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How Henry Ford Physician Network made the numbers work in the Next Generation ACO

Health IT data from its Epic medical records system and risk scores from Optum went into the enterprise data warehouse.

Susan Morse, Senior Editor

LAS VEGAS -- The Henry Ford Physician Network put more than 30 percent of its revenue at risk to take part in the Next Generation ACO and made the numbers work.

The $8 billion system beat its target benchmark of $249 million by 2 percent and realized net shared savings of $3.9 million, or $16.48 per member per month, according to CEO Bruce Muma.

"It was a very positive first year," he said.

Healthcare IT data from Optum and from its Epic system enabled the executives to add EMR and other population health risk data into the Henry Ford Health system enterprise data warehouse, according to Matt Hussman, director of Analytics for the Henry Ford Physician Network.

Before implementing, they started an ROI analysis for best and worst-case scenarios. 

"This proved to be the most challenging part," Muma said. "We had to convince senior leaders to invest in us," Muma said.

The best case scenario assuming a high-efficiency ranking by the Centers for Medicare and Medicaid Services and a reduced total spend of 3 percent, would result in $11 million in shared savings, Muma said. 

Under a worst-case scenario, if total spend went up by 3 percent, they would have to write a check for $4 million.

If the results turned out to be more middle of the road, which is closer to what actually happened, they'd realize a $2.2 million gain. 

To start, the Henry Ford Physician Network used data to look at waste in the system. This included the usual suspects: high-risk populations, acute care episodes, post-acute care and transitional care.

They focused on the top 5 percent of patients in prospective risk, specialty referrals and readmissions from skilled nursing facilities.

Many of the 20,000 members in the ACO belonged to this high-risk population.

To better manage the cost of skilled nursing facilities, the system hired two case managers to conduct post-acute care surveillance. The case managers called the skilled nursing facilities to ask about the intended care plans and reduced length of stays by about 10 percent. 

In the emergency room, they found physicians were reluctant to send at-risk patients home. 

"We developed a toolbox of 16 different things to let doctors know patients would be safe at home," Muma said. "In the first year, it resulted in 7 percent reduction in hospital admissions."

A third plan deployed comprehensive care procedure rooms in two clinics, which enrolled 500 patients who were in top the 5 percent risk category. This realized about a 25 percent reduction in per member per month cost.

The system also used case management integration, clinical decision support on choosing wisely and referring wisely among its plans to reduce cost. 

Henry Ford operates eight hospitals and has the provider-owned Health Alliance Plan. An estimated 1,400 physicians took part in the Next Generation ACO.

Henry Ford has about 3.2 million digital encounters a year, including 3,000 telehealth visits.

Henry Ford was an early adopter of value-based care, Muma said, but opted not to pursue the Pioneer ACO in 2012 or pursue Medicare Shared Savings Program in 2014, 2015 due to what it saw as payment issues and payment management barriers. In 2016 it opted to join Next Gen after it and 20 other health systems were selected as participants.

They saw the potential to leverage support from their provider-owned health plan and to leverage data, Muma said.

Drawbacks included Henry Ford being a safety net hospital and putting specialists, who were paid based on volume, on a value-based model.

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