ACO meets Triple Aim and save $millions

Peter A Gross, Chair, Board of Managers, HackensackAlliance ACO

Accountable Care Organizations (ACOs) are the new path for healthcare reform in the USA. Medicare’s Shared Saving Program (MSSP) promotes it. The MSSP’s 33quality performance measures and emphasis on care coordination meet the Triple Aim goals. Medicare shares the savings with the ACO if compliance with the quality measures is high.

The Triple Aim as described by Berwick states that the health of populations should be improved and at the same time the costs of the healthcare system should be reduced(1). What is new in the Triple Aim is an emphasis on the experience of the patient in the healthcare system.These three aims can take place without incurring additional costs.In fact, the expectation is that these improvement should occur with an overall reduction in costs. The Triple Aim was a stimulus for developing the concept of the Accountable Care Organization in the George W Bush administration and adopted by the Obama Administration.

Accountable Care Organization

The definition of an Accountable Care Organization (ACO) is as follows: “Accountable Care Organizations are groups of doctors, hospitals, and other healthcare providers, who come together voluntarily to give coordinated high quality care to their Medicare patients. The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending healthcare dollars more wisely, it will share in the savings it achieves for the Medicare program (2).” Because of the sharing of savings, the program is called the Medicare Shared Savings Program (MSSP).

Quality Performance Measures

The issue that distinguishes the ACO movement from most past cost containment efforts is the requirement to comply with a list of 33 quality performance measures. Because of this new emphasis, I will take up some space to show what this noble effort consists of. The Centers for Medicare and Medicaid Services (CMS) put together the quality measures. They are divided into four domains

1. Patient /Care giver experience domain

• Get timely care
• How well does your physician communicate
• Patient’s rating of doctor
• Access to specialist
• Health promotion and education
• Shared decision making
• Health status and functional status

2. Care Coordination / Patient Safety Domain

• All-conditions readmission risk standardised
• Ambulatory care sensitive conditions
   i. COPD or asthma admission in older adults
   ii. Heart failure admissions
• Percent of primary care physicians who qualified for the electronic health record incentive
• Medication reconciliation performed
• Screened for falls risk

3. Preventive Health Domain

• Influenza immunisation
• Pneumococcal immunisation
• Adult weight screening and follow-up
• Assessment of tobacco use and cessation information given
• Screened for depression
• Screened for colorectal cancer
• Had mammography screening
• Proportion of adults screened for high blood pressure in the past two years

4. At Risk Population Domain

• Diabetes
    i.  Haemoglobin A1C <8>     ii. LDL cholesterol <100>     iii.Systolic blood pressure <14>     iv. Tobacco non-use
    v.  Aspirin use
    vi. Percent of patients with diabetes whose Haemoglobin A1C is poorly controlled, that is, >9 per cent
• Hypertension
   i. Percent of patients with hypertension whose blood pressure is <140> • Ischemic vascular disease (IVD)
   ii. Percent of patients with IVD with a complete lipid profile and an LDL cholesterol <100>    iii. Percent of patients who use aspirin or other anti-platelet medication
• Heart failure
   i. Receive beta-blocker therapy for left ventricular systolic dysfunction (LVSD)
• Coronary artery disease (CAD)
• Percent of patient with CAD who meet all of the following criteria:
   1. Medication for lowering  LDL-Cholesterol
   2. ACE inhibitor or ARB therapy for patients with CAD and diabetes and/or LVSD

The scoring of the quality measures is complicated. It can be found in the first reference by Gross et al.(3). In general, for most quality measures, a high score is the goal. For some measures such as Haemoglobin  A1C  greater than 9 per cent,  a low score is preferable. CMS collects the responses to the first domain on Patient / Care Giver Experience and also collects most of the results for the second domain on Care Coordination. The physician practice has to provide the responses for the later measures in the second domain on Patient Safety and responses for measures in the third and fourth domains. The connection between the Triple Aimshown in round bullet points below and relevant examples of the 33 quality measures shown in the check symbol points below:

• Improve experience of care
i) Getting timely care, appointments, and information
ii) Shared decision making
• Improve health of population
i) Prevention with mammography and colonoscopy
ii) Better care of diabetes, CHF, CAD, BP, and IVD
• Reduce per capita costs of healthcare
i) Reduce admissions, readmissions

Decreasing Expenditures/Utilisation

Next we will address how savings are achieved by first going after the ‘low-hanging fruit’ such as hospital admissions, readmissions, and emergency room visits.

The total amount spent on admissions, readmissions, and emergency room visitsare the largest expenses and these were addressed first. As shown above, these costs were decreased each year as exemplified for the year 2015 (sourced via confidential data from the A1006 Hackensack Physician-Hospital Alliance ACO, LLC, Consolidated Aggregate Expendiure  Utilization Trend Report ACO A1006 Performance Year 2015, of the MSSP [April 1, 2012, agreement start date]). In addition, discharges of Ambulatory Care Sensitive Conditions (ACSC) were decreased over time. The idea behind ACSC is that these three diagnoses very often can be managed as outpatients and do not need to be admitted to a hospital. Ambulance expenses, although not a large part of our resource use, were very high for our ACO. It turned out that ambulance services were being over used. Once we realised this and CMS realised it, they enforced the appropriate use of ambulances and our costs per patient plummeted.

