Insights From the Most Successful Model for ACOs: Q&A With Barbara Walters of the Dartmouth-Hitchcock Clinic on the Medicare Physician Group Practice Demonstration

Dartmouth-Hitchcock Clinic, a 900-physician group practice in New Hampshire, has earned $13 million so far in the Medicare Physician Group Practice Demonstration, the model for accountable care organizations.

Those earnings, which don’t include the last year of the five-year project, were the highest awarded any of the 10 participating group practices. Only four of the practices earned any money at all. Barbara A. Walters, DO, senior medical director of the Dartmouth-Hitchcock Clinic, who headed the demonstration at Dartmouth-Hitchcock, explains how it worked and how it relates to ACOs.

Q: How did the demonstration work at Dartmouth-Hitchcock Clinic?

Barbara Walters: We had to come up with our own ways of delivering care to Medicare patients. We focused on reaching out to patients with chronic illness, improving coordination of care for patients transitioning between care settings and more aggressively monitoring patients between physician visits.

This involved taking a systems approach. We came up with 32 measures focusing on diabetes, congestive heart failure, coronary artery disease, hypertension and cancer screening. We developed registries for chronically ill patients. Imagine an Excel spreadsheet with these patients on it and the indicators for each one, such as the meds they are taking, their current weight, their hemoglobin A1c levels.

Q: Can you give an example of a key aspect of the program?

BW: Nurses were crucial to making this program work. We changed the role of our triage nurses from sitting at the phone to more active outreach. Three days before the appointment, a nurse would call the patient and make sure they had everything they needed. The patient would come in for lab test a few days before the appointment so that the physician would have the test in hand at the time of the appointment.

When patients were hospitalized, a nurse would contact them within 24 hours of discharge, go over discharge instructions and set up an appointment with their primary care physician within three days of discharge. The aim was to catch them before they go to the hospital and, if they are admitted, prevent them from getting readmitted.

Q: How were the extra payments to the practices calculated in the demonstration?

BW: The program measured the risk-adjusted total cost of care for this group of Medicare patients, including hospitalizations and other services. This amount was compared to the same statistic for other patients in the service area. We received payments for any savings below 2 percent of the average cost in the service area. This was a challenge because Medicare payments are comparatively low in our service area.

Q: How were the payments distributed among your physicians?

BW: We distributed the money equally. The way the outcomes were generated, we couldn't break down where the savings came from. We couldn't identify it by location or by physician. I suppose you could measure it that way, but that is not the way we pay our physicians. That is not our culture.

Q: How do these payments compare to what will be awarded to the ACOs?

BW: We won't know until the ACO regulations come out this fall, but we have talked to the people writing the regulations and from what we've heard, payments won’t be as generous. While HHS plans to remove the 2 percent limit and pay for the first dollar of savings, it is changing the target methodology to what would appear to be a lower rate.

Q: What role did hospitals play in your demonstration project?


BW: Our organization has a hospital, Dartmouth-Hitchcock Medical Center, which is a teaching facility affiliated with Dartmouth Medical School, but our largest clinics are in southern New Hampshire, away from the medical center. The hospitals there were not part of the demonstration project, but when our patients were admitted to those hospitals, the Medicare payment for their care was counted in our total cost of care.

Q: How would this new payment arrangement affect hospitals?


BW: Since there is a strong emphasis on keeping the patient out of the hospital, hospitals in markets where there is an overabundance of beds could lose revenue. That is not a problem at Dartmouth Hitchcock Medical Center, but it does appear to be a problem in overbedded cities like Boston. They are going to have to close beds or redeploy them.

Q: Does Dartmouth-Hitchcock Clinic plan to start its own ACO?


BW: We are as committed as we could be without knowing exactly what it is in the regulations yet. The ACO would be run by the practice. We have a lot of the arrangements in place from the demonstration. But we have not had discussions with other providers, such as the hospitals where our physicians admit patients.

Learn about Dartmouth-Hitchcock Clinic.

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