2 Playbooks for ACOs to Improve Cost Savings

Although all of Medicare's original 32 Pioneer Accountable Care Organizations improved on their quality metrics, just 13 achieved enough savings to share in them with Medicare. While the quality gains are admirable, there is clearly room for improvement when it comes to cutting healthcare costs through ACOs — and there are several ways to achieve those savings, according to Michael Nugent, managing director in Navigant's Healthcare practice and leader of the Payment Transformation team.


Here, Mr. Nugent shares two areas that can play a major role in ACOs' financial performance and provides step-by-step guides for hospitals on how to drive improvement in savings.  

Post-acute care

Post-acute care costs can be challenging to control for many Medicare ACOs, since most organizations participating in accountable care contracts are focused on primary, acute care. Traditionally, acute-care providers were not responsible for patients' outcomes after they left the acute-care setting. Under the ACO model, providers now need to consider the total cost of care and readmissions, both of which are impacted greatly by post-acute care. Post-acute care spend is of particular importance for Medicare ACOs, since their patients are generally older and therefore much more likely to utilize post-acute care than the patients under a commercial ACO, according to Mr. Nugent. The following is a guide for ACOs to optimize their post-acute care opportunities.

Use data. As part of the Medicare ACO program, CMS provides organizations with data to help with care coordination. Mr. Nugent recommends hospitals and health systems analyze that Medicare data to determine the total spend by post-acute care provider, and determine who gets the most spend.
Meet with post-acute care providers. After determining the spend by post-acute care provider, Mr. Nugent recommends speaking with the providers about how they care for the ACO's patients and "how to do it better" collaboratively.
Reexamine physicians' referral habits. ACOs should also use the analytics to point out any over-, under- or misuse of post-acute care services to the involved physicians. "Adherence to post-acute clinical protocols is important to managing readmissions and reducing avoidable costs," Mr. Nugent explains.

Avoidable emergency room visits

ER room visits usually cost more than if a patient visits another care site, like a physician office or even urgent care. Mr. Nugent says sites of care that are clinically appropriate and less costly represent a huge opportunity for hospitals and health systems to incur savings in the ACO. Here, he provides a playbook for ACOs looking to capitalize on the cost savings associated with reduced rates of avoidable ER visits:

Stratify patients. Mr. Nugent recommends using the claims data provided by payers to look at a patient's experiences, such as when they use physician offices and hospital services, and stratify them by diagnosis. "Figure out why they're going into the hospital," he says. "Look at patients who are frequent flyers in the ER."
Create care plans. Once the ER frequent-flyer patients are identified, ACOs should use a care provider — any one from a nurse practitioner or physician assistant to a primary care physician — to create personalized care plans for those individual patients that designates appropriate care settings for ailments. The care plans serve as a game plan for the frequent-flyer patients — they will know where the appropriate site of care is for various issues instead of uniformly visiting the ER.
Don't lose touch with the frequent flyers. Beyond personalized care plans, providers involved in these patients' care must be in constant contact. "There needs to be the right level of health information exchanged between everyone who touches the patient," Mr. Nugent says. Specific areas of focus include things like prescriptions and laboratory results.

Controlling post-acute care spend and reducing the number of avoidable ER visits can make a major impact on any ACO's bottom line and help hospitals and health systems share in savings with their ACO payer partners in the coming performance years.

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