At least one Pioneer ACO in California has saved money from Medicare's ambitious accountable care experiment. San Francisco's Brown & Toland, an independent physician practice with about 1,500 physicians, reported savings of $10.6 million in 2012. About 190 physicians treated 18,000 Medicare patients in the Pioneer ACO, and generated savings by coordinating care and avoiding unnecessary hospitalizations, the group said.
Centers for Medicare & Medicaid Services officials have even visited Brown & Toland's offices to learn from what it's doing right. The other three California Pioneers haven't released whether they ended up with savings or losses in 2012: Sharp HealthCare, Monarch HealthCare and Heritage California ACO all organizations adept at bearing risk and coordinating care.
But for an organization like HealthCare Partners to leave the Pioneer program, it's possible more Pioneers may be losing money, or expecting they will lose money, than are saying it. HealthCare Partners and PrimeCare Medical Network were the other two California Pioneers who left the program in July 2013 and switched to the Medicare Shared Savings Program, which has no downside risk. While HealthCare Partners hasn't commented on its reason for leaving, it's clear that issues with the benchmarks and metrics (which the 32 Pioneers publicly challenged in February 2013) has impacted return on investment for some Pioneers.
Whatever the reason HP chose to exit, the decision isn't a complete rebuke of ACOs for HealthCare Partners or for California. ACOs are growing rapidly in California: Los Angeles has the second-most ACOs to Boston in the country, according to HealthLeaders-InterStudy's HealthCare Network Manager and ACO Spotlight Series. With a count of 24, another was added just a few months ago between SeaView IPA in Oxnard and Anthem Blue Cross.
HealthCare Partners operates two commercial ACOs with Cigna and Anthem Blue Cross and has said it is seeking more such arrangements. Brown & Toland also operates commercial ACOs with Cigna and Aetna. The power of large employer groups like CalPERS (California Public Employees Retirement System) and the San Francisco Health Service System are requiring providers to show savings and better outcomes through ACOs. And with CalPERS successful ACO in Sacramento with Hill Physicians, Dignity Health and Blue Shield reporting $37 million in savings and SFHSS recently reporting ACO savings through no increases in their healthcare premiums, ACOs are proving they can work.
While the type and metrics of ACOs will continue to evolve (Anthem Blue Cross has recently narrowed its ACO focus to those with two or more chronic conditions only), ACOs are the future of healthcare delivery in California. In all of the state's major markets, health systems and physician groups are partnering, merging and acquiring each other in order to enter population health management. They know it's the future, and what payers expect.
Follow Jenny Kerr on Twitter @ JennyKerrHLI