Caravan Health, Texas Hospital Association launch Medicare ACO

Caravan Health and the Texas Hospital Association are launching the first Texas-wide accountable care organization for Medicare beneficiaries.

The new ACO, to be called Value TX Health, will benefit from Caravan’s experience in working with more than 250 health systems, 14,000 providers and a million patient lives to drive value-based care.

This year, Caravan Health—a population health management company—also helped launch statewide collaborative ACOs in Mississippi, Florida and Idaho.
In 2017, Caravan Health ACOs surpassed nationwide ACO performance with total savings of more than $54 million and quality scores of 94 percent, the company said. Along with Medicare savings, Caravan Health ACOs earned shared savings of more than $15 million.

“To successfully take on risk, providers will have to act like payers and pool their lives,” says Lynn Barr, CEO for Caravan Health. “The partnership works because state hospital associations are accustomed to bringing competing health systems together for scale, and Caravan Health provides the ACO infrastructure, population health nurses and methodology to make statewide ACOs highly successful.”

These ACOs in rural areas offer a way that enables unaffiliated providers and independent hospitals to stay independent, as they collaborate like a single system, sharing data, Hoffman says.

Lance Lunsford, president and CEO of THA’s HealthShare program, says the Texas hospital industry has launched several successful ACOs, but for smaller hospitals—and getting the resources needed to launch a successful program is difficult. “Our partnership with Caravan Health is based on research from a variety of our hospital leaders to help mold a clinically integrated network that helps hospitals succeed in their move to value-based payments," he says.

Value TX Health’s first goal will be to build a comprehensive readiness program for THA member hospitals that can guide and support them in the transition to the complex requirements of a VBC model, the groups said. The second phase will focus on increasing the number of hospitals successfully participating in the Medicare Shared Savings Program (MSSP), with an emphasis on helping hospitals face the challenges of limited resources.

Collaboration is one of the key tips for ACO success that Caravan offers in its latest white paper. ACOs need a minimum of 100,000 lives to generate predictable savings and consistently engage providers. This, in turn creates an 80 percent reduction in administrative costs. It “takes the element of chance out of taking risk,” the white paper says.

According to Caravan, the technology that supports that success includes rigorous and transparent performance tracking of providers, as opposed to tracking readmissions. “Tracking readmissions and other cost of care measures often leads to arguments among physicians and quality staff, not improvement,” Caravan says.

The company says it provides dashboards for physicians and practice managers based on actions and steps that they can control—an approach that empowers physicians and produces results. These include billing of care coordination services and engagement with care team planning meetings.

Caravan Health also leverages big data. “Big data matters,” Caravan says. “The cornerstone of value-based medicine is data-driven decision making.” The company combines claims data with clinical records to drive insight for ACOs. “Variation in clinical practice is common and often unobserved, posing hidden risks to patients but hidden opportunity for improvements in cost and quality,” Caravan says.

In addition, Caravan Health uses analytics to identify patients that may have been incorrectly classified by CMS, such as those with end stage renal disease. These incorrect classifications can cost ACOs hundreds of dollars on their benchmarks, making shared savings much harder to obtain, Caravan says.

Caravan also uses analytics to “harvest claims data to find hidden inefficiencies that are causing unwarranted variation in patient care and increased costs.”