Monarch HealthCare of Irvine is one of five doctors groups in the U.S. tapped to take part in a project that aims to reduce healthcare costs and improve the health of patients.
Monarch is working to create an “accountable care organization” set to launch early next year and run for five years.
HealthCare Partners, a Torrance-based medical group, and Anthem Blue Cross of California, a unit of Indianapolis-based Anthem Inc., are working with Monarch on the project.
Accountable care organizations are designed to encourage doctors, hospitals and insurers to work together to cut healthcare costs. They provide financial rewards for doing so.
The project is part of the federal healthcare reform law that was signed earlier this year.
Monarch, which has 170,000 patients and 2,500 affiliated doctors, is set to treat patients in Anthem Blue Cross’ preferred provider organization, said Jay Cohen, Monarch’s president and chairman.
The medical group is working with Anthem Blue Cross to determine how many of its members will take part in the project.
Details of Program
Monarch has the option of treating patients at set prices and covering the cost of treatments that go beyond them, like healthcare providers do in health maintenance organizations. Or it could opt not to take on the risk and leave it to insurers instead.
Monarch said it still is evaluating which way it will go.
Monarch doctors also will be evaluated on how patients fare after treatments.
If doctors meet quality measures and deliver care below set rates, the group will share in a portion of the savings, according to Cohen.
Accountable care organizations aren’t meant to replace HMOs or PPOs.
HMOs, which remain popular in Orange County and throughout California, use a “gatekeeper” approach to control healthcare costs.
Gatekeepers are primary care doctors who refer patients to more expensive specialists, if necessary.
Instead of gatekeepers, Cohen said accountable care organizations want to rely on electronic medical records and other data to determine the best and most cost effective way of treating patients.
“The intention is to educate patients and educate their doctors of things that are best practices,” Cohen said.
The workings of accountable care organizations “really should be pretty invisible to the patient,” he said.
Unlike HMOs, accountable care organizations patients will have more leeway to see specialists like they do with PPOs.
“There is no restriction in their (doctor) choice and there are no referrals required,” Cohen said.
Challenges
There could be pitfalls.
Monarch and the others basically will be learning as they go since accountable care organizations have not been tried nationally on a large scale, Cohen said.
“The nationally recognized experts on the subject matter openly acknowledge that this is going to be really hard,” he said. “Nobody’s done it and we’re going to figure it out.”
Brookings Institution’s Engelberg Center for Health Care Reform and Dartmouth College’s Institute for Health Policy and Clinical Practice promoted the idea for accountable care organization during the debate over healthcare reform.
The model differs from the type of integrated care that Oakland-based Kaiser Permanente gives because the doctors, insurers and hospitals aren’t all part of the same company. Accountable care organizations rely more on financial incentives to push different healthcare providers to work together.
Part of the challenge is in just sharing information among the disparate groups.
Monarch is doing what Cohen called “pre-work” on the project, including making sure its computers are able to share patient data with its partners.
Anthem Blue Cross is set to promote accountable care organizations to its members.
Why Monarch
Monarch was picked for the demonstration project because Cohen’s been “relatively active in D.C.” in the run-up to healthcare reform.
“In those activities, they got to know me and got to know Monarch,” he said.
Monarch is expected to get deeper into accountable care organizations in coming years after the federal Medicare plan for the elderly starts taking part in the program in 2012, according to Cohen.
Besides Monarch and HealthCare Partners—which acquired Costa Mesa-based Talbert Medical Group Inc. last month—medical groups in Arizona, Kentucky and Virginia also are taking part in the project.
