For years, Phil Bretthauer was one of the most expensive patients at Unity Point Health in Fort Dodge, a small town in western Iowa. The 70-year-old was frequently in and out of the hospital with heart attacks, COPD and prostate cancer.

“I always keep thinking, there’s something else coming,” says Bretthauer. “If it’s going to happen, it’s going to happen to me.”

Home health nurse Tammy Bennett visits Phil Bretthauer’s apartment and goes over all 17 of his medications (Photo by Jenny Gold/KHN).

His primary care physician, Dr. Lincoln Wallace, was worried about the same thing. “It’s a demoralizing position to be in to watch a guy like Phil go out the door and to anticipate that he’ll have some event that will likely either threaten his life or end up in the end of his life, and you have little or no way to stop it from coming,” says Wallace.

But this year, Unity Point – which includes multiple hospitals and doctor practices in Iowa — decided to do something to stop the expensive cycle of illness and readmission for patients like Bretthauer. The hospital signed on to become an accountable care organization, a Medicare program created by the Affordable Care Act that economists say could be a pathway to the holy grail of health care—providing better care at a lower cost.

Here’s how it works: a group of doctors and hospitals get together to form a network responsible for taking care of a group of Medicare patients—in this case, about 9,000 Iowans.  If the network can prove it’s keeping those patients healthier and spending less money to do so, it gets to keep some of the savings. The ACO can then use that money to do things Medicare doesn’t usually cover—like reaching out more to patients at home. But if the ACO does not succeed, it may face a financial penalty.

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