HealthCare Partners, PrimeCare Are Pioneer ACOs No More

The pioneer experience has prompted HealthCare Partners and PrimeCare to circle the wagons.

The two Southern California medical groups were among the nine providers that are dropping out of the Pioneer ACO demonstration project operated by the Centers for Medicare and Medicaid Services. Torrance-based Healthcare Partners confirmed the exit by issuing a formal statement on Wednesday.  Officials with the Ontario-based PrimeCare did not immediately to requests for comment, but their exit was confirmed by their absence from an interactive map on the CMS website listing the Pioneer ACO members and other published reports.

Despite the early exits of nearly a third of the Pioneer ACO participants, CMS declared the first full year of the program a success. It noted earlier this week that 13 of the ACOs produced shared savings in 2012 totaling $87.6 million, while all of them improved in at least some quality measures.

Overall, costs for the 669,000 enrollees in the Pioneer ACOs increased 0.3% in 2012, compared to a cost increase of 0.8% for other Medicare beneficiaries.

“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” said CMS Administrator Marilyn Tavenner.  “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.” 

Industry observers say the exits are an indication of the nearly a third of the Pioneer ACO indicates the financial pressures and complications inherent in improving care delivery and patient satisfaction while cutting millions of dollars in costs doing so.

Tom Williams, president of the Integrated Healthcare Association, a trade group that focuses on many of the incentive structures employed in ACOs, said the first year allowed participants to reflect on their experience and to assess whether or not to press on.

“Now that they have a year under their belt and understood the resources required, some decided it just wasn't the right fit,” he said.

Williams, whose organization is studying the operations of specific ACOs through a grant from the Robert Wood Johnson Foundation, declined to comment specifically on the experiences of Healthcare Partners or PrimeCare.

“The Pioneer ACO participants took a fairly clear-eyed view going into this, and they decided that the intermediate term risk and return on investment – it just wasn't there,” said Peter Boland, a healthcare consultant in Berkeley who works on formulating ACO structures.

Boland praised CMS for picking only providers with sophisticated healthcare IT systems and capital to be able to invest in creating a strong ACO infrastructure – something he noted costs millions of dollars. But it has also demanded an inordinate amount of time of senior managers, something that could put other operations at risk in the long-term.

As to the upside, “it's a good learning exercise and prepares you for graduated risk arrangement,” Boland said.

Indeed, Healthcare Partners announced on Wednesday that it planned to transition to a shared savings ACO demonstration project under CMS auspices. That structure is considered far less onerous for providers to implement and manage. It is also maintaining its two commercial ACOs with Anthem Blue Cross of California and Cigna, and is exploring other opportunities in that area, according to spokesperson Robert Klein.

Meanwhile, at least one other Pioneer ACO in California has experienced significant success. Brown & Toland Physicians, the San Francisco-based medical group, reported a savings of $10.6 million – about 13% of the total saved among all 32 Pioneer ACOs last year.

Keith Pugilese, Brown & Toland's vice president of accountable care and public policy, credited  the organization's success partly with its focus on transition-to-care issues. For example, keeping close tabs on a frail patient who visits the emergency room and is at high risk for a hospital admission without the right kind of attention to medications.

Pugliese said it was too early to project savings for 2013, but that adjustments were being made to continue to reap improved savings and quality.

“We're continuing to evolve our approach, and we're starting to learn what kind of approaches are more effective than others,” he said.