A Texas-Sized ACO Takes Shape

Margaret Dick Tocknell, for HealthLeaders Media , September 18, 2013

Morrow notes that Memorial Hermann has a "long history in developing patient data, particularly in the clinical arena." It has the population and risk stratification tools in place to calculate co-morbidities to identify the individual patients most likely to need intervention through care management or coordination.

Measuring success of the ACO will probably include the usual suspects such as increased utilization of recommended preventive care and screenings, and reduced hospital readmissions. Improved management of chronic conditions such as COPD, congestive heart failure, and diabetes will also play a role.

Lloyd says the financial arrangement will be based on the total cost of care with underlying clinical and cost benchmarks. The ACO will include the commercial and Medicare Advantage lines of business.

The multi-year contract will run at least three years, which Lloyd says is the time it takes to begin to manage the cost trajectory. Typically the first year of an ACO costs the most because of the amount of diagnoses taking place. Cost reduction begins to appear in the second or third years of an ACO.

Lloyd says the ACO arrangement is a win-win for patients and employers. "Patients like it because it's more focused on managing their health and not just caring for them on an encounter basis like when they are admitted to the hospital."

Employers are becoming more aware of ACOs and their potential to help reduce the cost of employee healthcare benefits. "When they see an accountable care network as part of the benefit design they are selecting it," says Lloyd.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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