The nation's health care system is badly broken, and fixing it won't be as easy as ABC.
But experts hope a starting point is ACO.
Short for accountable-care organization, the ACO is a model attempting to change the pay-for-service model of health care — where providers are paid for each test and treatment, regardless of effect on patient health — into a coordinated care model where providers work together to improve health and reduce duplicative spending.
NJBIZ spoke to the leaders of three prominent ACOs about their work so far in pioneering this care model in the Garden State.
In Morristown, changing the industry's silo mentality
It won't be clear if the ACO model is delivering cost savings for Morristown-based Atlantic until year's end, but that doesn't mean executives haven't seen an impact.
"We are seeing conversations among doctors about how they practice that we had never really seen before," said Dr. David Shulkin, administrator of the Atlantic ACO.
That's because the ACO can aggregate all patient claims data, from Medicare and the commercial payers, giving physicians access to all the medical care their patients receive.
"Now the doctor can call the patient and say, 'I didn't know that you were in the ER recently, or that you have been getting treatments for heart failure. Would you like to come into the office so we can sit down and make sure your care is really being coordinated and optimized?' " Shulkin said.
For instance, Shulkin said, one physician found out from the claims data that a patient being treated for a rheumatologic condition was getting double the recommended dose.
"This is an example where the primary-care physician was an advocate for the patient," Shulkin said. "The patient gets better care, and of course if you decrease the amount of infusions in half, you will also reduce cost."
That's all part of the goal.
"Health care is so siloed that you pretty much only know about the care that is being given in the silo you work in," Shulkin said. A central goal of the ACO is to change that.
Shulkin's Atlantic is the second-largest ACO in the country, with 1,490 physicians and 100,000 patients, along with six hospitals. Its first full year of operation wrapped up April 1, and once all the Medicare claims data is processed — probably by year end or early 2014 — "we will be able to say whether there actually has been an overall impact on the cost of care," Shulkin said.
But in the meantime, Shulkin, who is also president of Morristown Medical Center and chairman of the New Jersey Council of Teaching Hospitals, sees plenty of signs that Atlantic ACO is changing the practice of medicine in northern New Jersey.
"We have begun to really start focusing on what happens to the patient after they leave the hospital — to make sure they are going into post-acute care facilities when they need to, and going home when they can," Shulkin said. "We think it is the patient's preference to return home, and (home care) is underutilized in our community."
He said health care systems like Atlantic are pioneering ACOs because "the economy is under stress now, because of what the business community and the government are saying are unsustainable (health care) cost increases. We feel it's our responsibility to be out there innovating and learning before we necessarily know exactly which directions this is going to go."
In Jersey City, patients get incentives to follow orders
For the past two years, Dr. Susan Walsh has led a pilot program called Wealth from Health that uses financial incentives to motivate patients to take steps that improve their health while cutting overuse of the health care system.
The 300 members of Wealth from Health are assigned navigators who answer questions and help them navigate the health care system. The navigator awards points to the patient for making good health care choices, and those points can be redeemed for gift cards worth up to $50 a year.
Walsh is a former New Jersey assistant health commissioner who worked on public health issues like encouraging more people to get flu shots. "What I learned is that it's not just doctors and nurses — it is really everyone in the community who will get us toward health," she said.
"I'm telling the patient, 'I know you have to pick your kids up from school, but you also have to pick up your medication at the pharmacy,' " Walsh said.
Patients that get their medication on time can get points that eventually add up to a gift card for Amazon.com or Shop-Rite.
"I'm using human psychology that works for all of us," Walsh said. "You do the right thing because it's the right thing. Now I'm also giving you an incentive to do the right thing, at the right time: to keep your doctor's appointment, to understand your care plan, to take your medication, to get a flu shot or a mammogram."
Wealth from Health is part of the hospital's accountable care network, which has the same aims as other ACOs. Walsh said Wealth from Health has already begun to have an impact by lowering ER use.
Right now, Jersey City Medical Center is supporting the program of navigators and financial incentives, which costs about $1 million a year. In January, the hospital will launch a Medicare shared savings program, in which the hospital shares a portion of the savings that flow to Medicare from a more efficient use of the system.
"We are tying to incent patients to look for the best value" in health care, Walsh said. "They should be looking for efficient care and setting their own goals."
Virtua plugged in to health cost solutions
Virtua, in Voorhees, saw the light early on when it came to electronic medical records, investing $1 million to beef up the IT capability of its ACO.
The result is a system that create alerts "that listen to the data, to see what is happening," as Al Campanella, executive vice president of strategic business growth and analytics, terms it.
For example, if a patient is admitted to the ER with a broken hip, it generates an alert that tells the care coordinator to call the doctor.
If a patient is due for a blood test, an alert will trigger a phone call to the patient. When a patient turns 50, that can generate an alert to send a letter advising the patient to schedule a colonoscopy.
Campanella said VirtuaCare has 80 monitors in patient homes that collect biometric data, such as weight and blood pressure, and transmit it electronically into the IT system; that is being scaled up by another 500 home monitors, he said.
In the not-so-distant past, if the patient didn't call the doctor's office "they were not calling you because they are too busy," Campanella said.
By using IT that delivers patient information directly to care coordinators, "we are creating that infrastructure for continuous care."
With four hospitals in southern New Jersey, Virtua is among the largest health care systems in the state.
Campanella said the ACO launched Jan. 1 with 80 physicians employed by Virtua and their 14,000 Medicare patients; it also includes 16,000 Horizon Blue Cross Blue Shield members and 2,000 Aetna members.
But Campanella said the ACO's impact will extend beyond the Medicare population, to the 150,000 patients of the 80 physicians.
"These patients will be under the same kind of protocols of care," Campanella said. "This is transformational: we want to have one standard of care."
That doesn't come without cost — in addition to its IT expenses, the ACO has spent about half that to staff itself — but "we know this is the right thing to do," he said. "It's really the wave of the future and we're glad to be in it."
And there's light at the end of the tunnel. He predicts in 2015, the shared savings from Medicare and other payers will support the ACO.
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