8 Accountable Care Organizations Worth Closer Look
ACOs break new ground in healthcare as cost pressures mount for providers.
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On July 26, 2012, Aurora Health Care, a not-for-profit healthcare provider based in Milwaukee, Wis., joined forces with Aetna Inc., to form a new commercial accountable care organization. The Aurora Accountable Care Network, which will become effective on Jan. 1, 2013, will offer a price guarantee to employers built upon a healthcare model that it says will improve quality, outcomes, and the patient experience.
Aurora believes that with this model, employers will see big savings in what they spend on healthcare as a result of improved patient outcomes and greater efficiencies. Cost savings will be specific to each employer with the potential for an average 10% reduction based on the employer's past claims expenses, according to Aurora. The Aetna plans that the Aurora Accountable Care Network will offer have been designed for small and mid-size businesses in Wisconsin. Other plans target large, self-funded employers. The plans are fully insured and feature two tiers of benefits and copays. The ACO designed them to provide a more-coordinated, personalized experience for patients; lower co-pays for seeing Aurora Accountable Care Network providers; and better healthcare outcomes.
ACOs are not new to Aurora. The healthcare system also has a Medicare Shared Savings Program Accountable Care Organization. Aurora's Lakeshore Medical Clinic works with Centers for Medicare and Medicaid Services to provide Medicare fee-for-service beneficiaries with service and care, with the goal of reducing the growth in Medicare expenditures through better care coordination. The Lakeshore Medical Clinic accountable care organization includes 10,000 Medicare patients, with a focus on evidence-based medicine.
Aurora executives say that many healthcare purchasers focus on unit price, seeking to save money with the lowest-cost provider for diagnostic testing, X-rays, office visits, or surgical procedures.
Aurora claims that these initial savings are deceiving, because they don't take into account the most significant element of the healthcare cost equation: how healthcare services are used. True savings, they assert, come from lowering the cost of care per diagnosis. Aurora shares these savings with employers who are enrolled in the Accountable Care Network through their insurance carrier.
Why ACOs? Aurora officials said that it has demonstrated that coordinating care in a fully integrated medical network committed to continuous clinical improvement can lower health costs. As an employer, Aurora manages 48,000 lives. Its per-member-per-month costs went down 2.4% in 2010 compared to the national average, which have been rising 10% to 12% annually.