News from the Bay area last week came that San Francisco-based groups were forming two ACOs. The participants include Catholic Healthcare West (San Francisco, CA), UCSF Health (San Francisco, CA), Hill Physicians Medical Group Inc (San Francisco, CA), Blue Shield of California and the city of San Francisco. One of the overarching goals? Reducing healthcare costs – but not just for the providers. Emphasis in the news reports was on reducing healthcare costs for the patients involved in the ACO.

As reported by the San Francisco Appeal: “We work very hard to keep rates as affordable as possible for taxpayers and insurance members,” Health Service Board President Claire Zavanski said Wednesday at a news conference at City Hall. “We are looking to this new model that we hope will keep rates affordable.”

An employee benefits agreement reached between the city and county of San Francisco and Blue Shield of California (San Francisco, CA) will make the ACO program available to active employees, retirees and dependents of the city and county who choose the Blue Shield HMO plan during the April 2011 open enrollment period. Enrollees in the city’s Health Service System who select the Blue Shield HMO plan and then choose Hill Physicians for their medical group will be automatically enrolled in the ACO.

According to the Appeal, the San Francisco groups will be looking at a pilot program from Sacramento as an example. The program in Sacramento served 5,000 public employees and resulted in a 22-percent reduction in hospital readmissions and 15-percent reduction in bed days, City Supervisor Carmen Chu told the Appeal. It saved the state $20 million, according to one health partner.

“This puts San Francisco on a path for improved care and lower costs,” Chu told the Appeal. “Every dollar we save on health care is a dollar we can put back into San Francisco’s vital services.”

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