1. Evolution of ACOs in California
Berkeley ACO Workshop
May 8, 2015
Jill Yegian, Ph.D.

2. Project Overview: Evolution of ACOs in California
Partnership between IHA and UC Berkeley
Participating Physician Organizations
AltaMed, Los Angeles
Brown and Toland, San Francisco
HealthCare Partners, Los Angeles
St. Joseph Heritage, Orange
Monarch, Orange
Funding from the Robert Wood Johnson Foundation, April March 2015
Part of a cohort of four grantees studying ACOs across the country
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

3. Evolution of California ACOs
Areas of focus for investigation:
Structure
Strategy
Payment arrangements
Performance
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

4. Activities and Timeline
Issue briefs on ACO contracts, hospitals’ role in ACOs, patient engagement
1st round interviews with health plan executives
Compare available P4P data for ACOs with other medical groups
2nd round interviews with health plan executives
Spring 2013
Summer 2013
Fall 2013
Summer
2014
Fall 2014
Oct. 2014
May
2015
1st round interviews with physician organizations
2nd round interviews with physician organizations
“Total Expenditures per patient in hospital owned & Physician Owned POs” published in JAMA
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

5. ACO Product Offerings Monarch Brown and Toland HealthCare Partners
St. Joseph
Heritage
AltaMed
ACO Medicare FFS
 (Pioneer)
 (dropped Pioneer, now MSSP)
ACO commercial PPO 
ACO commercial HMO
Managed Medi-Cal
Medicare Advantage
Two cases (B&T and Monarch) continuing with Pioneer, one dropped (HCP) in favor of MSSP
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

6. Case studies: Market context
California's long history in managed care
Competition from Kaiser
Strong interest in ACO arrangements by both POs and health plans in most areas of the state
Major expansion of Medicaid population in California
Little ACO action in MMC/safety net
Launch of California’s exchange
Potential for local ACO approach (individual choice)
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

7. Takeaways -- Pioneer Experience
Selective network for patient attribution more successful than “land grab” strategy
PCP vs. specialist
Risk selection is major issue
Difficult to obtain inpatient, ED data for care management
Lag in data from Medicare
Hospital notification varies
Post-acute care transitions present a challenge
SNF utilization difficult to manage
Mixed financial results
Monarch and B&T continuing Pioneer, HCP shifted to MSSP
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

8. Takeaways -- Commercial Experience
Many different variants
HMO – shifting back toward full risk
PPO – supplementing with care management fee (for all, or just chronic)
Both HMO and PPO have shared savings
No savings = no bonus, regardless of quality
Targets vary – set against market vs. own trend
Healthy population – harder to find savings (relative to Medicare)
Referral management critical to managing cost
Lower cost AND higher patient satisfaction due to lower OOP costs (in- network utilization)
Maternity: can’t avoid admission, rely on steerage
Mixed financial results
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

9. Takeaways -- Patient Engagement
Difficult to engage PPO and Medicare FFS patients (vs. HMO & Medicare Advantage)
Patients may not realize they are in an ACO, skeptical
“Inducements” for beneficiaries prohibited
Physician-led communication with ACO patients trumps plan- initiated outreach
Plans delegating care management
Physician organizations may not be familiar to beneficiary
Doctor’s office needs to lead, with support from PO and plan
Little explicit focus on disparities to date
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

10. Surprise Finding: Hospitals’ Role
Hospitals less active than POs & plans on ACOs
Varying success among POs in case study on developing hospital partnerships
Several hospital systems in California pursuing vertical integration strategy (plan/delivery system)
New models emerging based on hospital network
Vivity HMO: Anthem’s joint venture with 7 hospitals in SoCal
Notable exception: Dignity Health Hospitals
Active pursuit of ACO strategy over last several years
CalPERS ACO: Dignity, Hill Physicians, Blue Shield of CA
New initiative announced in October with Hill Physicians, Aetna
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

11. JAMA Paper, October 2014
Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California
Authors Jamie Robinson (UCB), Kelly Miller (IHA)
Findings
Physician organizations (POs) owned by local hospitals are 10% more expensive than those owned by member physicians
POs owned by multihospital systems are 10% more expensive than those owned by member physicians
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

12. Issue Briefs – May Publication
Four IHA Issue Briefs to be published in the next month
Imperatives and Challenges of Physician- Hospital Alignment (Jamie Robinson)
Referral Management and Disease Management in California’s Accountable Care Organizations (Jamie Robinson)
ACO Contractual Arrangements in California’s Commercial PPO Market (Tom Williams)
A Large Community Health Center Adapts to a Changing Insurance Market (Jill Yegian)
Copyright © 2015 Integrated Healthcare Association. All rights reserved.

13. Research Team
Tom Williams – VP & General Manager, Accountable Care at Stanford Health Care; (during study: CEO, Integrated Healthcare Association) (Co- Investigator)
James Robinson – Leonard D. Schaeffer Professor of Health Economics, UC Berkeley School of Public Health, Director, Berkeley Center for Health Technology (Co-Investigator)
Jill Yegian – Senior VP, Programs, IHA (Co-Investigator)
Kim MacPherson – MPH Program Director, Health Policy and Management, UCB School of Public Health (Researcher)
Kelly Miller – Program Manager, IHA (Project Manager and RA)
Copyright © 2015 Integrated Healthcare Association. All rights reserved.