Farzad Mostashari, MD, addresses employees at a retreat. Mostashari is CEO and co-founder of Aledade, an ACO-driven company.
Beyond the ACO

Aledade thinks it can help your primary care practice save money

A mix of propriety technology, field ambassadors to show you how to use it, and upfront capital help to make Aledade more than an ACO-driven business.

When Thomas Bowden, DO, started his private practice in internal medicine in 2001, managing the practice’s finances was an ancillary concern.

As the small practice in West Virginia’s Kanawha Valley grew, managing it financially while ensuring optimal patient care became more of a challenge, particularly with the skyrocketing costs of medical care.

Wishing to remain independent yet open to innovation, Dr. Bowden and his fellow osteopathic practitioners at Charleston Internal Medicine were researching different practice models when Dr. Bowden ran across Farzad Mostashari, MD, speaking at a conference. The topic was his new company, Aledade, and its business model, which helps independent primary care physician practices cut costs within the framework of an Accountable Care Organization (ACO).

The concept made sense to Dr. Bowden, and the practice was one of the first to join Aledade’s West Virginia ACO in 2015.

Dr. Thomas Bowden, DO

“It’s a provider-driven model,” says Dr. Bowden. “They [Aledade] don’t tell us how to practice medicine. They give us tools to practice better.”

Beyond the ACO structure

Aledade was founded in 2014 by Dr. Mostashari, who was formerly the national coordinator for health information technology at the U.S. Department of Health and Human Services.  It added cutting-edge technology, data analytics, upfront capital and what it calls “business transformation services” to the ACO model.

An ACO is a group of independent physicians and specialists who band together to improve health outcomes and reduce treatment costs for Medicare beneficiaries through population health management and preventive health services.

“Our goal is to change the business model for health care beginning with primary care,” says Dr. Mostashari, CEO of Aledade.  “We want to do more primary care, more prevention, and reduce all those unnecessary and harmful health care costs, and then share in those savings.”

Shared savings

Aledade ACOs had a $51,000 average increase in practice revenue in 2015.

The trending downward in the total cost of care is a long journey, says Dr. Mostashari, “but by year two or three in the ACO, it’s very reliable that it’s going to result in shared savings.”

By shared savings, he is referring to the startup funding that Aledade provides private practices that want to join one of its ACOs in return for a share of their eventual savings.

Farzad Mostashari, MD

“It’s estimated that it takes [on average] $2 million to pay for the EHR, legal, administrative, regulatory aspects of an ACO,” he says. “The practices who most want to use these models are least able to reach into their pockets.”

In return for 40% of the ACO savings, Aledade funds the ACO startup expenses. The cost to the practice is $1 a month for every attributed patient, explains Dr. Mostashari.

“The first year we joined the [Aledade’s] West Virginia ACO, there was a little over $3 million in savings for the 11 participating practices,” says Dr. Bowden.

The ‘right business model’ 

The ACO concept requires early communication with patients to better understand their health and well-being. High-risk patients are flagged and brought into the office sooner, This allows  the practice to manage their overall care, avoiding many costly hospitalizations, preventable readmissions and ER visits, particularly for the most vulnerable patients, who are often those transitioning back home from a hospital, ER or skilled nursing facility.

Most of this work is done by way of technology. Aledade’s proprietary software collects patient data from a variety of sources to offer the primary care physician a big-picture view of their care.  “We make sure doctors reach out to those [high-risk] patients, make sure the structure is there,” says Dr. Mostashari. “The software really supports these workflows. It’s a very actionable information system for population health.”

Beyond the proprietary technology and data analytics that show the care a patient receives outside of a doctor’s practice, Aledade provides independent physician practices with regulatory and legal expertise, best practices from its network of primary care doctors, and coaching on how to optimize work flows and better utilize the technology.

“For more than 20 years, I’ve been trying to get better outcomes and save lives through public health and health IT,” says Dr. Mostashari. “After literally decades of trying to find different approaches, I realized that you have to combine all the quality improvements and technology and align it with the right business model.”

The osteopathic connection

The data analytics aspect of population health aligns with the osteopathic philosophy of preventive care, according to Dr. Bowden.

“It goes hand in hand because it’s taking care of the entire patient,” says Dr. Bowden. “With population health, you have to know that patient and their individual metrics, their blood pressure and blood sugar, but also their home life and stressors. To really impact somebody’s health, you need to know that.”

Dr. Bowden and the DOs who practice with him at Charleston Internal Medicine have also benefited from Medicare Advanced Payments for ACOs, which has given them funding to start initiatives.

“A lot of us use that money for chronic care management programs,” he says. “We hire people to do annual wellness visits and outreach to patients. They help patients navigate the whole health care system and have direct communication with us.”

The Aledade model, which is now active across 20 states, partnering with 200 independent, physician-led practices, works well in less-populated areas where primary care physicians are in charge and quarterback patient care, says Dr. Mostashari. This aligns well with osteopathic medicine.

“The idea of taking care of the holistic patient is one that’s deeply embedded in the osteopathic tradition,” says Dr. Mostashari. “And we find some of our most capable physicians in population health are trained in that tradition. The whole patient is in their charge, and that includes the patient’s home and community, all the social determinants of health.”

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