By Rose Hoban

About 13,000 Medicare patients in the southeastern part of North Carolina will be taking part of one the country’s newest accountable care organizations in a move approved by the federal Centers for Medicare and Medicaid Services last week.

Wilmington-based Physicians Healthcare Collaborative was given the green light for becoming an ACO, making it the seventh such organization in North Carolina to launch since the beginning of 2012.


ACOs are still an evolving model for delivering healthcare and returning savings to providers (see box). Physicians HealthCare Collaborative head Jeff James said his organization wanted to see what the experience of other organizations in the state before making the leap.

“We didn’t want to be on the bleeding edge. We wanted to be near the first, not the first,” James said. He also said he’s been communicating with the leaders of other early ACOs to see what they’ve done, and to learn from their missteps.

But also James said his organization has been expanding and planning for future changes in healthcare reimbursement since before passage of the Affordable Care Act in 2010. The group serves more than 90,000 patients in New Hanover, Brunswick and Onslow counties, with more than 24 practice sites.

“In 2009, we started rethinking our approach to healthcare finance, quality and patient experience,” James said.  He said his organization’s leaders were inspired by former CMS administrator Don Berwick, who James heard speak at a national conference of the American Medical Group Association.

“There were a number of us who were impressed by what he had to say about the need for the healthcare system to change,” James said. He recalls his colleagues were impressed by Berwick’s vision of what he calls the “Triple Aim,” three intertwined goals of higher quality care, lowered costs and better outcomes for populations receiving care.

“We started thinking about that, and started looking at the trends towards transitions that were just starting and determined that the healthcare system was going to change dramatically over the next couple of years.

James said since then the group has grown from 95 providers to more than 150, with specialists in almost every discipline.

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“A lot of our growth was geared at filling the holes we had before, adding rheumatology, orthopedics, oncology, a pain center. We added podiatry and endocrinology.” James said. “The reason for it is we recognized that in order for us to be more accountable, we had to have clinical integration across the continuum of providers.”

James said he anticipates their management of care will save at least $3 million from the cost of providing services to the organization’s 13,000 Medicare patients. Physicians’ total revenue last year was $85 million.

“Once we meet that savings threshold, we get to keep 50 cents of every additional dollar saved,” James said. He anticipates the changes in practice will also save money for Physicians’ other 75,000 patients.

“I would like to say that the work we and others like us are doing is helping transform the healthcare delivery system,” James said.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...