As a direct result of health care reform, North Carolina’s largest health insurer will collaborate with Wilmington Health in a new kind of partnership called an accountable care organization, or ACO.

It’s the first of its type in the region, and the collaboration is also notable because of the prominence of both Blue Cross and Blue Shield of North Carolina (BCBSNC) and a major local health care provider like Wilmington Health.

Hoped-for benefits include “reduced health plan costs and improved quality by partnering with employers in the market Wilmington Health provides care for,” administrators said.

The ACO model “is a relatively new mechanism born out of the federal health care reform law that is still being defined and tested,” according to Wilmington Health administrators.

The ACO between Wilmington Health and BCBSNC is innovative, but not an entirely untested concept, said Lisa Cade, the insurer’s vice president of network management.

“Our efforts with Wilmington Health will include more collaboration and joint discussions than you typically see between providers and insurers on ways to improve the health of the patients in southeastern North Carolina,” Cade said.

The ACO is BCBSNC’s first, but not the company’s first initiative with others “focused on improving health care quality while reining in costs,” she said.

“We anticipate more programs across the state, and look forward to working with others to find ways to improve our health care system in North Carolina,” Cade said.

Shared responsibility
While the term ACO might be new, the concepts behind it are not untested, Cade said.

“The foundation is built on improving health care quality while increasing efficiencies and lowering costs, and we’re doing this through other types of initiatives as well,” she said.

Cade said, for example, that BCBSNC has successfully implemented patient-centered medical homes and value-based reimbursement methods for providers, which include quality-based versus quantity-based, bundled payments for knee and hip replacements.

“The ACO model will continue to evolve over time and so will our work with Wilmington Health. Both parties will be collaborating on the performance metrics to measure outcomes and continue to collaborate to provide the most cost-effective care at the most appropriate time and setting,” Cade said.

The ACO concept has been successful in other regions of the country “and we believe it can work in Wilmington and other regions of North Carolina,” Cade said.

The ACO partnership was announced in July. The conceptual vision for the local ACO is in place, but many of the specifics are still on the drawing board, BCBSNC spokeswoman Darcie Dearth said.

Under the federal health reform law, it won’t just be insurance companies partnering with ACOs. Medicare also will be able to contract with those groups that the government designates as qualifying ACOs to provide care to enrollees.

Providers interested in receiving the designation for Medicare patients began submitting applications to the federal government earlier this year.

At the same time, health care providers and insurers have also started forming ACOs on their own.

An ACO is a group of health care providers – such as Wilmington Health – that collectively accept responsibility for the cost and quality of care delivered to patients. Providers can include primary care physicians, specialists and medical groups.

Currently, the majority of private insurance plans and public programs pay for health care on a fee-for-service basis. Individual doctors, hospitals and other providers are reimbursed for each service a patient receives.

Those critical of the fee-for-service system maintain it creates incentives to offer or order other health care services. Critics have also said that different providers who see the same patient often don’t coordinate services, resulting in duplication, or even conflicting, treatments.

ACOs are seen by some as an acceptable alternative within the framework of health care reform, advancing earlier efforts by primary care providers to create integrated care systems.

Areas the arrangement focuses on include preventative health and wellness, chronic disease management, care coordination and outreach programs for at-risk patients, along with the reduction of avoidable hospital admissions and readmissions, improved efficiencies and overall health of the population served.

Industry changer?
The local ACO depends on “transparency and coordination between the parent organizations and throughout the health care system to improve care and efficiencies while reining in costs,” according to BCBSNC.

“We’re on our way to a health care system in North Carolina that rewards doctors and hospitals for quality, not quantity of services. Organizations like these are an important step as we continue down this path,” Dr. Don Bradley, BCBSNC chief medical officer, said in a news release.

Bradley said Wilmington Health has already demonstrated leadership in improving quality “through collaboration and teamwork.”

“Together, we can achieve our shared goals of improving efficiency and health outcomes while ultimately lowering health care costs for our customers,” he said.

Jeff James, CEO of Wilmington Health, said in a news release that through the “physician-led model, we hope to improve the communication and coordination with other providers in the community and develop new partnerships.”

One example of the BCBSNC and Wilmington Health collaboration will be the development of a new oncology program to improve health outcomes “by ensuring that all oncology patients benefit from treatments that follow the latest evidence-based research,” Bradley said.

James described said relationship was an exciting concept.

“This is the type of innovation that will be at the forefront of transforming the health care delivery system,” he said.

In brief: NHRMC gets national recognition
New Hanover Regional Medical Center (NHRMC) in July received national recognition in U.S. News & World Report’s annual rankings of Best Hospitals.

NHRMC was recognized among the Best Hospitals in North Carolina and the Coastal Plains area for 2012-13. In the report, NHRMC was also recognized as high-performing in cardiology and heart surgery, gastroenterology, orthopedics and pulmonology, hospital spokeswoman Erin Balzotti said in a news release.

The rankings, in their 23rd year, include data on nearly 5,000 hospitals across the country. They cover 16 medical specialties, from cancer to urology, and identify top hospitals in several hundred regions, including all major metropolitan areas, according to U.S. News & World Report.

The 2012-13 Best Hospitals were ranked based on four elements: reputation, patient survival, patient safety and care-related factors such as nursing and patient services.

The rankings showcased 720 of the nation’s roughly 5,000 hospitals. The Best Hospitals rankings judged medical centers on their competence in situations in which patients are especially at risk because of age, physical condition, infirmities or the challenging nature of the surgery or other care they need.