Some providers are finding that success with value-based contracts depends on whether they can counter lower inpatient volume by adding new customers.
That was the experience at Memorial Hermann Healthcare System when the Houston-based system formed an accountable care organization with Aetna last year. The pricing for its narrow network was set 8% to 15% below the broader networks in which Memorial Hermann participates.
Aetna is anticipating about $3,200 in savings per member over five years, said Dr. Catherine Gaffigan, executive director of strategy and operations for Aetna's West and Midwest regions.
“The expectation is bending the cost curve over time,” she said during a session at the Healthcare Financial Management Association's 2014 Annual National Institute. “Maybe you ride those discounts the first year … but in the out years, this is really about squeezing out utilization.”
But shared savings are the more difficult part of the revenue opportunity in an ACO, said Christopher Lloyd, CEO of the Memorial Hermann Physician Network. Instead, the system is seeing new patients that previously sought care elsewhere.