News release: Accountable Care Organizations take root in Minnesota

News Release
October 21, 2015

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Accountable Care Organizations take root in Minnesota

Half of recently surveyed hospitals, clinics, and physicians in Minnesota are part of an Accountable Care Organization (ACO), according to a first of its kind analysis of Minnesota’s health care market.

ACOs are broad, provider-based organizations that accept responsibility for the cost and quality of care for a defined population. They are a key part of Minnesota’s current efforts to improve health care, since ACOs aim to improve quality and patient satisfaction while reducing costs.

The report shows that about 40 percent of the commercially insured population in Minnesota is receiving care from a provider affiliated with an ACO.

Though ACOs have taken root in Minnesota, they have only achieved expertise in fewer than a third of the areas needed for optimal implementation of this care delivery model.

The study looked at the capabilities that organizations need to succeed in an ACO model, including population health management, disease management, patient engagement, clinical decision support, performance management and utilization management. Minnesota’s ACOs have achieved expertise in fewer than a third of the areas needed for optimal implementation of this care delivery model. Larger organizations, many of which are organized around hospitals, generally had greater capabilities.

“When you look at Minnesota’s providers, they’re moving in the right direction, but there’s a lot more that we need to do to make progress on improving health through ACOs,” said Health Commissioner Dr. Ed Ehlinger. “Through our State Innovation Model work, we are giving providers and communities the tools to work with a broad range of partners to promote health with a more coordinated approach.”

A key goal of accountable care reform is to shift health care payments away from fee-for service towards a model where payers reward providers for keeping patients healthy while lowering costs.  The study indicates that fee-for-service payment still dominates in Minnesota, with only a small portion of revenues tied to ACO arrangements.  Two-thirds of surveyed providers indicated that 10 percent or less of their organization’s revenue was at risk; a quarter of respondents expected to see that figure rise to 30 percent by 2020.  

“As our state moves toward paying for better health care outcomes, as opposed to the volume of procedures, this report establishes a baseline for measuring much-needed progress,” said Human Services Commissioner Lucinda Jesson. “But health care experts alone cannot accomplish this transformation. To be successful, patients and community-based providers will play a critical role.”

The Minnesota Department of Health commissioned IBM/KPMG to conduct a baseline assessment as part of the $45 million federal State Innovation Model (SIM) grant to implement the Minnesota Accountable Health Model. The study drew on responses from more than 70 of the state’s largest health care providers and health plans, representing a majority of the commercially covered lives in the state.

The report’s recommendations include more education on population health management, increasing access to meaningful data to manage the health of patients across the spectrum of care, support to build partnerships with non-clinical providers, and investments in technology and core infrastructure. 

The full recommendations and report are available at Health Reform Minnesota: Accountable Care Organizations.


Media inquiries:

Scott Smith
MDH Communications

Martiga Lohn
DHS Communications