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Profile: Heartland Regional Medical Center ACO

Summary: In this issue, we profile two different types of accountable care organizations (ACOs), one led by a health system and another led by independent primary care providers. This profile focuses on the former, Heartland Regional Medical Center ACO in St. Joseph, Mo., which was one of 114 ACOs to join the Medicare Shared Savings Program in 2012. The ACO, which oversees care for 12,600 Medicare beneficiaries, reduced spending by roughly 15 percent in the first year of the program by expanding its care management program for high-risk patients and engaging employed physicians in quality improvement initiatives.

By Sarah Klein

Heartland Regional Medical Center ACO (Heartland) is headquartered in St. Joseph, Mo., a city of 77,000 residents that was once more prosperous than Kansas City, its neighbor 50 miles to the south. As a transit point for settlers, goods, and mail moving west in the late 19th and early 20th centuries, St. Joseph was an economic wonder—generating significant wealth that was used to build mansions on Millionaire’s Row and expand into the meatpacking and manufacturing industries. But as transportation patterns shifted, Kansas City surpassed it, both in population growth and living standards.

Perhaps because of this history, fostering the economic vitality of the community is a high priority for civic leaders, one shared by the executives of Mosaic Life Care—an integrated delivery system that operates 63 clinics and the community’s only hospital, Heartland Regional Medical Center. The system launched the ACO in 2012, the same year it entered the Medicare Shared Savings Program (MSSP) and three similar contracts with commercial payers, bringing the percentage of the system’s 135,000 patients who are covered by risk-sharing agreements to one-fourth (this includes 12,600 Medicare beneficiaries).1 It was one of only four to choose the MSSP’s two-sided risk model, which offers a larger share of savings, but the risk of losses as well. Heartland draws its patients from a 23-county region that stretches into parts of Kansas and Nebraska, but the majority come from Buchanan County, which has St. Joseph as its seat. Spending on medical services for Medicare beneficiaries in the hospital referral region that includes both St. Joseph and Kansas City ($8778.79 for 2012) is slightly below the national average ($8874.38).2

The goals of the ACO—reducing health care costs while improving health outcomes—are consistent with the system’s past efforts to improve the health of the community and take costs out of the health care system so that employers could reinvest the money in economic development. That was the impetus for competing for the Malcolm Baldrige National Award for Quality, a highly challenging process that requires organizations build and demonstrate a culture of continuous performance improvement. Its success at that was recognized when the system—then known as Heartland Health—won the prestigious prize in 2009.

Prior to competing for the Baldrige award, Mosaic Life Care invested heavily in educational and wellness programs designed to improve the health status of local residents whose rates of obesity (38%) and smoking (27%) exceed those of the state and the nation.3 “We’ve had the philosophy for a great many years that if we’re able to improve the health of local employees [including the system’s] and the community at large, we will have a stronger economy,” says Linda Bahrke, R.N., chair of the ACO’s health transformation committee.

We've had the philosophy for a great many years that if we're able to improve the health of local employees [including the system's] and the community at large, we will have a stronger economy. —Linda Bahrke, R.N., chair of the ACO’s health transformation committee

Past investments in performance improvement initiatives and population health programs, which included a robust care management program for high-risk patients and health information technology infrastructure, were a blessing and curse for Heartland when it entered risk-sharing contracts. It was able to begin with a clear idea of the delivery system’s strengths and weaknesses (as well as utilization patterns, thanks to prior ownership of the health plan) and an understanding of the rigors of quality measurement, including the challenges of using data to engage its 160 employed physicians in quality improvement. “We felt like we had a fairly good baseline, even though we weren’t given the [Medicare] data ahead of time,” says Stacey Counts, chair of the ACO’s measurement committee. Its care management program, which deploys nurses and social workers to help high-risk patients manage their care, also gave the ACO experience that some of its peers in the Shared Savings Program didn’t have.

With this experience ACO leaders were comfortable taking on the riskier of two payment models offered under the MSSP—one that promised a greater share of savings (60% vs. 50%) but carried with it exposure to financial penalties if spending exceeded the target set by the Centers for Medicare and Medicaid Services (CMS). The drawback, of course, was that its earlier efforts made it harder to produce savings in the first year of its ACO’s public and private contracts. “We (definitely) hurt ourselves by not entering risk-based contracts sooner,” Bahrke says.

ACO Initiatives
To make rapid progress, the ACO focused its first-year strategy on enhancing quality reporting at the point of care, which involved hiring a team with data analytics and software experience to adapt the delivery system’s electronic medical record (EMR) system (previously purchased from Cerner) so that providers could identify and address patients’ unmet needs. The team built a dashboard, known as the “m-page,” that appears whenever a patient’s chart is opened, revealing the ways his or her care diverges from evidence-based standards and the quality requirements imposed by the MSSP.

The dashboard gives members of the care team a quick synopsis of the patient’s diagnoses, his or her medication history, and utilization patterns; it also flags gaps in care, such as missed cancer screenings and lab tests for patients with chronic conditions. (To reinforce the importance of new quality measures, they were added to incentive programs for physicians and care managers in contracts that had previously emphasized productivity metrics. A similar incentive program will soon be extended to traditional hourly wage workers, such as medical assistants, which has the potential to raise their pay by 12%.)

The five-member data analytics team next built a system to automatically generate lists of at-risk patients, including those with multiple chronic conditions and those deemed to be at rising risk because of elective surgery or an acute condition. The lists are sent daily to care managers who, when necessary, follow up by phone, through office visits, and in some cases, by visiting patients in their homes. (The latter has proven to be a very effective means of identifying health barriers that some patients may be unaware of or are too embarrassed to admit, such as an inability to pay utility bills or for medication, which Heartland’s social workers attempt to remedy with the help of the community’s social services agencies, Bahrke says.) To build lists of at-risk patients, the ACO purchased new risk assessment and predictive modeling software, which mines hospital and emergency department records, medical charts, and billing data to reveal patients whose total treatment costs place them in the top 15 percent of ACO patients in terms of spending.

