UnitedHealthcare will help fund a new accountable care organization to start this year at Tucson (Ariz.) Medical Center. CMS also plans to fund the ACO, which was designed by the Brookings Institution and the Dartmouth Institute for Health Policy and Clinical Practice. Here Benton Davis, CEO for the Western States for UnitedHealthcare, explains the ACO's origins and how it will function.
1. Planning. "We started planning it before the ACO concept was finalized [in the healthcare law]," Mr. Davis says. It is based on a patient-centered medical home pilot that UnitedHealthcare has been financing for two years in conjunction with major employers such as IBM and Ratheon. Primary care physicians at Tucson Medical Center and in metro Phoenix receive a monthly fee covering the cost of coordinating care for each patient enrolled in the program. Physicians can also collect a performance bonus based on clinical quality factors such as cholesterol, blood pressure and blood-glucose measures for diabetic patients. Results of the pilot are still not complete, but so far, necessary ED visits for the medical-home group are 4.5 percent lower and unnecessary ED visits are 22.5 percent lower than visits for other patients.
2. Brookings-Dartmouth's role. Brookings-Dartmouth's is the "external manager" of the ACO, which means it proposed methods to base reimbursements on outcomes and value. Brookings-Dartmouth has developed spending targets based on three years of experience by each physician group, hospital and other providers in the ACO, as well as the patients they serve. In addition to Tucson Medical Center, Brookings-Dartmouth has partnered with four other health systems to set up ACO pilots: Carilion Clinic in Roanoke, Va., Norton Healthcare in Louisville, Ky., Monarch HealthCare in Orange County, Calif., and Health Partners in Southern California.
3. Physicians' role. Tucson Medical Center's ACO includes about a dozen employed physicians and 50-60 independent physicians on staff. Many of them are primary care physicians who were part of an ongoing patient-centered medical home pilot. However, the ACO will have a different operational structure and will not just be primary care-driven. "Tucson Medical Center is focusing on bringing in high-volume specialists," Mr. Davis says.
4. Payors' role. UnitedHealthcare will attribute commercial members and members of its managed Medicaid program to the ACO, while CMS attributes Medicare fee-for-service patients. Some self-funded employers have shown interest in joining the first round and other payors are expected to join later. "This is anything but the typical relationship between payor and hospital," Mr. Davis says. "It is much more than just a contract. It requires a huge amount of trust." After providers are paid their fee-for-service amount, "any extra payment will only be the result of improved value and improved performance," Mr. Davis says. "If you pay out an incentive, you've got to make sure the healthcare experience is complete. If you are paying for performance, you're going to need to make sure the performance is going to improve."
5. Patients' role. "This is not a new insurance product," Mr. Davis says. That is, patients will stay in their current plans and coverage will be seamless to them. "This is about Tucson Medical Center reengineering care for existing patients," he says. "The benefit design won't change. Access to care won't change."
6. UnitedHealthcare provides data. UnitedHealthcare will provide data and the IT infrastructure to deliver it. "This is a huge role for us," Mr. Davis says. "We have been heavily invested in healthcare IT for many years. We have significant amounts of data." The key value is getting the data to physicians in real time and making sense of it. "We're trying to give information when it is needed," he says, adding: "Providing data for data's sake isn’t enough. The providers have to be willing to look at the data and potentially improve the way we deliver care." Data must be on time because "the provider is going to need to know that there is patient sitting in an ED, admitted to a hospital somewhere, treated my multiple specialists perhaps in an uncoordinated way."
7. Applying measures and goals. "We have jointly agreed on quality measures and savings," Mr. Davis says. Tucson Medical Center and its affiliated physician groups, New Pueblo Medicine and Saguaro Physicians, already use electronic medical records. The EMR system enables providers to analyze patient data and find new ways to improve care and find efficiencies. For example, physicians can run a report and see which patients had a hemoglobin A1c test for diabetics and which heart patients have high cholesterol or high blood pressure in the past month.
8. Next steps. While UnitedHealthcare is ready to start, "there are still some issues to be worked out between Tucson Medical Center and CMS," Mr. Davis says. After start-up, the ACO will tinker with the model. "There won't be one way to do it," he says. "We want to see how different communities evolve." While payors will initially apply a shared savings model, "in the future we may put a capitated model on top of this chassis," he says.
