Cleveland Clinic ACO Targets 'Big Buckets' for Big Savings

Cleveland Clinic ACO saved more than $42 million across 71,113 beneficiaries in 2016 as a participating provider in the Medicare Shared Savings Program. Most of the savings came from reducing big bucket expenditures around inpatient stays, readmissions, and post-discharge care.

Cleveland Clinic’s accountable care organization has seen two years of solid savings under the Medicare Shared Savings Program. This year, the provider generated savings of $42.2 million, of which the clinic will receive nearly $20 million, a 20% increase over 2015, according to the Centers for Medicare & Medicaid Services.

James Gutierrez, MD, president and medical director of the Cleveland Clinic ACO, spoke with HealthLeaders Media about the success of the shared-savings program. The following is a lightly edited transcript.

HLM: How many physicians and patients are involved with Cleveland Clinic’s ACO?

Gutierrez: All of our employed staff physicians in both northeast Ohio and Florida are members of the ACO. We are talking upwards of 1,500-1,700 physicians. It keeps growing. In addition, we have about 300 primary care physicians employed by Cleveland Clinic in northeast Ohio, and probably 50 in Florida, and another 50 independent private practice primary care physicians in northeast Ohio who are members of our clinically integrated network called Quality Alliance.

Patient-wise, in 2017 we have about 85,000 patients. In 2016 we had just a little over 69,000.

HLM: Were you surprised that you’d generated $42 million in savings in 2016?

Gutierrez: We were surprised in 2015 because that was our first year of participation and we didn’t have a baseline in terms of familiarity. We were just gaining familiarity with the CMS claims data set that we received as part of the program but didn’t have any sense of where we would wind up until we got the final reconciliation.

Based on what we learned in 2015, our actuarial and analysis staff developed some modeling to predict how we would do at the end of 2016. They did a pretty good job of getting us in the ballpark. The $19.9 million for our share of the savings was in line with the range that we expected to see. It made us feel good that our predictive model was pretty good in understanding what we get from CMS and being able to monitor that through the year.

HLM: What is your projected savings for 2017?

Gutierrez: We are going back and forth with CMS now about the calculation of the benchmark. It looks like we will be roughly in the same range (as 2016), but we are waiting until the end of this month to get an updated benchmark from CMS to get a better idea of how our performance will compare with that benchmark. So, stay tuned.

HLM: Where do you find the savings?

Gutierrez: You break down the big buckets of Medicare spend. In 2016, we saw about an 18% reduction in the inpatient spend for our attributed population and about a 32% reduction in skilled nursing spend for that population. Those were really the key drivers, along with smaller improvements in high-end imaging utilization and emergency department utilization. But, it was mostly the inpatient and skilled nursing. We also saw a 9% reduction in 30-day readmissions, which certainly contributed to the bottom line.

HLM: Could these savings have been generated in a fee-for-service environment?

Gutierrez: We started to really focus on value and reducing utilization, where that was possible, back in 2013. Everybody saw what was coming with accountable care and value. So, we started to focus as a system on trying to improve access, develop care coordination for our highest utilizing patients to keep them out of the hospital and the ED, and we developed a more robust programs to reduce readmissions for people who were admitted.

We started to build that foundation several years before we started with the shared savings in 2015. We got into it at the right time because we had put things in place to start to cut out the spend where there was room to be found, and the shared savings program came into play when there was an opportunity to harness that.

HLM: Is this level of savings sustainable?

Gutierrez: Obviously, it’s going to get harder and harder as we continue to benchmark against ourselves and we keep cutting the fat out of the system.

However, our part of the country, northeast Ohio and the Midwest in general, is a less-advanced market than the coasts or other parts of the country. Our level of per-beneficiary, per-year spend is still relatively high so there is still opportunity there. But, in 2015 and 2016 we were picking that low-hanging fruit. It’s going to be more of a challenge for sure. We realize that.

HLM: What is it about the ACO model that allowed you to find savings?

Gutierrez: We’ve done a couple of things in recent years that helped us. No. 1, although we don’t own skilled nursing facilities at Cleveland Clinic, we have our own nurse practitioners and physicians caring for many of our patients at our highest-volume SNFs. This group has been out there for more than five years and they have been on the front lines improving quality and reducing unnecessary and managing length-of-stay in the SNFs. We reaped some benefits from our Medicare Advantage plans earlier in this decade and now we are seeing it in the ACO as well.

The second thing is we were very active in the bundled payment initiative, specifically for total joints. We rolled out total joint bundles across our system in 2015 and part of the success there is about being more comfortable bringing people home after a joint replacement rather than having them pretty much mandatory stay in a SNF.

Not only did that help us with total joint replacements, it teaches people in the hospitals, discharge planners, physical therapists, and most importantly physicians, that we need to have a comfort level with sending people home. The patients prefer it. There are less complications and infections. If you pick your patients well they do quite well in that setting. There is a halo effect that extended to other medical and surgical patients who left our hospital and avoided SNFs altogether.

HLM: Is leadership’s role different in an ACO?

Gutierrez: We really needed our leadership going back to the early part of this decade clearly and regularly saying that we need to move toward value. This is the train coming down the tracks. We need to get on or run over.

In terms of operationalizing it, that took place in the trenches. Every hospital ward, every community hospital had efforts going on around readmission reduction, primary care across all of our practices. We got engaged in care coordination and trying to get the message of value out to the front lines.

We had terrific quality results in 2016 for the ACO. We had a robust and engaged quality group that were frontline people in our practices figuring ways to close care gaps, get better diabetes and hypertension control, improve preventive care, improve screening for depression, etc. I was those small tactical wins that got us to the results we’ve got.

HLM: Is your replicable elsewhere? If so what needs to be in place?

Gutierrez: We followed a fairly standard roadmap for succeeding in terms of attacking the big buckets of spend; reducing readmissions, ED visits and SNF stays. The thing that put us in a great position to be successful was that the bulk of the physicians and patients were Cleveland Clinic attributed. As a medical staff model group practice with a single employment structure and single leadership, it made it much easier to align. We are still a big battleship to turn, but at the same time we all work for the same entity, so that made it easier to get that message across and work together to get these results.

A lot of ACOs, where you have a clinically integrated network of physicians who are more independent and you have several hospitals, it is much harder to get everyone to work in lock step. You can get there and some people have had tremendous results, but it’s harder to get that engagement when everyone is more independent.

HLM: Anything else?

Gutierrez: We made significant investments in population health analytics and health IT. When you are managing a population of 85,000 beneficiaries and you have this huge claims data set and a huge clinical data set that is coming out of our EHR, which is Epic, having the analytics to crunch that big data helped us identify who our highest-risk patients are who we need to care coordinate aggressively, who are our potentially high-risk patients who we can reach out to proactively and address care gaps and get them under control. That helped us in 2015 and 2016. As time goes on our folks are getting better using that analysis to help us.