April 08, 2019


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In a Caravan Health collaborative ACO, a group of unrelated health systems come together to reach the scale necessary not just to participate, but to thrive in accountable care. In the last year, Caravan Health has taken the natural next step and combined lives to form even larger ACOs, including the largest Shared Savings Program ACO in the country with more than 200,000 attributed lives. This year, we have also worked with state hospital associations to launch the first ever statewide collaborative ACOs in MississippiFlorida, and Idaho.  

Recently, our CEO and Founder Lynn Barr held a webinar walking through how a collaborative ACO works in practice. These large collaborative organizations require independent providers to stay in regular communication, make big decisions together, and hold each other accountable for results. Caravan Health has the roadmap for navigating these sometimes-tricky dynamics.  

How Do Independent Health Systems Work Together? 

The hallmarks of a collaborative ACO are shared governance, shared accountability, and local control.  Each ACO community has a local steering committee that checks in regularly to make sure all providers are using the best population health techniques like annual wellness visits and chronic care management. That local control means that the ACO stays in touch with what is unique about a provider, its clinicians, and its patients.  

As part of the shared governance model, ACOs will have to vote on some important issues. Early on, we decided that each participant, large or small, should get one vote. For this model to be truly collaborative, all providers need to have a voice in decision-making. 

The ACO participants use our unique scorecard to keep track of how they are performing and to hold each other accountable. Caravan Health believes that no matter how well a practice is doing, it can always do better. The scorecards show progress on standard metrics and can indicate if a practice is engaged in the program. When Caravan Health ACOs started using the scorecard in 2016, savings increased dramatically.  

Can One Provider’s Poor Performance Drag Down the Others? 

All ACO participants want to understand how the performance of other providers will affect them. Providers are almost always confident about their own performance, but worried that other providers will drag down average performance. In our experience, no individual participant will cause as much damage as much being too small will. Every provider’s biggest adversary is the statistical variation that comes from too few lives. The best way to get reliable and sustainable results is by working with others.  

If the scorecards show that there is a poor performer in an ACO, we can start a remediation process to help them improve. Caravan Health takes responsibility for verifying the performance of individual participants, since CMS only looks at the ACO as a whole. If there is not enough improvement with a poor performer, that provider could be asked to leave the ACO.   

How does the Money Work? 

A successful ACO requires investments in systems and staff. With strong population health management, an ACO can also expect to earn shared savings each year. The ACO will ultimately decide how to divide shared savings after any fees or investments are paid back. We recommend a formula based on the number of attributed lives, quality scores, and any special projects. Our experience shows that for every dollar invested in wellness initiatives, preventive care, and chronic care management, the ACO earns two dollars in shared savings.  

The Bottom Line 

Most ACOs are simply too small to succeed – more lives leads to more success. Caravan Health can get you connected with other health systems to get enough lives for predictable and sustainable results. A Caravan Health collaborative ACO can help your practice do its best in value-based health care. 

Watch the webinar recording


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