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Three Indiana Health Firms Sign On To Savings Initiative

By Gretchen Frazee

Posted July 16, 2012

Three Indiana healthcare networks - Evansville-based Deaconess Care Integration, Indianapolis-based Indiana University Health and Mishawaka-based Franciscan AHN - have joined a program designed to cut back on Medicare patients' costs.

As a part of the federal health care law, the government created a Medicare Shared Savings Program that encourages health care providers to share information about their Medicare patients so they can provide more coordinated care.

The U.S. Department of Health and Human Services says by creating partnerships, called Accountable Care Organizations or ACOs, hospitals and doctors' offices can provide better treatment at a lower cost. For example, if doctors share information about a patient's history, they may not have to run the same, often costly tests multiple times. The Department of Health and Human Services estimates this kind of information sharing could save Medicare $960 million in the next three years.

And there's an incentive. If the providers reduce medical treatment costs, the federal government will give those providers a portion of the Medicare dollars saved each year.

IU Health ACO Chief of Staff Neil Pickett says how much of a kickback his organization receives depends on the quality of care they provide.

"It depends on the amount of money that's saved and then it depends on meeting these quality criteria," Pickett says. "Medicare has identified 33 criteria which are based on meeting certain evidence based care delivery standards and also some patient satisfaction metrics."

Still, Pickett points out, it's not all about rewards. The health care law also created some penalty programs.

"If a hospital has too many of these 30 day readmissions then Medicare is going to penalize the hospital by lowering its reimbursement rate. There's a similar penalty for too many hospital acquired infections."

But Pickett says if hospitals and doctors work together effectively, they shouldn't have to worry about the penalties.

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