Insurer-hospital venture paves way toward accountable care

The two groups will work to establish an ACO-style arrangement that attracts more subscribers than PPO plans.

By — Posted July 10, 2012

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A joint venture between Aetna and Virginia hospital system Inova introduces a new way that payers, hospitals and physicians can relate to one another as delivery and payment systems continue to shift.

Under the deal, Aetna and Inova will sell co-branded health insurance. As health systems and payers collaborate elsewhere on forming accountable care organizations or signing capitated contracts, Aetna and Inova instead are aligning with PPO and HMO plans, at least for now.

The deal echoes not-quite-ACO partnerships that other insurers, including Cigna and WellPoint, have reached recently that include bonus payments to hospitals and physicians in recognition of clinical quality improvement but don’t eliminate fee-for-service payments.

Northern Virginia, and Inova specifically, aren’t quite ready to move to an ACO model. They need time to adopt the necessary technology and prepare the region’s physicians and patients, said Kylanne Green, executive vice president for health services at Inova.

“It’s a relatively immature marketplace from a managed care standpoint,” she said. “It’s still predominantly fee for service.”

Inova doesn’t have a staff of employed physicians it can move in one fell swoop to an ACO, either. It employs about 225 physicians, but an additional 3,400 use the Inova system.

Thomas Smirniotopoulos, MD, who serves on the board of the Medical Society of Northern Virginia, said Inova had been fairly explicit about its plans to collaborate with an insurer on an ACO-style project beginning about two years ago. In response, area physicians began forming specialty group practice associations, which he said would give the physicians “a position of strength” when they negotiate terms with Aetna and Inova.

“We’re heading in the same direction they are, but from physicians’ perspective,” said Dr. Smirniotopoulos, a pulmonologist and intensivist in Alexandria, Va.

Inova expects that the PPO and HMO models will attract the majority of subscribers at first, but over time, the two organizations will work to establish an ACO-style arrangement that they hope will draw more subscribers than PPO plans, Green said.

The first subscribers will be Inova’s employees, who are covered under Inova’s self-insured health plan, she said.

Aetna doesn’t have any other joint-venture arrangements in place, but a “walk, not run” approach to delivery and payment system reform could make sense in other markets where the fee-for-service model is dominant, said Tom Grote, North Capitol Market president for Aetna.

He said Northern Virginia is not alone in its fee-for-service emphasis. That means those other markets will take incremental approaches to delivery and payment reform, though they may not come in the form of a joint venture health plan.

Grote said Aetna has established a business division devoted to new arrangements, including ACOs, but also unique agreements like the one with Inova.

“As you build out these accountable care organizations, it’s important we get alignment and then implement technology to improve the flow of information so doctors have information they need at their fingertips,” he said. “Technology like that does take some time to get in to place. It’s not something where you can say, ‘Jan. 1, we’re an ACO,’ and flip a switch.”

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