The Benefits of Joining an Accountable Care Organization (ACO) with Augusta Health

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Tom Haederle
All of the challenges facing larger hospitals and health systems - workforce issues, reimbursement rates that don't meet the cost of care, patient populations impacted by the social determinants of health, and many others, are magnified for rural caregivers. Yet in facing these realities, some rural hospitals and health systems are doing more than coping. They are thriving.

00;00;31;29 - 00;01;05;23
Tom Haederle
Welcome to Advancing Health, a podcast from the American Hospital Association. I'm Tom Haederle with AHA communications. After years of smooth functioning, the pandemic hit Augusta Health hard. The Virginia based rural health system started for the first time to experience high rates of burnout and turnover. In this podcast, we hear how Augusta responded to keep delivering the care its patients deserved by including lots of cross-training across multi-discipline care teams, strengthening the role of case managers, and most importantly, transitioned to an accountable care organization.

00;01;05;25 - 00;01;11;09
Tom Haederle
Augusta's example shows how rural independent providers can be successful.

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Michelle Hood
Good day. I'm Michelle Hood, I'm the executive vice president and chief operating officer of the American Hospital Association. And joining me today is Mary Mannix, president and CEO of Augusta Health, based in Fisherville, Virginia, and a past board member of the AHA Board of Trustees. We are here to discuss the future of rural hospitals and health systems. But first, let us share our rural credentials, if you will.

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Michelle Hood
Certainly, nobody disputes that Maine is a rural state. And as the former president and CEO of Northern Light Health, previously known as Eastern Maine Health Care in Brewer, Maine, I worked with and on behalf of several very rural hospitals, including critical access hospitals, that were members of our system. I also had the privilege of leading the Montana/Wyoming Division of the sisters of Charity of Leavenworth Health System for seven years,

00;02;07;08 - 00;02;22;26
Michelle Hood
certainly, frontier medicine. Likewise, no one disputes that Virginia is a rural state, but your experience in rural health care goes back to your years in Pennsylvania. So, Mary, please share a bit of that experience with us.

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Mary Mannix
Well, yeah. Thank you Michelle. So I completed my graduate work in health care administration and have a master's in nursing and an MBA, and then did a two year postgraduate fellowship at the Guthrie Clinic and ended up staying for another 17 years. The Guthrie Clinic is kind of a hub and spoke concept. It serves two states, primarily New York and Pennsylvania.

00;02;47;01 - 00;03;23;06
Mary Mannix
It has its hub located in mid-central northern tier of Pennsylvania, and then a very distributed network of rural clinics throughout the bi-state area. From there, I was then recruited to Virginia, to the Shenandoah Valley, and as you mentioned, in Fishersville, Virginia. And Augusta Health is more of a community focused, less of a hub and spoke, more of a community focused health care organization that does have a far reach throughout many rural communities in Virginia, going north all the way up to Rockingham County, south all the way down to Lexington, and then Bath and Highland.

00;03;23;09 - 00;03;34;05
Mary Mannix
And of course, Augusta County is a very large area as well as the western side of Albemarle. And then Nelson County. So that's a population of about 340,000 people.

00;03;34;08 - 00;03;58;03
Michelle Hood
Well, you can hear from our descriptions of at least some of our experiences in health care that rural is near and dear to us. And our commitment to those providing care to those living in rural America is steadfast. Mary, when I ask health care executives, regardless of where it is that they're currently working, what is it that keeps them awake at night?

00;03;58;05 - 00;04;13;21
Michelle Hood
Hospitals and health systems still call out workforce as a critical challenge. One of the most of the critical challenges. So tell us about your workforce vulnerabilities at Augusta Health and how you are responding.

00;04;13;24 - 00;04;41;22
Mary Mannix
So, you know, we were working on this workforce challenge obviously long before the public health emergency. And then everything just became accelerated with the public health emergency. At Augusta Health we were fortunate we had a very stable workforce. Even when the pandemic started on that fateful day of Friday the 13th, March 20th, and we were able to retain stability in our workforce, we didn't have any reductions in workforce.

00;04;41;23 - 00;05;08;06
Mary Mannix
We did a lot of communication, we did a lot of partnership. And as we were waiting for the surge in our community, we did a lot of cross-training across multidisciplinary teams to prepare, and that served us very well. Our team members were appreciative. They loved how proactively we communicated. If we didn't know the answer to something we said we didn't know, but we'll get back to you and we worked together in a very strong sense of teamwork and spirit.

00;05;08;09 - 00;05;35;02
Mary Mannix
But that third to fourth quarter of I think it was 2021 when Delta morphed into Omicron. We didn't catch a break. And that's when you really started to see some burnout, some exhaustion. And that's what Augusta Health when our turnover really began to spike. And that is when we started to become overly reliant on contract labor to be able to, you know, sustain our mission and serve our community.

