Editor’s note: The article that follows originally appeared as a column in the Idaho Statesman’s Business Insider.
Mark Twain once said of newspaper accounts suggesting otherwise, “The report of my death was an exaggeration.”
So, too, those who have seized on recent reports that nearly a third of the pioneer Accountable Care Organizations, or ACOs, have dropped out as portending the failure of accountable care have similarly exaggerated, or at the very least, made their pronouncement extremely prematurely.
First, there’s the matter of perspective. Only nine out of the 32 pioneer ACOs — Medicare ACOs that agreed to take the financial risk for managing the population of Medicare beneficiaries assigned to them — have chosen not to move forward under that model.
Of those nine, seven agreed to switch to the program that St. Luke’s Health System is in: the Medicare Shared Savings Program, where we function as a Medicare ACO but do not accept the financial risk for the care of these patients.
It takes a while to learn how to manage financial risk. St. Luke’s has developed pilot programs to learn how to do this. Since we knew it would take time, we have set a goal of being prepared to do so in 2015.
It also takes time to cut costs. St. Luke’s has made some progress, but we have been clear that the most significant cost savings will not occur until the health of people can be improved and the business model changed to reward physicians and hospitals for investing in health and wellness and in reducing low value/no value services.
Our communities should see the results of our focus on reducing costs through smaller increases in insurance premiums. That has already happened for our employees and others who are signing up with our insurance company partner, SelectHealth. With more time, our expectation is that premiums will remain flat or actually decrease.
It’s also worth pointing out that although not all the pioneer ACOs were able to create cost savings, the growth in costs was slower than the prior year. This is bending the cost curve, one of St. Luke’s areas of focus.
Pioneer ACOs succeeded in decreasing hospital readmission rates, outperformed other managed care populations on hypertension and cholesterol control, and improved diabetes care for patients. The 32 pioneer ACOs improved quality and performed better than fee-for-service Medicare in 15 quality measures that the Centers for Medicare and Medicaid Services reported.
To transform care, health systems need more and better data. Health systems often find it difficult to get the data they need from health plans, and the pioneers had difficulty in getting timely, easily usable data from Medicare. These are among the reasons that St. Luke’s has invested in data analytics capabilities through a partnership with WhiteCloud Analytics in Boise.
There is no single answer to what ails health care. To be successful, health systems will have to implement programs to manage and improve health, standardized processes to improve care, and new business models that support the investment of physician time to care for patients, rewarding value and not just volume of services. I’m proud of St. Luke’s physicians, board and staff members, and community partners for stepping up to meet the challenges.
David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.