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How Rivals Built an ACO

 |  By Margaret@example.com  
   May 23, 2012

This article appears in the May 2012 issue of HealthLeaders magazine.

About three years ago two rival Minnesota health systems—HealthPartners and Allina Health—began exploring how they could combine their resources to accomplish together what they couldn't do alone.

HealthPartners and Allina each own several medical clinics and at least one hospital in the Minneapolis area. HealthPartners also has a commercial health plan.

The two formed Northwest Metro Alliance to focus on achieving the triple-aim of healthcare—better care, better health, and lower cost—for 27,000 high-risk HealthPartners commercial members who live in the northwestern suburbs of Minneapolis and receive their medical care at Allina's Mercy Hospital or at the nine local medical clinics operated by either HealthPartners or Allina.

The ultimate goal is to reduce healthcare costs and improve care by developing and refining services that can be scaled and applied to the 300,000 HealthPartners and Allina customers who live in the alliance service area.

Through Northwest Metro Alliance, the two organizations pool resources, share electronic patient data, mine claims data, and "agree not to duplicate services," explains Penny Wheeler, MD, chief clinical officer at Allina. Clinical, contracting, and executive teams from HealthPartners and Allina meet on a regular basis. One joint project director works across the organizations to align clinical practices. The alliance includes a collective shared savings model with both withholds and incentives. If it bends the medical cost trend below the market rate, then HealthPartners and Allina share in the savings.

So far the collaboration has focused on these strategies: increase generic drug use, reduce elective induction of labor before 39 weeks, reduce ED use by expanding urgent care options, and improved support for chronic care management.

In its first year of the seven-year collaboration, Wheeler says medical costs for the at-risk population were reduced by about $6 million, including $1 million by studying prescribing practices and shifting from brand-name to generic drugs. The total medical cost trend dropped from a 2009 growth rate of 8%, which was well above the area's average increase, to 3%, which is comparable to the area's average.

She credits a key investment in the development of advanced care teams as contributing to cost and outcome improvements. The teams, which consist of care managers and care guides, as well as social workers and pharmacists, work out of the alliance's primary care clinics. So far, the Alliance has reduced costly hospital admissions by 6% and contributed to a 5% reduction in ED use over the past year.


This article appears in the May 2012 issue of HealthLeaders magazine.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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