qotd: Insurer executive rolls her eyes over hokey ACOs

Orange County Register
updated May 1, 2014
Doctors, hospitals and insurers team up
By Bernard J. Wolfson

In an office building across the street from St. Joseph Hospital in
Orange, midlevel managers from Blue Shield of California gathered around
a conference table last week with representatives of St. Joseph Heritage
Healthcare. The setting was unremarkable, but the conversation that took
place was part of an increasingly common collaboration between a larger
insurer and one of its key medical providers.

Christy Mokrohisky perked up when Nancy England, a senior pharmacist at
Blue Shield of California, proposed a pilot program in which pharmacists
would be parachuted into the clinics and physician offices of St. Joseph
Heritage Healthcare to manage the prescriptions of sick patients for
doctors who are too busy to do it.

For Mokrohisky, who oversees St. Joseph's performance improvement
efforts, the idea spoke directly to one of her driving ambitions: to
keep chronically ill patients out of the hospital and away from the
emergency room.

"We all know that issues around medication are the number one or close
to the number one reason for trips to the ER or admissions to the
hospital," said Mokrohisky, giving voice to the consensus around the table.

The weekly meeting is only one manifestation of the huge upgrade in
communication and information sharing between the two groups that has
resulted from a 2-year-old alliance known, in the techno-jargon of the
industry, as an accountable care organization, or ACO.

The main goal of the ACO is to improve the quality of patient care and
save money through closer attention to patients' needs, monitoring of
their compliance with doctors' orders and avoidance of unnecessary
treatments.

Early signs indicate the Blue Shield-St. Joseph ACO is paying dividends.
In its first year, it produced a sharp reduction in patient admissions,
length of hospital stays, emergency room visits, outpatient surgeries
and readmissions, according to in-house data from the insurance company.
The group saved a total of $11.5 million, some of which the parties
divvied up.

The financial windfall aside, people in both organizations say this kind
of ongoing collaboration between an insurance company and a large
medical group – virtually unheard of a few years ago – has changed the
way they do business with each other.

"It sounds kind of hokey, and sometimes when I say it out loud I have to
roll my eyes at myself, but it has created something I have never seen,"
says Kristen Miranda, who oversees Blue Shield's 15 ACOs statewide. "It
absolutely has changed the way we interact with these providers and the
way they interact with each other. We all now see ourselves as coming
together to look at this population as if we are on the same side
instead of just battling it out at the negotiating table every year."

Blue Shield views the kind of orchestrated care it is offering through
its ACOs as a competitive wedge against Kaiser Permanente, a health care
giant in California that has a built-in advantage because its doctors,
hospitals and insurance are integrated.

Some industry observers say ACOs are little more than traditional HMOs
in new clothing.

(Glenn Melnick, a health economist at USC) worries that the ability of
ACOs to save health care dollars may be time-limited.

"At some point, you are going to reduce inpatient days and other
measures as low as they can possibly go," he says. "Then the question
becomes whether these ACOs will be able to generate additional savings
from other areas that might be more difficult."

http://www.ocregister.com/articles/blue-612097-shield-care.html

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Comment by Don McCanne

So now with ACOs, insurers and providers are "coming together to look at
this population as if we are on the same side instead of just battling
it out at the negotiating table every year." They are sharing a
"financial windfall" by having accomplished "a sharp reduction in
patient admissions, length of hospital stays, emergency room visits,
outpatient surgeries and readmissions, according to in-house data from
the insurance company." The insurers and providers have conspired to
split the gains from not providing care. No wonder the person overseeing
Blue Shield's 15 ACOs has to "roll my eyes" since it seems so "hokey."

No more hokey. Let's have a financing system geared to patients, not to
insurers - a single payer national health program.