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Four regional health care organizations form Penn State Health Care Partners

Four regional health care organizations are collaborating to form a new Accountable Care Organization (ACO) called Penn State Health Care Partners.

They include Lancaster-based Physicians Alliance, LTD (PAL), Reading-based St. Joseph Regional Health Network and Integrated Medical Group, P.C. and Penn State Milton S. Hershey Medical Center. Among the ACO’s first initiatives is an effort to enhance the overall coordination and quality of care for a large population of Medicare recipients.

Penn State Health Care Partners was selected as one of 89 new Medicare Shared Savings Program Accountable Care Organizations (ACOs), providing approximately 1.6 million additional Medicare beneficiaries with access to high-quality, coordinated care across the United States, the Centers for Medicare & Medicaid Services (CMS) announced in December. That brings the total to 405 Shared Savings Program ACOs serving over 7.2 million beneficiaries. Penn State Health Care Partners expects to serve the health care needs of approximately 27,500 Medicare beneficiaries across several central Pennsylvania counties, including Berks, Cumberland, Dauphin, Lancaster, Lebanon, Schuylkill and York.

“For physicians and other health care providers, Penn State Health Care Partners provides a valuable opportunity to improve the overall coordination of care for our patients. That includes the care we provide to heal them when they are sick and the things we do to help them stay healthy,” said Dr. Robert Hippert, chair of Penn State Health Care Partners Board of Managers.

“Ultimately, this is about delivering better care, spending dollars more wisely, and having healthier people and communities,” said Dr. Charles Mershon, a member of the Penn State Health Care Partners Board of Managers and a practicing physician with Physician Alliance, LTD. “ACOs like Penn State Health Care Partners drive progress in the way care is provided by improving the coordination and integration of health care, and improving the health of patients with a priority placed on prevention and wellness.”

Doctors, hospitals and health care providers establish ACOs in order to work together to provide higher-quality coordinated care to their patients, while helping to slow health care cost growth. Penn State Health Care Partners is one of 405 ACOs participating in the Shared Savings Program as of January 1.  Beneficiaries seeing health care providers in ACOs always have the freedom to choose doctors inside or outside of the ACO.

“Medicare patients are asked to navigate an increasingly complex health care system to get their care, particularly if they have chronic conditions such as congestive heart failure or diabetes,” said Sean Reynolds, interim executive director for Penn State Health Care Partners and director of the St. Joseph Provider Health Organization, which consists of over 300 providers in Berks and Schuylkill Counties.

“The fundamental goal of Penn State Health Care Partners is to make it easier for patients to get well-coordinated, timely, high-quality care. In the long run this approach will improve outcomes, enhance the patient experience and ultimately reduce cost.”

ACOs share with Medicare savings generated from lowering the growth in health care costs when they meet standards for high-quality care. ACOs are groups of doctors, hospitals and other health care providers that work together to give Medicare beneficiaries in Original Medicare (fee-for-service) high-quality, coordinated care. ACOs can share in any savings they generate for Medicare, if they meet specified quality targets.

According to CMS, ACOs are starting to see promising results. This fall, CMS released the early findings from the ACOs who started the program in 2012. ACOs improved on 30 of the 33 quality measures in the first two years, including patients' ratings of clinicians' communication, beneficiaries' rating of their doctors, and screening for high blood pressure. ACOs also outperformed group practices' reporting quality on 17 of 22 measures.  ACOs are also demonstrating promising results on cost savings, with combined total program savings of $417 million for the Shared Savings Program and the Pioneer ACO Model.

ACOs are also just one way that CMS is working to reduce the rate of growth in Medicare spending while improving care. Medicare spending per beneficiary was essentially flat in nominal dollars in fiscal year 2014, and from 2010 to 2014, Medicare spending per beneficiary grew at a rate that was two percentage points per year less than growth in GDP per capita. While the recent slow cost growth has multiple causes, reforms in the Medicare and Medicaid programs are meaningful contributors to these gains and are improving quality as well.  Preliminary data for 2013, for example, indicates improvements in patient safety has resulted in 50,000 fewer deaths, 1.3 million fewer patient harms, and $12 billion in avoided health care spending.  Recent research implies that many of these reforms may be generating savings in the private sector as well.

“Patients have very straightforward expectations of their health care providers. They want good communication, access to care when they need it and high-quality care that is seamlessly coordinated,” said Dr. Bill Bird, medical director for Penn State Health Care Partners and professor of family and community medicine at Penn State College of Medicine. “This model enhances the care team's ability to deliver on those expectations while enabling us to be ongoing advocates for the continued good health of our patients.”

Additional information about Penn State Health Care Partners can be found online at

More information about the Shared Savings Program is available at

For a list of the 89 new ACOs announced in December, visit:

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