Hospital hopes accountable care organization will trim Medicare spending

Friday April 26, 2013


Staff Writer

BENNINGTON -- What the average family of four spends this year on its health care, it can expect to spend twice that much in 2021 if nothing changes. Health care providers in Vermont are trying out a new method of managing Medicare to see if they can find a way to lower the amounts being spent.

One way being looked at is through an accountable care organization (ACO) which is a group of medical service providers getting together and sharing data on how to keep patients from needing more costly procedures.

On Jan. 1 Southwestern Vermont Medical Center (SVMC) joined OneCare Vermont, along with 12 other hospitals and 500 physician practices, said SVMC Spokesman Kevin Robinson. The ACO will share broad data on the 42,500 Medicare patients who have agreed to let their providers share some of their medical information, namely the type of illness they are being billed for and how much is being spent.

SVMC Director of Planning James Trimarchi said the way this ACO works is that the Centers for Medicare and Medicaid Services will give OneCare a target number to spend on those 42,500 Medicare patients over the course of the next calendar year. Medicare is billed normally by the providers and the groups goal is to spend less than that projection with the reward being it gets to keep half of what was saved provided it can meet requirements on the quality of the care that was given.

Dr. Trey Dobson, medical director for Dartmouth-Hitchcock Putnam Physicians, said the current model being used by most of the health care system is fee-for-service. "Basically, every time there is an encounter, every time there is a procedure, every time there is something done, there is cost to the system," he said. "Anybody providing health care has the incentive to do more treatments."

Patients are likewise not encouraged to be judicious with what procedures they undergo.

"They don't see those dollars"

"The patients have an incentive to welcome those services because they don't see those dollars if they have insurance," Dobson said. "They may have a deductible but once they reach that if someone recommends another study it's just their time."

He said the goal of any health care provider is to keep people healthy but the current business model they work in does not reward that. The goal of an ACO is to reward keeping people healthy and using only what procedures and tests are needed.

Trimarchi said OneCare will collect and share information on how to best manage patient populations and review it at the end of December 2013. By March 2014 it should have the data analyzed. It's possible that Medicaid will be involved in 2014 and private insurance in 2015, but those discussions have not been had. Trimarchi said the goal is to reduce spending by everyone.

He said OneCare is overseen by a Board of Managers with members being employed by Fletcher Allen Health Care and Dartmouth-Hitchcock but two local physicians also sit on the board. The managers facilitate communication and other administrative duties but under them is the Clinical Advisory Board, which also has two local physicians on it. That board reviews the actual data and makes recommendations based on it. He said if one area of the state is spending less on diabetes patients than others, the lessons learned from them will shown to others who may be seeing their spending up in that area.

Trimarchi said if the CMS target number is gone over there is no penalty in this three year period. What it might be if the program goes beyond three years is not yet known.

Patients should notice little early on, said Robinson, but over time they should see their care get better. He said this is not an effort to ration care but to make sure unnecessary procedures are not done and to work with patients so they do not need to see their doctors as often or use the emergency rooms.

Contact Keith Whitcomb Jr. at or follow him on Twitter @KWhitcombjr


If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions