During a session on how health reform is reverberating at the state level during the National Health Policy Conference held earlier this month, attendees learned how one health system in Ohio is using the accountable care organization model to improve care and costs and expand its horizons.
University Hospitals of Cleveland (UH), an integrated system of hospitals, clinics and physician offices, dipped its toe into the ACO pond over the last two years by building its ACO around its health plan, said Michael Szubski, UH's chief financial officer. UH is a self-insured employer.
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Because it self-insures, the hospital system assumed all the risk for shifting from fee-for-service financing, a fundamental driver of rising costs, to a value-based design. "So we had every incentive to make the change successful," he said.
The results were dramatic. In 2012, the hospital system lowered its overall health plan costs by $10 million to $15 million, allowing the health system to decrease the premiums its charges its employees, Szubski said.
When the hospital system first analyzed its 15,000 employees and 25,000 covered lives, it found that 15 percent of employees generated 80 percent of the costs. Additionally, only 25 percent had primary care providers. Employees used emergency departments too much and not enough of primary care providers, Szubski said.
"When you start digging into this, it's those bases that are what accountable care is all about," he said.
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Among the improvements the ACO design has brought about, employees have altered their utilization patterns, including a jump to 75 percent of employees with a primary care physician, and the hospital system has developed care management programs.
"We're not looking back anymore now." Szubski said. "All I can tell you is that the impact that (creating the ACO) has had for our employees tells me that it is the right thing to do," he said.
Its ACO status has lead UH to other opportunities, too. Last summer, University Hospitals was selected to participate in the Centers for Medicare & Medicaid Services' Medicare Shared Savings Program, which made it eligible to receive a Center for Medicare and Medicaid Innovation (CMMI) grant to join a pediatric care coordination program