CHICAGO – Hospitals and doctors serving tens of thousands of Illinois patients are taking part in an ambitious program under President Barack Obama’s health law that’s designed to save Medicare money and improve patient health.
They’ve formed “accountable care organizations,” or networks of providers who agree to manage the care of at least 5,000 Medicare patients for at least three years. After receiving the federal designation, these networks can share in any savings with the government if they find ways to eliminate repeat tests, keep patients healthy, reduce unneeded hospital visits and otherwise hold down health care costs.
“This isn’t rocket science. This is about getting to know your patients,” said Don Franke of Alexian Brothers Health System, which has agreed to manage the care of 16,000 Medicare patients in its ACO. “It’s about doing what you can do to keep them out of the hospital and avoid duplication of services.”
Alexian Brothers, based in the Chicago suburbs, received data in late June about the Medicare beneficiaries in its care. Medicare, the federal health insurance program for the elderly and disabled, now spends, on average, about $13,000 per patient per year on these Alexian Brothers patients. Alexian Brothers leaders believe they can do a better job of getting those costs closer to a benchmark of $10,000 per patient per year.
The first steps are identifying patients with the costliest and most complicated conditions, then developing customized and coordinated care plans.
But there are obstacles. The 800 physicians who are part of the Alexian Brothers ACO now have 52 different electronic medical record and billing systems. That will make it more difficult to drill down into the patient data, Franke said.
“Some providers aren’t even on a billing system. They just send their paper coding in to a third-party vendor who submits claims to Medicare,” Franke said.
Details in the patient data hold clues to reducing costs, he said. One doctor found his patients, on average, were seeing 14 different doctors.
“If the ACO can help coordinate the patient’s care to narrow that to the critical number who need to be touching the patient, it may help” to make care more efficient, Franke said.
Seven Illinois-based ACOs – located in Champaign, Chicago, Peoria and other cities – are among about 250 operating nationally under the health law. Combined, ACOs are coordinating the care for more than 200,000 Illinois Medicare patients.
The federal government estimates the ACOs could save $940 million over four years by preventing unneeded care and keeping patients healthier. But some health care economists have said ACOs may spur more consolidations and mergers among hospitals. That could drive up costs because bigger hospitals have more clout when setting prices with insurance companies.
Results so far have been mixed.
In Peoria, OSF Healthcare was one of the first designated ACOs, but the network didn’t lower costs in the first year enough to share savings with Medicare. It wasn’t alone. Of the 32 “pioneer” ACOs across the nation, only 13 produced enough savings to reap any rewards.
Among those that got good results, Franciscan Alliance achieved $13.3 million in savings in 2012 and received nearly half of that back. The shared savings will be split among the hospitals and doctors participating in the program. The Indianapolis-based ACO doesn’t serve any Illinois Medicare patients.
“The Affordable Care Act does more than just guarantee coverage. It’s also reducing costs and improving the quality of the care,” said Greg Dill of the Centers for Medicare and Medicaid Services’ regional office in Chicago.
In a report on the program in July, the agency said the spending for Medicare beneficiaries in the Pioneer ACO program grew by 0.3 percent compared to 0.8 percent for similar patients in traditional Medicare.
The health law includes protections for patients to prevent ACOs from becoming harsh gatekeepers focused only on the bottom line: Medicare patients can opt out of the ACO if they don’t want their data to be part of the program. And patients in an ACO can choose doctors and hospitals outside the ACO.
Ideally, patients in an ACO may notice better coordination of their care. They may not be asked to fill out as many medical forms, all asking for the same information. Their providers may communicate more with one another. Nurses dedicated to managing chronic disease may keep in touch to offer help.
Dill said patients who are part of an ACO “should definitely notice the better coordination of care. If they need assistance, they get it, and, as much as possible, it will be seamless for them.”