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Push to ACOs, PCMHs is coming to health care industry

Push to ACOs, PCMHs is coming to industry

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Horizon Blue Cross Blue Shield of New Jersey, the state's largest health insurer, is in the process of making a transformative move in how it supports the delivery of health care.

In the next two to three years, Horizon hopes to have the majority of its members in Accountable Care Organizations (ACOs) or Patient-Centered Medical Homes (PCMHs), said Joe O'Hara, the director of clinical innovation at Horizon.

This represents a dramatic increase from present, when just 500,000 of Horizon's nearly 3 million non-Medicaid members (or roughly 17 percent) are enrolled in these types of plans.

"By end of year, we will be approaching 700,000 (members)," O'Hara said. "Our goal is that (the majority) of our members will be in these programs in the next two or three years."

Horizon isn't the only insurer with such plans.

Aetna, which has just 135,000 of its 1.1 million New Jersey members in such plans, hopes to increase the total to 215,000 by the end of 2014.

"This, for us, is how we think health care in the future will be organized and delivered," said Michael S. Costa, a senior vice president for health care delivery for Aetna in New Jersey.

"As we look to the future, I think more and more you will see us and the providers innovating together."

The movement to reward performance over payment is everywhere. AmeriHealth New Jersey and UnitedHealthcare are also moving members into these new health care models.

AmeriHealth and Cooper University Health Care have collaborated to develop and offer an expanded suite of co-branded health plans and an accountable care model for New Jersey residents.

And UnitedHealthcare recently announced a partnership with the ACO of Atlantic Health System.

Such partnerships figure to become more and more common.

Horizon fully believes these programs improve the quality and control the cost of health care, O'Hara said. And while the programs evolved out of the Affordable Care Act, he said they have been part of the company's thinking for some time.

O'Hara said Horizon's board decided several years ago to move into new health care delivery models.

"(The board) looked at the marketplace and saw New Jersey was pretty much trailing the nation in most health care indicators, whether it was spending per patient or use of preventive service," he said. "We know change will happen and we want Horizon to be a catalyst for change."

Since first being launched as experimental pilots in 2011, ACOs and PCMHs have evolved into mainstream programs.

Through the PCMH model, patients in primary care practices get care that is coordinated with an eye toward getting medical conditions under control. In ACOs, Horizon partners with groups of hospital systems and physicians who work on keeping patients healthy and out of the hospital.

Horizon also is working with specialists to improve care and control excessive spending in areas such as hip and knee replacement, pregnancy and colonoscopies.

O'Hara said these programs enable the health care system to use patient care data to better coordinate medical care and avoid excessive care and spending.

For physicians who have been in the PCMH program for more than two years, there has been dramatic improvement in quality, with 80 percent exceeding the 80th percentile nationally on quality metrics, O'Hara said.

And there has been progress on the financial front: in 2012, PCMH practices had an aggregate cost of care that was 6 percent less than non-PCMH practices.

It's all because of the system, O'Hara said: "(The ACOs and PCMHs) get a file that shows them all of their patients who are in a hospital," he said.

It turns out that primary care physicians in general were only aware 30 to 40 percent of the time that one of their patients had been hospitalized. That's because the patient was admitted by another doctor or came in through the emergency room.

"By making them aware that their patient is in the hospital, (the physician) now has an opportunity to become involved and work on what happens when the patients come out," O'Hara said.

"The immediate impact is that you can dramatically reduce the number of readmissions after the patient gets out of the hospital," O'Hara said. "It is a simple example of how information can change the physician's approach to working with the patient, and it can have a big impact on outcomes and cost."

E-mail to: beth@njbiz.com

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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