Ahead of the game

Uncertainty did not stop health systems from racing ahead with accountable care as the U.S. Supreme Court debated the healthcare reform law that launched Medicare's efforts to encourage the emerging model.

Now that the law survived largely intact, the industry's accountable care experimentation will give efforts structure and momentum, executives said.

“We are pleased that the Supreme Court has released their decision because now we know the context in which we move forward,” Chuck Mooty, interim CEO for Minneapolis-based Fairview Health Services, said in a statement.

“We've had great success working with local payers in our market to support changes in care delivery and payment, and we intend to continue those efforts,” Mooty said. “As one of the 32 Medicare Pioneer accountable care organizations, our ongoing work also will include delivering greater value to Medicare beneficiaries. These are just a few examples of how we are and will remain engaged in health reform.”

Montefiore Medical Center, also selected by Medicare as one of the ACOs to launch in January, did not defer investments as the court debated the law, said Dr. Steven Safyer, president and CEO of the New York-based, 1,491-bed hospital.

“There was risk,” but the risk paid off, Safyer said. “That's why I'm happy.”

The law, a mash-up of health policy, includes new insurance regulation, insurance subsidies and expansion, quality incentives and other provisions, including one four-page provision to create ACOs under Medicare. Another provision created the Center for Medicare & Medicaid Innovation with the authority to launch payment experiments such as accountable care.

The political and legal debate surrounding the law has centered on its insurance expansion provisions, but a decision from the Supreme Court on those points threatened to bring down the entire law.

Yet healthcare organizations were pursuing new accountable care contracts under Medicare even in the weeks and days leading up to the court's decision.

In Milwaukee, Aurora Health Care went ahead as the legal challenge brewed and applied to be among the Medicare accountable care organizations to be named in coming weeks.

Dr. Nick Turkal, the system's president and CEO, said he was pleased that expanded coverage and provisions to overhaul healthcare delivery, such as accountable care, survived, though “the law falls short of really reforming healthcare in our country.”

New York City's public health system told Medicare officials of plans to apply to join the Medicare shared-savings program for ACOs starting in 2013.

Alan Aviles, president and CEO of the New York City Health and Hospitals Corp., said the outcome would give focus and momentum to efforts to revamp healthcare delivery “and result, hopefully, in improvement in efficiency and quality that remain the central challenge before us.”

Aviles said accountable care, as an approach to revamping incentives to promote quality and reduce costs, has gained “a fair amount of momentum,” and Medicare's move toward the model is consistent with the direction of the industry and the system.

Indeed, executives engaged in ACOs said the efforts would have continued, regardless of the decision.

“The emphasis on a higher value, more-organized, better coordinated healthcare system that provides better quality and focuses a great deal on providing better quality has started, and that's not going to stop,” said Jeff Squier, executive director for Bellin ThedaCare Healthcare Partners, another Pioneer ACO.

Catholic Medical Partners operates eight accountable care contracts, including private-market ACOs and a Medicare ACO that covers 30,000 and stands to generate $260 million of revenue for the Buffalo, N.Y.-based provider.

“We're doing this anyway,” Dennis Horrigan, president and CEO of Catholic Medical Partners, one of 27 organizations to win some of the first Medicare accountable care contracts made possible by the Patient Protection and Affordable Care Act.

Healthcare spending cannot continue to grow unchecked, and providers face pressure from employers, households and governments to curb spending, said Chuck Lehn, CEO of the Banner Health Network, which oversees the health system's ACO. “Practically speaking, the underlying problem does not go away.”

Hospitals, medical groups and commercial insurers will continue with efforts, such as accountable care, that seek to better coordinate medical care and improve the quality of medicine, he said. “Everybody's got their head down working on it,” Lehn said.

Banner Health launched its Medicare ACO in January under the Center for Medicare & Medicaid Innovation. The Phoenix-based system, which owns or operates 22 hospitals, has roughly 52,000 seniors in its Medicare ACO.

John Hensing, Banner's executive vice president and chief medical officer, said an aging population and rising health spending are creating demand for greater efficiency, more collaboration and new incentives that reward hospitals and doctors that keep people healthy “almost regardless of what the Supreme Court said.” The ruling, he said, “doesn't change that activity, and we'll continue to pursue it.”