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Insurer, Topeka health provider create accountable care organization

By Meg Wingerter | July 25, 2016

Insurer, Topeka health provider create accountable care organization
Photo by Megan Hart/KHI News Service SCL Health, the parent company of St. Francis Health in Topeka, will form an accountable care organization with Blue Cross and Blue Shield of Kansas.

One of Kansas’ largest health insurers is trying to reduce costs and improve the quality of care for at least some of its customers in the Topeka area.

Blue Cross and Blue Shield of Kansas announced Monday that it had formed an accountable care organization, or ACO, with SCL Health, the parent company of St. Francis Health, which operates a hospital and more than 20 physician clinics in the region.

Mary Beth Chambers, spokeswoman for BCBSKS, said the ACO is a way of using funding to encourage health providers to improve their coordination of patients’ care.

Patients still can choose their doctor or hospital, she said, and if they notice a difference in their care, it should be that the provider is doing more to coordinate care among health providers.

“For some members, they may not recognize a change,” she said.

It’s not the first ACO in Kansas. BCBSKS started something similar in February 2015 with Via Christi’s Healthier You Alliance in Wichita, but Chambers said it’s too early to look at results of that effort.

Also in 2015, the Kansas Foundation for Medical Care worked with a Maryland-based company to establish Aledade Kansas, an ACO with up to a dozen physician practices in the state.

While ACOs are intended to benefit patients while reducing costs, they can raise confusion. Here are answers to some basic questions about ACOs.

  • What is it? An ACO is a health care provider or group that makes an agreement with an insurer to try to reduce costs and improve patient outcomes. Usually, it includes a hospital and a group of primary care doctors, though some have added pharmacies and home health agencies to the mix, according to Kaiser Health News. The ACO receives additional money if it improves patient health outcomes while reducing costs. Most have worked with Medicare so far, but a few private insurers have started setting up similar arrangements to pay for quality.
  • Why do this? The idea is that paying for patient outcomes, rather than the number of services provided, will reduce unnecessary treatments while giving providers an incentive to provide new types of services.
  • Has it worked before? The federal government started making ACO agreements to try to reduce the growth of Medicare spending after the Affordable Care Act passed. They have shown some success. In 2014, more than 300 ACOs working with Medicare saved about $411 million in care costs, although the program didn’t save money overall because it paid out too much in rewards for reducing costs.
  • What does the patient get? Possibly improved care. A 2014 study in the New England Journal of Medicine found patients thought their access to care was improved after a year in an ACO but didn’t see any difference in their interactions with doctors or the overall quality of care. 
  • What does the provider get? If the provider is successful, the insurer pays out a share of the savings. If not, the provider could be hit with a penalty. Chambers said BCBSKS and St. Francis worked to set up a budget for patient care and a way of dividing any savings or unexpected costs. She declined to discuss specific provisions.
  • What does the insurer get? If it works, insurers see lower costs over the long term by avoiding unnecessary care and health complications. Chambers didn’t outline specific expectations. “What we want to do is try to develop an approach that’s more coordinated,” she said. “We think that down the line, that’s where those savings across the system come from.”