Five of the most notable health brands in North Texas are forming an accountable care organization to help employers drop their healthcare costs by as much as 15 percent in a five year period. Texas Health Resources, Methodist Health System, UT Southwestern Medical Center, Children’s Health System of Texas, and Cook Children’s Health Care System came together late last month to form Forward Health Partners.
The ACO’s network is among the largest in North Texas. In all, it will include more than 1,300 primary care physicians and over 4,100 specialists as well as 42 hospitals and 72 outpatient facilities. The setup means a physician employed by Methodist could refer a patient to a Texas Health Resources specialist.
“That’s the way the product is designed,” says Jay Beck, co-chair for marketing and communications at THR and Forward Health Partners spokesman. “They will enroll and have a primary care physician that is part of one of those systems. The referral patterns will fall within that realm from a specialty and acute care setting.”
The ACO is registered with the state as a 162.001(b) physician nonprofit organization, which dictates that all its medical policies are developed and instituted by physicians. The board of directors is made up of five practitioners, one from each system. Talks began about 18 months ago between the groups, which led to them agreeing on offering trend guarantees to middle- and large-sized employers with a regional footprint.
Beck says actuarial forecasts show that signing up with Forward Health Partners would save employers between 4 to 5 percent on healthcare costs in the first year, up to 10 percent in the third year, and then about 15 percent in the fifth. Employer premium costs have risen 26 percent in the past five years, the Kaiser Family Foundation found. Now, annual premiums for the average employer-sponsored family health coverage is $16,834. Workers pay about a quarter of that, $4,823.
“What we’re excited about is to deliver a promise,” Beck says. “For employers, especially from a CFO basis, having a certainty aspect of knowing what they can budget for their trend, we think it’s really great.”
Involving these specific institutions was a strategic decision to appeal to employers who may have employees in multiple cities throughout Dallas-Fort Worth, said Dr. Melissa Gerdes, chief medical officer of outpatient services and accountable care organization strategy at Methodist Health System.
THR is based in Arlington and has 25 acute care and short stay hospitals, many of which are in Tarrant County. Methodist Health System has four hospitals, including its flagship in Oak Cliff. UT Southwestern Medical Center has a strong presence in Dallas’ Medical District. So too, with Children’s Health System, which has full service hospitals in the Medical District and in Plano as well as 18 Children’s Health Pediatric Group primary care locations in multiple counties. Cook Children’s serves children in the Fort Worth area.
“We have a lot of commuters, or if the company has multiple satellite offices, the geographic presence of the employer will be fairly varied,” says Gerdes, who is also a board member. “Employers may choose healthcare providers in the neighborhoods where they live, they may choose them based on their proximity to work, they may choose them based on other reasons, perhaps services or reputation. With all those different decision drivers, I think that large network presence becomes important.”
Forward Health Partners launched with Aetna Whole Health as its sole payer, Gerdes said. It hopes to get more signed on in the coming months. Beck says officials have met with brokers and consultants in the area to help get in front of employers. The ACO is hoping to sign on municipalities and public entities, as well.
Education will also be a key factor for participating physicians. Gerdes says they’ll have access to data that illustrates quality metrics for each specialist they may refer patients to. Physicians will also be able to see where the other physicians are located to provide patients with a broader variety of options.
“I think, for us, it was a chance to come together with a community of providers and broaden our networks in an ability to impact patient care in North Texas,” Gerdes says. “We’ll learn synergistically from each other, and it’s also a bigger entity to contract with.”