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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Kansas accountable care organization launches this week

New physician network model aims to coordinate care, reduce health costs for Medicare patients

By Bryan Thompson | May 06, 2015

Kansas accountable care organization launches this week
Photo by Bryan Thompson Dr. Jennifer Brull, who has a private family practice in the northwest Kansas town of Plainville, will serve as the medical director for Aledade Kansas, an accountable care organization.

Accountability means taking responsibility for an action or result. Lately, it’s taken on a new connotation in the field of health care.

The Affordable Care Act provides a way for health care networks to get bonus payments by providing better care and keeping Medicare patients healthier through accountable care organizations that are about to have a larger presence in Kansas.

Kansas has been slow to adopt accountable care organizations, also known as ACOs, which are networks of physicians who band together to deliver coordinated care to Medicare patients. Less than 4 percent of the population is enrolled in some form of alternative payment model, like ACOs.

“We’re maybe several years behind where some of those demonstration projects are, but ACOs are beginning to get a foothold,” said Ken Mishler, president and chief executive officer of the Kansas Foundation for Medical Care, a nonprofit organization that partners with state and federal agencies to improve the quality of health care in Kansas. “Some of the hospitals, many of the larger health systems in Kansas are now starting ACOs.”

But the newest ACO in Kansas doesn’t involve hospitals. A Maryland-based company called Aledade is partnering with the foundation and up to a dozen physician practices with as many as 30 doctors in Kansas. Aledade CEO Farzad Mostashari said that will give them the number of Medicare patients the federal government requires to certify an ACO.

“An individual practice can’t really take on these sort of risk contracts because they have too few patients. And you have one or two patients that has an unfortunate accident or disease, then that makes it really hard for them from an actuarial insurance perspective” said Mostashari, formerly the national coordinator for health information technology at the U.S. Department of Health and Human Services. “So you want at least 5,000 patients. We would prefer to have 10,000 patients.”

Aledade’s motto is better care and better health at lower cost, and that’s how ACOs are designed to work. If keeping patients healthier saves money, as anticipated, Medicare will split the savings 50-50 with the ACO. Aledade will keep 40 percent of the ACO’s share. The rest will be divided among the participating clinics.

“The average ACO that earned those savings had 5.6 percent reduction in health care costs,” Mostashari said.

If that figure holds up, the doctors in Aledade Kansas could share in annual bonuses of nearly $1.7 million. Mostashari said the key to those savings is understanding where the money goes now.

“We pay $10,000 a year for every Medicare patient, on average, and much of that — 95 percent, to be exact — doesn’t go to primary care,” he said. “It goes to hospitalizations and ambulances and rehab.”

That’s why, at least in theory, giving patients better, more timely access to primary care is a good investment — even if it costs money up front. Dr. Jennifer Brull, who has a private family practice in the northwest Kansas town of Plainville, will serve as the medical director for Aledade Kansas.

“What we know is that a patient with a cold who uses the emergency room will spend on the order of 10 to 20 times as much for that same medical care than if they were able to access that care in an outpatient setting,” Brull said.

But providing care in outpatient settings may mean doctors need to adjust their hours so that patients aren’t forced to use the emergency room as an after-hours clinic.

“Perhaps you have a walk-in clinic,” she said. “Or you have same-day spots, or you expand your hours, or you educate your patients around how to get that care, so that you provide the appropriate care in the appropriate time, but in the least costly setting.”

“What we know is that a patient with a cold who uses the emergency room will spend on the order of 10 to 20 times as much for that same medical care than if they were able to access that care in an outpatient setting.”

- Dr. Jennifer Brull, a family practice physician in Plainville

Plainville may be a rural community, but Brull is one of the state’s leaders in using electronic medical records. She has a web portal that allows patients to securely view their medical records and lab tests and to email her.

“Every day, I respond to email from my patients, which may or may not — in fact, most times doesn’t — require them to come for an office visit,” she said. “So, I’m dispensing medical advice. I am hopefully keeping my patients healthier. I am saving the insurance company money by not bringing them to the office. But I’m not being paid.”

The ACO bonuses may offer one way to fill that gap. Aledade Kansas will officially launch Saturday, although a few practices could be added to the group after that date.