A rewarding approach to wellness

Skeptics of accountable care organizations point to the failures of health maintenance organizations of the 1990s and predict doom.

But early signs indicate the ACO model will improve patient care, as promised.

Now it must show it will lower Medicare costs, too — and yield enough savings so that both providers and payers can thrive, while bending the nation’s projected increases in health care spending downward.

That’s the challenge for Carilion Clinic, which in January became a participant in the Medicare Shared Savings Program.

But Carilion has had a separate incentive-based payment model with Aetna since 2011.

And last year, it reached an agreement with Anthem to pay the clinic’s family physicians for best treatment practices that focus on keeping patients, in particular those with chronic diseases, healthy and out of the hospital.

As other ACOs around the country have reported, Carilion has some early data that indicate a payment system that rewards wellness is an important piece in cutting health care spending — by reducing the need for more expensive care.

A win for patients, and for providers and payers, too, if savings are substantial enough.

Using 2011 as a baseline, the Aetna Whole Health ACO showed that the numbers fell for hospital bed days per 1,000 participants, readmissions, avoidable visits to the emergency room and orders for high-tech imaging.

There’s a rub, though. “As we reduce admissions and E.R. visits, we reduce top-line revenue,” Carilion Vice President for Financial Services Donna Littlepage explained last week during an interview with executives guiding the clinic’s transformation. “It makes it difficult to sustain services.”

Carilion’s Doctors Connected ACO for Medicare beneficiaries who want to participate — it is strictly voluntary — is set up to coordinate care among Carilion family practices that have been certified as Patient Centered Medical Homes, the clinic’s specialists and its hospitals.

The goal is to make patient care more seamless by sharing electronic medical records within the system, and eventually involving partners outside of it.

The strategy is to focus on disease prevention and careful disease management, and when patients do need hospitalization, to keep track of them after discharge to make sure they keep follow-up appointments and fill prescriptions.

“Part of that is engaging some community physicians who are not employed by us, but use our hospital,” Dr. Thomas Denberg, executive vice president for regional operations, elaborated.

“The desire is to decrease fragmentation of care — make the patient experience more seamless. Look beyond the four walls of the hospital.”

“That’s why we focus on patients after discharge,” Littlepage said. “We’re focusing on potential gaps.”

Anyone who crossed swords with payers in the 1990s, when managed care was to be the way to slow spiraling health costs, likely remembers the moment in the quirky 1997 romantic comedy “As Good As It Gets” when Helen Hunt’s struggling waitress is refused help for her asthmatic son because of the “[expletive] H.M.O. [expletive] pieces of [expletive]!”

ACO critics say the new model won’t work any better because this kind of coordinated care is so labor intensive.

But ACOs differ from HMOs in some crucial ways.

“What we can do with data is different,” Littlepage said. “Then, you could only measure costs. Now, the metrics are about quality of care.

“Then, we couldn’t have a conversation about patient outcomes. Today, there’s more data to keep everybody focused on outcome. Insurers are more willing to share data to improve patient outcome.”

The claims data plus EPIC, Carilion’s electronic medical records system, give doctors a more complete picture when seeing a patient.

Kenneth Davis, president of Mount Sinai Hospital in New York — an ACO that has cut emergency room visits by high-risk patients by 54 percent — told Bloomberg News that earlier coordinated-care programs often failed because insurance companies called the shots.

“There was no sense that decisions were being made in the patient’s best interest rather than in the interest of saving money,” he said.

Insurers bore 100 percent of the financial responsibility, so the focus was on controlling utilization.

ACOs are provider-driven, and focus on prevention and disease management. Payers and providers share the risk — and the benefit of any savings realized when healthier patients cost insurers less than projected.

Carilion has not yet realized any savings, but early metrics are hopeful on the healthier-patients side of the equation. A 70,000-patient study in 20 of its medical homes from 2009 to 2012 shows improved clinical performance.

And a two-year study of diabetes patients showed better outcomes on every measure for those who received coordinated care than for those who got the usual care.

Carilion also is talking to insurers about their willingness to pay for services not now covered — patient phone consultations with nurse care coordinators, for example. They’re a less expensive, but more convenient, way to manage chronic conditions than repeated office visits.

Patients and taxpayers have every reason to hope for success.

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