Operating an ACO - Part 2 June 23, 2011. Speakers. David Jones – CureIS Healthcare, Inc. (Minneapolis, MN) Michael Kosir – Initiate Consulting (St. Paul, MN). 612.834.4544 email@example.com. 612.247.9728 firstname.lastname@example.org. Presentation Overview. What got us here
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Texas Workers Compensation Research Institute
33% expenditure difference across state…with near-equal outcomes.
Striking the Balance: An Analysis of the Cost and Quality
of Medical Care in the Texas Workers’ Compensation System
50% Medicare expenditure difference between similar health populations of El Paso & McAllen.
A Cost Conundrum: What a Texas Town can teach us about health care
GlobalThe Commonwealth Fund
U.S. = highest cost but last in outcomes.
2007 study of 6 industrialized countries
Spending on Health Care Services
In 2005 dollars
Average Annual Growth
Average annual GDP growth
Source: Congressional Budget Office based on health services and supplies, as defined in CMS national health expenditure accounts.
Fee For Service
Insurers pay for transactions
Controlled reimbursement | some quality
1:1 doctor – patient relationship
Employed physicians serving employees
Patient-centered care controlled by medical professionals
Objectives (3 Part Aim)
1Better Care for Individuals
2Improved Health for Populations
3Lower Growth in Expenditures
Qualified & Quantified!
Data Information Data Information Data Information Data Information Data Information Data
A commitment by leadership to improve value as a top priority + a system of operational accountability to improve performance at the following levels:
If not engaged
Opportunities are endless…
Build it… they may not come
One of the 5 quality domains is Patient/Caregiver Experience. Simple Patient surveys assess the following:
Imagine if 20% of your shared savings
were determined simply by
measuring patient satisfaction.
The Basic Formula
How It Works
Intent: increased quality and increased savings equals increased sharing.
All ACOs will operate under the two sided model
in year 3 of the initial contract period and thereafter.
Minimum savings rate for each one sided ACO based on the number of beneficiaries assigned. MSR calculated as follows:
(weighted 60%. 30%, 10%)
New Way ACO 1-Sided Model
20,000 patients @ $8K average cost/yr (3 yr historic avg.)
Benchmark = $160M
2.5% MSR = $4M
Target Spend = $156M
Performance Year 1 = $140M
Net Savings = $20M
50% of Savings = $10M
FQHC/RHC 2.5% Credit = $0.5M
Total Savings Share = $10.5M
Maximum = 7.5% of benchmark ($12M).
New Way keeps everything.
Sharing the Savings
If You Remember Nothing,
Understanding Regulations of ACOs
July 14, 2011
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