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Best Ideas for ACOs, PHOs and Shared Savings Agreements

May 25, 2012

By Laura Miller

In a session titled, "The 5 Best Ideas for ACOs, PHOs and Shared Savings Agreements," at the Becker's Hospital Review Annual Meeting, CEO of Mission Point Health Partners Jason Dinger, Chief Medical Officer of Blue Cross Blue Shield of Illinois H. Scott Sarran, MD, and CEO of DuPage Medical Group Michael A. Kasper discussed accountable care organizations and other methods of shared savings. The panel was moderated by Scott Becker, JD, of McGuireWoods.

"Strategically, we made the decision that ACOs couldn't be part of someone else's job," said Mr. Dinger. "We decided to go all in and build a new organization to contract with physicians on shared savings programs and build a comprehensive program for our data system. The biggest challenge was reframing how our organization though about ACOs. We had to help hospitals really understand the fixed costs business they are in. In doing that, it allowed us to accelerate the business for physicians."

Dr. Sarran brought the insurer's perspective to the table, discussing the need to find the best intersection between price point and network tracking for commercial groups and individuals. "Historically, most large insurers were trying to get everyone in their network a modest discount and not advantage one provider over another," he said. "That's not going to work for us to reach the price point for what we need. If we stay price- and service-focused, in essence we are going to make it nearly impossible to have networks that are as attractive as they are today. Those who are more attractive are at the highest price point. We have to move away from price-focused to total cost-focused. We know whatever price point we achieve today is going to be lower tomorrow."

At DuPage Medical Group, Mr. Casper and his colleagues are working together to find new and innovative ways to claim a strong community presence. "There is a sense that an own-and-control model will lead to a panacea of good healthcare," Mr. Kasper said. "I think it's a best-in-class strategy. When hospitals acquire physicians, they are buying physicians who are already bringing cases into the hospital. They say hiring the physicians is more efficient, but they already had them. Our group went to three core hospitals and said we want to come together; we think of ACOs as an alignment strategy. We created an alignment with the hospitals and let them be the hospital manager because that's what they do well."

Mr. Kasper believes that when healthcare organizations focus on the patient outcome and experience to add better value, they will be successful. Dr. Sarran added the importance of sustainability; he said the challenging hospitals are those with a high cost structure and no trajectory to move toward a total cost of care system. Mr. Dinger's ACO has effectively brought hospitals and physicians together to realize cost savings without compromising quality.

"We are way ahead of our payor partner's expectations in terms of dollars saved," said Mr. Dinger. "I think we're finding that you've got to start doing the work to understand it. We talked internally about managing our population and we're finding that almost all of the readmissions are for non-clinical reasons — 80 percent are for non-medical reasons."

Mr. Kasper also works on lowering costs with his physicians and partnering hospitals. "When we look at high cost patients, we separate whether it is for this year only or if they are always going to be high cost," he said. "There are 50 percent to 60 percent of people who are high cost every year. Most of the people who are high cost could get better; they have multiple diseases, inadequately diagnosed depression or substance abuse and an imbalance with life/stress and their coping mechanisms and support. We believe strongly that someone needs to get in front of those folks and help them get in front of their lives. We've got to decrease the number of high cost members."