Evolution of ACOs in California Berkeley ACO Workshop May 8, 2015 Jill Yegian, Ph.D

Evolution of ACOs in California

Berkeley ACO WorkshopMay 8, 2015

Jill Yegian, Ph.D.

Project Overview:Evolution of ACOs in California Partnership between IHA and UC Berkeley

Participating Physician Organizations‒AltaMed, Los Angeles‒Brown and Toland, San Francisco‒HealthCare Partners, Los Angeles‒St. Joseph Heritage, Orange‒Monarch, Orange

Funding from the Robert Wood Johnson Foundation, April 2013-March 2015

‒Part of a cohort of four grantees studying ACOs across the country

Copyright © 2015 Integrated Healthcare Association. All rights reserved. 2

3Copyright © 2015 Integrated Healthcare Association. All rights reserved.

Evolution of California ACOs

Areas of focus for investigation:

Structure

Payment arrangements

Strategy

Performance


Activities and Timeline

1st round interviews with

health plan executives

Compare available P4P data for ACOs with other

medical groups

2nd round interviews with health plan

executives

2nd round interviews with physician organizations

“Total Expenditures per patient in hospital owned &

Physician Owned POs” published in JAMA

1st round interviews with physician organizations

Summer 2013

Fall 2014

Fall 2013

Summer 2014

Spring 2013

Oct. 2014

May2015

Issue briefs on ACO contracts, hospitals’ role in ACOs, patient

engagement


ACO Product OfferingsMonarch Brown and

TolandHealthCare Partners

St. JosephHeritage

AltaMed

ACO Medicare FFS (Pioneer) (Pioneer) (dropped Pioneer, now MSSP)

ACO commercial PPO

ACO commercial HMO

Managed Medi-Cal

Medicare Advantage


Case studies: Market context

California's long history in managed care ‒Competition from Kaiser

Strong interest in ACO arrangements by both POs and health plans in most areas of the state

Major expansion of Medicaid population in California‒Little ACO action in MMC/safety net

Launch of California’s exchange ‒Potential for local ACO approach (individual choice)


Takeaways -- Pioneer Experience

Selective network for patient attribution more successful than “land grab” strategy

‒PCP vs. specialist‒Risk selection is major issue

Difficult to obtain inpatient, ED data for care management‒Lag in data from Medicare‒Hospital notification varies

Post-acute care transitions present a challenge‒SNF utilization difficult to manage

Mixed financial results‒Monarch and B&T continuing Pioneer, HCP shifted to MSSP


Takeaways -- Commercial Experience

Many different variants‒HMO – shifting back toward full risk‒PPO – supplementing with care management fee (for all, or just

chronic)Both HMO and PPO have shared savings

‒No savings = no bonus, regardless of quality‒Targets vary – set against market vs. own trend‒Healthy population – harder to find savings (relative to Medicare)

Referral management critical to managing cost‒Lower cost AND higher patient satisfaction due to lower OOP costs (in-

network utilization)‒Maternity: can’t avoid admission, rely on steerage

Mixed financial results


Takeaways -- Patient Engagement

Difficult to engage PPO and Medicare FFS patients (vs. HMO & Medicare Advantage)

‒Patients may not realize they are in an ACO, skeptical‒“Inducements” for beneficiaries prohibited

Physician-led communication with ACO patients trumps plan-initiated outreach

‒Plans delegating care management‒Physician organizations may not be familiar to beneficiary‒Doctor’s office needs to lead, with support from PO and plan

Little explicit focus on disparities to date


Surprise Finding: Hospitals’ Role

Hospitals less active than POs & plans on ACOs‒Varying success among POs in case study on developing hospital

partnerships‒Several hospital systems in California pursuing vertical

integration strategy (plan/delivery system)‒New models emerging based on hospital network▪ Vivity HMO: Anthem’s joint venture with 7 hospitals in SoCal

Notable exception: Dignity Health Hospitals ‒Active pursuit of ACO strategy over last several years ‒CalPERS ACO: Dignity, Hill Physicians, Blue Shield of CA‒New initiative announced in October with Hill Physicians, Aetna


JAMA Paper, October 2014

Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California• Authors Jamie Robinson (UCB), Kelly Miller (IHA)

Findings• Physician organizations (POs) owned by local hospitals are 10%

more expensive than those owned by member physicians• POs owned by multihospital systems are 10% more expensive than

those owned by member physicians


Issue Briefs – May Publication

Four IHA Issue Briefs to be published in the next month 1. Imperatives and Challenges of Physician- Hospital Alignment

(Jamie Robinson)2. Referral Management and Disease Management in California’s

Accountable Care Organizations (Jamie Robinson)3. ACO Contractual Arrangements in California’s Commercial PPO

Market (Tom Williams)4. A Large Community Health Center Adapts to a Changing

Insurance Market (Jill Yegian)

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Research Team

Tom Williams – VP & General Manager, Accountable Care at Stanford Health Care; (during study: CEO, Integrated Healthcare Association) (Co- Investigator)

James Robinson – Leonard D. Schaeffer Professor of Health Economics, UC Berkeley School of Public Health, Director, Berkeley Center for Health Technology (Co-Investigator)

Jill Yegian – Senior VP, Programs, IHA (Co-Investigator) Kim MacPherson – MPH Program Director, Health Policy and

Management, UCB School of Public Health (Researcher) Kelly Miller – Program Manager, IHA (Project Manager and RA)

Copyright © 2015 Integrated Healthcare Association. All rights reserved.

Documents

Evolution of ACOs in California Berkeley ACO Workshop May 8, 2015 Jill Yegian, Ph.D