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Health Care Innovation Zones: An ACO for AMCs?

Julie Schulz, MD, Consultant, Sg2, April 7, 2011

Anticipate major organizational and cultural changes needed for AMCs to become ACOs or HIZs. Faculty practices that are unified with university hospitals and clinics will be in a better position to coordinate care and avoid interdepartmental conflict than organizations with fragmented leadership. AMCs will have to negotiate alignment strategies that balance the needs and goals of faculty, nonfaculty employed physicians and independent physicians aligned with the AMC network. Meaningful clinical quality incentives (financial and nonfinancial) will have to be developed for faculty, whose current incentives heavily favor research and grants.

AMCs Making ACO News
AMC interest in ACOs and HIZs varies considerably by organization. A few AMCs are aggressively pursuing ACO and ACO-like networks, while many are adapting a wait-and-see approach and others are sitting firmly on the sidelines. Interest, however, has picked up significantly in the last few months. Two examples include:

  • Montefiore Medical Center, the university hospital for the Albert Einstein College of Medicine, is actively positioning itself to become an ACO. Montefiore’s 4-hospital system has maintained positive operating margins despite the fact that 80% of its volume comes from Medicare and Medicaid patients. It has done this by building an integrated system that includes 21 primary care clinics, multiple physician-led quality improvement initiatives and a health IT system that tracks patient data across the care continuum. This integration has allowed Montefiore to efficiently deliver care to 150,000 enrollees in capitated contracts from both government and private payers, laying the groundwork for eventual transformation into an ACO.
  • Johns Hopkins Medicine’s plan to develop an ACO places it in a unique position because it already has an insurance plan, affiliated primary care groups, community hospitals and 2 recently acquired regional hospital centers. In addition, Johns Hopkins has been participating in innovative payment models, such as PACE (Program of All-Inclusive Care for the Elderly), a capitated program that provides outpatient senior care. Hopkins also has created a virtual, multidisciplinary Center for Innovative Medicine to promote patient-centered approaches to care delivery.
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