"We hope to change the way healthcare is being delivered and financed," Mr. Davis adds. The new system was developed because "the status quo wasn't working," he says. "This is going to need time to evolve. It is in many respects a sea change for all of us."
Learn more about UnitedHealthcare.
1. Planning. "We started planning it before the ACO concept was finalized [in the healthcare law]," Mr. Davis says. It is based on a patient-centered medical home pilot that UnitedHealthcare has been financing for two years in conjunction with major employers such as IBM and Ratheon. Primary care physicians at Tucson Medical Center and in metro Phoenix receive a monthly fee covering the cost of coordinating care for each patient enrolled in the program. Physicians can also collect a performance bonus based on clinical quality factors such as cholesterol, blood pressure and blood-glucose measures for diabetic patients. Results of the pilot are still not complete, but so far, necessary ED visits for the medical-home group are 4.5 percent lower and unnecessary ED visits are 22.5 percent lower than visits for other patients.
2. Brookings-Dartmouth's role. Brookings-Dartmouth's is the "external manager" of the ACO, which means it proposed methods to base reimbursements on outcomes and value. Brookings-Dartmouth has developed spending targets based on three years of experience by each physician group, hospital and other providers in the ACO, as well as the patients they serve. In addition to Tucson Medical Center, Brookings-Dartmouth has partnered with four other health systems to set up ACO pilots: Carilion Clinic in Roanoke, Va., Norton Healthcare in Louisville, Ky., Monarch HealthCare in Orange County, Calif., and Health Partners in Southern California.
3. Physicians' role. Tucson Medical Center's ACO includes about a dozen employed physicians and 50-60 independent physicians on staff. Many of them are primary care physicians who were part of an ongoing patient-centered medical home pilot. However, the ACO will have a different operational structure and will not just be primary care-driven. "Tucson Medical Center is focusing on bringing in high-volume specialists," Mr. Davis says.
4. Payors' role. UnitedHealthcare will attribute commercial members and members of its managed Medicaid program to the ACO, while CMS attributes Medicare fee-for-service patients. Some self-funded employers have shown interest in joining the first round and other payors are expected to join later. "This is anything but the typical relationship between payor and hospital," Mr. Davis says. "It is much more than just a contract. It requires a huge amount of trust." After providers are paid their fee-for-service amount, "any extra payment will only be the result of improved value and improved performance," Mr. Davis says. "If you pay out an incentive, you've got to make sure the healthcare experience is complete. If you are paying for performance, you're going to need to make sure the performance is going to improve."
5. Patients' role. "This is not a new insurance product," Mr. Davis says. That is, patients will stay in their current plans and coverage will be seamless to them. "This is about Tucson Medical Center reengineering care for existing patients," he says. "The benefit design won't change. Access to care won't change."
6. UnitedHealthcare provides data. UnitedHealthcare will provide data and the IT infrastructure to deliver it. "This is a huge role for us," Mr. Davis says. "We have been heavily invested in healthcare IT for many years. We have significant amounts of data." The key value is getting the data to physicians in real time and making sense of it. "We're trying to give information when it is needed," he says, adding: "Providing data for data's sake isn’t enough. The providers have to be willing to look at the data and potentially improve the way we deliver care." Data must be on time because "the provider is going to need to know that there is patient sitting in an ED, admitted to a hospital somewhere, treated my multiple specialists perhaps in an uncoordinated way."
7. Applying measures and goals. "We have jointly agreed on quality measures and savings," Mr. Davis says. Tucson Medical Center and its affiliated physician groups, New Pueblo Medicine and Saguaro Physicians, already use electronic medical records. The EMR system enables providers to analyze patient data and find new ways to improve care and find efficiencies. For example, physicians can run a report and see which patients had a hemoglobin A1c test for diabetics and which heart patients have high cholesterol or high blood pressure in the past month.
8. Next steps. While UnitedHealthcare is ready to start, "there are still some issues to be worked out between Tucson Medical Center and CMS," Mr. Davis says. After start-up, the ACO will tinker with the model. "There won't be one way to do it," he says. "We want to see how different communities evolve." While payors will initially apply a shared savings model, "in the future we may put a capitated model on top of this chassis," he says.
"We hope to change the way healthcare is being delivered and financed," Mr. Davis adds. The new system was developed because "the status quo wasn't working," he says. "This is going to need time to evolve. It is in many respects a sea change for all of us."
Learn more about UnitedHealthcare.