ACO success in northern Calif. spreads to San Francisco
An early proponent of accountable care organizations (ACOs), Hill Physicians Medical Group in northern California, has expanded its success with ACOs in the Sacramento area to the San Francisco Bay area.

The new ACO, led by Hill Physicians, along with St. Mary's Medical Center and Saint Francis Memorial Hospital of Catholic Healthcare West (CHW), and University of California, San Francisco (UCSF) Medical Center, took root in San Francisco this month with the approval of an employee benefits agreement between the city and county of San Francisco and Blue Shield of California.

In 2009, CHW, Hill Physicians and Blue Shield of California launched an ACO pilot in Sacramento to serve more than 40,000 members of the California Public Employees' Retirement System (CalPERS). Results from the first year of the pilot showed increases in clinical measurements and cost management, and generated anecdotal feedback from members who felt more actively engaged with their doctor and their own health, according to Steve McDermott, CEO of Hill Physicians.

The collaboration also succeeded in preventing premium increases, and achieved an estimated 22 percent reduction in hospital re-admissions and $20 million in savings. The program in San Francisco is expected to benefit from the lessons of the Sacramento pilot.

"We've shown that independent physicians and community hospitals can coordinate high-quality care around an individual's health, creating a smoother experience for the member before, during and after a hospital stay," said McDermott. "Now, we're taking that ACO coordination to the next level by extending our CHW partnership through its San Francisco hospitals and including the nationally recognized strengths of UCSF Medical Center."

The collaboration among Hill, CHW and UCSF creates a similar "virtual integrated model" of care, in which all three organizations are seeking to improve quality, cost and service to employees of the city and county of San Francisco. This ACO is one of the few in the U.S.—and the only one in northern California—that includes an academic medical center.

"Collaborating with our community partners on a new care model aligns well with UCSF's goals of finding new ways to improve the quality and cost-effectiveness of care, while increasing patient satisfaction," said Jay Harris, chief strategic planning officer for UCSF Medical Center. "This approach is a perfect example of the innovative approaches that employers, health plans and providers must take to make health care more affordable without compromising quality."

Discussions about forming an ACO in San Francisco began picking up steam last fall as the city's Health Service System began seeking ways to take unnecessary costs out of its healthcare coverage. At the same time, preliminary results from the ACO established by Blue Shield, CHW and Hill Physicians in the Sacramento area began showing encouraging results.

Partly due to these provider collaborations, Blue Shield was able to hold premiums for city and county of San Francisco enrollees to a zero percent increase.

Approximately 100,000 active employees, retirees and dependents across northern California obtain medical coverage through the city's Health Service System, with about half residing in San Francisco. Enrollees in the city's Health Service System who select the Blue Shield HMO plan and then choose Hill Physicians – San Francisco for their medical group will be automatically enrolled in the ACO.

ACOs are a key component of creating a more efficient healthcare system, as envisioned in the Patient Protection and Affordable Care Act of 2010. Healthcare organizations, as well as doctors and hospitals, are encouraged to reach beyond their own organizations to build clinically driven processes that enhance the patient experience at every stage of care. As unnecessary costs are curtailed and outcomes improve through this coordination, the providers within the ACO are able to share savings.

Clinical coordination is expected to include a number of initiatives, including an emphasis on prevention and chronic disease management, both of which can lessen the need for, and cost of, multiple acute care hospitalizations.

Over the past few years, Hill Physicians has addressed this need with predictive modeling, preventive care reminders, an expanded team of registered nurses for case management, a post-discharge "welcome home" program, pharmacy consultations, nutritional counseling, web-based practice support and an advanced auto-authorization system that expedites most medical service requests. The presence of these capabilities at the medical group level can help coordinate care across multiple hospitals and their extensive resources, McDermott said.