System-insurer ACO cuts hospitalizations by nearly 11%

Officials say initial data encouraging, but more study is needed

Chicago-based Advocate Health Care and Blue Cross Blue Shield of Illinois (BCBSIL) say their accountable care organization has helped them slash hospitalizations and ED visits among members.

The ACO—called AdvocateCare—was launched in late 2010 and currently covers about 250,000 PPO members and 125,000 HMO members. After analyzing six months of operating data, ACO officials say they have produced spending reductions that trump those for out-of-network patients.

According to Lois Elia, the ACO's vice president, AdvocateCare's hospital admissions per member in the first half of 2011 decreased by 10.6% compared with 2010 data, and ED visits dropped by 5.4%. "It's clear we're driving down utilization," Elia said.

Officials say the poor economy may have led to an improvement in utilization trends. "But since our medical cost trend was 6.1% below market, it shows our reductions were likely due to prevention of ambulatory-sensitive conditions through better care management [and] physician access," Elia said.

According to Elia, the Advocate Health-BCBSIL program included hiring 60 "care managers," who managed high-risk cases and post-acute care. H. Scott Sarran, BCBSIL’s chief medical officer, noted that that the program also leverages a narrow provider network—which encompasses Advocate's 10 hospitals and 4,000 physicians—and a payment system that accounts for financial risk.

However, hospital officials emphasized that the results are preliminary and do not guarantee that the three-year program will be successful (Hancock, "Capsules," Kaiser Health News, 3/8).

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