Reports From the Field

Operational Lessons from a Large Accountable Care Organization

Journal of Clinical Outcomes Management. 2014 October;22(10)

Author(s):

Margaret Costello, David Connolly, Gary L. Gottlieb, MD, MBA

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From Partners HealthCare, Boston, MA.

Abstract

Objective: To describe operational lessons from a large accountable care organization (ACO).
Methods: Description of an approach that includes the creation of a sustainable financing mechanism, new incentive structures, a high risk care management program, integrated mental health services, tools for specialist engagement, a post acute strategy, fostering patient engagement, and new clinical and analytic technologies.
Results: Committed ACOs face challenges in enacting care delivery changes. Key challenges include educating boards and management about requirements for success as an ACO; advocacy for state and federal regulations that support the success of ACOs; and engaging patients as active participants in the changes. Importantly, financial returns (as shared savings) on the investment required for these changes will not be available within short-term contract cycles, so committed organizations will need to plan for the long haul.
Conclusion: A comprehensive approach undertaken within a system that is capable of integrating care across the full continuum of care delivery has the best chance for successfully managing costs and improving care.

After Massachusetts enacted legislation expanding health insurance to nearly all residents in 2006, additional legislation was enacted that focused on health cost containment. The goal of the many new regulations has been to hold the rate of health care cost growth to the rate of general inflation. Consistent with payment policy changes under the Accountable Care Act, Massachusetts regulatory efforts have emphasized putting health care providers at financial risk for some proportion of increases in costs of care. Providers who contract as accountable care organizations (ACOs) typically conduct their usual fee-for-service billing practices, but in addition the providers also agree to an annual total medical expenses (TME) spending target for an assigned population of patients. An annual reconciliation results in either penalties for exceeding targets or shared savings if spending remains below the target. The reconciliation incorporates a small number of commonly used primary care quality measures.

Partners HealthCare, an integrated health care delivery system in Massachusetts that includes 2 large academic medical centers—Massachusetts General Hospital (MGH) and Brigham and Women’s Hospital (BWH)—began deploying new care models designed to reduce the growth in health care costs prior to these policy changes, but the new contracting environment has dramatically accelerated these efforts. Partners HealthCare signed accountable care risk contracts across all major payer categories—commercial, Medicare, and Medicaid—in 2011. Currently, Partners HealthCare has accountability for cost increases for nearly 500,000 lives, making it one of the largest providers of accountable care in the United States [1].

In this paper, we describe some of the initial lessons learned and share some of our concerns for the future success of risk-based contracting. We have organized the paper as we have organized our work—addressing different care services by site of care: primary care, specialty care, non-acute care, patient engagement, and necessary infrastructure. This framework has allowed us to engage the care providers throughout our organization with programs tailored to their specific circumstances. While practical, this framework is nonetheless somewhat artificial because much of our work could be characterized as building bridges between sites of care.