Patient-Centered Medical Home Certification

Interestingly, these cost reductions were achieved with an indirect approach. Our emphasis at the formation of our ACO was on selecting the right physicians to belongto the ACO. Our selection criteria were that the physician’s office should be certified as a Patient-Centered Medical Homes by the National Committee for Quality Assurance (NCQA). A PCMH is defined as a practice “that provides first contact, continuous, comprehensive, whole person care for patients across the practice. PCMH has at its foundation the Joint Principles developed by the primary care medical societies (American College of Physicians, American Academy of Family Physicians, American Academy of Pediatrics, American Osteopathic Association):

• Whole-person care;
• Personal clinician provides first contact, continuous, comprehensive care;
• Care is coordinated or integrated across the healthcare system;
• Team-based care. (4)

If physicians wanted to join and were not yet certified, we would pay for training the physicians and their office staff to become certified within one year. In addition, the physicians had to use an electronic medical records system immediately or at least within one year.Failure to do so meant that the physicians could no longer remain in our ACO. NCQA has published the evidence that PCMHs are cost effective and improve quality(5). In March 2017, NCQA redesigned their criteria for certification to account for recent changes by Medicare and to simplify the process. We will not review these changes (i.e., the Medicare Access and CHIP Reauthorization Act of 2015 [MACRA] and the Merit-Based Incentive Payment System [MIPS]), and Advanced Alternative Payment Models) at this time.

The point of our heavy emphasis on PCMH certification is that certified physicians understand the future of healthcare and the inevitable changes taking place. Given this point of view, the physicians would be more likely to comply with the goals of the ACO by naturally providing more efficient care. Indeed, this is what happened. So no instructions had to be issued requesting that the physicians decrease admissions and emergency room visits. It just happened from the inception of the ACO.

An important approach that facilitated the decrease in resource utilisation and costs was the fact that the physicians saw the patients in their offices more frequently than in most other ACOs. The more frequent office visits permitted the physicians to keep an eye on the patients with chronic illnesses and manage the changes as they occurred rather than have toadmit the patient to a hospital because these changes were neglected in the outpatient setting. This point is reflected in the 30-day post-discharge provider visits per 1.000 discharges where our office visits per patient increased over the average for other ACOs.

Care Coordination with ACO Nurses

Besides the PCMH certification policy, the other important factor in our initial creation of our ACO was the hiring of nurse care coordinators. We started with 3.5 for 11,000 patients and eventually hired over 15 as the patient population grew to over 30,000. The purpose of the nurse coordinators was to assist the practicing physicians in managing their high-risk patients and in complying with the quality measures.

Nurses were carefully selected to be out-of-the-box thinkers and ‘do-ers.’ They had to come with the right work ethic and know how to deal with people in a gentle manner. They were not to perform clericalduties, were not responsible for data analysis or business development. They were to be part of the group at practice meetings even though the practice didn’t have to support their salaries. They are supposed to provide feedback to the physicians on compliance with the quality measures and are to take part in value-based decisions. It took some time to insinuate the ACO nurses into the practice, but they eventually became a key part of it. With the physician leaders, the ACO nurses wrote care coordination policies.

Achieving Cost Savings

For the first three years of the program we were able to save significant expenditures (3, 6). In the first year that covered April 2012 through December 2013, we saved US$10,747,669.

In the second year (January-December 2014), we saved US$6,464,895. In the third year, the savings increased dramatically to US$33,353,310. Theoretically, we were entitled to receive 50 per cent of the savings and Medicare would keep the other 50 per cent. But remember that the amount an ACO receives is dependent on their quality score. In the first year of the MSSP, every one received 100 per cent credit for reporting activity with the quality measures, so we received US$5.266.358. In the second year, actual compliance with the measures was required. Our quality score was 89.43 per cent, as a result we only received (89.43 per cent times 50 per cent = 44.72 per cent) or US$2.83.988. In the third year our quality score rose to 95.70 per cent, therefore, we received {95.70 per cent x 50 per cent = 47.85 per cent) or US$15,640,878. If you do the math, the numbers are off a little because CMS took out a sequestration adjustment for when the US Government closed down for a few months. The large increase in the third year resulted from a large increase in the number of physicians in the MSSP that resulted in a significant increase in the number of patients in the program.

Volume to Value Challenge

ACOs are expanding at a rapid rate in the United States. Each year, Medicare approves approximately 100 new ACOs. There are now over 700 ACOs in the United States. Will thepredominant approach remain unchanged so that volume continues to be the ultimate goal and keeping hospital full is still the byword? Or will we switch to value as the prime driver and keeping patients out of the hospital unless absolutely necessary is the new byword? To improve quality and decrease costs, ACOs appear to be a reasonable approach to facilitate the switch from volume to value.


1. Berwick DM, Nolan TW, Whittington J. Health Affairs 2008; 27:759-760.
2. Accountable Care Organizations (ACO) – Centers for Medicare and Medicaid Services – Accessed July 18, 2017.
3. Gross PA, Easton M, Przezdecki E, et al.The ingredients of success in a Medicare Accountable Care Organization.Am J Account Care 2016; 4(2): 42-50.
4. PCMH Eligibility. July 18, 2017.
5. PCMH Evidence. July 18, 2017.
6. Gross PA, Menacker M, Easton M, et al.Case study: how does an ACO generate savings three years in a row?Am J Account Care2017; 6(17):27-31.

--Issue 37--

Author Bio

Peter A Gross

Peter A Gross is Professor of Preventive Medicine and Community Health at Rutgers-NJ Medical School. Past national leadership positions include JCAHO, SHEA; and FDA. He is a graduate of Amherst College and Yale Medical School and published more than 250 articles.

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