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ACOs Seek Expanded Capabilities to Further Align Providers with the Community

Study evaluates 19 ACOs to determine what is working in alternative payment model implementation

CHARLOTTE, N.C. & PRINCETON, N.J. – (October 27, 2016) — A report released today by Premier Inc. (NASDAQ: PINC), with support from the Robert Wood Johnson Foundation (RWJF), suggests that as accountable care organizations (ACOs) progress, they are seeking to expand population health management capabilities, including their relationships with community organizations and patients. 

These insights were published in the first of two reports developed under a grant from RWJF by the Premier Research Institute, a non-profit affiliate of Premier, in conjunction with Greenwald & Associates, LLC, National Research, LLC, and KNG Health Consulting, LLC. The researchers collected qualitative and quantitative information from 19 fully-integrated ACOs that participate in Premier’s Population Health Management Collaborative to understand the current state of ACO development and implementation, and identify barriers and potential solutions.

“Alternative payment models, such as ACOs, serve to shift the traditional fee-for-service model, which incents providers to do more rather than do better, to a value-based model that aligns incentives with measurable quality, cost and population health outcomes,” said Timothy Lowe, PhD, director, healthcare research, Premier Research Institute, the study’s principal investigator. “As providers develop and implement alternative payment models to align with value-based payment policies, such as the new Quality Payment Program for physicians, it is critical to identify what is working and what is not to support continuous change and improvement.”

Review of the qualitative findings yielded a number of overarching themes that capture opportunities, challenges and outcomes as organizations develop and implement ACOs. For instance, while nearly every ACO studied is working with community social service organizations, 84 percent cited increased support from their community partners as an opportunity for improvement that is very different from the work that hospital-based organizations have traditionally considered. This includes moving to serve as the central hub to enable community organizations to be more effective in meeting the needs of mentally ill and chemically addicted residents, as well as teaming with employers and local gyms to offer exercise and nutrition-based counseling to address preventative health needs.

"Increasingly, providers understand how important the things that happen outside of the doctor's office or hospital are to improving and managing a person's health,” said Andrea Ducas, program officer at RWJF. "To that end, some leading ACOs are expanding their services to include more upstream, preventive support for patients and are also expanding their work to reach entire communities, rather than just focusing on their assigned beneficiaries.”

“What can get lost in discussions is the impact of the social determinants of health on how well ACOs perform,” said Joe Damore, vice president of population health management at Premier. “This analysis reveals real-world efforts underway when it comes to the importance of community partnerships to influence health outcomes and performance. We’re seeing our members collaborate with organizations like Meals on Wheels to improve the health of their populations.”

However, there are different levels of maturity among ACOs. Some are struggling with financial pressures and payer requirements related to the specific populations for which they are accountable. Only 32 percent of respondents reported that their communities had adequate resources to meet the challenge of improving community health. Limitations include, inadequate funding for staffing and services, data interoperability challenges, physicians operating under the fee-for-service model, and payer pressures.

“These limitations have obvious implications for healthcare policy and restrictive reimbursement frameworks, including providing the resources and funding to address the basic clinical, social, and psychological needs of patients,” continued Dr. Lowe.

Researchers also identified three ways ACOs are engaging to meet the ongoing and future challenges of population health and value-based payment models:

  • Improving information and best practice sharing with other ACOs.
  • Developing a framework for implementing population health improvement activities based on level of maturity and access to required community resources.
  • Enhancing dialogue between providers, regulators and funders to set priorities for services development and future research foci.

A quantitative analysis, which compares differences in patient outcomes and care costs between the 19 ACO systems and a matched sample of their non-ACO peers, will be published in a separate report.

Most of the ACOs studied are participating in the Medicare Shared Savings Program (MSSP) and a commercial ACO or shared savings program. Half of the Medicare ACOs in Premier’s Population Health Management Collaborative qualified for shared savings payments in performance year 2015.

About the Robert Wood Johnson Foundation

For more than 40 years the Robert Wood Johnson Foundation (RWJF) has worked to improve health and health care. RWJF is working with others to build a national Culture of Health enabling everyone in America to live longer, healthier lives. For more information, visit www.rwjf.org. Follow the Foundation on Twitter at www.rwjf.org/twitter or on Facebook at www.rwjf.org/facebook.

About Premier, Inc.

Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of approximately 3,900 U.S. hospitals and health systems and approximately 150,000 other providers and organizations. With integrated data and analytics, collaboratives, supply chain solutions, and advisory and other services, Premier enables better care and outcomes at a lower cost. Premier, a Malcolm Baldrige National Quality Award recipient, plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on www.premierinc.com; as well as Twitter, Facebook, LinkedIn, YouTube, Instagram and Premier’s blog for more information about the company.

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