Quality Over Quantity: Accountable care organizations link physician payments to hospital outcomes

Robert Wood Johnson University Hospital is building an inpatient hospitalist service that will become an integral part of that mission, he says, with its focus on increasing efficiency, reducing the length of hospital stays, appropriate testing and handoffs, and proper communication with other care providers prior to hospital discharges.

ACO Outreach

But any system in which success leads to fewer hospitalizations also needs buy-in from those who stand to lose business. In short, otolaryngologists and other specialists will need financial incentives, too. That reward system, in turn, requires the right formula for setting and regularly measuring quality standards.

Based on initial savings estimates, however, Dr. Tallia isn’t worried about anyone missing out on a slice of the pie. “We’re looking at somewhere between 15 percent and 25 percent cost reductions,” he says, adding that participants should gain sizable rewards. Initially, he says, he hopes to start with 5,000 to 10,000 enrollees and launch demonstration projects targeting patient subsets like Medicare beneficiaries and those insured by large employer groups. Ultimately, he’d love to have half of the state’s insured population.

From its own database models, Virginia’s Carilion Clinic estimates that its doctor group takes care of as many as 60,000 Medicare patients per year, with a strong tilt toward primary care providers. For the past six months, the clinic has been working to identify the geographical scope and specific subset of beneficiaries that would work best for the pilot.

Once it settles on the best combination, Dr. Werner says, the clinic can look at that group’s historical spend rate over the past few years, then agree on a reduction in the rate of growth by, say, 1.5 percent. “If we’re able to have reductions that exceed 1.5 percent, we would have an opportunity to share in those reductions,” he says.

EMRs

Dr. Whatley has difficulty imagining how an organization could pull off a successful ACO without electronic health records, as Carilion now has. Unsurprisingly, many payment reform advocates are pushing for the technology needed for ACO-style startups to flourish.

As Dr. Werner says, “You need to give the group of physicians that are going to be part of an accountable group the necessary infrastructure and tools to be able to provide care together.” ENTtoday