Blue Shield Forms Another ACO
Blue Shield of California has entered into another pact to form an accountable care organization, this time with providers in the San Fernando Valley.
The San Francisco-based Blue Shield will operate the ACO with three hospitals operated by Providence Health & Services: Providence Holy Cross Medical Center in Mission Hills; Providence Saint Joseph Medical Center in Burbank; and Providence Tarzana Medical Center. The ACO will also include the Facey Medical Group and the Facey Medical Foundation, two Providence-affiliated physician organizations.
The ACO will provide and coordinate care for 16,500 Blue Shield HMO enrollees in the Los Angeles area. About a third of are enrolled through the California Public Employees Retirement System, or CalPERS.
According to Blue Shield spokesperson Lindy Wagner, the ACO will initially focus on three areas that have been driving up costs: Utilization of hospital emergency rooms; obstetrics utilization; and pharmacy costs.
On average, overall healthcare costs for the members involved in the ACO have been increasing around 7% a year. The goal of the ACO is to eliminate all costs increases, and possibly roll them back.
Another Blue Shield ACO involving CalPERS enrollees, hospital operator Dignity Health and Hill Physicians Medical Group in Northern California has not realized such an ambition, although cost increases were brought down to around 3% a year, almost pacing the general inflation rate. It has reaped about $37 million in savings during its first two years of operations, according to Wagner.
"This collaboration is another important step in our ongoing effort to align incentives across the healthcare delivery system in order to transform how care is delivered and control the healthcare cost trend," said Kristen
Miranda, Blue Shield's vice president of strategic partnerships. "Providence and
Facey have shown an incredible level of commitment to this work already, including setting aggressive cost and quality improvement goals. We're confident they'll be great long term partners."
The ACO is Blue Shield's tenth in California to date, and it recently received opeational approval from state regulators. It will operate at least through 2015.
