Gainsharing, Shared Savings Examined
In the case of Advocate Health Care, population health management was a key strategic goal, so the opportunity to work with BCBS of Illinois aligned with that goal. The organization hired 60 full-time nurses to act as outpatient care managers and work closely with the sickest 3% of the patient population, and it added software to enable costs and outcomes to be monitored and measured against core metrics.
Data is essential for the program to succeed, Shields says, as it allows the team to dig into the numbers by physician, group practice, disease type, etc., and to provide all participants quarterly feedback on progress. Although it tracks nearly 160 metrics, Shields says "a handful are high-priority areas and help maintain the focus for our physicians and our hospital."
In April, Advocate released its 2012 Value Report based on the organization's 2011 results for the first full year of the program, and the cost savings for its shared savings, population health management-based approach are promising.
The Value Report notes Advocate set a generic prescribing target rate of 73% or better for its physicians and it reached 74%, resulting in savings of $12.4 million. Its asthma outcomes initiative resulted in a control rate for its patients of 59%, some 17 percentage points above the national average, saving $8.9 million annually in both direct and indirect medical costs. Additionally, its diabetes care initiative calculated savings of $4.3 million just for making improvements to poor HbA1c levels.
Both gainsharing and shared savings programs can reduce costs by millions of dollars, and while the two approaches differ in their implementation structure, the cost savings goal is consistent and the cornerstone for both rests on physician collaboration.
"We'd been on a clinical integration road for a decade, so we had a lot of relationships with physicians and infrastructure already built," says Shields. "But I think for people who are particularly new to clinical integration, gainsharing can offer a good beginning. Whichever path is chosen, it needs to fit with the larger organizational strategy."
This article appears in the August 2012 issue of HealthLeaders magazine.
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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