HLM Live: The Care Management ACO

Leaders at Memorial Hermann have developed an accountable care organization that combines care coordination and physician alignment to drive savings.

This article appears in the October 2015 issue of HealthLeaders magazine.

Back around 2007, Memorial Hermann Health System had only a distant promise when the Houston-based organization began to talk with area physicians about the concept of clinical integration. Terms like accountable care organization were still mostly left to theory. As Keith Fernandez, MD, recalls, the selling point that he and other leaders of the MHMD Memorial Hermann Physician Network had to offer was a more manageable life for physicians.

"We had a great advantage over many other groups," says Fernandez, now also chief medical officer of the Memorial Hermann Accountable Care Organization. "We had a group of doctors in very small practices [averaging 1.8 per practice] that had no collective vision of how they might move successfully into an uncertain future. The doctors were ready to do things differently and were intrigued by models of clinical integration."

The concept that attracted the doctors was simple—do the right things to care for patients, be measured in quality and cost, and prove to the community and themselves that they were the highest quality and most cost-efficient.

Recalls Michael Shabot, MD, executive vice president and chief clinical officer of Memorial Hermann Health System, and founding chairman (now past chairman) of the Memorial Hermann ACO: "In a way, our secret was starting early, before we knew what the actual goal or plan was going to be. We had a more generic goal of taking better care and more efficient care of our patients."

That promise of the future rang true, and success has followed. In the first full year of the Medicare Shared Savings Program in 2013, the Memorial Hermann ACO led all MSSP ACOs with savings of nearly $58 million, almost $20 million more than the next highest ACO. From a ground of zero at-risk lives in July 2012, Memorial Hermann now has almost 240,000 in risk arrangements.

But building the physician alignment strategy for successful clinical integration took some learning.

"We sold doctors on the concept of being able to manage their future practice by defining what quality is, improving it, and measuring performance," Fernandez says. "In other words, not relying on other people to decide what good quality is, relying on them to report it accurately, and then using that to determine what defines a good doctor. I was really hoping for 500 physicians on the first pass, but we had 1,200 physicians sign up, which was a surprise to me."

The number of physicians in the network swelled to almost 3,000 after the success of the shared savings program, and this created a problem. "When we looked at our quality metrics at that time, we saw a deterioration in performance. And so we implemented more stringent criteria to both enter and stay in the clinical integration program that would protect the quality and cost-efficiency of the network."

The result was a more specific business agreement that the physicians now sign to join the ACO. It requires physicians to supply EMR data for 90 days, be on a preferred EMR, and agree with and abide by the MHMD compact, Fernandez says. Other requirements include appropriate policies and procedures that govern patient safety.

Aligning hundreds of independent physicians meant addressing some initial cultural and governance barriers. Many held true to a spirit of physician autonomy in the state, where historically physician groups had been relatively small and deeply competitive.

To create a physician-driven structure that could propel clinical improvement, the physician organization created clinical program committees in each specialty, which focus on evidence-based best practices, Shabot says. While there were just a handful of core committees in the program's first year, that number has since increased to 50.

"Years and years and years of effort went into this to create quality protocols, safety protocols, and efficiency protocols developed by the physician committees," Shabot says. "And then to make them active in the hospitals, we had developed a mechanism for getting them through each of our currently 11 medical executive committees. Getting 11 MECs to agree on the same thing—that wasn't easy either. And we put literally scores of quality and safety measures through the MECs in that way over the past seven or eight years."

Each of those 500-plus measures sent through the clinical program committees and then to the hospitals started with some basic agreements, says Christopher Lloyd, CEO of the Memorial Hermann Accountable Care Organization.

"There has to be some focus," Lloyd says. "There has to be some reason why certain things are done, and usually that's guided by clinical data and input from a whole bunch of other different team members. Even beyond what clinical condition you identify, you have to ask, what's the point in doing it? What driver are we looking to drive? Do we all have agreement on that before we even step into it? Do we all agree that we're managing a cost metric or we're managing a clinical metric? It just depends from measure to measure, but I think that there's a lot of discussion around making sure that our goals and our roles are in the same direction."

Early success and shared incentives have also helped usher in "a gigantic cultural change," Fernandez says. "I rarely have any trouble with engaging physicians now. In fact, I have to sometimes restrain them. We have 50 clinical practice committees—not because I'm looking for more committees, but because the doctors are demanding them. I have doctors coming to me now saying, 'I've got to get this problem fixed.' "

Reprint HLR1015-10

HealthLeaders Media LIVE from Memorial Hermann: A Care Management ACO, will be broadcast on Wednesday, November 11, 2015, from 11:00 to 2:00 p.m. ET. Memorial Hermann reveals its multi-pronged approach for their successful Accountable Care Organization. How physician alignment, patient engagement methodologies, and a focus on community health has propelled them to the top.