Accountable Care Organizations Get Respect — $3M for Pilot Projects

Money will go to help make better use of Medicaid data in Camden, Trenton, and Newark

Dr. Jeffrey Brenner, executive director of the Camden Coalition of Healthcare Providers
While $3 million may not seem like much in the context of New Jersey’s $34.8 billion proposed budget, for three growing urban healthcare programs, a little could go a very long way.

Gov. Chris Christie included an extra $3 million — half federal, half state — for the Department of Human Services in the spending plan he proposed Tuesday to help pilot programs in Camden, Trenton, and Newark. It marks the first public funding of the three state-licensed Accountable Care Organizations, which have depended so far on philanthropic support and resources provided by the hospitals and healthcare centers that are partners in the program.

“We’re very pleased to see this commitment,” said Linda Schwimmer, president of the New Jersey Healthcare Quality Institute, which has worked closely with organizations to get the programs established. “It takes a lot of investment up front and a lot of time.”

The programs, focused on Medicaid patients, reflect a growing trend in New Jersey and nationwide to keep people healthy, instead of paying for costly treatment after they get sick. The goal is to connect local healthcare providers so that they can share patient data, identify those who have the greatest health needs — and are therefor usually the largest healthcare consumers — and coordinate medical, behavioral, and social care to keep these patients healthy and out of the hospital. Eventually, any money saved will be distributed among the healthcare partners involved.

“The budget funding is so important,” Gregory Paulson, executive director of the Trenton Health Team, which runs the regional ACO. “Three million is a very small investment, but given the partnerships we’ve built over the past decade and given their willingness to do the work, that money will go a long way toward improving the health of our community.”

Authorized by a 2011 law — for which regulations took four more years to complete — the three state-licensed programs are evolving at different paces. The Camden ACO is part of the Camden Coalition of Healthcare Providers, which was built over the past 12 years largely by Dr. Jeffrey Brenner, a family physician and MacArthur Foundation “genius,” who has become a national advocate for using patient data — and targeted individual outreach — to improve community health and reduce medical costs. The Greater Newark Healthcare Coalition, established in 2008, is now building staff and structure to support its regional ACO.

[related]Paulson said conversation around the Trenton program began nearly a decade ago, as a local hospital closed and healthcare leaders reexamined the capitol area’s needs. Now driven largely by the 50 local partners, he said the ACO is responsible for nearly 38,000 Medicaid beneficiaries in the Trenton area. The larger Trenton Health Team, which oversees the ACO, seeks to provide the same coordinated, data-driven care to all patients in the region. The $1 million provided by the state will allow the ACO to expand its data analysis capacity, add staff and assist their partner organizations with program costs, he said.

“The lack of an identified funding stream for the Medicaid ACO program has been a challenge for all of us,” Paulson said, “one that we’ve overcome thanks in a large part to the Nicholson Foundation.” He said Newark-based foundation provided at least $6 million to the Trenton program, plus funding for other regional efforts, and fueled much of the ACO infrastructure in Camden and Newark as well.

Tyla Housman, who heads the ACO collaborative for the Healthcare Quality Institute, said there are several other Medicaid ACO programs underway as well — in Passaic County, New Brunswick and in Cumberland and Gloucester counties.

While they are not licensed by the state, she said they are working to coordinate local caregivers and hope to eventually have access to the same state Medicaid data that will be provided to the licensed groups in Camden, Trenton, and Newark. The licensed ACOs have until July to file a plan with the state outlining how they will divvy up any savings in the future.

The level of achievable savings remains a big question. The ACO law predates the major reforms triggered by Obamacare, which added more than 400,000 Medicaid patients in New Jersey since 2014 and changed the way insurance companies oversee the federal healthcare program for poor residents. In addition, New Jersey’s ACO program is focused on a population — poor patients, many with significant health needs, in some of the state’s most troubled communities — that is costly to treat.

“The state’s current ACO model presents some real challenges,” said Joel Cantor, director of the Center for State Health Policy at Rutgers. Cantor’s group is now evaluating the ACO programs, as the law requires.

Sen. Joseph Vitale (D-Middlesex), the chairman of the Senate Health Committee and sponsor of the ACO law, underscored that while there is potential to save enormous amounts, the focus isn’t on the money. The commitment of $3 million in the budget “is important money. It’s a good investment. Savings matter, but what matters most is the health outcomes,” Vitale said. “Even if it were a wash, what matters is that people are getting earlier care and better treatment.”