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Physicians Hold the Keys: Lessons from the Nation’s Largest Commercial ACO

The Centers for Medicare and Medicaid Services (CMS) announced last week that it selected 27 accountable care organizations (ACOs) to participate in its Shared Savings Program, which rewards organizations for meeting quality benchmarks and reducing costs.  The announcement followed the earlier selection of 32 Pioneer Model ACOs and six Physician Group Practice Transition Demonstration organizations.

Altogether, CMS says more than 1.1 million patients receive care from providers participating in Medicare shared savings initiatives.

Yet the nation’s biggest commercial ACO isn’t on the CMS list.

AdvocateCare, an ACO with 350,000 covered lives and 3,900 participating physicians, is the largest of a growing number of private ACOs across the US.  Launched in late 2010, the ACO is a joint venture between Advocate Health Care, a $4.5 billion IDN based in Chicago, and BCBS of Illinois.

Building on Advocate’s 8-year-old clinical integration program, the ACO has already demonstrated success with reduced hospital admissions and ER visits. And the promised savings are there for all to see. This year, Advocate will distribute more than $90 million in shared savings to its ACO physicians, according to Mark Shields, MD, MBA, senior medical director of Advocate Physician Partners.

Physicians in the driver’s seat 

Attendees at last month’s American Medical Group Association meeting in San Diego got to hear Shields’ key lessons from the ACO.  You can view his presentation here. Shields described the ACO’s foundational technology infrastructure, including the Allscripts EHR used by its 900+ employed physicians. And he talked about the importance of careful governance and transparent incentives.

But what stood out most for many listeners was the key role physicians play in the leadership of the ACO.

You might assume, since Advocate’s hospitals generate the vast majority of revenue for the IDN, that the hospitals would hold all the cards in the ACO as well. Not so, says Shields. In Advocate’s ACO, nearly all key committees are heavily dominated by physicians. ACOs, he said, must do more than pay “lip service” to physician leadership. “It has to be driven by physicians – that is critical to the process.”

The physician focus of the ACO model has led some to suggest physician groups will try to go it alone, forsaking partnerships with their long-time nemesis, hospitals. And, in fact, Shields said Advocate has worked hard to assure physicians they’ll get a fair shake in the ACO. It helps, he said, that independent physicians are attracted by the scale of the ACO and its focus on working as a team to provide superior care for entire populations.

“Our physicians realized they can accomplish things on a much greater scale than just their own panel,” Shields said. “I think this is really the Renaissance for primary care. With our ACO, primary care physicians do what they got into medicine to do – work in teams, optimally manage chronic conditions, and provide easy access to care.”

Still, Advocate has been at this for years. It will be challenging, to say the least, for other health systems with less experience to hand over the reins to physicians.

What do you think?

Have you been invited to participate in an ACO in your region? If so, are you confident that governance and incentives will be equally shared between hospitals and physicians?  Speak up, we’d love to hear what you have to say.

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