Q&A: Methodist Health CEO on an ACO Alternative

Margaret Dick Tocknell, for HealthLeaders Media , June 1, 2011

When this all started everyone was saying there would be 400 to 500 ACOs; now the scuttlebutt is 100. That's unfortunate because in my mind there are more than 100 organizations that are already there from the standpoint of having all the components parts to be an ACO today.

The new initiatives won't help Methodist Health and I don't think they will help many in the industry. It's a direct appeal to a targeted few that CMS really needs to get involved in ACOs early so they can get some positive momentum going. I think it's a move to get those organizations that already function like ACOs to go ahead and commit.

Webcast: Alternative ACO Strategies: June 7, 2011, 1:00–2:30 pm (ET) Register today.

As I understand it based on reading a synopsis, ACO Pioneer is for organizations like Cleveland Clinic, Geisinger Health and Kaiser Permanente that are already involved in coordinating patient care. These organizations have been functioning for decades like ACOs. That doesn't help us.

The second level, the accelerated payments, is really for organizations involved in the Medicare shared savings program. Methodist Health isn't so that doesn't help us and I don't think it will help most hospitals.

The third level, which we probably will take advantage of, is the accelerated development learning sessions that CMS will conduct to help the field migrate toward ACOs. Education and training might help get more hospitals interested in ACOs.

Q: So these initiatives haven't changed Methodist Health's position that it will not participate?

A: Unless something changes, our first overture for an ACO will be on the commercial side in 2014, not in Medicare in 2012. Our plan has always been to perfect the skill set with our own employees and our insurer then we'll move to the community and work with other employers and insurers. Then maybe we'll have a structure in place to take on Medicare.

We're encouraged with the results from our own employees who have chronic conditions and benefit from having a medical home and more longitudinal care. On the carrot side, we created an incentive where for every quarter they are compliant with their plan they receive a $250 bonus. As long as they are compliant their copays are waived. On the stick side, if they fail to comply they pay 20% more for their health insurance than other employees.

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