Accountable Care Organization case study

Value-Based Care Case Studies

Abstract

Accountable Care Organizations (ACOs) are healthcare models designed to improve care coordination, enhance quality, and reduce costs by aligning incentives across physicians, hospitals, and other providers. ACOs address inefficiencies and fragmentation in the U.S. healthcare system by emphasizing population health management, preventive care, and patient engagement. This paper examines the McFarland Clinic, an Iowa-based, physician-owned multispecialty group, as a case study of ACO success. Since joining both commercial and Medicare Shared Savings Program (MSSP) ACOs, McFarland Clinic has consistently achieved high-quality outcomes and maintained shared savings. Key strategies include integrated care teams, data-driven population health management, specialist-led quality improvement initiatives, and strong primary care foundations. The Clinic’s experience highlights how ACOs can drive value-based care through physician governance, proactive chronic disease management, and collaborative, patient-centered practices.

Introduction

The AAN’s Care Delivery Subcommittee, under the guidance of the Medical Economics and Practice Committee, set out to better understand different care delivery models and their professional and personal advantages and disadvantages compared to traditional fee-for-service care delivery models and reimbursement. Michael J. Kitchell, MD, FAAN, Care Delivery Subcommittee member, shared his 15-year experience as part of an Accountable Care Organization (ACO). Responses below represent the individual experiences of the contributors and are not the official opinion of the AAN.

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Value proposition

Value proposition to the patient

  • Quality of care
  • Patient-centered care approach

Value proposition to the provider

  • Provider collaboration and integration
  • Increased focus on preventative care
  • Data-driven decision making

Value proposition to the health system

  •  Increased cost savings
  • Keeps unnecessary cost down
  • Emergency department and hospitalizations are far below national averages

How it works

ACOs focus on population health management to improve health outcomes for large groups of patients. Population health management uses data effectively to improve care and engage patients while understanding their social drivers of health. The ACO has contracted with both Medicare, Medicaid, and commercial insurers to receive shared savings from a budget-based year of medical expenses on a set population of patients, with quality measures that need to be met or exceeded in one year’s episodes of care for that population.

Basic elements of an ACO include the following:

  1. It is a legal entity that contracts with the payer (insurance company or Medicare/Medicaid)
  2. It has a number of primary care providers who are attributed (responsible for) their patients’
    (population) outcomes
  3. It is an entity governed by the providers
  4. It is able to measure the quality and efficiency of the care delivered
  5. It is paid based on the performance on these quality and cost (value-based) measurements.

Successful ACOs are highly integrated, which entail many different types of providers (e.g., primary care, specialists, and inpatient facilities) all working as teams in a highly coordinated fashion. Their focus is on patient engagement, improved access, preventive care, and chronic disease management, to facilitate keeping people healthier. People who have chronic diseases often have much higher costs, so most ACOs focus on preventing complications or flare-ups of those chronic diseases. Patient engagement, working closely and cooperatively with the entire care team, makes it more likely that treatment and prevention of complications will lead to more successful outcomes.

ACOs are measured and rewarded for keeping a population healthier. Their contracts with a payer include a number of quality measures that have been chosen to promote higher quality care and better outcomes while reducing low-quality or unnecessary care. Studies have shown that as much as 30% of our national health care costs are spent on unnecessary care.

ACOs contracts with CMS or private insurers specifically require measures to show higher quality while receiving some incentives for keeping down costs for a designated population. Patients are assigned on the basis of their primary caregivers, or other providers who manage their care, not providers who may have spent the most on their care. If there is no demonstration of high quality, ACO contracts do not pay out incentives for lowering costs. 

The care model

The McFarland Clinic is Iowa’s largest physician-owned multispecialty group. The McFarland Clinic network of more than 280 providers and 1,000 staff members works as an integrated team centered around care coordination and collaboration. The multispecialty group consists of various committees and a Board of Directors (voted on by physician shareholders) that serves as the governing body.

In 2014, McFarland Clinic signed an ACO contract with a large commercial insurer and has maintained very high quality and lower cost measurements, with shared savings paid every year since then. In 2015, McFarland Clinic signed with CMS to become an MSSP (Medicare Shared Savings Plan) ACO that also showed measures with high quality and low cost, and has received shared savings for the past six years. The clinic has also signed ACO contracts with upside as well as downside risk, as well as with Medicare Advantage and Medicaid plans, in the past three years.

The provider experience

The McFarland Clinic providers are paid in various ways, some with salaries and others from production dollars from either commercial, Medicare, or Medicaid fees. The shared savings from the ACO contracts are allocated more to primary care. McFarland specialists receive smaller portions of the shared savings but also have some bonuses on two process improvement projects per year.

McFarland primary care providers are expected to manage their patients’ care, often with specialists’ help, using data, for example, glucose monitoring, and guiding many patients with chronic care management by McFarland population health department case workers (usually medical assistants or nurses). In Annual Wellness Visits, new risks of disease and the care needed are identified for prevention of complications or to reduce progression of diseases.

Specialists at McFarland Clinic have had potential bonuses for six years, having been challenged to identify processes (for example, “Choosing Wisely” recommendations) that reduce costs while either improving or keeping quality and patient outcomes the same. These projects are designed to reduce ED or hospital visits, unneeded procedures, labs, or imaging. By having specialists choose their own processes to improve, McFarland Clinic helped to foster creative ideas by those closest to the patients and their illnesses, to give better outcomes while avoiding or reducing progression of diseases, complications, and costs.

Neurologists, like other McFarland specialists, help bring about ACO success and higher quality care with a number of their activities. First, functioning as a team, by giving appropriate access and coordinated care at the right time, making sure the patient can avoid progression or complications of their disease(s), and making sure that most injuries are avoided. For example, patients with fall risks are educated or treated to avoid injuries.

Second, educating other providers to help them avoid imaging or other services that either are futile or unnecessary. For example, McFarland neurologists have educated other providers to follow “Choosing Wisely” recommendations, such as not ordering carotid ultrasound tests for patients with syncope.

Third, counseling families and primary care physicians about patients with neurological disease to help avoid flare-ups or complications, for example, such as the risk for Parkinson’s patients to have cognitive fluctuations with stress, illnesses, or metabolic problems.