How Rivals Built an ACO

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.