San Diego Business Journal

Sharp Is Pioneer in Health Reform Pilot Program

Tuesday, December 20, 2011

Sharp HealthCare said Dec. 19 that it is the only health care group in San Diego and one of 32 nationally that the U.S. government has selected to participate in its pilot program for Pioneer Accountable Care Organizations — a program that’s expected to cut Medicare costs by $1.1 billion in the next five years.

“Through our network of hospitals and affiliated medical groups, Sharp has a long history of successfully delivering coordinated, patient-centered, high-quality care,” Mike Murphy, president and CEO of Sharp HealthCare, said in a statement. “Under this pilot, we will be actively engaging an expanded population of Medicare beneficiaries in a comprehensive, coordinated care model.”

To participate in the program, Sharp had to complete a rigorous selection process that included applications and in-person interviews, the U.S. Department of Health and Human Services said in a statement.

An accountable care organization, or ACO, is a group of providers — such as hospitals, physicians and specialists — that work together to coordinate care for the Medicare patients they serve.

ACOs are a key provision of the health care reform law that President Barack Obama signed into law in 2010. Participating health care groups that help the government lower its Medicare costs will get a financial bonus based on the total savings.

“In the traditional fee-for-service model, patient care can sometimes be fragmented across many providers who do not have access to all of a patient’s information,” said Donald C. Balfour III, president and medical director of Sharp Rees-Stealy Medical Group, which is part of Sharp’s Pioneer ACO.

The government has created different types of ACOs: a basic model designed for health care systems testing out an integrated model for the first time, and a riskier model called the Pioneer ACO, designed for health care systems like Sharp that have experience with an integrated approach to patient care and billing.

Pioneer ACOs will be rewarded with a greater percentage of their total savings, but the model is riskier because they’ll also share in any financial losses.

The U.S. Centers for Medicare & Medicaid Services will publicly report the performance of Pioneer ACOs on its website; the first performance period begins Jan. 1.

The Sharp HealthCare ACO will serve nearly 32,000 Medicare beneficiaries in San Diego County, Murphy said.

— Kelly Quigley