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Mary Mannix
The areas that have been most challenging have been in nursing, some key areas of physician practice. We have a 260 multi-specialty physician group practice from primary care all the way through various subspecialties. We started to see a little bit of turnover there, even in areas like lab and radiology. Even in mammography, we began to see turnover, a very new phenomenon for us, and one that made us, as I said, very dependent on contract labor.

00;06;04;16 - 00;06;21;23
Michelle Hood
Yeah. So I think, you know, we are still seeing that. And I think the workforce challenges that we have within our field are going to continue. You add on the demographic shifts and the aging of the population and less workforce and more choices for that workforce. And I think we've got challenges for the years ahead.

00;06;21;23 - 00;06;23;03
Mary Mannix
Yeah, definitely.

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Michelle Hood
Look forward to working with you further on those. Let me shift gears a little bit and talk about the payment landscape. For many years, we as a field have been working towards a value based care and alternative payment models, not with a whole lot of success, with some success. Certainly there have been pockets of transformation. What does it look like at Augusta Health, and how are you thinking about that?

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Mary Mannix
It's a great question. And we knew that this movement away from fee for service into value based models was going to be a really important part of our experience curve in our learning curve. So believe it or not, ten years ago we sat down with our board and said, we think that we really need to conceptualize this as kind of a research and development time for Augusta Health, and that we need to get into the ACO space.

00;07;12;12 - 00;07;38;26
Mary Mannix
I'm going to be honest with you, Michelle. I didn't even fully understand what an ACO was, but I knew that strategically that was the direction we needed to go. We needed to educate ourselves. And so we actually applied way back in 2014 for the Medicare Shared Savings Program. Worked with a consultant to help us complete the application and understand some of the infrastructure that was going to be required, and then began to develop the resources for population health management.

00;07;38;28 - 00;08;01;03
Mary Mannix
We've been through three cycles now with Medicare Shared Savings Program, so we've been in it now for over ten years and have moved from the one-sided upside only model all the way to where we are today. Fast forward, and we are now in the enhanced model where we are doing two-sided risk. We're about to get our fourth year of shared savings.

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Mary Mannix
We have learned a lot on this journey. We've learned about how to become competent and understand attribution, complexity coding, chronic disease management and especially as it relates to lived life, social determinants of health. The integral role of not only the primary care physician, but the case manager who's really effective at social complexity. We've developed the analytical tools and the platforms.

00;08;27;00 - 00;08;56;12
Mary Mannix
We've mapped out areas of deprivation and worked with many community partners to begin to address these gaps. So today, we're a smaller ACO. We have probably a little over 8000 Medicare beneficiaries. We have over 300 providers, and we probably have about 100 million of Medicare revenue running through our ACO. But we've learned a lot, and our quality scores range anywhere from between 94 and 98%.

00;08;56;14 - 00;09;30;05
Mary Mannix
Our cost per beneficiary is well below that of the average of all ACOs in the country. And as I said, this has positioned as well. And for the last three years, and soon to be the fourth year, we will have meaningful shared savings that will be able to distribute to those practices that participate in our ACO. What's interesting to me is that I feel like CMS has kind of been leading the pack here, and that our commercial partners have been a little less interested, have been not as eager to move into that experience curve, although their interest is certainly peaking.

00;09;30;08 - 00;09;57;05
Mary Mannix
But we find that commercial insurers really don't necessarily have the sophistication, the reliable and valid data management tools. And in our experience, the strength of commercial insurers ability to lead and partner and service these two-sided risk models, quite frankly, is inferior to CMS. We are working with our commercial insurers, our partners, and we have a couple, you know, very successful alternative payment models with them.

00;09;57;05 - 00;10;16;28
Mary Mannix
But I really feel like we've come the furthest with CMS and now we're in that enhanced program. So our risk is 75% up or down. And again we've been able to move across these now for enrollments with the Medicare shared savings program to more narrow corridors of risk because we've become more competent in population health management.

00;10;17;00 - 00;10;37;11
Michelle Hood
You know, interestingly, when I was with Northern Light Health, we were an early adopter of ACO as well. But I actually had to go to Baltimore to convince CMMI that we could do it in rural Maine, and obviously did convince them that that was possible. And I think, you know, rural communities have some advantage. Rural providers have some advantage.

00;10;37;13 - 00;10;50;10
Michelle Hood
They have lifelong patients that have been with them for the entirety of their life, sometimes multi-generational. They have great community partnerships. They know the social determinants issues really, really well.

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Mary Mannix
So I couldn't agree with you more. They know their communities. They feel better than any other model, quite frankly, of health care. And they're nimble and they're agile because of their lack of scale.

00;11;01;25 - 00;11;22;19
Michelle Hood
Yeah, they have to be. Yeah. Yeah, absolutely. Well, we're going to turn to the question of your independence. You are quick to tell us that you are one of the few remaining independent hospitals in Virginia. I know that that can be lonely at times, but you have done a great job with that and continue to strengthen your position.

00;11;22;21 - 00;11;32;29
Michelle Hood
So tell us about how you do that. I know you partner with a lot of organizations and you're a great collaborator, but what do you think it is? It's making you successful as an independent provider?

