FACT SHEET: Blue Shield of California and Accountable Care Organizations (ACOs)
The current health care delivery system creates health plan, hospital and medical group silos that do not efficiently work together to control cost and offer optimal patient care. Blue Shield of California is collaborating with providers to launch accountable care organizations (ACOs), which have the potential to optimize costs and quality by encouraging integrated care. Blue Shield now has ACOs in Sacramento, San Francisco, the Central Valley, Contra Costa County, Orange County and Santa Cruz County.
Dignity Health (formerly Catholic Healthcare West), Blue Shield of California, and Hill Physicians are collaborating on an ACO for CalPERS members. The integrated health care delivery model aligned incentives among the health plan, hospital system, and medical group with the goal of keeping 2010 healthcare premium costs flat.
The program serves more than 40,000 eligible CalPERS members in the greater Sacramento region (Sacramento, Placer, and El Dorado counties).
The program was launched in January 2010 and continues to this day.
Each organization shares clinical and case management information in order to tightly coordinate care. They have agreed to contribute to cost savings and bear the financial risk for any variance from the project’s cost reduction goals. Success depends on taking cost out of the delivery system, not by shifting risk to other partners.
Cost-saving strategies include:
- Manage utilization through coordinated operational infrastructure and clinical processes.
- Personalize care and disease management to eliminate unnecessary utilization and non-compliance with evidence-based care.
- Reduce physician clinical and resource variation through quantitative analysis and targeted interventions.
- Reduce pharmacy costs through directed member outreach, drug purchasing and contracting strategies.
- Facilitate communication of patient medical information through integrated electronic health information.
By sharing data, the three organizations have been able to identify where costs are unduly high and implement solutions to bring those costs down.
Hysterectomies and elective knee surgeries were revealed to be the biggest cost drivers in the region among CalPERS members. Hill Physicians and CHW are collaborating on alternatives, including evidence-based approaches to therapy and treatments that should be pursued before recommending surgery.
Through data analysis, the participants are able to more efficiently identify the causes of preventable readmissions. When patterns of readmissions are discovered, processes are changed to improve case management and discharge planning, plus caregivers are educated on ways to address issues that are causing the readmissions.
There are high costs associated with patients going out-of-network for care. A repatriation program has been initiated that identifies patients who are going out-of-network and bringing them back in.
Final outcomes from calender year 2010 include:
- 15% reduction in inpatient readmissions
- 15% decrease in inpatient days
- 50% decrease in inpatient stays of 20 or more days
- A half-day reduction in average patient length of stay
- $15.5 million saved
An independent third-party analysis by Milliman confirmed that the pilot program likely contributed to a reduction in healthcare resource utilization.
The collaboration delivered $37 million in savings to CalPERS based on the pilot trend versus non-pilot trend. The parties beat the 2011 cost-of-healthcare target by $8 million, which was shared by the parties.
San Francisco ACOs (2)
Providers in ACO #1: California Pacific Medical Center, Brown & Toland Medical Group
Providers in ACO #2: Dignity Health, Hill Physicians and UCSF Medical Center
Members: 26,000 HMO members of the San Francisco Health Service System
Target 2012 combined savings: about $8 million
Central Valley ACO
Providers: AllCare Independent Physician Association, Doctors Medical Center of Modesto (a Tenet Healthcare Corporation hospital)
Members: 8,000 Blue Shield HMO members in Stanislaus County
Target 2012 savings: about $2.3 million
Orange County ACOs (2)
Provider: St. Joseph Health System
Members: 26,200 Blue Shield HMO members in Orange County
Target 2012 savings: about $7.6 million
Provider: Greater Newport Physicians Medical Group, Hoag Memorial Hospital Presbyterian
Members: 10,600 Blue Shield HMO members in Orange County
Target 2012 savings: about $2.5 million
Contra Costa County ACO
Provider: John Muir Health
Members: 16,000 Blue Shield HMO members in Contra Costa County
Target 2012 savings: about $4.7 million
Santa Cruz County ACO
Providers: Dominican Hospital and Physicians Medical Group of Santa Cruz County
Members: 8,000 Blue Shield HMO members in Santa Cruz County