The ABCs of the ACA’s ACOs

A frustrating part of an endocrinologist’s job is to watch as the noncompliant diabetes patient deteriorates, with crises leading to frequent emergency room visits, leading to revolving-door hospital stays. By finding innovative interventions for working with 600 of its highest risk patients, New York’s Mount Sinai Hospital has cut down significantly on those visits and hospital stays. Over a two-year period, the Preventable Admissions Care Team (PACT) reduced 30-day readmissions by 43% and emergency room visits by 51%.

The pilot initiative began in response to incentives in the Affordable Care Act that allow providers to earn bonuses for better outcomes, but threaten them with penalties for readmissions. It has grown into an accountable care organization (ACO) called Mount Sinai Care serving more than 22,000 Medicare beneficiaries.

“Our ACO has been in the Medicare Shared Savings Program for 16 months, and we are bending the cost curve,” says Mark Callahan, MD, who heads Mount Sinai Care. “We are below our baseline for cost. We have also submitted our first set of quality metrics, and we achieved 100% on that, which we are very proud of.”

In a case reported in The Wall Street Journal, this team approach improved the status of one diabetes patient so much that she went from 12 emergency room visits and five hospital stays in 2012 to a single hospitalization in 2013. Th at meant a drop in Medicare’s costs from almost $44,000 in 2012 to less than $7,000 for the first eight months of 2013. As a participant in the Medicare Shared Savings Program, Mount Sinai stands to benefit from that decrease.

But beyond the monetary impact is the impact on patient care, and endocrinologists have an important role to play in this major new direction in medicine, according to Ronald Tamler, MD, PhD, head of Mount Sinai’s diabetes center.

ACOs are one of the fastest growing parts of Medicare, with more than 4 million beneficiaries enrolled. Th at’s a tremendous number considering that the program began just three years ago. Medicare pays an ACO a capitated rate determined by the expected costs of treating a certain population. If the ACO can meet quality criteria and keep the cost below an assigned benchmark, it keeps a portion of the savings. And Medicare is not the only payer betting on ACOs to play a significant role in holding down costs while improving care. Private insurance companies are moving into them, too.


As part of its PACT pilot, Mount Sinai created its own predictive algorithm that analyzes electronic health records to automatically calculate the risk of readmission for every patient who gets admitted to the hospital. Th ose who are rated as being at high risk for readmission are targeted for special intervention.

Th hospital invested heavily in the effort, hiring new social workers and care coordinators who begin their intervention while the patient is in the hospital, and follow up intensively after discharge. Thy do what they can to improve compliance, making home visits, making sure patients keep their appointments, solving transportation challenges, helping with benefits issues, and even getting involved with housing problems. “Thse are the things we have found that lead patients to fall through the cracks and have their illnesses not controlled and end up in the emergency room or in the hospital unnecessarily,” Callahan tells Endocrine News. Social workers have been known to meet patients early in the morning and accompany them to ensure they get to crucial appointments like dialysis treatments. One hospitalization averted can cover the cost of several months of a social worker’s salary, Callahan says. And based on the success of its program, Mount Sinai received a federal grant to fund some social workers.

A high-risk diabetes patient might be assigned a nurse practitioner as a primary care provider and a care coordinator, along with a team of caregivers that could include an endocrinologist, a diabetes educator, and an ophthalmologist as well as other specialists to address complications, such as a cardiologist. Th team provides consistency in care and communicates freely to keep each other informed about a patient’s status.

Tamler says that the ACO approach has expanded his role from that of the traditional endocrinologist toward being an “intellectual spearhead” to see that good diabetes treatment is delivered largely outside of the endocrinologist’s offi ce. But he says that this change in the role of endocrinologists is not limited to ACOs: “Th majority of care that patients with diabetes receive does not come directly from an endocrinologist. It comes from a variety of team members, such as primary care doctors and physician extenders, other specialties, ophthalmology, nephrology, cardiology, and so on. Th role of an endocrinologist … has been changing to become partners for creating best practices for these patients that are consistent throughout the organization.”

