In its latest move to reshape how healthcare is delivered, Florida Blue, the state’s largest health insurance network, has formed an alliance with Holy Cross Hospital in Fort Lauderdale to deliver integrated care intended to improve quality and lower healthcare costs.
Starting Jan. 1, the insurer will join the 230 doctors in Holy Cross’ Physician Partners to form an accountable care organization (ACO), in which the groups will share savings that are expected to come from coordinated care while maintaining specific quality standards.
Florida Blue already has similar arrangements with a group of Miami-Dade oncologists and Baptist South Florida; Moffitt Cancer Center and Baycare Health System in the Tampa Bay area; and the NCH hospital system in Naples. Jonathan Gavras, the insurer’s chief medical officer, said several more ACOs will be announced shortly.
The ACOs are part of a larger effort by Florida Blue to move away gradually from the expensive fee-for-service model, in which providers are rewarded for each additional treatment.
The plan is replace it with an integrated system that uses evidence-based standards to coordinate care to avoid unnecessary expenses such as duplicated diagnostics and reduce such things as hospital readmissions by ensuring that patients receive the necessary post-hospital services.
The ACOs require that providers and the insurer share financial and quality data — something that both sides have been highly reluctant to do in the past. The reward will be that all will share in savings generated by the system.
While many healthcare theorists believe ACOs may be a major way for the nation to reduce its healthcare costs, Gavras said they’re not a simple fix. “It’s hard work,” he said to get hospitals, doctors and insurers — traditional rivals — to work together.
Shawn Franklin, the Holy Cross executive in charge of physician services, said Holy Cross joined with Florida Blue because “we see ... a huge benefit integrating services, ultimately improving the quality of care ... and lowering cost.”
Holy Cross has been a leader in the national trend of hiring doctors. It now has about 150 on staff and another 80 community doctors that are in its provider network. Physician services continue to lose money for the hospital, Franklin said, but executives are convinced that ACOs will be a large revenue builder in the future.
Unlike the old gatekeeper model of health maintenance organizations, with the new ACOs “you can’t share in any savings without meeting quality criteria,” Franklin said.
Large hospital networks around the country have also been hiring doctors as a prelude to setting up ACOs, and other insurers, too, are starting to get involved. Earlier this month, Aetna announced a new integrated partnership with Baycare in Tampa Bay.
Linda Quick, president of the South Florida Hospital and Healthcare Association, said some other hospitals in the area are starting to explore the possibility of setting up their own ACOs but have yet to act.
Florida Blue has been an aggressive leader in this field of restructuring healthcare. It has set up a bundled payment system with the Mayo Clinic — paying for an episode of care, rather than for each individual service.
More widespread is its move that has put more than 700,000 patients in medical homes — generally with a primary care doctor coordinating their care, offering extended office hours and other benefits — so that basic care is easily available, reducing the need for expensive emergency room trips.
Unlike the old gatekeeper HMOs, the new medical home involves the insurer paying primary care doctors more so that they spend more time with patients. The medical home program was set up in partnership with the Florida Academy of Family Physicians, Gavras said.
“Physicians make more money but overall costs go down,” Gavras said. “You’re investing money up front to get better outcomes.” Unlike the old gatekeepers, doctors in medical homes get bonuses for quality care. “The data is much better” these days, he said. “It’s much easier to measure provider performance.”
The first year of the medical homes program showed “it really works the way everybody thought it would work,” Gavras said, with quality up and costs down. “And physician satisfaction was up.”
Medical homes and ACOs are now separate concepts, but they’re likely to dovetail in the future, Gavras said, with medical homes becoming part of larger ACOs.
Both concepts are emphasized in the federal Affordable Care Act, but Gavras said Florida Blue had been planning for both well before the act was passed in 2010.
“We knew that the healthcare cost trend was unsustainable ... Even if it was repealed tomorrow, we would still be moving toward this model,” Gavras said.