September 18, 2020


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Caravan health is the national leader in accountable care and recognized for making quality and cost savings numbers work in value-based payment for more than 25,000 providers and 250 community health systems across the nation.

Each year, Caravan ACOs consistently deliver population health care to millions of patients in rural and urban settings using nurse-led, value-based care models. In 2019, Caravan clients had an average MIPS score of higher than 95%, saved Medicare more than $154 million and earned more than $50 million in shared savings  

At the core of Caravan’s success is the innovative collaborative ACO, established under the direction of Founder and Executive Chair, Lynn Barr, who was recently named to Modern Healthcare’s 2020 Class of Top 25 Innovators. Caravan is guided by the leadership of CEO, Tim Gronniger. The large ACO protects against the normal fluctuations in health care costs due to its scalable size and results in predictive, consistent savings. With over 235,000 attributed Medicare lives, Caravan’s and the nation’s largest-ever ACO earned more than $33 million in shared savings in 2019. This success emphasized the critical importance of scale in ACO performance

With the 2019 ACO results received and as clients prepare to receive their payments, we’ve sat down with Lynn Barr and Tim Gronniger for a deeper dive into their secrets of ACO success. 

Caravan Health was established in 2013, which means the organization is no longer a start-up. Was there a lot of trial and error in those early days? 

Lynn: It’s been trial and error for everyone learning value-based care in a fee-for-service world. Old models of capitation don’t work when patients have unlimited choices and no restrictions. The hard part was that in the early days we didn’t have enough data to know what works and what doesn’t because of the high variability of health care spending and outcomes. In our first year we had 12,000 lives and couldn’t interpret the data. The second year we had 50,000 lives and couldn’t interpret the data. The third year we had 225,000 lives and finally could draw conclusions.  


What was the catalyst that led to launching the collaborative ACO? 

Lynn: We had 38 ACOs ranging from 5,000 to 20,000 lives and watched their performance bounce around like crazy. In aggregate, we were saving 1-2% per year but individually they were all over the place.  Milliman analyzed the data and said the statistical variability for a 10,000 life ACO is +/- 6%. How do you see 2% savings in 6% noise? We work with rural and safety net providers. They need low cost, high touch support that provides a reliable income stream in value based payments. This is only achievable in ACOs that exceed 60,000 lives and have less than 2% noise. The bigger the better, as long as you hold everyone accountable.  


Tim: The important insight, to me, was that we can’t reasonably expect our clients to invest new resources – care management nurses, technology, etc., in improving access in primary care if shared savings is a coin flip even if the project is successful. Reducing the noise allows success to shine through more reliably, that’s why 70% of Caravan Health clients are receiving shared savings payments this year, vs just 50% of ACOs nationwide. We aim to push that number over 90% in the next two years.  


Given the uncertainties in health care, and in the midst’s of a global pandemic and public health emergency, how confident are you that accountable care is stable and sustainable? 

Lynn: We will see in the data that patients in ACOs and MA plans will perform better than regular fee-for-service models because we have proactive patient management systems. I hope this evidence will continue to accelerate value-based care.  


Tim: After a brief freeze in the spring while health systems processed the situation and prepared, we’ve seen strong interest in building the tools of population health – taking care of your patients even when they aren’t in front of you, tracking your patients with chronic disease and helping them access care in non-traditional ways, using technology and the full spectrum of practice staff to provide team-based primary care. If anything, we expect interest in value-based models to increase vs the pre-COVID world, as the fee-for-service system collapsed when volume disappeared in March and April.   


Please describe some challenges or obstacles you were not anticipating with the collaborative ACO and how you overcame those. 

Lynn: Shared savings distribution is a challenge. Payments are shared fairly equally, with higher payments for providers with higher quality scores and greater effort on the ACO special initiatives. I’d like to be more precise, but the actuarial issues stand in our way. If I can’t accurately judge cost and quality for a 10,000 life ACO, how can I judge an individual provider’s performance. This is the fallacy of MACRA.   


Tim: Well, nobody expected a pandemic. The collaborative ACO structure has worked well through the 2020 COVID problems, as we’ve been able to rapidly share knowledge and best practices, and many severe regional impacts of COVID wash out when spread across a larger group nationally.  


Scalability is essential to success. How does the Caravan ACO model qualify and quantify success of its ACOs?  

Lynn: Everyone has to win. The patients receive better coordinated care through the support of practice nurses. The payers see higher quality for their members and lower costs of care. The clinicians feel supported, their administrative burden is reduced, and they are rewarded financially for the hard work of population health.  


What has surprised you about the collaborative ACO?  

Lynn: More than 150 health systems said “yes”. It was a radical idea and I wasn’t sure people would agree. Now they are getting reliable shared savings and they would never join a smaller ACO again.  


Tell us about a positive ripple effect you’ve seen since launching the collaborative ACO – perhaps with clients, data outcomes, employees, national trends, competitors or other areas. 

Lynn: Imitation is the greatest form of flattery. ACOs are getting larger as others see our results.  


What does the future look like for Caravan Health?  

Lynn: Amazing!  

Tim: As always, full of hard work! We’re digging deeper into what’s possible for our clients to deliver, with a variety of new products and tools set to come in 2021. We already know that CMS is seeking a variety of new rural participants for ACO programs in 2021-2022, and we’ll be right there with them. Most importantly, we want our clients to develop deeper, more effective relationships with their patients every year, and we’ll do everything we can to support that.  

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