Blog Post

What we've learned from the Medicare Shared Savings Program

December 2, 2014

    When CMS began inviting organizations to participate in its Medicare Shared Savings Program, starting in December 2011, there was no guarantee that providers would say yes.

    Some organizations worried that the program's quality metrics would be too demanding. Others wondered if creating an "accountable care organization" would end up being more trouble than it was worth.

    But on balance, experts thought that providers would regret sitting out of the MSSP more than they'd regret jumping in.

    "Our initial take," the Advisory Board's Chief Research Officer Chas Roades wrote at the time, "is that the program warrants serious consideration by hospitals and health systems."

    Three years—and three hundred or so participants—later, the MSSP has generally been a success. The federal government this fall said that ACOs participating in the program saved Medicare almost $280 million in the MSSP's first full year, led by Memorial Hermann's nearly $60 million in savings.

    Many of the organizations that achieved the greatest savings for Medicare were able to recoup tens of millions of dollars, too.

    But these organizations were in the minority: Only one-quarter of participating providers ended up qualifying for shared savings in performance year 1. To put it more simply, many MSSP participants have seen little return, despite investing considerable time and energy getting themselves ready for population health.

    What are the hallmarks of top-performing ACOs—and most importantly, are those elements replicable?

    Here's a quick look at three tactics that have jumped out.

    Tactic: Pick your physicians carefully.

    An ACO is only as good as the staff that support it. And that's one reason why leaders at Memorial Hermann ACO, in Houston, put considerable effort into carefully choosing their initial cohort of doctors.

    CEO Christopher Lloyd told ACO Business News that Memorial Hermann looked for physicians that were already invested in population health. One way was by vetting them using a 15-item checklist that included requirements like (1) having a pre-existing electronic medical record and (2) being willing to accept some risk.

    "Using the ACO as the call to action for your physicians and hospital network is not the right strategy," according to Lloyd. "There has to be physician leadership. Our physicians are leaders of this effort."

    Memorial Hermann ACO generated savings of nearly $58 million—more than any other organization—in its first full year of participation in the MSSP.

    Also see: How to design the clinically effective workforce

    Tactic: 'Wow' your patients.

    The continued push to be accountable for patients' outcomes also has pushed providers to develop closer relationships with those patients. How to do that? Administrators at Florida-based Palm Beach ACO elected to prioritize the patient experience.

    "We realized that dissatisfied patients could mean as much as 25% in lost savings," CEO Kelly Conroy writes in the American Journal of Managed Care. She notes that the organization was surprised that many patients simply walked out of the office without follow-up appointments.

    "That loss of control over a patient's health care often resulted in the loss of the patient altogether, which means lost revenue and decreased shared savings," Conroy adds.

    As a result, Palm Beach staff spent "countless hours" working with physicians to create positive patient experiences, like calling to check in with Snowbird patients who left the state during the summer time.

    Palm Beach ACO generated almost $40 million in savings in performance year 1.

    Also see: How to compete on patient engagement

    Tactic: Identify the patients with the most need.

    At the same time, a successful ACO may end up prioritizing some patients over others. So the CEO of Catholic Medical Partners ACO in Buffalo said his group adopted a simple solution: Stratify the population.

    "We started with the group of patients at the highest risk who have the highest burden of illness, and then worked our way into prevention," Dennis Horrigan said. "While prevention pays off in the long run, the greater opportunity from a personal and human perspective, as well as a financial perspective, is to try to make the interventions with people most in need." 

    In many cases, that meant identifying and proactively focusing on the population that hadn't gotten medical care.

    Like many successful ACOs, Catholic Medical Partners administrators note that it took years—before the MSSP program even started—to develop the right tools and culture to be successful.

    "If you were just starting from square one without that history, I wouldn't expect you could do much," Horrigan told Buffalo Business First. "This is hard work, this transition to a population health focus."

    Catholic Medical Partners ACO generated total savings of $28 million and recouped nearly $14 million.

    Also see: How to prioritize population health interventions

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