The very definition of an ACO is a group of providers that assume responsibility for the care and quality of a defined population of patients. And, as in most healthcare spaces, the more lives covered the better.
“By definition, this is a strategy that works best where you have a density of members and providers,” says Paul McBride, CEO of accountable care solutions business development from Aetna. “It requires a large population on the side of the provider to invest in the kind of change that is necessary.”
You would typically need 2,000 to 5,000 covered lives to measure quality, spread out risk and get providers to collaborate on services like expanded access, according to Emma Hoo, a director at the Pacific Business Group on Health. It’s also more difficult for providers to justify working with small groups (particularly in the commercial realm) because of the volatility of their population.
Take, for example, UT Southwestern Accountable Care Network, which aggregates data from its 350,000 patients to identify areas where it can make improvements, such as increasing vaccination rates or reducing ER visits. That would be tough to pin down in a group of 200 people. “We can take that to the bank and say we need to work on specific areas because we have large numbers of credible data,” says Danny Irland, UT Southwestern’s CEO.
David Smith, chief development officer for Leavitt Partners, says it’s not as easy for small businesses to be included in ACOs but they can make their way in through a couple of different vehicles. Employers can work directly with a primary care provider or specialty network and create a contract with them for a particular set of services. Or they can work with a group to organize enough mass in a market so providers will be willing to start an ACO.
A small number of organizations are creating products malleable enough to work with small businesses. One is Regence BlueShield of Ohio, which plans to roll out its Regence Medical Neighborhood in 2018. The ACO allows patients to choose a primary care medical group to coordinate their care through affiliated hospitals and specialists. Regence has created 17 quality-improvement targets for providers in the ACO to meet in an attempt to provide high-quality care at a low cost. The organization says participating physicians have already worked to reduce unnecessary care, prevent readmissions, monitor medications and better manage chronic care in Regence’s other ACO programs. The plan will be available to both individuals and businesses with 51 or more employees.
Reed Bjergo, vice president for next-generation products at UnitedHealthcare, says the company spent nearly $60 billion on value-based payments in 2017, nearly half of that year’s output. It is looking to expand that number, and one place it is focused on is its NexusACO product.
Already available in 22 markets, UnitedHealthcare plans to release this commercial ACO to nearly a dozen more areas next year. UnitedHealthcare makes its way into markets by working its top-rated groups in each place into a NexusACO. The providers sign on to meet UnitedHealthcare’s quality standards and cost-of-care and delivery criteria. The benefit plan allows patients to see other providers, but it incentivizes them to use ACO providers by offering the highest level of benefits with those visits. Because the providers are different and each market has different needs, the NexusACO contract looks slightly different everywhere.
“We meet providers where they are within their process and work on a plan together where we can focus on shared business objectives and get to the point where it makes sense for both entities,” Bjergo says.
He says UnitedHealth Group tends to enter a market working with national accounts because that’s where it sees demand for the product. But the ACO is also a solution for smaller businesses.
“We have some clients in the midsize space,” he says. “We certainly see it as viable for small businesses with two to 10 lives. To look at quality and cost results, you need to have a sizable population flowing through and driving enough volume. But we have developed a product that can be delivered from large groups down to small businesses, most of which are fully insured, and they can co-exist because it is a national product.”