ACOs at Year 1 Celebrate Some Successes but Face Uncertain Future

Affordable care organizations are finding a focus in their patient communities, while concerned about funding for the coming year

camden coalition
Healthcare professionals in Camden are helping residents who once spent days in the hospital avoid readmissions. In Trenton, partnerships among community organizations have improved access to healthy food options, and providers in Newark are working together to better coordinate care.

These advances are among the benefits described by participants in New Jersey’s three official Accountable Care Organizations, pilot projects designed to pull healthcare professionals together to provide better care for Medicaid patients with complex health and social needs, while saving money. Their experiences informed a report by Rutgers University’s Center for State Health Policy, released earlier this year, and were part of a recent conference at Thomas Edison University, in Trenton, hosted by the Good Care Collaborative, a statewide advocate for Medicaid reform.

While many participants agreed the model shows significant promise, the first year of the pilot projects also revealed some vulnerabilities. New Jersey’s pilots launched in July 2015; and the Rutgers report covers their work through July 2016.

Selecting subgroups

ACO participants felt that the projects could be more successful if they focused more closely on certain subgroups of patients and better limited the metrics they used to measure success. Some said they had struggled to engage the insurance providers who cover the patients they work with, making it harder to coordinate care, and several worried about the lack of a stable funding source for their operations. And while the potential for savings is significant, it may take a few years to recognize these advantages.

“It’s a lot more fluid and a lot more flexible than the model that everyone had in mind at the beginning,” explained Derek DeLia, a research professor and senior health economist with Rutgers CSHP, who wrote the report with two colleagues based on interviews with dozens of participants in the three programs. “And the ACO groups are kind of hedging for what happens in the future,” he said. “There’s kind of a sense this might not continue.”

The ACO model was one of many pilot projects developed under the federal Affordable Care Act to help states test new policy approaches to caring for high-needs patients. One of the goals was to reduce the cost of caring for these individuals, who absorb a large percentage of public healthcare dollars; state’s have significant control over the models, which are funded from local public sources or nonprofit sources. While the federal law didn’t limit the pilot projects to Medicaid patients, New Jersey’s enabling legislation chose to focus the state’s efforts on this low-income group. (The interviews took place before efforts to repeal the ACA took hold in Washington, D.C., and they don’t specifically address uncertainty about changes on the federal level.)

A plethora of applicants

More than a half-dozen communities applied for the ACO program and, in July 2015, the state Department of Human Services selected Camden, Trenton, and Newark for the three-year initiative. (Paterson, which had applied, has also worked to institute some care coordination efforts on its own, without the state designation.) But the fact that it took several years to get the program started after the federal law passed, in 2011, sparked frustration among some participants, Rutgers found.

The Camden ACO is spearheaded by the Camden Coalition of Healthcare Providers, a group formed in 2002 under the guidance of Dr. Jeffrey Brenner, a primary-care doctor who would receive national attention for his work with vulnerable patients. The coalition had done extensive work over the years to identify patients with the highest healthcare needs and target them for better medical care and social services, groundwork that gave them a running start on the ACO work.

The Trenton Health Team had been working together for a decade (at first informally) before it was selected to run that city’s ACO. Their their experience had allowed them to identify a similar group of high-use patients and connect them with better care. The team had formed connections with local providers and engaged city government, which proved helpful when the ACO eventually launched.

Difficult obstacles to overcome

Healthy Greater Newark, the group selected to run the ACO there, benefitted from the work of the nonprofit Greater Newark Healthcare Coalition, and chose to focus on pediatric health. But Rutgers found this group faced the greatest challenges building an infrastructure, focusing its work, and engaging insurance providers in the project. Participants expressed concern about the future of the program without a more stable source of funding.

“The uncertainty in the funding makes it hard to plan what you want to do one year from now, or two years from now,” Rutger’s DeLia agreed.

Start-up funding for all three projects came in part from a $10 million grant from the Nicholson Foundation, a Newark-based philanthropy organization, among other sources. In February 2016 Gov. Chris Christie proposed adding $3 million in state and federal dollars as part of the budget to take effect that July — or $1 million for each — when the projects had already been operating for a year. (DeLia said ACO projects in other states, like Oregon and Colorado, involved funding up-front.)

But the funding didn’t come until the following year

Concerned about state’s contribution

Participants welcomed the state’s contribution, DeLia found, but expressed concern it would not continue. In fact, there is no additional funding in the budget proposed for fiscal year 2018, which starts this July. But officials in Christie’s office said last week that the fiscal 2017 allocation of $3 million, or $1 million per ACO, was actually intended to be spread over three years — not renewed annually.

That news came as a surprise to DeLia, and he said none of the ACO participants he interviewed had described the state’s contribution as a three-year allocation. “My sense is the ACOs did not view it that way,” he said, noting that the need for sustained funding was a common theme.

Gregory Paulson, executive director of the Trenton Health Team, said the project has been successful in bringing together competing stakeholders to focus on a shared vision. “We have developed the partnerships and infrastructure to advance this work in significant ways. But there’s a lot more work to be done. Continued structural and financial resources are needed to advance our regional collaboration and coordination and to complete the [pilot project] with integrity,” Paulson said.

Another common concern among ACOs was the struggle to sign contracts with the insurance companies who provide the Medicaid policies to patients, a step that is critical if the ACOs are to access accurate medical and spending data. Participants said it had been a challenge to convince these companies that the nonprofit ACOs can help improve patient health and save money. Camden has contracted with two providers, with which they agree to share any savings generated by the project, but the process has taken longer in Trenton and Newark, Rutgers found.

All three groups have also evolved in their focus on certain patient groups, DeLia’s research revealed. When the pilots started, attention centered on the high-utilizers, patients who might visit the hospital hundreds of times a year. But the ACOs found it hard to make inroads with this group, in some cases, or discovered cases — like pediatric cancer — that couldn’t really be treated more economically.

As a result, there is now a growing focus on patients defined as “risking risk,” individuals with a poorly controlled disease that could end up absorbing far more healthcare resources if their condition isn’t properly treated. “We’d rather look at some other areas where we can clearly measure the impact that we’re having to know if we’re doing something positive,” one participant told the Rutgers team.

The teams are also looking to narrow the number of metrics they are working with, since measuring dozens of outcomes has become time consuming and distracting, making it difficult to easily identify trends and gains. The Trenton team is now assessing which metrics are the most useful for its population. Camden has chosen to focus largely on the “7-Day Pledge,” which calls for prompt followup care after a hospital discharge, and tracks readmission rates and other factors related to this protocol.

“Our work is impacting patients and providers on the ground every day, and we are beginning to see a positive savings trend for our ACO, despite significant increases in pharmacy, outpatient and pediatric care costs across the state,” explained Victor Murray, director of population health Initiatives at the Camden Coalition.

But real savings could take time, DeLia and his colleagues noted, something that is not unusual for ACO pilot projects nationwide. “Given more time, however, the Demonstration may continue to foster innovative partnerships and approaches that will yield measurable results later in the Demonstration,” the report states.

Some of this detail may emerge later this year, when the Rutgers team plans to release another report based on patient outcomes and spending data for the ACOs first year.