Baylor ACO Will Be the System’s Provider Network in 2013

Baylor Health Care System is launching its accountable care organization by covering its employees in 2013.

The ACO, called Baylor Quality Alliance, officially announced its first contract with the BHCS Employee Benefit Plan Wednesday.

In a letter to Baylor employees, chief executive officer Joel Allison said, “As Baylor employees we have the opportunity to be the first to benefit from Baylor Quality Alliance. Beginning January 2013, Baylor Quality Alliance will become the preferred provider network for our medical plan, and if we choose to use a physician in the BQA, we will experience a savings.

“Baylor Quality Alliance allows us to address several critical issues at once—the rising cost of care and the fragmentation of care. It is designed to ensure that the quality of care remains both high and affordable, while keeping health care expenses from rising to levels that cannot be maintained.  It also provides a valuable new way of making sure that care is truly integrated.”

Baylor Health Care System has 20,000 employees and 12,000 dependents in its self-insured health-benefit plan. BQA President Carl Couch, M.D., said the ACO would be present at each of the company’s 25 “benefits fairs” in October and November. He said participation in the ACO is encouraged, but not mandatory.  Benefit design would contain economic incentives for participation.

Couch said there would be links between BQA and Baylor’s award-winning wellness program called “Thrive.” Nearly three out of four Baylor employees participate in Thrive. Couch said BQA plans to hire at least six registered nurses as health coaches to work with sicker patients. He pointed out that the top 20 percent of Baylor’s workforce accounts for about 80 percent of healthcare spending. He said the coaches would refer patients to Thrive programs, such as weight-loss counseling, with a “seamless interface.”

In an interview last month, Baylor chief operating officer Gary Brock said the system is using in-network incentives for elective surgeries in 2013. If employees have elective procedures done at a Baylor facility, they will have a 20 percent co-payment. If they go outside the system, they will pay 50 percent of the cost. Brock said that would save the system $12 million annually.

Couch said the surgery incentive underscores the need for an ACO. “We have huge, broad networks in Dallas. Those networks have not achieved higher quality and lower cost. We need to create accountable care structures if we are going to achieve Institute of Medicine’s triple aim (improving population health, the care experience and reducing per-capita cost),” he said.

Baylor formed BQA in April 2011 as a limited liability corporation wholly owned by BCHS hospitals. Physicians are “participation members” rather than owners. The organization is governed by a 19-person board of managers that includes 14 physicians, three Baylor executives, a community representative and a system board member.

Physicians pay a $1,500 fee to join the ACO. Participating physicians will agree to follow what Baylor has determined to be best-care practices.

Baylor’s best-practice order sets that will be part of BQA’s quality standards are created by the system’s Best Care Committee. The group acts a sort of clinical legislature to align and drive quality initiatives. The group has more than 100 voting members, including hospital presidents, chief nursing officers, physician leaders and health care improvement directors. The group has established more than 100 best-care protocols that, once established, are spread quickly across the system.

Couch said BQA also establishes its own initiatives to increase quality and lower cost. Three current projects include prevention of unnecessary and avoidable hospital readmissions, use of generic medicines whenever available, and appropriate care and workup on lower back pain patients.

BQA requires its physicians to log onto a members-only website to look at their comparative performance metrics on quality, cost, patient satisfaction and clinical integration. Couch said BQA plans to publish its aggregate performance data and provide “a transparent look at the value BQA contributes to the community. That will be the highest quality at the most reasonable cost.”

Physicians will benefit in a number of ways, according to BQA officials. They say physicians will belong to a clinically integrated organization that shares patient information digitally through a health information exchange for contracts that offer shared savings, bundled payments and other emerging methods of healthcare reimbursement.

The ACO’s ability to track quality data will allow participating physician practices to become more qualified to be designated as a Level 3 patient-centered medical home (PCMH) by the National Committee for Quality Assurance. BQA has the ability to designate practices as Level 1 and Level 2 PCMHs.

Couch said BQA has about 1,000 physicians either credentialed or in the credentialing process. Several hundred more have expressed interest in writing, he said. The vast majority of the 600 physicians in Baylor’s employed-physician group known as HealthTexas Provider Network have joined BQA.

BQA chose not to pursue designation as a Medicare Shared Savings Program ACO. The sticking point was the Center for Medicare and Medicaid Innovation refused to reconsider its insistence on attributing patients based on physician-group tax identification number, where most care is delivered, rather than identification of the patient’s primary physician. Baylor argued that not all physicians in a given practice would participate in an ACO, putting the ACO at risk for patients whose physicians are not participating in the organization.

BQA is ardently pursuing Medicare Advantage and commercial-insurance contracts for shared-savings models and PCMH fees.

Baylor’s new program is one of three local ACOs. North Texas Specialty Physicians and Texas Health Resources were selected for Medicare’s Pioneer ACO program in December. Methodist Health System’s ACO became part of the Medicare Shared Savings Program in July.

Steve Jacob is editor of D Healthcare Daily and author of the new book Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at