Researchers from Leavitt Partners are using a combination of public and proprietary data to report on some early findings about ACOs.
Success experienced by some participants in the CMS Medicare Shared Savings Program (MSSP) is leading to increased interest by other providers in getting involved in value-based care. That’s why the research team at Leavitt Partners used a combination of public and proprietary data to report on some early findings about these accountable care organizations (ACOs).Managed Healthcare Executive (MHE) recently interviewed David Muhlestein, senior director of research and development, and Douglas Hervey, director, to dig a bit deeper into their findings.
MHE: What’s so special about what Memorial Hermann is doing? Its ACO seems to be doing really well.
HerveyDavid Muhlestein: It’s a handful of things, and this is a little bit of speculation. They’re in a market where there’s a lot of opportunity to do better. When you have a higher benchmark market, it’s easier to see savings.
The real difference, in terms of management, is that they have been doing this for a long time. One of the key takeaways is that those who have been in the program a long time seem to be performing better. Memorial Hermann actually started eight years ago going down this pathway-and it was not for the purpose of saving money; they wanted to improve quality. I think they’re just farther down their journey than a lot of the other ACOs.
Douglas Hervey: Memorial Hermann had shared savings of $22.7 million in 2014. That’s essentially the same amount as the combined savings of the other top 10 performers in the program. If Memorial Hermann is doing things that should be instructive to the other entities in terms of better and more effectively managing population health, that would be helpful to learn. In order for the shared savings program to gain wide acceptance, the savings need to be spread out more-more than just within a select few providers.
MHE: What other provider stands out to you in terms of success?Muhlestein: Another ACO that’s got quite a bit of credit is Rio Grande Valley Health Alliance, which is based in McAllen, Texas; that’s a region with a reputation for providing high-cost care. The ACO has a relatively small population, but they were able to save almost $8.7 million in 2014 because this was a very sick population. They had a high rate of mismanaged diabetes, and they were able to use aggressive care coordination to actually provide better care for these populations that were using many more services than they would need to because they were improperly managed.
MHE: Why aren’t more ACOs saving money?
Muhlestein: Transformation takes a long time. And it’s a lot of work. Payment reform is important and it’s a driver of this. But delivery reform is ultimately what we’re looking for.
What we’re seeing is that success is concentrated in a few organizations that have done very well. Whether it’s because of their benchmark or their market, they seem to have figured it out. But taking what has been learned at those organizations and translating it to other organizations takes time and effort. And even if you have the answer, even if you have the roadmap in front of you, it takes a lot of time and effort to make that transformation happen within an organization.
I’ve talked to some of the ACOS that are doing really well, and they’ve been doing this for a long time. For a variety of reasons, these providers moved to shared savings before the Affordable Care Act. When I ask them how long it takes to really change your culture and your approach to more of a value-based mentality, they say it’s usually about a decade. If you’re looking at a decade, you shouldn’t expect all of these providers to be seeing lots of success this early on.