Focus on hospital employees for ACO savings

While some healthcare organizations remain skeptical of the ACO movement, they can utilize their own employees for proof of accountable care success, according to a white paper published yesterday by Evolent Health, a management services organization in Arlington, Va.

Focused on improving hospital employee health, University of Pittsburgh Medical Center implemented an employee ACO (eACO) model in 2004 and achieved compounded savings of more than $65 million within five years. Thanks to the program, unscheduled time away from work dropped 5.3 percent between 2007 and 2009, saving UPMC $3.1 million, according to the white paper.

Click here to check out FierceHealthcare's special report: Maps of Medicare ACOs >>

"The eACO gives health systems a proof-of-concept opportunity in a controlled environment, as they begin to explore what works and what doesn't," author Eric Parmenter, Evolent Health vice president of employer services, said in a statement.

The healthcare workforce has high benefit costs--a reason for structuring eACO-like programs, the white paper says.

In fact, the cost of employee benefits is quickly becoming hospitals' largest expense item, Kevin L. Shrake, a former hospital CEO and a fellow in the American College of Healthcare Executives, wrote in a January Hospital Impact blog post.

Although hospitals can use their own employees as controlled populations to deliver ACO services, accessible membership doesn't mean an easy transition to accountable care. The development of underlying information technology, as well as the financial resources to invest in necessary infrastructure, is key to an organization's ACO readiness, FierceHealthIT previously reported.

For more:
- here's the white paper (.pdf)
- read the research announcement

Suggested Articles

HIMSS21 conference organizers shared more details Friday about moving the major health IT event to August 2021, including feedback from exhibitors.

The bill for $100 billion in advance Medicare payments is coming due on Aug. 1 for some providers, some of which are still struggling due to COVID-19.

A federal appeals court ruled HHS has the legal authority to cut 340B drug payment rates by nearly 30%, dealing another legal blow to hospitals.