Doctors employed by the St. Charles Health System and six clinics across Central Oregon have partnered to form a Medicare accountable care organization, a new model that seeks to reward physicians for improving patient health rather than for providing more services.

Physicians participating in the venture can receive bonus payments for keeping their patients healthier and providing good quality, and can share in any savings achieved by avoiding unneeded or costly procedures when their patients get sick.

“We’re not going to say, ‘You need to cut cost; you’re inefficient,’” said Dr. Jim Guyn, St. Charles’ senior vice president of population health. “What we’ve seen in studies is, if you produce a high quality of medicine, your costs will go down.”

The six clinics — Mosaic Medical, Cascade Internal Medicine Specialists, Fall Creek Internal Medicine, La Pine Community Health Clinic, Madras Medical Group and Central Oregon Family Medicine — are all part of the Central Oregon Independent Practice Association, which invited the hospital system to collaborate on forming an accountable care group in the region.

“We wanted to see how we could better serve the community,” Kim Bangerter, executive director of the physician group, said. “With the data that we’re going to get, we can see where gaps in care are, how we can better coordinate so that duplication of services is less of a problem and how can we also reduce costs.”

The clinics, along with St. Charles Family Care Clinics in Bend, Madras, Prineville, Redmond and Sisters, care for about 11,000 seniors and disabled people enrolled in the traditional Medicare program. Unlike those who enroll in a Medicare managed care organization and may have in-network and out-of-network providers, seniors in traditional Medicare are free to see any doctor they choose. Those doctors then bill Medicare to receive payment for the care they provide.

But under that approach, no one individual is managing the patient’s care. A patient with heart troubles, for example, may see a primary care physician, a cardiologist and a heart surgeon for care. Those doctors may not talk with each other, so they could repeat the same tests or prescribe conflicting drugs.

The traditional fee-for-service system also inadvertently rewards doctors when their patients get sick. The more tests, procedures and treatments they need, the more their doctors get paid. Medicare officials have been testing new ways, sometimes called value-based care, to reward doctors for keeping them healthy instead.

“By developing these ACOs, and moving to fee for value, we’re going to allow doctors to practice medicine the way they would rather do it,” Guyn said.

Under the new approach, Medicare will assign patients to the primary care doctors they see most often, and those doctors will be judged on how well they manage the care of those patients.

Doctors will be told when patients assigned to them visit specialists, go to the emergency room or are hospitalized, giving them a better picture of their patients’ health. They will also receive updates on how well they follow the best practices for dealing with chronic conditions, ordering preventive services and screenings and other measures of quality care.

A Medicare patient assigned to one of the doctors in the accountable care organization will likely not even know she is enrolled in the care organization, although she may experience a change in the way the clinic deals with her, with more follow-up after emergency room visits or hospitalizations, and more of a team-based approach to health challenges. But the patient isn’t required to continue seeing that doctor, and could see a doctor not participating in the care organization.

“We have to make it so she wants to stay with us,” Guyn said. “We need to give her the experience that she wants to come back to, and make her feel like she’s being taken care of by our teams.”

The partners launched the new model on Jan. 1 under a three-year commitment with the Medicare program.

“If you look at the statistics, it takes three years to be successful,” Guyn said.

The accountable care organization model was created by the Affordable Care Act and some groups have operated in that model since 2012. According to the Center for Medicare & Medicaid Services, in 2014, the more than 350 groups that had formed the care organizations saved a combined $411 million. But after paying out bonuses, the program had a net loss of $2.6 million. Some groups who formed accountable care organizations early have already quit the program.

While the bonus payments and quality measures only apply to Medicare patients, the model could help improve care for other patients in Central Oregon. Clinics are likely to adopt the same strategies for all of the patients they see.

Bangerter said if the new approach is successful, the partners may also collaborate on contracts with other public and private payers. The clinics already work together under contracts to serve members under the Oregon Health Plan and commercial insurance plans.

— Reporter: 541-633-2162,