Years before Dartmouth-Hitchcock was chosen in December 2011 to participate in CMS’ Pioneer ACO model, Dartmouth-Hitchcock Clinic was one of only 10 organizations in the country selected to take part in the Physician Group Practice Demonstration (PGPD), a five-year pilot program CMS launched in April 2005 to explore the potential of the ACO model. As Medicare’s first physician pay-for-performance initiative, the program’s primary goals were to encourage physicians to participate in Medicare Part A and B, promote cost efficiency and quality of patient care, and reward physicians for improved health outcomes. In this program, the physician groups were responsible for assigned patients and all costs of care incurred, regardless of the care setting. 

Nearly all of the participants met all 32 of the quality measures by the fifth year, but no more than half of the organizations achieved a level of savings that qualified them for performance payments in any given year. Dartmouth-Hitchcock qualified for performance payments in years two, three and four, earning approximately 15 percent of the $107.5 million in total payments CMS made during the five years of the PGPD program (overall savings were approximately $134 million). Nurses played a crucial role in Dartmouth-Hitchcock Clinic’s success in the PGPD initiative through patient outreach efforts that have since become a basic component of coordinated care in the ACO model.  

Even though the final financial results of the PGPD program were not as positive as the participants and CMS had hoped for, all 10 PGPs agreed to participate in a two-year follow-on initiative, the Physician Group Practice Transition Demonstration. Several modifications were made to address issues that had come to light during the original project, including the use of a national benchmark instead of a local comparator group when assessing the PGPs’ spending growth rates, implementation of a different risk adjustment mechanism and alterations in the way Medicare beneficiaries were assigned. Dartmouth-Hitchcock and two other participants completed only the first year of the PGP Transition Demonstration before being selected to participate in the Pioneer ACO model. 

All of this early experience in providing population-based, patient-centered care gave Dartmouth-Hitchcock a head start in the Pioneer program. By the time the ACO was launched in January 2012, Dartmouth-Hitchcock had already developed best practices guidelines, a network of Level Three National Committee for Quality Assurance-certified patient-centered medical homes, electronic medical record systems, a data warehouse and patient registries and had transformed many of its nurses into health coaches and care coordinators.

During its first calendar year of operation, the ACO met all of the established quality benchmarks and generated $1.7 million in shared savings; the organization’s share of those savings amounted to more than $1 million. It has deferred calculation on year two savings until after its third year of operations. In its first year, it performed better than average on 32 quality measures (screening for depression was the only lower measure). In year two, it performed better than average on 30 of 33 quality measures.

It accomplished these outcomes in part by continuing to focus on patients with multiple chronic diseases, providing this patient population with extra outreach and care coordination, and by scanning patient data to identify gaps in care, such as preventive screenings, that could effectively avert potentially serious health problems and hold down costs. 

Initially, the Dartmouth-Hitchcock ACO, which included Dartmouth-Hitchcock Clinic and Mary Hitchcock Memorial Hospital, provided care to approximately 17,000 patients. In January 2013, New London Hospital joined and the ACO was renamed “allwell”—an awkward name that has yet to stick. A year later, Catholic Medical Center, St. Joseph Healthcare of Nashua and Exeter Health Resources of Exeter joined allwell, bringing the total Medicare patient base to almost 47,000. 

At the start of 2014, 20 percent of the ACO’s total net revenue was derived from value-based care. The goal, according to Dartmouth-Hitchcock, is to increase that proportion to 50 or 60 percent within the next three to five years, although much depends on the willingness of payers to change their fee structures. The ACO’s investment strategies are changing as well, evolving from an early focus on care coordination and data analytics to a more recent emphasis on innovative care strategies, such as offering a mobile team of palliative care experts and deploying more providers to serve in the community or home setting.

In addition to the Pioneer ACO, Dartmouth-Hitchcock co-founded a separate, statewide ACO in Vermont with Fletcher Allen Health Care in January 2013. That ACO, called OneCare Vermont, is participating in the Medicare Shared Savings Program. OneCare Vermont’s network includes all of Vermont’s 14 hospitals, Dartmouth-Hitchcock in New Hampshire, hundreds of physicians, two health centers and multiple rural health clinics. The ACO coordinates care for approximately 42,000 of Vermont’s 118,000 Medicare beneficiaries.

Dartmouth-Hitchcock Health is a member of the Brookings-Dartmouth ACO Learning Network, a member-driven network consisting of more than 100 payers, consultants and health care organizations. Members have access to expertise and resources to help them develop and implement ACOs and can exchange innovative ideas and solutions to advance accountable care.


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