The third prong of the ACO’s strategy was to educate physicians about new quality improvement priorities and provide them with quarterly performance reports to help them identify deficiencies. Communication strategies were developed by physicians and administrators working in dyads, and were executed by physicians who were well respected by their peers. With that approach, “there was less questioning about the data and whether our methods were the right ones,” Bahrke says.

The Heartland ACO reduced per-beneficiary, per-month Medicare spending from a roughly 15 percent decline. Once the financial results are confirmed, the ACO will receive a $2.9 million bonus, a 60 percent share of the savings. Of this, $2 million will be returned to the ACO to reimburse it for new hires, purchases of predictive modeling software, and other investments. The remainder will be used to recoup the first-year bonuses it advanced to providers in recognition that the shift to a population health-based approach to primary care would require them to invest significant time and effort.

During the first year of the MSSP, ACOs were not assessed based on their performance on the 33 measures, but were instead required only to report data for all measures and all participating providers. The ACO did see improved performance between 2012 and 2013 on some of the quality and outcomes measures—among them, the percentage of patients whose hypertension was under control (63.75% vs. 70.36%) as well as the percentage with ischemic vascular disease whose lipid profile was tested (70.32% vs. 76.14%) and received aspirin or another antithrombotic (86.86% vs. 89.40%). Pneumococcal vaccinations also increased (84.60% vs. 89.40%) as did rates of BMI screening and follow-up (92.42% vs. 93.41%).

Next Steps
A common challenge for all ACOs is how to maintain their infrastructure improvements while reimbursements fall in subsequent years. To increase its efficiency, Heartland is now looking at ways to automate some aspects of its care management program so that care managers will be able to work with more patients without adding the expense of additional staff to the ACO. One way of doing this is to determine how patients want to interact with providers; the ACO expects some will prefer to receive information via text and email or the system’s patient portal, while others may want to talk to a physician.

The ACO also is working to increase its patient engagement efforts, which are now focused on educating Medicare beneficiaries about the ACO model a) through health-focused newsletters that have been tailored to the Medicare population's specific health needs; and b) during activities geared to this population, such as walking groups. It also will be reaching out to patients who haven’t visited a physician in the past 12 months and encouraging new Medicare enrollees to take advantage of the “Welcome to Medicare” office visit, which is free to beneficiaries and gives care teams an opportunity to proactively determine a patient’s health risks and future care needs. Going forward, it also will be working to assess each patient’s activation level to determine which patients need additional support to achieve their health goals.

Finally, the ACO also will be deciding whether to include other partners such as long-term care facilities (it also could acquire them) and new providers, including independent primary care and specialty care physicians, which would enable the ACO to extend its reach and offer more choice to patients.

Enablers and Challenges
The ACO has benefited from being the dominant health care provider in its community because this reduces the likelihood that patients initially attributed to the ACO will go elsewhere and be removed from CMS calculations—which would deprive the ACO of savings that it might have achieved through its care of those patients. (At other MSSP sites, the turnover rate was as high as 30 percent, ACO leaders say.)

Being the dominant health care provider in the community also facilitates the delivery system’s shift from inpatient to outpatient care. “In a competitive market, it’s a big decision for a hospital to get into an ACO because you’re fighting for business and you need to fill beds,” Bahrke says. In contrast, Mosaic Life Care, which operates the 352-bed hospital, considers the community overbedded and wants to reduce the size of the hospital. “We think it’s the right thing to do,” she says. “We also know that treating patients at home and in outpatient settings is safest for them.”

Having employed physicians also appears to have helped. “It allowed us to move rather quickly because we didn’t have to get new contracts in place for risk-sharing,” Bahrke says.

Despite these advantages, Heartland is not immune from the challenges other ACOs face, including midstream changes in the methods CMS uses to track quality performance and—in year two—to determine whether an ACO is eligible for a bonus.

A secondary concern is that the ACOs in the MSSP, which are benchmarked against one another on quality metrics, have different degrees of experience with measurement, which may lead to variation in their methods of collecting and verifying results. “This could be a reason for the unexpected variance in the benchmarks,” Counts says. The uneven comparisons that may have resulted weren’t a major concern in the first year because ACOs were not judged on quality performance, but rather on the ability to report results, but going forward, problematic comparisons could put bonuses at risk.

When asked what other ACOs could learn from Heartland's first-year success, Counts and Bahrke said they couldn’t stress enough the importance of communicating and educating providers about the goals of the ACO. A good care management program and the ability to dive into data and determine areas for improvement are also critical. “We are very blessed to be an integrated delivery system with a very high-functioning EMR and an innovative chief medical information officer who has emphasized the importance of using the EMR to present actionable information to providers at the point of care and change clinical workflows to enable them to address problems,” Counts says. “We believe we can truly influence our activity and efficiency that way.”


1 Medicare's Shared Savings Program, launched in 2012 under a provision of the Affordable Care Act, seeks to reduce health care costs by providing incentives for providers to work together in entities known as accountable care organizations (ACOs). ACOs take on responsibility for the quality and costs of care for a designated group of Medicare beneficiaries.

2 See Centers for Medicare and Medicaid Services, Geographic Variation Public Use File,, HRR Report—Beneficiaries 65 and older.

3 Results of County Health Rankings and Roadmaps for Buchanan County.

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