Arizona ACO Model Ready to Go National

The Blue Cross Blue Shield of Arizona Shared Savings Program sent more than $148,000 to 148 physicians in the fourth quarter of 2016, in payments ranging from under $1,000 to over $5,000. Stakeholders want to expand on their success.

With encouraging results from their first year of operations, stakeholders in the Blue Cross Blue Shield of Arizona Shared Savings Program say they're looking to expand their model into other states.

The model now includes more than 725 providers treating 45,000 BCBSAZ members. John Wallace, senior vice president at Change Healthcare and president and COO of ACO Partner, spoke with HealthLeaders Media about the model, why it works, and how it will grow.

The following is a lightly edited transcript.

HLM: You describe the Blue Cross Blue Shield of Arizona Shared Savings Program as a "truly unique value-based collaborative." What makes it truly unique?

Wallace: The reason we say it is truly unique are the services, the technology, the total offerings coming through at zero risk to the providers and their patients. How we deliver those services directly for the doctors on behalf of providers to their patients we believe is unique.

I realize there are similar programs across the country, but we launched this with major investments made on behalf of the patients and the providers in the state. We thought that was important to do. Not just the strategy on the business side, but playing a part in improving the healthcare sector.

HLM: Who are the patients?

Wallace: These are commercial patients; folks that are buying health insurance across Blue Cross Blue Shield. We started with commercial because there are plans with ACO Partner to partner with other health plans across the country.

HLM: How is your model different from a traditional ACO?

Wallace: We are not an ACO. I would consider us a value-based transformation vehicle.

Traditionally, ACOs are owned or co-owned by the provider group. Many times that ACO is responsible for footing the bill for the technology the services, etc. That gives the providers a bit more control, but it's a cost.

Ours are two entities coming in and funding that cost risk free on behalf of the providers and their patients, and taking on the financial aspects for all the right reasons. There is clearly a return for Blue Cross Blue Shield, if you can improve quality and reduce overall cost of care.  

We look at this as a way to participate more broadly in the value-based transformation in Arizona as a proof point that we can make the investments, and we can put our technology and our services into play through this vehicle to do this much more aggressively across the country.

HLM: Is the model making money?

Wallace: I can't comment on financials. I will tell you that all stakeholders to date, based on the 2016 results and expected results in 2017, will do sufficiently well.  

HLM: This model is all carrot and no stick for providers. Why?  

Wallace: At this point we thought it was important to be all carrot and no stick so we can teach these providers how to fish and create longer-term sustainability. The risk to the providers is zero. It's very easy in to get into the program and very easy out to get out.

HLM: What's your sales pitch to physicians?

Wallace: We tell them what we are going to do, and here is why we are going to do it. Whether it's a disease management program or HEDIS gaps we are going to close, we explain what we are going to do. We look at projected outcomes, their current benchmarks on how they're doing against the 12 core metrics that we measure and we put a plan together for each of those metrics. We take the responsibility.

Once we are successful with that provider and we write a savings check back to that provider for providing higher quality care we tend to get their interest. They want to understand how they can do better with their other patients. That is why we say it's all carrot when we teach these providers how to fish.

HLM: So, you see this as a transitional model, with the hope that docs will someday take up the risk?

Wallace: We do. The base program is helping independents remain independent. Independent practice physicians may not have the breadth or financial ability to purchase the technology or hire the additional people to be successful.

When we believe this 730-provider network is strong enough, is clinically integrated more than it is today, there is a potential to move down this bridge to a risk model.

HLM: When might this transition occur?

Wallace: I do not know. I'd be uncomfortable saying a timeframe. We believe we can do it, but we have to build a case and create a trend line and move aggressively down the bridge to risk.

HLM: Where do you see this model in five years?

Wallace: First and foremost, we wanted to make sure we could bring all stakeholders to the same side of the table with an aligned vision. We've been able to prove that out.

We're already in discussions with multiple health plans across the country, specifically in four states and we will be in pro forma financial modeling in the next 60-90 days with two of those plans.

We created this joint venture entity for other health plans to buy into, and it is important to have an equity position in the joint venture, which means finding the right partner. Ownership will be diluted down allowing other partners to participate.

The benefit is they have a key structure in place where we have a set of metrics that we know are improving quality and the outcomes are bringing the cost of care down, and it's been proven.