Illinois’ largest hospital system and biggest health insurer agreed in late 2010 to form an聽accountable care organization,聽a network in which the聽organizations would cooperate to boost quality and restrain cost increases, sharing in any savings.聽Chicago-based Advocate Health Care gambled聽that its portion would compensate for聽the lost revenue from the resulting empty beds.
Now, with聽six months of operating data in hand, Advocate and partner Blue Cross Blue Shield of Illinois聽claim spending reductions that are greater than聽those for patients聽outside the network.聽The results thus far are聽inconclusive but are encouraging evidence, they suggest,聽that聽ACOs can help聽reduce doctor and hospital visits and聽the use of expensive procedures.
“It’s clear we’re driving down utilization,” said Lois Elia, vice president at AdvocateCare, the ACO run by聽Chicago-based Advocate Health and BCBSIL.聽She spoke at聽a this week sponsored by America’s Health Insurance Plans,聽the health insurance trade association.
For the first six months of 2011, AdvocateCare’s hospital admissions per member fell 10.6 percent compared with 2010 results, and emergency room visits were down 5.4 percent, Elia said.
Due to the poor economy, patients across the country have delayed seeking care, causing an improvement in utilization trends. But聽AdvocateCare’s聽experience聽was聽better than BCBSIL’s overall results for the period, suggesting聽that something else was going on.
“The economy impacted some of this,” Elia said via email. “But聽since our medical cost trend was 6.1 percent below market, it shows our reductions were likely due to prevention of ambulatory-sensitive聽conditions through better care management, physician access and the like.”
Key to the results were聽the聽hiring of 60 “care managers,” many聽embedded in physician practices,聽 to manage high-risk cases and post-acute care, she聽said.
Also聽important are聽a聽relatively narrow provider network, anchored by聽Advocate’s 10 hospitals and about 4,000 physicians, and a payment system that incentivizes Advocate to contain costs but doesn’t put it at risk of catastrophic loss,聽said Dr. H. Scott Sarran, BCBSIL’s chief medical officer.
The 2010 health law provides for , known as shared savings programs. But private聽insurers such as BCBSIL are聽setting up聽ACOs on their own.
With 250,000 PPO members and 125,000 HMO members, “we聽do think we’re the largest commercial ACO in operation now,” said Sarran.
Six months of data do not guarantee聽success of the three-year experiment. “This is good but too early to draw conclustions,”聽Elia said. Still, she added,聽“we get calls weekly from people that want to understand what we’re doing and the value it’s creating and how we’re going about it.”
