ACO formation is on fire in Northern New Jersey. In the first half of March alone, three new accountable care organizations have popped up in the 14-county Northern New Jersey healthcare market, bringing the region's total number of ACO contracts to 27.
That's a lot of ACOs for any market, but it's especially intriguing that Northern New Jersey has had three ACO announcements in one month kind of like March Madness in the ACO world. Not that it's a contest, but Northern New Jersey's ACO count exceeds the 23 ACOs in New York City despite the fact that its population of 6.9 million is roughly half that of the population of 13.1 million in NYC. New Jersey has so many ACOs that there is even a state association of ACOs the Affiliated Accountable Care Organizations, an initiative of the nonprofit New Jersey Health Care Quality Institute.
So why are there so many ACOs in Northern New Jersey?
Multiple stakeholders are driving ACO formation in Northern New Jersey. Two of the three ACOs formed in March include the market's dominant insurer, Horizon Blue Cross Blue Shield of New Jersey, which announced one ACO with Hackensack-Physician Hospital Alliance and another other with JFK Medical Center in Edison. The third new ACO includes Aetna and Atlantic Health System. Horizon created a foundation for ACO development in 2011 when it started a patient-centered medical home program for 63 physicians. By 2014, this program has expanded to include 1,300 primary-care physicians who provide care for 330,000 Horizon members. Care coordination is a core component of the medical home model, and it's a vital part of accountable care organizations, too.
Success in the Medicare Shared Savings Program has also added to the ACO momentum. Thirteen ACOs in Northern New Jersey market are participating in the Medicare Shared Savings program, including seven that joined the program in January 2014. At least two of the older Medicare ACOs in Northern New Jersey, led by Optimum Healthcare partners and Hackensack Alliance ACO, have already produced savings. They are among 29 Medicare ACOs out of a total of 114 formed in 2012 that have accounted for producing $128 million in overall savings in the Medicare Shared Savings Program.
Another factor in ACO formation in Northern New Jersey is that the top five health systems have adopted clinical integration a key strategy as they operate and develop ACOs. With an emphasis on clinical protocols and performance measures, clinical integration helps providers focus on evidence-based practices and facilitates coordination of care among providers.
Multiple physician groups are leading ACOs as well. Robert Wood Johnson Partners, a collaboration of Rutgers Robert Wood Johnson Medical School and Robert Wood Johnson Health System, is operating a new Medicare ACO. Partners in Care, a management services organization with a network of independent physicians, operates a Medicare ACO as well as commercial ACOs with Horizon and Cigna. And Summit Medical Group has operated commercial ACO with Cigna since 2012.
Innovative leadership in the state may also be a making a difference. For example, Jeffrey Brenner, M.D., the leader of the Camden Coalition of Healthcare Providers in Southern New Jersey has earned a McArthur Foundation fellowship for his hot spotting work, which uses patient data shared by healthcare providers to target preventive resources in neighborhoods with high emergency room utilization, according to NJ Spotlight, a news website that sponsored an ACO conference in February 2014.
ACO formation in Northern New Jersey is not likely to slow anytime soon. Expect even more ACOs in the market because of a new state Medicaid ACO program that will begin operating later this year. Look for participants in Northern New Jersey to include RWJ Partners and providers in Trenton and Newark.
Deborah White, a market analyst for Decision Resources Group, follows healthcare markets in Northern New Jersey, New York, and Texas.