What Does It Take to Succeed in the Next Gen ACO Program?

By Andrew Ziskind, MD, senior executive officer, Southwestern Health Resources

The evidence is in, and it’s mixed. Does the Centers for Medicare & Medicaid Services (CMS) Next Generation Accountable Care Organization (ACO) Model save money? In January 2020, Seema Verma reported in Health Affairs that “the model did not lead to a statistically significant difference in spending over the first two performance years. And when looking at just the second performance year (2017), Next Gen ACOs actually led to a statistically significant increase in spending of $115.6 million across the 44 participating ACOs.”

The hard fact is that redesigning care delivery around value instead of volume remains a work in progress.

However, at Southwestern Health Resources (SWHR), a participating Next Gen ACO, formed by UT Southwestern and Texas Health Resources, we are making meaningful steps in moving from volume to value. For three years in a row, SWHR has been the top-performing Next Gen ACO in the US, saving CMS more than $120 million since 2017. Like a hockey team that wins the Stanley Cup three years in a row, we’ve got to be doing something right.

In our journey to excellence, we’ve found that succeeding in the NextGen ACO program relies on the following five principles for population health management:

#1 Doing the right thing for patients lowers the total cost of care.

To succeed, ACOs and risk-bearing organizations need to lower the total cost of care, not just offer cost discounting. We accomplish that by doing the right thing for the patient at every step along the care continuum. We ensure that medicine is provided using best-practice guidelines.  Managing the overall cost of care—from inpatient to ambulatory, from lab tests to surgery—means ensuring appropriate utilization. And sometimes that means spending money to save money. SWHR has been able to keep our annual increase in health care costs to 75% less than our market average. An SWHR patient, for example, may need to spend an extra day in the hospital, increasing the cost of their inpatient care. But that added night will prevent costly readmission, lowering the total cost of care while improving the patient experience. One example of our ability to manage total costs of care, we have 19% fewer unnecessary imaging tests than any other health system in North Texas. 

In the outpatient setting, we lower costs and improve outcomes by focusing not just on the five percent of complex, high-cost patients but also on early interventions for rising-risk patients. We have 18% fewer outpatient surgeries than all of the other health networks in the region. For all our members, we work relentlessly to close gaps in care.  

During the pandemic, while other ACOs completely missed their preventive care and care management goals, we exceeded ours. Working with our affiliated physicians, we personally reached thousands of isolated patients and succeeded in getting the patients to do testing for cancer, diabetes and other chronic conditions. 

Our utilization may be higher than other ACOs because we go the extra mile to get more people to complete all their screenings—even in a pandemic. In short, we do what’s best for the patient, and cost savings are the result.

#2 Integrated care works best when it is led by physicians

We believe that taking care of patients means taking care of physicians. So, SWHR improves the health of physicians’ practices and supports their care of patients with an infrastructure of resources. The size of our network—5,000 academic, community and independent primary care physicians, as well as 29 hospitals and 700,000 patient members—enables us to provide IT support on a scale inaccessible to most independent physicians. For example, when the COVID-19 pandemic hit, we helped community physicians in our network ramp up telehealth visits and manage reimbursement to rapidly restore practice volumes.

The scale of our network also helps community physicians and other providers access the data and analytics needed to manage care beyond the walls of their practice. It’s usually difficult, for example, for a primary care doctor to control what happens after one of their patients is discharged from a surgical service. SWHR steps in with performance data to ensure that only top-performing post-acute facilities are recommended in the transition in care and that the community physician knows where their patient is receiving care at any moment. Most independent physicians want to manage the care of their patients with this degree of clarity, but few have the time or the resources to do so. That’s where SWHR comes in.

#3 Capture data and make it actionable.

Health care has a lot of data, but that data isn’t being acted on—or care teams aren’t being effectively coordinated so they can act on it. To make data actionable, SWHR functions as a think-tank as much as a care coordination enterprise. Research is part of our mission. So, we support investigations in population health at our acute-care parent organizations and use data to inform care in the community. As a physician-led ACO, we are able to integrate clinical and administrative data. It’s like piloting a ship with both GPS and radar. What the GPS doesn’t pick up, the radar will and vice versa. With diverse data sources, we build a more complete picture of both patient and practice health. Then, independent physicians don’t need to be employed by a large health system to get data-driven insights and resources, from practice management analytics to social determinants of health data. With the visibility we provide, community providers can ensure their patients have the right care, at the right time, in the right place—and keep their practices functioning smoothly.   Recently, during the peak of the pandemic, death at home cases because of heart attack and stroke increased more than 125%. In response, we sent targeted communications to more than 100,000 at-risk patients—in both English and Spanish. Emergency responders reported we might have helped save dozens of lives.

#4 Excellence in execution matters.

Every ACO is trying to improve outcomes at a lower cost. But success relies on excellence in execution. Unfortunately, in the time of COVID, health care organizations are becoming more risk-averse than ever. But taking on more downside risk, even in a pandemic, is more than possible. It’s the appropriate next step if we can master excellence in execution. It’s like a mountain climber setting their eyes on Mt. McKinley. You don’t get to the summit until you’ve climbed three or four other peaks first. It takes practice and continual improvement. At SWHR, we have a team that is grounded in excellence. We consistently exceed our contract benchmarks in physician communication measures and are one of the top three rated Next Generation ACO’s for physician-patient communications. So, although we’re in a high-utilization market, we make steady progress in year-over-year benchmarks for improvements in the cost of care for our population.   

According to CMS data, we had 16% fewer unnecessary emergency room visits and 7% higher quality scores than all the health systems in North Texas. Nationally, we ranked highest at testing and preventing diabetes care among high-risk patients than any other Next Gen ACO.

#5 Transitioning to a value-based system is exactly that: A transition.

In health care, we sometimes adhere to outdated practices because the newer alternatives still have shortcomings that aren’t resolved yet. As anyone who has bought a smartphone knows, new technology can decrease our productivity for a period. That doesn’t mean the technology isn’t worth the struggle and won’t eventually increase our productivity. Next Gen ACOs are a space in which we learn how to lower the cost of care while improving outcomes—and sometimes we will struggle. But we are learning.

And eventually, we will learn enough so that Next Gen ACOs are no longer sustainable simply because we cannot reduce the cost of care infinitely to zero. The fact is, as savings are measured off a baseline that gets lower each year, it gets harder to save money. Yet, for the moment, we’re still learning how to create value in the ACO model. We’re paving the way to a new, stabilized system based on appropriate payment for appropriate value. All of our contracts include risk elements. In the meantime, SWHR’s success as a Next Gen ACO is helping to define how health care will be delivered in the future.

There’s a lot we don’t know at this precarious moment in health care. We don’t know how long COVID will continue to be a factor in care delivery. We don’t know if patients will resume avoiding care or if there will be a rebound in utilization due to catching up on delayed care. Rather than viewing this era as defined by the pandemic, let’s view the pandemic as a stress test for new models of care. In North Texas, we’ve discovered that our model works. With these five principles, we can connect care across the continuum, ensuring high-quality care that delivers value. And if we can succeed in the crisis of the century, we know we’ve found a sustainable path forward for all of healthcare.

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