An accountable care organization anchored by San Francisco-based Dignity Health has saved the California Public Employees' Retirement System $37 million for 2010 and 2011, according to a Los Angeles Times report.
Dignity Health partnered with Blue Shield of California and San Ramon, Calif.-based Hill Physicians Medical Group to coordinate care for 41,000 CalPERS members, beginning in 2010.
Blue Shield said CalPERS saved $37 million for 2010 and 2011 compared with projected healthcare costs without the program. The cost per CalPERS member dropped 1.6 percent to $393 per month in the first year, while the average cost for members outside of the program grew by 10 percent to roughly $436 per month in the same time period.
Blue Shield attributed much of the savings to shorter hospital stays, according to the report. The number of inpatient days and hospital readmissions dropped 15 percent in the first year, and the number of hospital stays longer than 20 days was halved.
The savings did pose risk for Dignity Health facilities, which were taking the largest financial hit of the three ACO participants. Blue Shield agreed to transfer patients who initially sought out-of-network hospitals back to a Dignity facility once they stabilized, and Hill Physicians agreed to send more patients to Dignity facilities — even more than the 70 percent of patients they had referred in the past.
A Dignity official said in the report that the ACO and partnership was structured so people involved in patient care were not informed of executive-level financial discussions.
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Dignity Health partnered with Blue Shield of California and San Ramon, Calif.-based Hill Physicians Medical Group to coordinate care for 41,000 CalPERS members, beginning in 2010.
Blue Shield said CalPERS saved $37 million for 2010 and 2011 compared with projected healthcare costs without the program. The cost per CalPERS member dropped 1.6 percent to $393 per month in the first year, while the average cost for members outside of the program grew by 10 percent to roughly $436 per month in the same time period.
Blue Shield attributed much of the savings to shorter hospital stays, according to the report. The number of inpatient days and hospital readmissions dropped 15 percent in the first year, and the number of hospital stays longer than 20 days was halved.
The savings did pose risk for Dignity Health facilities, which were taking the largest financial hit of the three ACO participants. Blue Shield agreed to transfer patients who initially sought out-of-network hospitals back to a Dignity facility once they stabilized, and Hill Physicians agreed to send more patients to Dignity facilities — even more than the 70 percent of patients they had referred in the past.
A Dignity official said in the report that the ACO and partnership was structured so people involved in patient care were not informed of executive-level financial discussions.
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