One of our all-time favorite bloggers, Dr. Jaan Sidorov of the Disease Management Care Blog, did a characteristically excellent job of hosting this week’s Health Wonk Review – be sure to check it out. I especially liked the entry from Health Affairs, written by Glenn Melnick and Lois Green, about an ACO-style shared risk arrangement between Blue Shield of CA and provider and employer partners. While ACOs are a new buzz word lately in healthcare circles, this program has been in place for five years already, and the Health Affairs article highlights what we can learn from it. It’s a long post, but it reads quickly and is an excellent discussion about how a shared-risk program actually works.
The ACO-style program in this case is a joint venture with four major players: Blue Shield of CA, a physician group, a hospital, and a large employer with 42,000 employees and their families. Basically, Blue Shield promised the employer that they would keep 2010 premiums at the 2009 level. That meant that they needed to find about $15 million in savings, and they ended up surpassing that goal and reaching $20 million in savings. The extra savings are split among the health insurance carrier, the hospital group, and the physician group (if they had not met their goal, the financial losses would also have been split among them, so everyone had strong incentive to work together and succeed rather than passing the buck).
In addition to beating their target financially, the program has also resulted in happier patients, increased market share for Blue Shield, fewer patient readmissions (likely due to the comprehensive patient discharge program that they created, and better chronic care management), a significant decrease in the number of inpatient days per thousand members, and far lower start-up administration costs than are typically projected for ACOs (although they note that they worked with existing programs and already-established relationships, so they weren’t building an ACO from scratch. But I imagine that would likely be the case with most ACO creation?).
The Health Affairs article is mostly a transcript of a unique four-way interview of representatives from all four of the partner organizations in this shared-risk program. So it gives a particularly insightful look at how these programs actually work, from the perspectives of everyone involved. One of the interviewees noted that although the partners in the shared-risk program had been “working together” for 15 years prior to the start of the program, they hadn’t really been working together. The introduction of the shared-risk cooperative provided an incentive for better communication, better problem solving, more sharing of information, and more true team-work towards a common goal rather than competition and cost-shifting.
I’ve written recently about Anthem Blue Cross Blue Shield’s medical home program in Colorado, and Cigna’s collaboration with Colorado Springs Health Partners. A very common theme in the Health Affairs interview was the problem of affordability and the fact that if we continue on our current path, health insurance is going to become unaffordable for a large chunk of the population. Keeping healthcare costs in check – and thus addressing the affordability issue – is one of the primary goals of both of the Colorado programs. Hopefully they will be as successful as the shared-risk program that Health Affairs highlighted.