Providence's ACO saved Medicare $137M in 1 year — here's how

Among the nation's 453 ACOs, Providence's Health Connect Partners generated the highest shared savings for Medicare in 2023 with $137 million saved through its senior program.

After accounting for shared savings and losses, 132 ACOs collectively generated nearly $695 million in net savings, according to CMS and the National Association of ACOs. In 2023, Medicare recorded its largest savings to date — $5.2 billion total, with $2.1 billion going to Medicare and $3.1 billion distributed as shared savings.

In 2022, Health Connect Partners also generated the most savings for Medicare compared to other shared savings ACOs, contributing to about $98 million that year. 

Besides providing the largest Medicare savings from an ACO for two consecutive years, Renton, Wash.-based Providence also accomplished a 2% decrease in readmissions in 2023. 

Deepak Sadagopan, CEO of Health Connect Partners and COO of population health at Providence, spoke with Becker's about the ACO's growth since 2014, value based care and the system's payer-provider structure. 

500% growth

Health Connect Partners, a Medicare Shared Savings Program, implemented a payer-agnostic whole person care management model. Mr. Sadagopan said there were two core focuses of this model: An alignment with value based care incentives and a goal to minimize health disparities with preventive health. 

The 51-hospital system has more than 100 value based care arrangements, leading to more than 700 discreet data files on which patients are covered on a VBC arrangement, according to Mr. Sadagopan. 

"That's a crazy amount of complexity, and we have to synthesize that and very quickly get that to our caregivers on our front line," he said. "We've been able to develop the back end cloud-based efficient data environment to synthesize all that information and put that in front of our caregivers, either through our EHR or other analytics systems."

The ACO was the first to develop an HL7 Fast Healthcare Interoperability Resources (FHIR, pronounced "fire") platform that exchanges clinical data between providers and payers. 

Health Connect Partners has been in the Medicare Shared Savings Program for 10 of the 11 years it has existed. In that span, the ACO grew from 40,000 members in 2014 to more than 150,000 in 2024. 

"It's a bit surreal," Mr. Sadagopan said. "From our early days where we were not that great at generating savings for the program, and to now, turning that around and contributing the largest savings for CMS as part of the program has been a great journey for us and evolution of our population health focus."

Population health

To identify and prioritize population health initiatives, Providence employees utilize an internal analytic tool, Community Pathways to Health, to stratify quality measures and social determinants. 

For example, a health equity fellow realized a 10% difference in controlled blood pressure rates between white and Hispanic patient populations. The fellow launched a bilingual, bicultural pilot program that reduced the disparity by more than 8% in four months in Providence's California region, Mr. Sadagopan said. 

Another fellow noticed a longer length of stay average among patients with limited English proficiency, leading to daily rounds for these patients and a 25% reduction in LOS. 

"These are small changes, but over a period of time, they provide a cumulative value to the communities that we serve," he said. "And by integrating all these different components, we're able to create this comprehensive population impact across our system."

Value based care

As payers move toward VBC, "the mainstream delivery system doesn't really work," Mr. Sadagopan said. 

"A key part of what we've been able to do is to help our delivery system really think like a payer would," he added, "and really provide that broad visibility of how the resources available through value based care initiatives can co-exist with core delivery system economics" across several domains like Providence's hospitals, medical group, emergency department and care centers. 

The conventional financial management system of evaluating a hospital's net operating income and net utilization won't work, either. 

Mr. Sadagopan recommends other leaders fully grasp how different populations are financially performing, in terms of total cost of care, and join that information with the healthcare delivery system. It's a framework he refers to as risk pool financial management. 

Imagine fee-for-service and value based care models as two different canoes. To effectively navigate the two canoes, healthcare providers risk going overboard if they place one foot in each canoe.

Linking the FFS canoe with the VBC canoe requires efficiently distributing financial resources covered in one population to provide the best possible care outside the hospital.

"We have to figure out how to put those canoes together so you have more of a stable journey without jumping into the water," Mr. Sadagopan said. 

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