THR, Baylor Share ACO Growing Pains

Baylor Quality Alliance (BQA) President Carl Couch acknowledges his accountable care organization (ACO) is pursuing initiatives that are decreasing the health system’s revenue.

Baylor chief executive officer Joel Allison also noted at a Dallas conference earlier this month that the company’s quality efforts “are hurting the bottom line.”

“Why are we doing this?” Couch asked rhetorically. “Because we have to. It’s the only way to create value.”

Couch and Karim Kaissi, a Texas Health Resources (THR) director of business development, recounted the challenges and lessons learned at an Executive Health Network panel discussion in north Dallas Wednesday as the two large health systems develop their ACOs.

BQA was formed in August, with the Baylor Health Care System as its first client. THR and North Texas Specialty Physicians created DFW’s first ACO as one of the first crop of Pioneers in the Centers for Medicare and Medicaid program. It added commercial ACOs with Aetna and Blue Cross and Blue Shield of Texas in quick succession in January.

ACOs have spread rapidly in a little more than one year. As of February, there were 428 ACOs in 49 states.  More than half of Americans live in areas served by ACOs. Physician participation has tripled in one year. Nearly 9 out of 10 health-plan executives said they either had implemented or were planning to implement an ACO in the next 12 to 18 months, according to a recent survey.

Kaissi said the commercial ACO offers more leverage to negotiate. However, he insisted those negotiations are centered around programs rather than prices.

“We are trying to set up win-win situations for both sides,” he said. “Medicare is very restrictive. That (Pioneer) ACO allowed us to learn but there is more risk.”

Couch said today’s accountable care differs sharply from the health maintenance organizations of the 1990s.

“That was managed costs, not managed care. Also, you couldn’t measure quality back then. Now I say we have 50 percent lower mortality than seven years ago in (Baylor) facilities. We can also measure patient satisfaction now. If we can’t improve both at a lower cost, we are going to fail,” he said.

Kaissi said the ACO startups have underscored the importance of physician leadership to champion the effort. He pointed out THR recently created three geographical zones, each led by a clinical and operations executive at the same level.

An underappreciated challenge, Kaissi said, is patient accountability. THR is attempting several strategies to engage patients in their health to improve outcomes, including a patient advisory group. The system also has a 10-year agreement with Nashville-based Healthways to help physicians analyze and address patient health behavior.

Couch said winning the trust of physicians is critical to BQA’s success. He said he sees the ACO organizationally as a triangle, with the Baylor system, Baylor’s employed physicians and independent affiliated physicians as the key players.

“The independent physicians are fiercely independent, and they don’t trust hospitals. We need to win their trust by making promises that we can keep,” he said.

Couch said he believes ACO shared savings will be temporary. He said payers will “offload” risk to the providers, and then onto patients in the form of higher deductibles and benefit design.

“We can’t manage the (healthcare) system the way it is now,” he said.

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

Posted in Hospitals, News.