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Thursday, Mar 28, 2024
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Group Is Part of New Approach to Medicare

A new, physician-led Accountable Care Organization formed this month in San Diego, with aims to cut systemic Medicare costs by streamlining patient care.

As part of a voluntary government program to reduce medical costs in anticipation of health care reform, the San Diego Independent Accountable Care Organization will link 29 physicians in private practice to treat about 7,000 Medicare beneficiaries.

The SDIndyACO, as it’s called, joins just two other ACOs in San Diego County. Sharp HealthCare was an early adopter of the concept by participating in a “pioneer ACO” program in late 2011, and has since formed a wide network of nearly 900 physicians — investing about $5 million in its infrastructure. And Tri-City Medical Center in Oceanside formed the Tri-City North Coast Medical ACO Inc. in July 2012 with about 150 doctors.

The Future of Medicare

“An ACO is kind of a look into what Medicare is going to look like in the future,” said Wayne Knight, executive director of health care reform and managed care at Tri-City. “We wanted to get a jump on that, really understand it, and so did our physicians.”

Earlier this month, the government announced 106 new ACOs around the country, bringing the national total to 259 — with 23 in California. But it’s early in the game, said San Diego Independent Accountable Care Organization President Venu Prabaker, and he predicts that more and more ACOs will sprout up around the county and country as more draconian cuts to Medicare come.

On the website of the SDIndyACO, an orange Hawaiian shirt hangs in an empty closet with the words “Future home of something quite cool” emblazoned across the top.

That image is apt. The concept of the ACO, frequently likened to unicorns or leprechauns for its amorphous nature, is now beginning to take shape. Prabaker, a primary care physician in private practice who employs 18 in clinics in La Mesa and El Cajon, said that although it’s early yet to start quantifying any savings, the concept is indeed something quite cool.

Brainchild of Affordable Care Act

Accountable Care Organizations are the brainchild of Affordable Care Act policymakers to save Medicare potentially billions of dollars while improving patient access to care.

The Centers for Medicare & Medicaid Services will evaluate ACOs on 33 criteria, making sure that physicians standardize their screening processes in elderly patients. By improving communication across hospital systems and physician groups, the idea is to reduce redundant testing and hospital readmission rates.

The government is incentivizing hospitals, physician groups and other health care providers to find ways to cut costs and enhance patient care, and will reimburse ACOs by paying back a portion of the savings.

There are two varieties of ACOs — pioneer ACOs such as Sharp and “shared savings” ACOs like Tri-City’s and SDIndyACO. There are only 32 pioneer ACOs in the country, and they are all large hospital systems with established cost-saving infrastructures. The remaining follow the shared savings model, and can be comprised of hospitals, hospital systems, physician groups or a combination.

Shared savings ACOs will split the money saved with Medicare if they are able to decrease projected annual cost increases by at least 2 percent. They will not receive any reimbursement if their savings are below 2 percent.

Pioneer ACOs operate like shared savings ACOs for the first two years, but if they reduce the costs for their patient population by a minimum of 2 percent by Dec. 31, beginning in 2014 they will get paid a set amount per beneficiary per month, said Alison Fleury, senior vice president of business development and strategic planning for Sharp. But if they fail to meet their benchmarks, Sharp could lose money, Fleury said.

“It’s very much an equal risk and equal reward,” Fleury said. “But getting paid upfront will allow us to be even more innovative in the care we provide.”

Each ACO forms its own bylaws and reimbursement structure, Knight said. For instance, if Medicare deems that Tri-City has successfully saved money and improved access to care, the hospital will receive 5 percent of the payback. Primary care physicians would get about 66 percent, hospital physicians about 17 percent, and other ACO professionals would get the remaining 12 percent.

“Our hospital didn’t go into this as a moneymaking venture, but as a way to avoid cost,” Knight said. “The Medicare reimbursement Tri-City will receive will be reinvested in improving the ACO.”

Knight said the Tri-City ACO has set up measures that ensure that discharged patients see their primary care physician within a week. They make sure patients have received their immunizations and are routinely checked for diabetes and hypertension.

“There are business reasons to do it, business reasons that make it somewhat risky, but as an institution, we decided it was a worthwhile endeavor and have been successful so far,” Knight said.

Prabaker’s reasoning behind forming his own ACO — as opposed to joining Sharp’s, for instance, as he’s affiliated with its Grossmont Hospital — is because he said private practitioners don’t want to cede any control over the way they practice medicine to larger hospital groups.

“We’ve been in practice for a long time, and it’s very important for us to maintain our independence,” Prabaker said. “So I reached out to other doctors, counseled them, and said, ‘Either we organize ourselves and get this ball rolling, or someone else is going to control us.’ ”

Teaming up with Encompass Medical Group, a Spring Valley-based network of primary care physicians, Prabaker holds monthly meetings with the physicians in his ACO, educating them about best practices so they can streamline their processes.

“Many more doctors wanted to join our group from the metro area, Chula Vista and National City — but I don’t want to extend myself too much,” Prabaker said. “We’re keeping our ACO small with only 29 doctors for now because I don’t want this to be a failure. I want this to be successful.”

‘Aggressive Preventative Care’

Prabaker explained one avenue that an ACO could be successful: If an elderly diabetic visited his office only sporadically, his blood sugar could easily spin out of control and the likelihood of hospitalization would be extremely high. Hospitalization is expensive, easily costing Medicare $18,000 or more, he said.

On the other hand, through coordinated care — using visiting nurses, telemedicine and more frequent primary care appointments — the diabetic’s blood sugar could be regulated, and the likelihood of an emergency room visit or hospital admission would decrease significantly. Monthly checkups, he said, might cost Medicare $100 per visit — or $1,200 a year. But that’s far less than the cost of even one hospitalization.

“ACOs are about aggressive preventative care,” Prabaker said. “If we can keep just one patient from getting admitted through effective care, we save the system thousands and thousands of dollars.”

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