Performance-Based Incentives for Independence ACO Participants Could Reach $150 Million in 2014

Rewarding physicians and hospitals for collaborating to improve quality of care and lower costs could reach $150 million in 2014, according to initial results from the Philadelphia-based Independence Blue Cross Accountable Care Organization (ACO).

Nearly half of hospitals participating in Independence, a nationally recognized health insurer serving nearly 8.8 million people in 24 states and the District of Columbia, have reduced medical costs and increased patient satisfaction.

The Independence accountable care payment model requires healthcare providers, often a hospital and its affiliated primary care physicians (PCPs) and specialists, to establish an ACO-like entity that shares responsibility with the insurer for improving clinical performance and cost efficiency for the care delivered to patients.

Key results from hospitals and health system participants in the first year include:

  • Half of the hospitals participating successfully reduced their medical costs, determined by customized targets based on historical costs;
  • Nearly 90 percent of the participants lowered hospital readmission rates with an average reduction of 16 percent;
  • 100 percent of the health systems improved at least one hospital-acquired infection (HAI) measure or received a top distinction from the Pennsylvania Department of Health for infection control;
  • Nearly all participants scored better in measures that assess patients’ experience during their hospital stay, such as their understanding of information about recovery at home.

Under the Independence accountable care payment model, half of the potential earnings for the hospital and physicians are based on their ability to improve their performance related to HAIs, patient experience, readmissions, and surgical care, and the treatment of heart attacks, heart failure, and pneumonia. The other half of the potential incentive payment is based on their ability to manage costs through greater collaboration and coordination of inpatient, outpatient, ancillary care, home health, prescriptions, and other health services.

Source: Independence, July 14, 2014

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