WakeMed, Duke approved by Medicare for profit-sharing programs

Two hospital systems in the Triangle received the go-ahead Monday from Medicare authorities to launch an intensive health management program that will give the hospitals a financial incentive to reduce unnecessary hospital visits and medical services.

WakeMed Key Community Care and Duke Connected Care could each reap several million dollars a year by improving medical care and paring waste from the system. WakeMed Health & Hospitals is teaming with 470 area doctors, while Duke University is working with 1,700 doctors, in the first such Medicare projects in the Triangle.

WakeMed and Duke were among 123 accountable care organizations approved Monday by Medicare, including seven in North Carolina. Since 2012, the federal government has approved 14 such programs in North Carolina, mostly in rural areas.

Accountable care organizations will closely monitor Medicare patients after they leave the hospital, contacting them daily if necessary to make sure they are taking their medications and following up with medical appointments.

The care managers will also visit patients at home to take blood tests and will arrange personal transportation so elderly patients can get to the doctor. Medicare patients could be monitored for the rest of their lives.

“Ultimately they’ll get a higher level of care because they’ll get one-on-one care,” said Leslie McKinney, president of the board of WakeMed Key Community Care and a doctor at WakeMed’s Accent Urgent Care. “We will have to manage these patients for many years.”

To qualify for federal approval, a medical practice has to have a critical mass of at least 5,000 Medicare patients. WakeMed’s accountable care organization has a roster of more than 30,000, and Duke has about 50,000.

Medicare patients typically cost about $10,000 a year for medical care, said Devdutta Sangvai, Duke’s associate chief medical officer, who will be executive director of Duke Connected care. The goal will be to bring down the average by intensively managing the costliest patients who are prone to return hospital visits.

Such programs have long been known to reduce medical costs in the long run, but they have been too costly to implement and oversee. The new health care law encourages hospital systems to invest in the programs by letting medical providers share up to 50 percent of the cost savings achieved.

But the program also exposes hospital systems to the risk that they spend millions of dollars to establish an accountable care organization that fails to generate substantial cost savings.

Health care systems have long been financially rewarded for generating patient volume, even when costly care could have been avoided with cheaper preventive measures.

“It always was about optimizing volume,” Sangvai said. “It was getting patients in and out of the hospital, and in and out of expensive testing.”

WakeMed officials have said the ACO is a major part of their overall strategy to return to profitability after an operating loss of $14.4 million in the 2012-13 fiscal year, the hospital’s first financial loss in more than a half-century.

Medicare patients can develop multiple chronic conditions, such as diabetes and heart disease, without adequate family support to help the patients manage their medications and diet.

“You really have to track them for a long time,” Sangvai said. “It’s really about identifying your high-risk patients and tracking them pretty aggressively.”