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CEO of ACO shares how it saved nearly $12 million in year 1


In 2013, its first year taking part in CMS’ Shared Savings Accountable Care Organization (ACO) Program, Rio Grande Valley Health Providers saved nearly $12 million. Here, the CEO and CMO discusses the keys to success.

In 2013, its first year taking part in CMS’ Shared Savings Accountable Care Organization (ACO) Program, Donna, Texas-based Rio Grande Valley Health Providers, LLC, saved nearly $12 million and followed that up with savings of more than $7.5 million in year two.

Despite being in an area of the country where the incidence of diabetes is as high as 40%, the ACO’s diabetes patients fare better than patients within most other ACOs around the country.

Among the ACO’s diabetes patients, 75% had A1c levels below 8% in 2013 and that number increased to 77% in 2014. In 2013, the mean performance for ACOs on that quality measure was 69%, whereas no comparable data was available in 2014. In reporting years 2013 and 2014, Rio Grande Valley ACO’s patients were also more likely to receive depression, colorectal cancer, and mammogram screenings, when compared to other ACOs around the country.

Managed Healthcare Executive (MHE) recently interviewed Jose F. Pena, MD, chief executive officer and chief medical director of Rio Grande Health Providers, LLC, to find out what has led to the ACO’s success.

MHE: Tell me about the patient population you serve. What are some of the health issues they suffer from?

PenaPena: We’re in South Texas, which has a population that’s about 80% Hispanic. A lot of first- and second-generation Mexican-Americans call this area home. This population has a very high incidence of diabetes, which leads to hypertension, high cholesterol, and other health issues. Driven by genetic factors and diet, at 40% of our population, our area in South Texas has the highest prevalence of diabetes in the country.

The average per-capita salary in our area is about $10,000 per year. Many of these patients don’t speak English in this part of South Texas that’s about 20 minutes from the U.S.-Mexico border.


Next: Why was the ACO route the right one to serve these patients?


MHE: Why was the ACO route the right one to serve these patients?

Pena: It made sense to have primary-care doctors “in control” of patients’ care, rather than having patients jumping from one specialist to another. The ACO gives more power to primary-care doctors by giving them more resources to reach out to the patients they serve and giving them data to identify the highest risk and highest cost patients.

Those are the basic elements that you need, in addition to a dedicated group of leaders and doctors. This was a very high expenditure population-and it wasn’t because the doctors were poor doctors. There was no incentive to provide care in a different way. The problem was we had no data to inform doctors about which patients had high A1c levels. The EHR didn’t help, and we didn’t have a patient registry.

MHE: What have you learned about transforming your organization into an ACO?

Pena: There’s no “magic bullet.” There are several elements that come together to help us improve the care we provide to our patients.

The first thing is the doctor needs to have a critical mass of patients. The program works better when you have a doctor who has 200 or 300 Medicare patients and there’s a care coordinator helping the doctor. What also helps is if there are several private payers involved in value-based programs with similar quality metrics and similar rules and regulations. Down the road, MACRA will help with that.

The ACO program has a greater chance of success in areas such as the inner city or in the South or other areas where you have sicker patients who are overutilizing health services and you can make corrections by applying outpatient care management. Your patients will get better, and you’ll be able to improve quality and save money.

There’s not too much to fix when you have a population where everyone is eating their vegetables and going to the gym.

Next: What else is important to your success?



MHE: What else is important to your success?

Pena: Physician engagement and a good management structure are both important. Success doesn’t happen without leadership. It’s just like any enterprise. You need a good leadership structure that’s led by doctors who lead by example.

Doctors listen more to other doctors than to healthcare executives. In my area of the country, doctors are skeptical of hospital leaders sometimes because they may have competing agendas.

What you need to tell doctors is if their patients get more colonoscopies, mammograms, and pneumonia shots, they’re going to have a healthier population. Doctors need to hear that managing diabetes now is going to reduce the incidence of blindness and open-heart surgeries five years down the road.

Doctors need to hear that this is going to make them better doctors, and that they can receive some economic incentives as well.

MHE: Tell me what physician engagement looks like at your ACO.

Pena: It means that doctors can spend more time with the patients who need them most. Our doctors are supported by a care coordinator, who is generally a very well educated medical assistant or a licensed practical nurse. Care coordinators are essential, because doctors can’t do this alone.

Physicians are also invested in learning about the patient experience at their practice. As a result, we provide pleasant background music in our office and coffee and low-sugar cookies in the waiting area. We also make sure we’re able to accommodate sick patients with same-day appointments. The alternative is those patients may go to the emergency room. Also important is having extended hours during the week and being open on Saturday.


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