's the only program out there that we could qualify for, get claims data, start leveraging the data and hopefully [receive] some shared savings payments to cover the costs," Ms. Barr explains.
Additionally, research has shown that commercial insurers charge rural beneficiaries about 20 percent more than their urban counterparts, even though they cost an average of 10.5 percent less. "It's cost-shifting," Ms. Barr says.
By learning in the ACO model to manage risk, these rural providers can prepare to offer local insurance products and "potentially reduce the cost of insurance [for beneficiaries] and make a little revenue," she adds.
Cross-country collaboration
While building local insurance plans could be the end result of the NRACO, right now, member organizations are focusing on making the shift from volume to value. "There really wasn't any option for us to make the transition" without the financial benefit of possible shared savings, says Tim Putnam, DHA, president and CEO of Margaret Mary Health and board chairman of the NRACO. "Working with other hospitals seemed to be the best way."
The NRACO model provides resources and patient volume necessary to become a Medicare ACO, but Dr. Putnam became interested in the NRACO because of the information sharing inherent to the model. "We really liked being able to partner with other hospitals across the country with a similar focus," he says. "We can sit at the table with people from Michigan and California and really hear what they're trying to do to serve the needs of the community and how they think care can be better delivered coming from the value proposition."
To stay connected even though they are geographically disparate, executives attend monthly board meetings, either in person or via conference call. Since the ACO is still fairly new, the organizations share ideas on how to implement care coordination and address the challenges associated with that.
The next step, Dr. Putnam says, is to get front line staff like care coordinators working together to share best practices as well.
Road ahead
Currently, there are nine NRACO members in one network crossing three states. But that isn't the end form for the NRACO as Ms. Barr envisions it. The organization is looking to add more members soon, though to individual networks, preferably within state borders. That way, the network has more leverage with payers in the area. "We want to have a Texas, Montana or California ACO," she says.
Overall, the NRACO model and what it can build for its rural members will boost rural healthcare quality and value. It helps "build the infrastructure to keep rural hospitals independent [and help them] become the health home for their communities," Ms. Barr explains. "I think a lot of rural providers have felt sort of beaten, seeing nothing but cuts. But we see an exciting future and vision for them. [Rural providers] really are beautifully integrated networks. We just need to claim our future."