Tamler notes that diabetes patients in a related initiative, the Patient-Centered Medical Home, have clearly benefited from the approach, with a 1.4% reduction in hemoglobin A1C levels, a three-pound weight loss, and a 40% increase in ophthalmology screening rates. “In the traditional model of care, you wait for a patient to come in,” he says. “In the ACO model of care, you want to ensure that whether a patient actively reaches out to you or not, that patient is receiving good care. So it puts much more of the emphasis on the outreach toward the patient.”

Another difference in his practice is his involvement with computers and information technology: “We help devise systems that will facilitate population management [and] best practices.”

The Affordable Care Act contains incentives for greater adoption of electronic medical records, and Callahan and Tamler agree that the ACO’s achievements would not be possible without tapping the data in these records. The records not only allow providers to crunch the numbers to identify patients who are at risk, but can also be used to spot patterns and problems within an organization, such as where care is not being delivered appropriately.

Pioneer ACOs

While Mount Sinai appears to be making progress, firstyear results have been mixed from a Medicare experiment called the Pioneer ACO program. The program featured 32 large organizations, considered some of the most experienced with capitation programs. Under the rules, providers not only shared savings but could face financial risks for not meeting goals.

All 32 Pioneer ACOs met the program’s quality goals, exceeding industry benchmarks on 15 measures and outperforming managed-care plans on diabetes measures such as blood pressure and cholesterol control. Overall, they held down spending compared with fee-for-service programs, increasing 0.3% instead of 0.8%, and saving Medicare almost $90 million. But most savings came from a few providers. Although 18 of the Pioneer ACOs lowered their costs, only 13 did so enough to reach the level for shared savings. Fourteen actually had higher costs.

Given these results, nine ACOs dropped out of the Pioneer program, with seven of them moving to the less-stringent Medicare Shared Savings Program, where participants do not face the risk of losses. Two dropped out entirely. A spokesperson for one of these, Presbyterian Health Care of Albuquerque, N.M., told media outlets that because his organization works in a low-cost area already, cutting costs as a Medicare ACO did not seem practical.

Private ACOs

Private insurers already have agreements with more than 200 ACOs. In 2009, seven healthcare providers entered into an ACO-like “Alternative Quality Contract” (AQC) with Blue Cross Blue Shield of Massachusetts. The agreement is based on a global budget and quality benchmarks approach, in which providers face financial risks for excessive spending and are rewarded for performance on 64 quality measures.

In a study published last year in Health Aff airs, Harvard Medical School researchers compared results for patients in practices covered by the AQC with those of a control group from providers not participating in the contract. They found that quality of care improved at a lower cost in areas such as chronic care management, adult preventive care, and pediatric care within organizations participating in the AQC compared to control organizations. “Groups in the AQC spent 3.3% less than fee-for-service groups in the second year” of the program, the study said. “Savings were largely achieved through shifting referrals to less expensive providers and settings rather than reductions in utilization.”

Of course, ACOs have their critics, such as Jeff Goldsmith, PhD, president of the consulting group Health Futures. Goldsmith finds the Pioneer ACO results comparable to those at the start of the Physician Group Practice demonstration program Medicare began in 2005. That program also provided bonuses for meeting spending reduction and quality improvements goals, until it was abandoned as unworkable in 2010.

Another question mark for ACOs is their ability to cut or control costs year after year: How much can be squeezed out once efficiencies have been implemented? Saving money by working with the most expensive, highest risk patients is like picking the low-hanging fruit — where do you go next?

Mount Sinai dove in to ACOs to stay ahead of the market, and Callahan says that in the next few years the financial models may change greatly: “But I think it will still involve having physicians and hospitals being at risk for quality and at risk for utilization. Just about every major insurance company has talked with us about some kind of an ACO model for their patients.”

— Seaborg is a freelance writer in Charlottesville, Va., and a regular contributor to Endocrine News.

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