Medicare ACOs in Premier Population Health Collaborative Outperform Peers by 57% in Achieving Shared Savings

CHARLOTTE, N.C. (Dec. 21, 2017) — Since 2012, Medicare accountable care organizations (ACOs) that participate in the Premier Inc. (NASDAQ: PINC) Population Health Management Collaborative (PHMC) have outperformed their peers in achieving cost and quality improvements. Nearly half of PHMC Medicare ACO participants received shared savings payments in performance year 2016 compared to 33 percent of all Medicare ACOs. In addition, since 2012 PHMC Medicare ACOs have performed 57 percent better on average in achieving shared savings.

PHMC Medicare ACOs make up six percent of all Medicare ACO program participants but have generated 20 percent of the savings since 2012. In a recent analysis*, Premier projects that Medicare could have doubled the $2 billion in savings it has achieved across its ACO programs since 2012 if all participants performed at the average level of PHMC members.

Additionally, in performance year 2016:

• Nearly 75 percent of PHMC Medicare ACOs achieved savings for Medicare, compared to 57 percent achieving savings for Medicare across all Medicare ACOs.
• PHMC Medicare ACOs outperformed their peers in 18 out of the 33 quality measures, with the greatest gains in meeting meaningful use requirements, fall prevention and pneumonia vaccinations.
• 100 percent of PHMC Next Generation (NGACOs) and Pioneer ACOs achieved shared savings compared to half for all other NGACOs and Pioneers. PHMC NGACOs and Pioneers represent 15 percent of the total program participants but achieved 29 percent of the total program savings.

“Achieving success in Medicare ACO models is difficult work with complex variables at play, and PHMC ACO members are consistently proving that establishing a well-planned value-based care delivery process and model leads to success,” said Joe Damore, vice president of population health management at Premier. “We’re seeing ACOs in both the public and private sectors continue to drive forward the movement toward value-based, wellness-focused care. We congratulate the PHMC members on their steadfast commitment and these impressive results.”

A recent Premier C-Suite survey identified several barriers to achieving success in value-based, alternative payment models. The most significant barrier they face is balancing health system margin pressure from both managing participation in fee-for-service and value-based payment arrangements successfully – with 100 percent of respondents suggesting it’s a challenge (85 percent said it is a significant issue). C-Suite leaders also noted significant challenges with:

• Aligning physician and other provider compensation and incentives with new payment models (61 percent);
• Developing an effective cross-continuum care management system with primary care physicians and other providers (59 percent);
• Creating and incentivizing high-value network participants across the entire continuum (59 percent); and
• Population health data management, including an effective claims analytics system (56 percent).

“There’s no question that antiquated fee-for-service policies are impeding success in value-based payment programs. Managing in both worlds is a difficult challenge. While our members are asking for these issues to be addressed so they can better serve their patients, they are also following best practices based on what’s working across the PHMC to create aligned incentives, effective high-value networks, clinical integration and robust data management systems,” said Damore.

Premier recently published a white paper titled Building Successful Two-Sided Risk Models, which discusses evolving risk-based alternative payment models and uncovers insights around the capabilities health systems need to achieve success in today’s value-based payment environment. PHMC member experiences in developing successful value-based care delivery and alternative payment models were also published in a 2016 report with the Robert Wood Johnson Foundation.

The PHMC includes approximately 70 health systems across 80 markets with hundreds of hospitals and thousands of clinicians working together to align, measure and improve population health management. Through the PHMC, leading health systems work together to share lessons learned, insights, data and best practices with each other. This includes access to robust claims analytics and benchmarking capabilities that produce unblinded reports, allowing members to drill down and evaluate key internal and comparative performance trends, per capita costs, leakage, assess risk and gaps in care, as well as identify high-risk populations. Named Best in KLAS for Value-Based Care Consulting in 2016 and 2017, Premier consultants partner with healthcare organizations pursuing ACOs in both government and commercial health plan sectors to build the capabilities needed for them to succeed in new value-based models.

*The Premier analysis measured upside and downside results for all PHMC Medicare ACOs in performance years 2012-2016 to create an average savings rate, weighted by number of beneficiaries, and multiplied it by the total benchmark expenditures for all other Medicare ACO program participants in the same timeframe.