Blue Shield-Advocate ACO lowers cost trends

An accountable care organization between Blue Cross Blue Shield of Illinois and Advocate Health Care has reduced admission rates and prevented an increase in average length of hospital stay, according to utilization trends from Blue Cross.

The three-year old ACO, which is one of the country's first and largest commercial payer-provider collaborations, has led to costs trending 2.5 percent below other hospitals in the Blue Cross PPO network, Steve Hamman, senior vice president of network management for Blue Cross, told Crain's Chicago Business.

Such results could signal similar ACO arrangements can successfully reduce the cost of care. With a national push for cost-effective care, a Premier Inc. report predicts the number of ACOs will double by the end of 2014.

Under the ACO arrangement, Blue Cross pays doctors and hospitals owned by Advocate, Illinois' largest health network, based on their ability to meet quality, patient satisfaction and cost metrics for roughly 380,000 ACO members.

The arrangement also led to a 1.4 percent reduction in admission rates for about 200,000 members from 2011 to 2012, compared to rates that increased by 2.2 percent at other hospitals in Blue Cross's network. And the ACO prevented the average length of hospital stay from growing while also limiting an increase in inpatient days.

The data builds on the ACO's success within the first six months, during which it was able to reduce hospital admissions and emergency department visits per member by 10.6 percent and 5.4 percent, respectively, FierceHealthcare previously reported.

To learn more:
- read the Crain's Chicago Business article

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