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Gainsharing, Shared Savings Examined

Karen Minich-Pourshadi, for HealthLeaders Media, August 28, 2012

Marlowe says that ultimately the greatest challenge in setting up a gainsharing program proved not to be working with the OIG guidelines, but gathering the data and learning to communicate better with physicians. "Establishing gainsharing is challenging; it isn't a cake walk, but it's been very successful for us. Although we had a gainsharing partner, they didn't do all the work; we still have to engage the physicians and work with them to make this a continual success," says Marlowe. "Through this process I have learned that physicians are eager to work with the hospital to accomplish shared goals."

Getting physician buy-in and collaboration has proved a similar challenge for those organizations that do opt to pursue a shared savings program, notes Mark Shields, MD, MBA, senior medical director for Advocate Physician Partners and vice president of medical management for Advocate Health Care, an Oak Brook, Ill.–based system that includes 10 hospitals, 2 integrated children's hospitals, and more than 3,222 beds.

"On the surface it can look like a gainsharing program might be a quicker and easier path to cost reductions because it's typically limited to one to two service lines or handful of DRGs," says Shields. "But we felt it really wasn't easier due to the administrative and legal complexities, and the organizational hurdles to get the physicians working together."

Advocate Physician Partners entered into a care management and managed care contracting joint venture between the Advocate Health Care System and 3,900 physicians on the medical staff of the Advocate hospitals to create one of the first commercial ACOs and shared savings programs. The system created a clinical integration program in which physicians collaborate to address the quality and cost associated with an entire episode of care, explains Shields.

"If an organization hasn't strategically committed to wanting to be a population health management company, then shared savings isn't going to fit for them; gainsharing may be a better approach," he says.

Physicians work directly with patients to reduce the physical and financial effects of disease and illness by designing treatment plans that include medical intervention and lifestyle changes. The program came about during a contract renewal with BlueCross BlueShield of Illinois in late 2010. With just four months left in the year to establish the program, the payer and Advocate agreed to set provider incentives in the contract based on meeting specific quality, safety, efficiency, and patient satisfaction metrics. Dubbed AdvocateCare, the accountable care and shared savings project started in January 2011.

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