Editor’s Note: The University of Florida Health Science Center and Shands Teaching Hospital and Clinics have found a unique and innovative way to address the complex needs of patients while being conscious of cost constraints: a regional collaborative with Orlando Health. A new article in the “American Journal of Accountable Care” provides an overview of the approach and its implications. The article below summarizes some key highlights. Click here to download the full article.

In this era of health reform, health systems are struggling to provide the right balance between quality and cost efficiency. Accountable Care Organizations (ACOs) hold promise as a solution, as evidenced by the dramatic increase in ACO activity. Together, private sector ACOs and Medicare programs put the national total of operating or planned ACOs at over 200.

Many organizations, however, are not yet prepared to pursue a full ACO contract with a payer. They are looking for innovative intermediate steps that can begin to achieve some of the goals of the ACO model—particularly better patient care at a lower cost.

The University of Florida Health Science Center and Shands Teaching Hospital and Clinics, Inc. (University of Florida and Shands) have come up with a unique and creative approach to meeting patients’ needs while limiting costs: a regional collaborative with Orlando Health. The article below summarizes its three-phase approach that is allowing both organizations to offer better, more efficient care.

An Opportunity for Collaboration

The University of Florida and Shands collectively form a $2.7 billion organization that operates across two campuses—Gainesville and Jacksonville. It serves a disproportionately impoverished population, with more than one-third covered by Medicaid and 9% with no insurance.

Its partner, Orlando Health, is an approximately $2 billion not-for-profit corporation, with 1,738 beds in 6 hospitals. One of Florida’s most comprehensive medical systems, it serves about 1.8 million residents in central Florida.

The two institutions operate in contiguous and almost entirely non-competitive markets. More than two years ago, the concept of a partnership to deliver better care materialized into an action plan. In May 2011, the University of Florida and Shands agreed with Orlando Health leadership to a model of regional clinical integration that would improve quality and constrain costs. The model has been extended to form a formal clinical integration network (CIN) governing joint activities across four key areas: clinical integration, data analytics, contracting and operations.

Phase 1: Identifying Opportunities for Collaboration

Early on, the leaders of both institutions identified 11 areas for collaboration, covering a range of health and clinical services, combining institutional efforts and leveraging each other’s expertise. The following collaborative activities have been implemented and are starting to show results for both organizations:

  • The ability to pool expensive physician manpower in pediatric orthopedics through shared staffing and resources
  • The ability of Orlando Health to rely on the University of Florida and Shands for transplant services, eliminating the cost of pursuing its own program
  • A regional heart failure program at Orlando Health run by Orlando Health cardiologists trained by the University of Florida and Shands, eliminating the need to recruit an additional heart failure medical director at Orlando Health
  • The establishment of weekly teleconferences for heart failure patients between Orlando Health and the University of Florida and Shands, enabling patients to get a second opinion with minimal effort and allowing Orlando-based patients to remain in Orlando for heart failure care until a transfer is deemed necessary
  • A joint ventricular assist device (VAD) program that enables the organizations to purchase and share expensive equipment for high-cost procedures
  • Improved ability to meet patient care demands and disseminate best practices in mental healthcare by sharing the nationally-recognized addiction medicine program at the University of Florida and Shands, as well as the staffing of outpatient clinics
  • Improved bed capacity and staffing resources through the novel use of telemedicine to help University of Florida psychiatrists better triage mental patients in the emergency room
  • Millions of dollars in savings for both organizations for joint purchasing of the same supplies or similar supplies (agreeing on a single product rather than buying multiple similar products)

Phase 2: Establishing a CIN

The CIN is responsible for expanding the collaboration. Jointly governed by both organizations, it is focused on four pillars that will drive care improvements and cost reductions:

  1. Clinical integration: Establish patient registries and integrate patient data into a common electronic health record platform via a health information exchange to support expanded care coordination, facilitate care transitions, improve patient management and ensure efficient referrals across institutions.
  2. Data analytics: Create a new data warehouse and analytical platform that will push quality and performance metrics, as well as clinical data, onto scorecards and reports used to identify care variations and drive best practices.
  3. Contracting: Develop a contract management platform to enable risk profiling and risk management, position the organizations to engage in risk-based contracting with third parties, and realize shared savings through bundled payment distribution contracts.
  4. Operations: Plan to merge and streamline operations around supply chain management, pharmaceutical management, durable medical equipment, home and long-term healthcare and tertiary care. The plan enables joint purchasing, consolidation of post-acute care services and streamlined tertiary procedures that share rather than duplicate resources.

Phase 3: Laying the Foundation for an ACO

The work to date between the University of Florida and Shands and Orlando Health has laid the foundation for an ACO that spans their two regions. A centralized office staffed by administrators from both organizations provides oversight, prioritization and project management. The two organizations have created a kind of “pre-ACO” that focuses on the critical elements needed to transition and manage a patient population. Collaborative efforts around clinical integration are creating a provider culture that pushes for coordination across the care continuum, leverages expertise for specific procedures and uses innovative delivery systems, such as telemedicine, enhanced home health and community-based patient management.

Conclusions and Implications

The innovative approach that the University of Florida and Shands and Orlando Health have taken is a viable path for transitioning to a more accountable payment and delivery model through a formal ACO in the future. Organizations contemplating their own path toward accountable care can learn from the approach of first developing a regional collaboration. Policymakers and health services researchers also can benefit from studying the Florida example to gain a better understanding of the elements of accountable care and how they can be harmonized with other delivery system reforms, such as bundled payments, patient-centered medical homes and value-based purchasing. The collaboration is a novel example of how provider organizations can work together to gain both short-term efficiencies and long-term strategic transformation.