Don't Think the ACO Model Works Within Primary Care? Think Again

Primary Care Group Enhances Quality of Care, Saves Costs

March 16, 2011 04:30 pm Jim Arvantes

As a staff physician for the WellMed Medical Group in San Antonio, Texas, which mostly employs family physicians and internists, FP Jose Salinas, M.D., is part of one of the few primary care-based accountable care organizations, or ACOs, in the country. And Salinas couldn't be happier. His participation in the model allows him to see 15-20 patients a day, a caseload that permits him to really focus on the needs of his patients.

"We don't have to worry about generating 30 or 40 patient visits a day to make ends meet," Salinas said of the ACO model, which is not based on fee-for-service. Thus, he has time to address all of his patients' needs and manage their chronic conditions better, which leads to improved quality of care.

As a WellMed physician, Salinas noted that he also has a care coordination team and a disease management program to help eliminate gaps in patient care. And, like other WellMed physicians, Salinas, who is paid a salary, qualifies to earn extra income by meeting certain quality metrics.

As an early adopter of the ACO model, WellMed has repeatedly demonstrated how primary care and the patient-centered medical home, or PCMH, can work in tandem to reduce costs and improve care while also enhancing and even saving lives.

"WellMed has shown that family physicians can lead and govern the development of ACOs, and that these entities can, in turn, improve quality and save money with family physicians in the lead," said Gary Piefer, M.D., M.S., a family physician and chief medical officer of WellMed Medical Management Inc., the parent company of WellMed Medical Group.

Unlike nearly every other ACO in the country, the WellMed ACO is not affiliated or dominated by a large hospital or insurance company. It is primary care-based and -driven, according to Robert Phillips, M.D., M.S.P.H., executive director of the AAFP's Robert Graham Center and the lead author of a case study( (abstract) on the WellMed Medical Group in the January/March 2011 issue of The Journal of Ambulatory Care Management. The study demonstrates that the most effective ACOs are built on a foundation of primary care and the PCMH, said Phillips.

"WellMed has proven that it is possible to create an accountable care organization without a hospital -- one that allows you to improve quality and mortality while reinvesting savings purely in primary care," said Phillips.

The WellMed Medical Group, which operates 22 clinics in the San Antonio area, provides care to more than 40,000 seniors through a full-risk capitation contract with a Medicare managed care plan. It also operates 13 clinics in other parts of Texas and Florida, which provide care to another 30,000 patients.

One in five Medicare-eligible seniors in the San Antonio area is a WellMed patient, and according to the Graham Center study, the mortality rate for WellMed patients is consistently and substantially lower than that of other seniors in Texas.

"One of the things that impressed me the most about WellMed is they have been able to substantially prevent deaths," said Phillips. "I can't think of a more patient-centered measure."

Meanwhile, WellMed's hospital admission rates average fewer than 200 patients for every 1,000 patients in San Antonio compared with 350-425 patients for every 1,000 patients 65 and older in Medicare fee-for-service programs, according to Piefer. Moreover, WellMed's total hospital bed days for every 1,000 patients averages about 800 days compared with more than 1,800 days for every 1,000 patients in fee-for-service programs.

Piefer is quick to point out that WellMed's success is not a result of a healthier-than-average patient population. According to the Graham Center study, the mean age of WellMed patients in the San Antonio area is between 75 and 76 years compared with an average age of 72 years for Texas Medicare recipients. The medical group's patient base in San Antonio is largely older and predominately Hispanic, and more than 20,000 of its patients have one or more chronic conditions.

Accountable Care Organizations and Medical Homes

WellMed employs about 91 physicians at its 22 San Antonio-area sites and an additional 14 physicians at its other sites, most of whom are internists and family physicians. The medical group also employs nurse practitioners, physician assistants and other health care professionals who work as part of the health care team. In addition, WellMed contracts with physicians outside of the medical group.

All of the clinics in the Texas and Florida markets operate as PCMHs, a cornerstone of the ACO, according to Piefer. He is convinced that the PCMH model must be the foundation of ACOs if they are to succeed and thrive in the long term.

"In the medical home, care coordination is seriously addressed and is managed in a manner that cannot be accomplished in an acute-care, fee-for-service productivity model," Piefer said.

WellMed patients "get used to the fact that they have a medical home," said Salinas. "When patients have a medical issue, they call our clinic first. They don't immediately go to the hospital emergency room or go see a specialist. They come to us first, and then we can determine what the best option is for that patient."

WellMed physician Chris Arnold, M.D., of San Antonio, described the WellMed ACO model as just good care. "If you provide good care, the patients will be happy. They will keep coming to you. I can't tell you of all the self referrals we have gotten just because of the care we provide. The word gets out that patients are going to get taken care of."

Both Salinas and Arnold noted that one of the keys to WellMed's success is the management of chronic diseases, something that Piefer said is critical to the success of the model.

"You have to understand that 10 percent of all patients you are going to manage are going to account for three quarters of all your costs," he said. "You have to have an intense focus on patients who have three or more chronic conditions."

Consequently, WellMed has a disease management program that manages conditions and diseases in the outpatient setting, which averts many costly hospitalizations, according to Piefer. In addition, WellMed does not operate as a loose confederation. Physicians and other providers within the system know the health status of their patients, which makes it easier to manage their care, said Piefer.

With its PCMH-focused approach, WellMed also has been able to generate millions in cost savings, and it has funneled some of those savings back into the medical group in the form of higher compensation for physicians and other health care providers.

"They are paying their primary care physicians two to three times the national average," noted Phillips.

Piefer said the higher compensation is another key to the success of the ACO. Primary care physicians need a per-patient, per-month fee of $40 to $50 to put together a structure to make ACOs work, said Piefer. "A $2 per-member, per-month fee is not going to let you put together all of the supplemental pieces that you have to have to decrease hospital rates and keep patients out of the hospital and give them better outcomes."

Health System Lessons Learned

The WellMed Medical Group ACO provides other lessons for the health care system, as well, said Piefer. For example, WellMed's experience has shown that the fee-for-service payment model is no longer "sustainable," and physicians will have to learn to accept risk, according to Piefer.

"There is no way to control costs under the traditional fee-for-service model," said Salinas. "There are no incentives for physicians, hospitals or imaging centers to control costs. With (the ACO) model, we have an incentive to not only provide quality care but to also provide cost-effective care."