00;11;33;01 - 00;12;02;01
Mary Mannix
I think it starts with our governance model. We have a board of directors of 16 individuals that live in the community, and so they're very much in touch with the community. And that is an incredibly high accountability model or strong accountability model. We don't make tough decisions and then they go off to different communities to live. They live with the consequences and really think through deeply all of the really important sort of bet-the-farm decisions that health care is faced with.

00;12;02;04 - 00;12;25;03
Mary Mannix
That model of accountability, I think, is where it all begins. There's a tremendous amount of pride in the model that comes from the medical staff, the medical community that comes from our team members, that I also think is really important and critical to keeping everybody engaged in this model of care. We're a sole community hospital, but we only have one hospital, a 255 bed hospital.

00;12;25;03 - 00;12;58;13
Mary Mannix
And the rest of what we do is really on an outpatient basis. I mentioned we've got unemployed physician network of 260 providers. We have 35 regional sites of primary care, subspecialty care, kind of diagnostic and treatment or urgent care. And so we're providing the continuum. The other thing that I think is probably critical to our success, and that comes back to governance, is that our board has made the decision that we're going to take 5% of our investment portfolio and sort of seal it off into an endowment, and it's called the Community Partnership Endowment.

00;12;58;16 - 00;13;29;00
Mary Mannix
And the proceeds of that endowment go toward health equity opportunities that are our identified youth scholarship in our community, but most importantly, to provide grants to not for profit partners that are aligned with us in improving the health of the community by focusing on our community health needs assessment and what those top 3 to 4 issues are. And this has really kind of become a flywheel, if you will, of community collaboration and partnership.

00;13;29;02 - 00;13;56;04
Mary Mannix
And, you know, we have other partnerships as well. You know, we're part of the Mayo Clinic Care Network, which provides great affiliation for resources. Second opinions. We're an affiliate of Duke Oncology Network for Clinical Research for our oncology service line, and we partner with our legislators and our local governments. We have very important partnerships at the state level, you know, with the Department of Health, and we partner with other foundations in the region.

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Mary Mannix
So I feel like this model of collaboration, really knowing our community, sort of it all beginning with governance and making a lot of inroads into our community through these partnership models, are probably the most important critical success factors to our ability to hopefully sustain our mission for many generations to come.

00;14;14;04 - 00;14;39;17
Michelle Hood
That doesn't come without a lot of hard work, so congratulations on that. One of the other things that I know you and I share is our desire to be really strong advocates, to increase the role for women in health care leadership. We see many more women CEOs today than we have in the past, and I see a lot of young women coming up in the ranks who are really promising.

00;14;39;19 - 00;14;53;06
Michelle Hood
So interested in how you think the opportunities for women have developed over the years, and how we can continue to open doors for young women, but also other minorities who are underrepresented in our vocation.

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Mary Mannix
One of our speakers this morning said, diversity is knowledge, and I just think that that is so true. You know, as women, Michelle, I think we need to remain networked and actively involved in mentorship relationships with our female colleagues at a very intentional level. We need to take risks with our female colleagues and other minorities for succession planning and leadership development.

00;15;16;20 - 00;15;43;12
Mary Mannix
And I really feel like we need to encourage our colleagues, female and other minorities, to sort of take that next step of professional development and responsibility even if you don't feel 100% ready. It's okay to come out of your comfort zone and get into your discomfort zone. I also think we need to talk openly about phenomenon that hold back high performing executives, you know, things like imposter syndrome and, you know, these other cognitive distortions.

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Mary Mannix
We need to get those out in the open and tame that emotion by acknowledging its presence and coach and mentor and just reframe around growth and, quite frankly, self-kindness. I think we have to certainly advocate for greater parity in our field across the board, whether that is in fair market value compensation or the types of networking activities that previously have been very gender oriented, whether it be the golf tournament or, you know, what have you.

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Mary Mannix
And, you know, I look forward to the day when a health care system CEO is simply a health care system CEO, not necessarily a female CEO, but a health care system CEO. And, you know, it's my hope that we're paving the way for our daughters and that our daughters will continue to pave the paths that we've started. And I think they're going to do that.

00;16;33;23 - 00;16;57;08
Michelle Hood
That's well said, really well said. So I want to thank Mary for sharing her thoughts on the challenges of rural hospitals and health systems, and the challenges that must be overcome to assure a viable and robust rural health care delivery system for the future. I know our listeners appreciate the credibility you bring through a lifetime of experience as a clinician, administrator and leader in rural health care.

00;16;57;11 - 00;17;07;19
Michelle Hood
I am Michelle Hood, executive vice president and chief operating officer of the American Hospital Association. Thank you for listening. This has been an Advancing Health podcast.

00;17;07;21 - 00;17;16;01
Tom Haederle
Thanks for listening to Advancing Health. Please subscribe and write us five stars on Apple Podcasts, Spotify, or wherever you get your podcasts.