Evolution of ACOs in California. Accountable Care Congress Los Angeles November 11, 2014 Jill Yegian, Ph.D.

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1 Evolution of ACOs in California Accountable Care Congress Los Angeles November 11, 2014 Jill Yegian, Ph.D.

2 Integrated Healthcare Association Statewide multi stakeholder leadership group that promotes quality improvement, accountability and affordability of health care in California. Actively convenes all healthcare parties for cross sector collaboration on health care topics; manages regional and statewide programs; and serves as an incubator for pilot programs and projects. Mission: to create breakthrough improvements in health care services for Californians through collaboration among key stakeholders. Copyright 2014 Integrated Healthcare Association. All rights reserved. 2

3 Evolution of California ACOs Areas of focus for investigation: Structure Strategy Payment arrangements Performance Copyright 2014 Integrated Healthcare Association. All rights reserved. 3

4 Project Overview Partnership between IHA and UC Berkeley Participating Physician Organizations AltaMed, Los Angeles Brown and Toland, San Francisco HealthCare Partners, Los Angeles St. Joseph Heritage, Orange Monarch, Orange Funding from the Robert Wood Johnson Foundation, April 2013 March 2015 Part of a cohort of four grantees studying ACOs across the country Copyright 2014 Integrated Healthcare 4 Association. All rights reserved

5 Activities and Timeline Compare available P4P data for ACOs with other medical groups 1 st st round interviews with health plan executives 2 nd round interviews with health plan executives Issue briefs on ACO contracts, hospitals role in ACOs, patient engagement Spring 2013 Summer 2013 Fall 2013 Summer 2014 Fall 2014 Oct Mar st st round interviews with physician organizations 2 nd round interviews with physician organizations Total Expenditures per patient in hospital owned & Physician Owned POs published in JAMA Copyright 2014 Integrated Healthcare Association. All rights reserved. 5

6 ACO Product Offerings Monarch Brown and Toland HealthCare Partners St. Joseph Heritage AltaMed ACO Medicare FFS (Pioneer) (Pioneer) (dropped Pioneer, now MSSP) ACO commercial PPO ACO commercial HMO Managed Medi Cal Medicare Advantage Copyright 2014 Integrated Healthcare Association. All rights reserved 6

7 Case studies: Market context California's long history in managed care Competition from Kaiser Strong interest in ACO arrangements by both POs and health plans in most areas of the state Major expansion of Medicaid population in California Little ACO action in MMC/safety net Launch of California s exchange Potential for local ACO approach (individual choice) Copyright 2014 Integrated Healthcare Association. All rights reserved 7

8 Takeaways Pioneer Experience Selective network for patient attribution more successful than land grab strategy PCP vs. specialist Risk selection is major issue Difficult to obtain inpatient, ED data for care management Lag in data from Medicare Hospital notification varies Post acute care transitions present a challenge SNF utilization difficult to manage Mixed financial results Monarch and B&T continuing Pioneer, HCP shifted to MSSP Copyright 2014 Integrated Healthcare Association. All rights reserved 8

9 Takeaways Commercial Experience Many different variants HMO shifting back toward full risk PPO supplementing with care management fee (for all, or just chronic) Both HMO and PPO have shared savings No savings = no bonus, regardless of quality Targets vary set against market vs. own trend Healthy population harder to find savings (relative to Medicare) Referral management critical to managing cost Lower cost AND higher patient satisfaction due to lower OOP costs (innetwork utilization) Maternity: can t avoid admission, rely on steerage Mixed financial results Copyright 2014 Integrated Healthcare Association. All rights reserved. 9

10 Takeaways Patient Engagement Difficult to engage PPO and Medicare FFS patients (vs. HMO & Medicare Advantage) Patients may not realize they are in an ACO, skeptical Inducements for beneficiaries prohibited Physician led communication with ACO patients trumps planinitiated outreach Plans delegating care management Physician organizations may not be familiar to beneficiary Doctor s office needs to lead, with support from PO and plan Little explicit focus on disparities to date Copyright 2014 Integrated Healthcare Association. All rights reserved 10

11 Surprise Finding: Hospitals Role Hospitals less active than POs & plans on ACOs Varying success among POs in case study on developing hospital partnerships Several hospital systems in California pursuing vertical integration strategy (plan/delivery system) New models emerging based on hospital network Vivity HMO: Anthem s joint venture with 7 hospitals in SoCal Notable exception: Dignity Health Hospitals Active pursuit of ACO strategy over last several years CalPERS ACO: Dignity, Hill Physicians, Blue Shield of CA New initiative announced in October with Hill Physicians, Aetna Copyright 2014 Integrated Healthcare Association. All rights reserved 11

12 Research Team Tom Williams CEO, Integrated Healthcare Association (IHA) (Co Investigator) James Robinson Leonard D. Schaeffer Professor of Health Economics, UC Berkeley School of Public Health, Director, Berkeley Center for Health Technology (Co Investigator) Kim MacPherson MPH Program Director, Health Policy and Management, UCB School of Public Health (Researcher) Kelly Miller Program Analyst, IHA (Project Manager and RA) Jill Yegian Senior VP, Programs and Policy, IHA (Researcher) Contact: Jill Yegian,

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