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San Francisco story: How ACO reduced double-digit premium increases to 3.25 percent

BY PAUL BROWN — Facing double digit premium increases, San Francisco Health Services System leaders knew something had to change in providing health care benefits to the 117,000 employees, retirees and family members of the city and county, school district, community college and courts of San Francisco.

So, six years ago, they decided to embark on a close collaboration with Blue Shield of California, Dignity Health and Hill Physicians Medical Group that ultimately resulted in reducing premium increases to 3.25 percent annually.

These remarkable results demonstrate the success of Blue Shield’s Accountable Care Organization (ACO) model, which provides members with access to better coordinated care and simplified communication, all while holding Blue Shield, doctors and hospitals accountable for the quality and cost of care.

Catherine Dodd, now retired from leading the San Francisco Health Services System, shared the success story recently at the Conference Board’s annual conference in San Diego. Dodd was joined on a panel by Terri Scott, Dignity Health’s regional senior director of care coordination, and Terry Hill, vice president for performance strategy at Hill Physicians Medical Group.

Dodd told the audience the reduction was “pretty remarkable” and added: “That is probably a $10 million save each year … we were thrilled and are thrilled.”

The cost savings were achieved as patients received the right care, at the right time and in the most appropriate setting, resulting in reductions in surgeries, average lengths of patient stays in hospitals and the number of people admitted to the hospital.

Dodd also cited a newly created position – care transition manager – as a successful quality care initiative undertaken as part of the partnership. A person in this position manages the coordination of care for members as soon as a patient is admitted to the hospital to 30 days after being discharged to ensure the patient has the right care.

“They really are the navigators that the patient has a connection with,” she said. “And that sense of compassion, and you’re not going to fall through the cracks, you’re not going to have to call for four hours to get to find out where your mother is going to be admitted, or which nursing home she is going to, or did your prescription change and where should you pick it up. These really smart people who have motivational interviewing skills are really that patient-centered component of it, and that of course, is important to me because it affects our members' experience of care and healing process.”

Along with Dodd, speakers from each group in the partnership explained its success, giving tips to others on how to replicate the accomplishments. Blue Shield currently has 42 ACOs.

Scott noted care coordination and reductions in waste can drive down costs and provide access to the right care.

“You will take care of people in the outpatient setting so they don’t end up in the hospital, and you’ll have good communication across levels of care and less redundancy,” Scott said.

Hill said this model of better coordinated care will be the way of the future.

One way employers — especially those who are self-funded — can be involved in meeting goals of quality health care for their employees while controlling costs is to meet with the health plan and its ACO providers on a regular basis, Dodd said.

“Looking at that quarterly data or seeing the spike in days and picking up the phone and say what’s going on (is important) because when those days spike, I think ‘cha-ching’ because we are flex funded, so I pay the hospital bills directly. So I am at risk for their work,” she said. “So encourage employers to demand a seat not only at the decision table, but at the monitoring table and celebrate the success.”

Paul Brown is area vice president of premier accounts for Blue Shield of California.