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Dartmouth-Hitchcock Aces ‘ACO’ Hospital Hits Benchmarks in Accountable-Care Experiment, Gets $1 Million

Sunday, July 28, 2013
Lebanon — Ever since she moved to Sunapee eight or nine years ago, Anne Nilsen has been getting her care at Dartmouth-Hitchcock.

The retired nurse is in good health. She doesn’t see her doctor often, but when she does, she said, she’s generally pleased with how she’s treated.

So she paid attention when, a year and a half ago, her hospital joined in an experiment through Medicare that could have changed the way she gets care.

The experiment, called the Pioneer Accountable Care Organization, or ACO, is aimed at reining in health care spending while maintaining — maybe even improving — the quality of care. Dartmouth-Hitchcock was one of 32 ACOs nationwide that would test new ways of delivering care with this common goal in mind. If successful, these organizations would get to split the savings with the federal government.

“The intention of this is a very good thing,” Nilsen said last week. “If they can live up to what they want to do.”

So far, so good. At least, for Dartmouth-Hitchcock.

This month, Medicare released the results of the first year of its Pioneer ACO program, and Dartmouth-Hitchcock came out as one of the winners. It was able to hit all 33 benchmarks for quality while saving $1.7 million in caring for more than 17,000 New Hampshire residents, Nilsen among them. Of the total savings, the Twin States’ largest health care provider got to keep more than $1 million.

“I’m really excited,” said Dartmouth-Hitchcock’s president and CEO, Jim Weinstein, last week. “I think our community should be very proud to be in a place where an organization is looking at what’s best for the people we serve.”

But Dartmouth-Hitchcock’s success puts it in the minority. Although every one of the 32 Pioneer ACOs hit the marks for quality, fewer than half — 13 of the 32 — were able to produce enough savings to be shared with Medicare in 2012. Just as many ended up losing money and, after just one year, nine ACOs said they would be leaving the Pioneer program.

The mixed results show just how difficult it will be to meet the goals of federal health reform and move the U.S. health care industry toward a more financially sustainable model, particularly at a time when it is adjusting to changes in the insurance market and various other Medicare programs. (See related story.)

Regardless, health experts say, they have no choice but to try.

“This is the way we need to go if we’re going to have an affordable and sustainable health care system,” said Elliott Fisher, director of The Dartmouth Institute for Health Policy and Clinical Practice, who developed the concept of the ACO.

“The good news is people are trying them. I think we should be careful not to be impatient. We need to be careful not to give up too quickly on this.”

A Running Start

There are now more than 250 ACOs caring for an estimated 4 million Medicare beneficiaries in the U.S., according to Medicare figures. But long before the concept was included in the Affordable Care Act of 2010, Dartmouth had promoted ACOs as a way to move toward a more financially sustainable health care system.

The existing “fee-for-service” world of health care pays doctors according to the volume of treatments they provide, not necessarily the quality of care. In that way, a fee-for-service approach actually rewards hospitals for keeping people sick so they can provide more treatments and collect more money.

Weinstein and others have argued that providers need to turn their attention to keeping people healthy and out of the hospital.

“I think we have to stay on this path toward getting away from fee for service into more capitated global payments and trying to work with our partners across the region to create this sustainable system to the benefit of people we serve,” he said.

Accountable care could be one way of doing that. Although ACOs can take different forms, the same basic principle applies to all: hospitals agree to take responsibility for the cost and quality of caring for a certain group of patients, no matter what.

Some types of ACOs are more risky than others. The Pioneer ACO that Dartmouth-Hitchcock launched in New Hampshire bears the most risk for the institution, because it not only shares in the spoils if it saves dollars, but it could also lose money if patient costs rise.

As it turned out, Dartmouth-Hitchcock came out ahead. Exactly where it found those savings is still something of a mystery.

The institution is breaking down the Medicare data to figure out where and how it saved money, said Barbara Walters, senior medical director for regional practice at Dartmouth-Hitchcock.

But past experience has yielded some useful lessons, she added.

In 2005, Dartmouth-Hitchcock was one of 10 health care networks across the country to participate in a project called the Physician Group Practice Demonstration. As with ACOs, providers were offered financial bonuses if they could slow down spending while providing high-quality care.

The experiment lasted five years. Like the ACO experience, the results from that project were mixed. Maintaining quality care was not an issue, but finding enough savings was, according to a 2011 report by the Centers for Medicare and Medicaid Services. By the final year, only four of the 10 sites had saved enough money to qualify for the bonus. Dartmouth-Hitchcock was not among them.

A follow up study by Dartmouth researchers yielded a more promising conclusion — participating health care systems were, in fact, successful in reducing spending for so-called “dual eligibles,” or people who qualify for both Medicare, which covers the elderly, and Medicaid, the federal program insuring the poor.

