Pediatric ACO Experiences Improved Value of Care for Medicaid Children

Partners for Kids (PFK), an Ohio based pediatric accountable care organization (ACO), has improved the value of care for Medicaid children, according to a new report from Pediatrics. PFK is the oldest and one of the largest exclusively pediatric ACOs in the nation, covering over 300,000 low income children in central and southeastern Ohio. The report specifically examines the cost and quality of care at PFK from 2008 to 2013. PFK was able to substantially reduce growth in the cost of care while maintaining quality, when compared to the growth experienced by Ohio Medicaid fee-for-service (FFS) and managed care (MC) organizations. The report also suggests the PFK model achieved these results because “pediatric ACOs are better positioned to bridge coordination gaps in care than either an individualized patient-centered medical home or an insurer could do alone; the ACOs are, in effect, the medical neighborhood for the medical home.” The ACO model of healthcare delivery is a breakaway from the traditional fee-for-service model. ACOs seek to encourage innovation, increase effectiveness, and improve costs by incentivizing healthcare providers to manage each patient’s health and provide preventive care to reduce the need for hospital stays and expensive procedures. Rather than paying healthcare providers for each procedure they perform, the ACO model rewards healthcare providers who keep costs down by giving them a share of the savings. If healthcare providers and healthcare organizations do a poor job of managing a patient’s health, and he or she requires expensive treatment, they incur some of the risk associated with the higher cost. While the majority of PFK physicians work under a salaried model, the remaining physicians receive a percentage over the Medicaid fee schedule as quality-based incentive payments. The report concludes that by highlighting pediatric ACOs it demonstrates an understanding that “pediatric care is a critical intervention point where, as a nation, we can shift from a culture of acute care to a culture of prevention…and [shows] an appreciation for the different market forces in pediatric healthcare.” For a more in depth look at ACOs as a new model of healthcare delivery, please see Barton’s ACO breakdown.