ACO Bets Hospital at Home is The Future

Accountable care organization Atrius Health is betting big that hospital care will move into the home. To that end, Massachusetts-based Atrius recently partnered with Medically Home Group, a health care technology and service company based in Westport, Connecticut, that recently raised $4 million.

As a Pioneer ACO that takes care of more than 740,000 patients in New England, Atrius is looking to improve care outcomes and lower costs by pushing more acute care into the home setting. The ACO expects it can move roughly 15% of its hospital care patients to home, according to Atrius CEO Steven Strongwater.

“Medically Home is the future,” Strongwater told Home Health Care News. “We will move 15% or so of our medical admissions and some unknown number of our elective medical patients out of hospitals to homes. The surgical procedures would be done in an ambulatory surgical center, with recovery at home without needing the high-cost infrastructure of a hospital.”


With its home health care partner VNA Care, Atrius Health is aiming to significantly lower health care costs with the innovative new program—and gain financial incentives that Medicare rewards to ACOs that create cost savings.

Care in place

Atrius has a history as a successful ACO, achieving $10.4 million in savings for the Centers for Medicare & Medicaid Services (CMS) in 2016. The ACO is made up of a number of physician and medical groups, including Dedham Medical Associates, Granite Medical Group and Harvard Vanguard Medical Associates.


VNA Care is the home health subsidiary of the ACO and a crucial part of the new push to add more services in the home.

“You can’t put those programs together without having the right DNA,” Strongwater said. “The VNA is part of that DNA. They have the experience to provide nursing care in the home over time.”

With Medically Home, Atrius can provide patients much of the same care as a hospital setting, without the overhead cost. So far, Atrius has treated 31 patients with the model, which provides care at home over a 30-day episode. The ACO seeks to build the model to 4,000 patients annually and expand to other health systems, according to Kathy Keough, director of government affairs at Atrius.

The first patient with Atrius’ Medically Home program was a 93-year old who suffered from underlying heart failure, was legally blind and “a little deaf,” Strongwater said. He had also been hospitalized six times within the last year. After plugging into the Medically Home program, the patient’s conditions were stabilized and under control, moving him down Strongwater’s population health triangle—from a high-risk patient to a rising risk patient—and reducing health care costs significantly in the process.

The patient’s outcomes improved with additional services at home, including getting assisted living and managing some of the social determinants of health that were impacting his conditions.

“He’s not been hospitalized since,” Strongwater said. “There’s magic there. From the population health pyramid, he was in that top tier, and he no longer is.”

While this will lower his cost of care over time to Atrius, the organization will actually receive lower payments as a result, because the ACO’s payments are risk-adjusted. So, as a patient moves down the pyramid, associated payments go down. The setup is emblematic of some of the competing financial imperatives within the population health model, which is meant to reward them for lowering the cost of care overall.

“Ironically, our risk-adjusted payment for [the patient] is going to do down because we’ve gotten better,” Strongwater said. “It’s a tremendous amount of effort and then to hold him where he is is effort, but that’s what ends up happening.”

The addition of the hospital-at-home program for Atrius is just one example of how leaders in the ACO space are responding to the incentives in place and maximizing the value of the home care setting. At the same time, the ACO environment is wrought with challenges, and the current administration’s thinking of the space is still somewhat unknown as initiatives continue to go into place.

ACO advancements

While Atrius has taken on Medically Home and is pushing the hospital-at-home model, not all ACOs are performing as well with innovative programs. Alex Azar, the new Secretary of the Department of Health and Human Services (HHS), recently affirmed that value-based care will move forward but called ACO results “underwhelming,” in part because these organizations are not taking on full financial risk.

Home health care partners within ACOs are similarly not taking on full risk in these payment models.

“I think part of the problem is that there is an enormous amount of inertia to remain in the status quo, in the fee-for-service model,” Strongwater said of the current ACO and hospital system environment. “It’s absolutely true of hospitals and certainly of physicians who are independent, because [they] don’t have the infrastructure to take on that risk and don’t have a stop-loss program.”

While Strongwater does believe that new payment systems and models are going to drive the systematic changes toward greater adoption of population health management, the system isn’t there yet. The pace and size of incentives to get providers into ACOs or alternative payment models may not be right, just yet, for acceleration of population health, he said.

“We definitely need better incentives and I would argue the right path is to have best care protocols that people have to adopt and reduce unjustified variation,” Strongwater said. “Going after best protocols and getting people to accept them is really part of the holy grail. If you look at industries that have really focused on safety—the airline industry for example—they’ve adopted a lot of common practices. And they’ve been able to manage through very challenging financial times. It is analogous to what we need to go through… to save a lot of money and improve outcomes for patients.”

Written by Amy Baxter

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