Organizing System-Wide ACO Programs
Focused efforts to lower cost trends and improve outcomes for a defined population began with MGH’s participation in a Medicare demonstration project in 2006. This successful program assigned specially trained nurse care managers to over 2000 of MGH’s highest cost Medicare beneficiaries [2]. The program was expanded in 2009 and then again in 2012, and now includes the entire Partners system. Building on this success, Partners’ providers evolved a broader set of tactics to include data, measurement and evidence-based methods of improving access, continuity, and care coordination to provide population-based health care [3,4]. To coordinate the system-wide work required by new risk contracting arrangements, Partners created the Division of Population Health Management (PHM). PHM works closely with organizational leadership at member institutions to collaboratively design and execute its system-wide accountable care strategy.
PHM has developed capacity, infrastructure, and expertise to implement and manage a clinical strategy for the entire integrated delivery system. This included some governance changes, new management processes, new investments in information technology and establishing system-wide incentives to promote care delivery innovation and improvement. Most importantly, through an extensive planning process Partners identified a comprehensive set of tactics and a multi-year plan for system-wide adoption of those tactics.
The majority of Partners information infrastructure to date was built internally, which allowed for rapid customization and flexibility, but also created significant interoperability problems. Moving forward, the majority of Partners systems will use a single IT platform. Partners has developed and implemented patient registries and care management decision support tools to help focus provider attention on patients most in need of interventions and to support reporting of quality metrics. In addition, Partners continues to expand a comprehensive data warehouse that incorporates a variety of clinical, administrative, and financial data sources to support advanced analytics for self-monitoring and continuous improvement. This extensive network-wide approach over the past several years has generated a number of lessons regarding successful accountable care organization implementation.
Implementing New Financing and Incentive Structures
Once an ACO is formed, the organization needs to restructure management to create organizational accountability for performance (as noted above), determine how to finance programmatic initiatives required to deliver the performance called for in the contracts, and create incentives for all the different providers within the ACO to drive performance towards the system’s goals. These latter two require the ACO to make specific design choices that include some trade-offs.
Partners chose to fund system-level population health management initiatives through a tax on net patient service revenue from its member providers—both hospitals and physicians. Alternative approaches include either setting aside a yearly allocation that is not proportional to a revenue stream or simply allocating the external risk to different operating units and allowing them to determine their own individual approaches (and investments) to managing the financial risk. By linking financing of PHM programs to clinical revenue (independent of risk contracts), and setting a uniform percentage tax, Partners has signaled that the wealthier parts of the system will contribute more to PHM (on an absolute basis) and more importantly that accountable care is a prioritized long-term investment. Allowing each entity within the organization to “sink or swim” based on its own performance was considered inconsistent with the interdependent nature of care delivery in a well functioning system. In addition, investments in the required infrastructure cannot be dependent on annual contract performance due to the volatility in contracted performance and the time it takes for an organization to get a return on their PHM investment.