Helping Providers Get Ready for ACOs, Medical Homes: Q&A with Tim O'Rourke of Humana

Humana, a major player in Medicare Advantage, has been helping hospitals prepare for accountable care organizations and primary care physicians prepare for patient-centered medical homes. Here, Tim O'Rourke, vice president of provider engagement at Humana, discusses the Louisville-based insurer's work in this area.

Q: What is your experience with paying for coordinated care?

Tim O'Rourke: ACOs are a new term, but basically we've been using the ACO model for 20 years. This is the arrangement we use for Medicare Advantage and its predecessors in the Medicare program. Humana has 1.8 million beneficiaries enrolled in Medicare Advantage. Of these, 1.2 million are involved in different reward and engagement programs with physicians.

Q: Do you see a lot interest in ACOs and other coordinated-care arrangements from hospitals and physicians?

TO: There is a lot of interest and it comes from basically two groups: highly independent primary care physicians, banding together in groups, and large independent delivery systems. Providers that are already contracting with Humana come to us for guidance. They ask us a lot of questions. They want to know, for example, "Where are our gaps in clinical reengineering?"

Q: How does Humana help these providers?

TO: We can share a lot of information with them that they could not get on their own. The hospital only has data on its portion of the costs, but we can tell them what's happening with the total healthcare dollar.

We tell them the best way to get used to ACOs is in stages. We use a progression model in our Medicare Advantage program. Physicians and hospitals can start with a pay-for-performance type of program. The provider is paid fee-for-service plus a reward for meeting quality measures, improving readmissions and prescribing generic drugs. Then they take on downside risk, moving to something like a capitated model.

Q: How have you been helping providers embrace ACOs?

TO: One example is our ACO project with Norton Healthcare in Louisville, which we developed in partnership with Dartmouth-Brookings. Unlike Medicare Advantage, this is a commercial population. If the ACO reduces spending by a certain amount and meets quality targets, such as making sure patients get antibiotics in a timely way, Norton will share in the cost savings.

Q: How have you been helping primary care physicians with medical homes?

TO: We are very excited about setting up patient-centered medical homes. Here, primary care physicians can work on admissions, patients' use of the ED, prescriptions and referrals to specialists. The medical home model has raised patient satisfaction scores, reduced ED visits and increased use of generic drugs.

The physician in the medical home gets a small payment to cover costs for expenses and then shares savings retrospectively. Not every provider is ready for subsequent stages that involve downside risk. The progression model we use in Medicare Advantage is very useful here.

The medical home is very popular with physicians. The National Committee for Quality Assurance started accrediting primary care practices for the medical home model in 2008. More than 1,000 practices have won NCQA recognition for meeting medical home standards.

Find out more about Humana.

Learn more about private insurers and ACOs:

- 8 Hospitals and Health Systems Recently Announcing ACOs

- Illinois' Advocate Health Care, BCBS Announce Accountable Care Agreement

- Dartmouth-Hitchcock, Anthem Launch Pilot for an ACO


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