“We’ll have data and see who the outliers are, and there are teeth in the agreement,” he says. Quality initiatives will be put in place, and rates will be based on how well the group’s physicians meet those targets. Outliers will be asked to leave.
“If we do go down the road of the ACO, everyone needs to be rowing in the same direction. It won’t make sense to be a high utilizer and gaming the system. We value private practitioners because we are them. We will help you get there and give you a platform to have a voice.”
Health systems generally have most, but not all, pieces of the healthcare continuum. While some have the payer function, making them ideal for ACOs, most do not. Dozens of systems own all the pieces except the payer, however, and that puts them in an enviable position, argues Bertine McKenna, executive vice president and chief operating officer at Bassett Healthcare Network, headquartered in Cooperstown, NY. Bassett has six hospitals, 23 health centers (including 19 school-based health centers), two nursing homes, a durable medical equipment company, and a home care company.
“Our model is well positioned for the ACO,” McKenna says. “We have a fully employed physician staff and advanced practice staff of about 400 practitioners who travel throughout 5,000 square miles to bring care to our patients.”
CEO William Streck, MD, started putting together the pieces of the vertically integrated network about 20 years ago as the only way he thought the system could meet the healthcare needs of its widely dispersed—and largely rural—patient population.
Bassett—largely as a result of this rural population, which has few other choices for healthcare services—felt the need to ensure that whatever a patient needed, the healthcare system could provide. McKenna believes it set the stage not only for better patient care, but toward Bassett becoming an ACO as CMS defines it.
“We started this journey when few others had, but it seemed the right model for patients,” she says. “Financially, we’re all struggling to understand the value-based healthcare reform initiative, but we’ve been prepping for this for five years,” says McKenna, who adds that Bassett has volunteered with commercial insurers to be at risk for patient outcomes “just to test ourselves.”
Another case of a system that is making strides to become more integrated is Robert Wood Johnson University Hospital Hamilton (NJ). As part of the Robert Wood Johnson Health System, Hamilton is one of four hospitals in the state that are clinically integrated—to varying degrees—with the main hospital, 600-staffed-bed Robert Wood Johnson University Hospital in New Brunswick, NJ. The network includes four of New Jersey’s leading acute care hospitals including RWJ New Brunswick, RWJ Rahway, RWJ Hamilton, and Children’s Specialized Hospital.
Anthony “Skip” Cimino, president and CEO of RWJ Hamilton, believes a closer relationship with the flagship hospital, as well as increased partnership with corporate employers, positions the hospital well to serve as either part of an ACO or as an ACO itself as the government and managed care providers push for better outcomes.
Cimino believes the hospital’s Center for Health and Wellness, which includes 86,000 square feet of medically based supervision, is one area that will help. The center also houses its community education program, “where we touch more than 150,000 lives.” RWJ Hamilton also has a significant outpatient presence and an occupational health division.
“As we talk to the companies we serve, we make sure
we offer them discounts for the wellness center and link the corporate experience to that.” RWJ Hamilton, with 1,350 employees, has also taken what Cimino calls a “sober look at our expenses.” It is collaborating as a system to get better pricing on expensive items and has executed a $14 million expense reduction and revenue enhancement program in 2010. It has identified $5 million that senior
leaders believe can be taken out in the future for the hospital, which brings in about $212 million annually in net patient revenue.