Hospitals, doctors, insurers move to accountable care
As Reported In LEHIGH VALLEY BUSINESS.
By JENNIFER TROXELL WOODWARD
Dr. Mark Wendling of Lehigh Valley Health Network is conscious of the rapid shift toward an Accountable Care Organization market in the health care community.
“It is happening for a multitude of reasons, as a better way of reimbursement with the notion that it creates an affordable cost control while providing quality care,” said Wendling, medical director of the Lehigh Valley Physician Hospital Organization and Valley Preferred for LVHN in Allentown. “Within a year, the hospital will likely become an ACO.
“We already have two commercial ACOs, one with Cigna, started a year and a quarter ago, and one with Aetna, which was implemented six months ago.”
An Accountable Care Organization consists of doctors, specialists, hospitals, health care professionals and insurers who work together to deliver quality, affordable care. ACOs are quickly forming in the medical community as, proponents say, a new way for doctors and hospitals to get reimbursed while keeping patients healthier and out of the hospital.
Clif Gaus, president of the National Association of ACOs in Bradenton, Fla., said there are more than 600 ACOs in the nation.
“It is a form of fair delivery, and it is our best effort at providing coordinated care at lower costs to patients,” Gaus said. “Patients are becoming more informed, and doctors are getting more incentives to provide good, quality care.”
In West Reading, Dr. George A. Jenckes III, CEO and senior medical director, Reading Health Partners, a subsidiary of Reading Health System, said the hospital still may be years away from being an ACO system. The establishment of Reading Health Partners, a clinically integrated system with a network of 675 doctors, is a step in the direction toward an ACO system.
“The marketplace will dictate that we become an ACO, but we are not there yet. It takes millions of dollars in reserve to create an ACO.” Jenckes said. “With our new clinically integrated system, we are just now only reaching out to employers,” contracting with them, looking at their claims data, making a large information technology investment in software and gaining knowledge of how to best care for their employees.
He said that an ACO is complex. There are the Medicare-run ACOs, commercial ACOs that include partnerships with health care insurers and hospital-based ACOs.
An ACO places health care insurance companies and providers on the same team, with the same objective to give patients the best in affordable care and eliminate unnecessary spending. Doctors and hospitals essentially make more money by keeping their patients healthy.
The volume of care is no longer a measure of payment. Instead, providers receive bonuses and incentives for keeping patients at home and out of a hospital bed.
Walt Cherniak, spokesman for Aetna’s Pennsylvania territory, sees an ACO as “the new arrangement in health care, important in its focus on rewarding hospitals for doing better as opposed to doing more.”
Cherniak cited Aetna’s recent ACO agreement with Valley Preferred, a provider of wellness services aligned with LVHN. Starting this past spring, Aetna began offering insurance plans to employers that would give those insured access to Valley Preferred services and a network of ACO physicians.
Aetna provides health benefits to more than 1.3 million Pennsylvanians.
“By forming accountable care relationships with hospital systems, we’re improving quality and making health care more affordable and efficient for our customers in Pennsylvania,” Patrick Young, president of Aetna’s Pennsylvania, West Virginia and Delaware operations, said in a statement.
According to reports, about four million Medicare beneficiaries now are in a Medicare-run ACO, and, combined with the private sector, more than 428 provider groups are part of an ACO. About 14 percent of the U.S. population is being served by an ACO.
ACOs force providers to be accountable for the health of patients, paying them incentives to be part of this insurer-provider team. It avoids tests and procedures that are not essential, and provider and insurer must share information and work toward a united target.
And while patients will be encouraged to use doctors and hospitals in an ACO network, they will not have to pay more if they go outside the network.
Wendling of LVHN said the hospital is getting its feet wet with its commercial ACOs, specifically its arrangements with Cigna and Aetna. It sees advantages to these commercial ACOs as opposed to Medicare-run ACOs.
The commercial kind allows partnerships with the local business community and employers who can tailor health care plans to maximize employee incentives. The Medicare-run ACO does not have that the option to provide for the same incentives.
Wendling said the hospital has all of the necessary parts to becoming an ACO institution with a clinically integrated network, way to share data on patients and the vehicle and team to proactively manage care.
“Being an ACO will sustain growth and provide better care. We are poised well to become one,” he added.
On the other hand, Reading Hospital will wait for more research on reimbursement and for reviews on other ACOs in the nation.
“One size does not fit all,” Jenckes said. “We are not an institution that believes in eating the whole elephant at once.”