So, with Pioneer, Dartmouth-Hitchcock continued to focus on the neediest patients.

“Given that this is truly year seven in our journey with the Medicare population, I would say that what we did and maybe what is the most important and perhaps the most difficult in any of these initiatives is continuing to maintain focus on the basics,” Walters said.

The “basics” involved finding patients with multiple chronic diseases and “wrapping our arms around those folks with extra care coordination and outreach,” she said. Dartmouth-Hitchcock also scanned patient data to find the gaps in care, such as doing preventive screenings that would help them get out in front of a problem. There was also constant training and education of new employees and patients as they came into the system.

“We always need to be thinking of making sure that we’re including and incorporating and educating our docs, our clinical staff and reaching out to the Medicare beneficiaries as they get into our group one way or another.”

Other ACOs didn’t have the advantage of a five-year head start.

Texas-based Seton Health was among the ACOs that didn’t qualify for savings. It is now applying to switch to a less-risky ACO-model known as the “Shared Savings program,” in which it is allowed to share in the upside if it controls spending but won’t have to pay out money if costs rise.

Seton Health CEO Jeff Cook said his organization learned a lot in the first year but ended up losing money in the end. He didn’t want to get into specifics of why there were financial losses, but said the economics of the central Texas market made it difficult to hit all of the benchmarks for cost and quality.

Still, there were some positives. Among the biggest was that he was able to share information with other Pioneers about what worked and what didn’t when it came to coordinating primary care and focusing on high-risk patients.

Cook said he was not ready to abandon the model or aims of ACOs and felt that the shared savings option would make it easier to grow the organization and still meet Medicare’s goals.

“Philosophically, as a system, we believe it’s better care,” he said. “We think it’s the future of health care.”

Expanding the Program

Even before the results were released, other hospitals were joining Dartmouth-Hitchcock in various ACOs.

The hospital system joined with Fletcher Allen Health Care in Burlington to form OneCare Vermont, a Shared-Savings ACO that covers about 43,000 Medicare beneficiaries and involves dozens of physician practices and nearly all of Vermont’s hospitals. That effort, however, bears less risk for the hospitals than the Pioneer program in New Hampshire.

Still, even in the riskier Pioneer, Dartmouth-Hitchcock has been able to convince other hospitals to join.

New London Hospital this year became the first New Hampshire provider to get involved with Dartmouth-Hitchcock’s Pioneer, bringing several thousand more Medicare beneficiaries into the fold. Pioneer now includes more than 22,000 patients, Walters said, and soon may include many more. Dartmouth-Hitchcock has been in discussions with several other Granite State providers about joining Pioneer, Walters said, though she declined to say which ones. They should be announced in the coming months.

As more institutions come into the fold, one challenge will be getting everyone on board with the new strategies, health officials said. They’ll have to get past old notions of competing for patients, as well as ideas of how doctors interact with patients, and realign their practices around team-based concepts.

“The focus of the ACO is on changing the paradigm of how we deliver care,” said Margie Lim-Morison, chief nursing officer at New London Hospital. “The goal is how do you get to patients before they get sick so that they make good decisions.”

It was perhaps easier for New London to adapt to Dartmouth-Hitchcock’s model. The two hospitals have long had institutional ties through shared staff and resources. New London CEO Bruce King worked at Dartmouth-Hitchcock for 15 years before he came to New London in 2003, and he is still technically a Dartmouth-Hitchcock employee who is “leased” to New London through a management services agreement. The two hospitals are also pursuing a more formal collaboration agreement.

When New London joined Pioneer, it moved its primary care practitioners toward a team-based approach, King said. It also hired a “transitional care nurse” to follow up with patients after they’ve visited the emergency department or hospital, to make sure patients were clear about medication and doing what they need to do to stay healthy and avoid costly readmissions to the hospital, another goal of federal health reform.

Laura Harding is the nurse who was hired in that role last November. She said the response from patients and physicians in the hospital has been positive, and believes the follow-up is helping keep people out of the hospital.

“I completely agree with the program because I think it’s going to make better use of the resources we have in the community,” she said. “I think everybody knows Medicare is under a lot of strain.”

All of this expansion is not without some risk. As more hospitals join together, the challenges of coordinating separate organizations with distinct institutional cultures and ideas of how to provide care will be difficult, Weinstein said. Some may not be able to control costs as well as others, and maintaining quality among all the hospitals will be a constant concern.

But the risk is worthwhile, Weinstein said.

“The more we expand this, the more risk we actually take because we then are more reliant on other systems to deliver what we’ve had to deliver, which we know is not easy,” he said. “But we know we want to keep pushing this because we believe it’s the right thing to do.”

Chris Fleisher can be reached at 603-727-3229 or

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