Hill Physicians Medical Group and BCBS of California ACO

Program Location: 
San Ramon, CA
Payer Type: 
Blue Shield of California

Reported Outcomes


Hill Physicians Medical Group has launched 3 ACO collaborations. Beginning as a pilot in 2009, an ACO was formed between Hill Physicians, Blue Shield of California and Dignity Health for the CalPERS population in Sacramento. The integrated health care delivery model aligned incentives among the health plan, hospital system, and medical group with the goal of keeping healthcare premium costs flat. Each organization shares clinical and case management information in order to tightly coordinate care. 

As part of their ACO-model of care, Hill Physicians have built upon their PCMH Initiative. They have redesigned the inpatient discharge workflow to close the gap between inpatient and outpatient care, leveraged Skilled Nursing Units, In-Home Medical Management and other services to reduce unnecessary Emergency Room visits, and have begun transforming selected practices into Patient Centered Medical Homes. Within the PCMH model, care providers work in physical teams as well as across virtual medical neighborhoods to coordinate care, especially for patients with chronic conditions like hypertension, diabetes and congestive heart failure.

Payment Model: 

Each year, an annual budget is set based on a global per-member, per-month (PMPM) cost target for five categories: facility services, professional services, mental health services, pharmacy, and ancillary services. Targets are set at a level that reflects the partners' commitment to reducing costs below current trends. 

Fewer ED / Hospital Visits: 

Blue Shield of California (December 2015)

  • reduction hospital admissions by up to 13 percent over the first 5 years
  • reduction in hospital bed days by up to 27 percent over the first 5 years

Blue Cross Blue Shield Industry Report (2012):

  • 15% reduction in inpatient readmission (2010)
  • 15% decrease in inpatient days (2010)
  • 50% decrease in inpatient stays of 20 or more days (2010)
  • a half-day reduction in average patient length of stay (2010)

Health Affairs (September 2012):

  • The thirty-day readmission rate continued to decline, from 4.3 percent in 2010 to 4.1 percent in 2011. Average length-of-stay, which decreased from 4.05 days in 2009 to 3.53 in 2010, increased to 3.74 in 2011 because of a considerable increase in catastrophic cases. But it remained below 2009 levels and was well below that of Northern California CalPERS members who were not in the pilot accountable care organization
Improved Health: 

Noteworthy examples include achieving 67% HbA1c testing mong diabetics, with 77% demonstrating control within clinically accepted standards. Additionally, sharpening our focus on women’s health, we set a target of achieving over 76% compliance in breast cancer screening among those due for a mammogram. We achieved 79% compliance.

Cost Savings: 

Blue Shield of California (December 2015)

  • achieved more than $325 million in healthcare cost savings in the program’s first five years

Health Affairs Blog (April 2014):

  • Overall cost of health care (COHC) savings reported a gross savings of more than $105 million, with net savings of $95 million to CalPERS members, since 2010

Blue Cross Blue Shield Industry Report (2012):

  • $15.5 million saved (2010)
  • $37 million in savings to CalPERS based on the pilot trend versus non-pilot trend. The parties beat the 2011 cost-of-healthcare target by $8 million, which was shared by the parties. 

Health Affairs (September 2012):

  • Health care costs for CalPERS members were $393.08 PMPM in 2010, a 1.6 percent decrease from the 2009 baseline amount. For members not in the organization, costs were $435.94 PMPM, which was a 9.9 percent increase from 2009 for that group
Last updated March 2019
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