Wellmark program saves $17 million through ACO shared savings model

Hospitals and health systems across the state saved more than $17 million in 2014 through a major Wellmark Blue Cross and Blue Shield cost-saving program, the insurer announced on Thursday.

Wellmark's Accountable Care Organization (ACO) Shared Savings model, now in its third year, provides financial rewards to ACOs that reach established quality goals and slow the rate of increased health care spending.

At the same time, health care providers will not earn incentives if quality declines or costs run higher than expected.

An ACO is a network of local health care groups that work to reduce costs and improve quality through better coordination of care. The insurer now has 13 ACOs, which provide care to 525,000 people, participating in the program.

'Wellmark's ACO shared savings model continues to be a critical component of our strategy to work collaboratively with physicians and hospitals to promote high quality care for our members,” said Mike Fay, vice president of health networks for Wellmark, in a prepared statement.

Wellmark data shows that in 2014 the eight participating ACOs reduced hospital admissions by nearly 11 percent, readmissions by 8 percent and emergency department visits by 10 percent.

Preventive care services also increased over the previous year, Wellmark said. There were an additional 21,000 visits to primary care physicians, an additional 2,500 women received mammograms, 1,500 more children received preventive visits and 1,100 additional people were screened for colon cancer in 2014.

During the first two years of the ACO program, Wellmark's first five ACOs saved more than $12 million by reducing hospital admissions by nearly 12 percent, readmissions by 7 percent and emergency department visits by 11 percent.

The health systems included in the 2014 ACO data are UnityPoint Health, Mercy Medical Center-Des Moines, Genesis Health Systems, the Iowa Clinic, McFarland Clinic, Family Healthcare of Siouxland, Wheaton Franciscan Healthcare and a collaboration between Mercy Medical Center in Cedar Rapids and University of Iowa Hospitals and Clinics.

Dr. Tim Quinn, executive vice president and chief of clinical operations at Mercy, said the hospital has made significant quality advancements as well as efforts to improve patient costs resulting in fewer emergency department visits and increased cancer screenings among other improvements.

'We're measured against our baseline performance,” he said, adding the Mercy-UIHC ACO also can see how it performs compared with others in the program. 'We scored quite well.”

The hospital will invest the financial incentives into a bonus program, Quinn said, that rewards physicians, nurses and other employees for making sure patients are up to date on preventive care services.

The relationship with UIHC is helpful because the hospitals can communicate better and serve as a sounding board, Quinn said. But they also can pool resources and share expenses, which is hugely beneficial due to high demands in health care and health care expenditures, he added.

This is especially true when it comes to analytical data. Mercy implemented an electronic health record several years ago that allows the hospital and its clinics an easier way to stay current with patient records and preventive care measures that might be missing, such as a colon-cancer screening or a diabetes test.

But now the hospital is able to look at cost data as well, which provides better insight for items such as the most expensive pharmaceutical drugs prescribed or tests ordered, Quinn said.

This allows the hospital to be better stewards of patients dollars, he added, eliminating duplicated tests such as MRIs or subbing a frequently prescribed name brand drug out for a generic drug.

'We can build plans around that and intervene,” he said.