Memorial Hermann Accountable Care Organization

Nonprofit profile at a glance

EIN
800778181
IRS 990 coverage
2018–2022
Forms available
Form 990 2022
Location
Houston, TX, USA
Phone
7133384552
Rating
76
Verdict
SUPPORTED
Rating confidence
Moderate

Official website

Reported finances

Revenue
$11,446,170
Expenses
$13,586,602
Assets
$150,795
Liabilities
$73,687

Source: IRS Form 990. Selected filing: tax year 2022. Amounts in USD.

Leadership & pay

16 people listed

Executive titles in this filing

  • David L Callender MD (CEO/President)

Highest reported compensation

  • David L Callender MD (CEO/President): $4,017,427 total reported compensation
  • Deborah Gordon (EVP, CAO/CLO): $1,870,900 total reported compensation
  • James McCarthy MD (EVP, Chief Physician Executive): $1,837,496 total reported compensation

Source: IRS Form 990. Selected filing: tax year 2022. Names and roles reflect this filing, not necessarily current officeholders.

Overview

Mission

Memorial hermann accountable care organization (mhaco) is dedicated to promoting social welfare by achieving the goals of the three-part aim of the medicare shared savings program: lower cost, improved care, and better health. Mhaco seeks to improve health care for individuals by (1) investing in the primary care physicians who are directly accountable for the patient population, (2) investing in technology innovations and health care processes management, population management, and high-risk patient identification, and (3) lowering the growth of expenditures by driving high quality, consistent care through mhacos network of care providers, hospitals, and other healthcare facilities. As a result, mhaco is advancing health and social welfare of the community by seamlessly bridging care delivery, physicians and health solutions.

What it reported doing in 2022

At Memorial Hermann, we believe that healthcare providers should be accountable for the care they deliver. Memorial Hermann Accountable Care Organization (MHACO) is committed to delivering high-quality care in a cost-effective manner. In addition to the health system's 17 hospitals, numerous specialty institutes and advanced outpatient facilities, MHACO consists of a network of affiliated physicians that unite independent and employed physicians of every specialty throughout the Houston area in a common commitment to quality and accountability. These physicians practice evidence-based medicine proven to result in better clinical outcomes and shorter hospital stays-as well as cost savings for healthcare consumers. At Memorial Hermann, we're advancing health in our community by seamlessly bridging care delivery, physicians and health solutions. Our hospitals and affiliated physicians utilize information technology and specialized tools to increase care effectiveness and safety while getting patients more engaged in managing their health. Through a process called clinical integration, these healthcare providers share information about patient care with each other. This allows them to deliver care that is more coordinated and therefore, more cost-effective. Each healthcare provider treating a patient receives a more complete picture of that patient's health so physicians and patients can make better, more informed healthcare decisions. In addition to delivering care that leads to shorter hospital stays, MHACO physicians aim to keep patients out of the hospital in the first place. Through the use of preventive medicine and a team-based, proactive approach, MHACO physicians can identify patients at risk of illness before they become ill. For patients with chronic conditions, MHACO offers a full continuum of care that leads to better clinical outcomes and controls healthcare costs. Care Coordination teams focuses efforts on discharge planning and follow-up needs for any patient assigned to the ACO and admitted in a Memorial Hermann hospital as an in-patient. MHACO utilizes data analytics to provide meaningful actionable information to physicians. MHACO's goal is to improve the health of the Greater Houston community through increased access, lower costs, and improved care. According to CMS reports, Memorial Hermann Accountable Care Organization was the top performing MSSP ACO in terms of generated savings for performance years 2013, 2014, 2015, #8 out of 432 in 2016, #11 of 472 in 2017, and #24 of 548 in 2018.

Operating model

Revenue model
Earned-program. 100% of the money available for current operations came from fees and other program revenue.
Distribution model
Direct operator. The filing allocates 100% of reported program-service expenses outside its grant, affiliate-payment, and member-benefit lines. This expense classification does not rule out separately announced grant awards.

The verdict

SUPPORTED - A large share of available resources goes toward mission work and the filed numbers largely add up. A relatively small share of voting board members are independent and expenses are high relative to revenue.

Rating breakdown

  • Financial Efficiency: 87
  • Transparency & Controls: 94
  • Accountability: 62
  • Sustainability: 9
  • Growth: 0

Detailed rating inputs

Financial Efficiency

  • Mission deployment rate: 100%; rating input score 100
  • Program expense ratio: 92.6%; rating input score 93
  • Fundraising efficiency: Limited

Transparency & Controls

  • Consistency checks: 100%; rating input score 100; 63rd percentile among comparable filings
  • Pay-setting controls: 5 of 6 controls in place; rating input score 83
    • Compensation committee: Pass
    • Independent consultant: Pass
    • Other Form 990s reviewed: Pass
    • Written employment contract: Missing
    • Compensation survey or study: Pass
    • Board or committee approval: Pass
  • Foreign activity oversight: Limited
  • Grant itemization coverage: Limited
  • Major donor itemization: Limited
  • Related-party transparency: Yes; rating input score 100

Accountability

  • Independent voting board: 50%; rating input score 50; 9th percentile among comparable filings
  • Governance controls: 7 of 9 controls in place; rating input score 78
    • Conflict-of-interest policy: Pass
    • Whistleblower policy: Pass
    • Document-retention policy: Pass
    • CEO compensation review process: Fail
    • Other executive compensation review process: Fail
    • Form 990 shared with the board: Pass
    • Board meeting minutes documented: Pass
    • Audit committee oversight: Pass
    • Independent financial-statement audit: Pass

Sustainability

  • Operating margin: -18.7%; rating input score 6; 6th percentile among comparable filings
  • Total-asset coverage ratio: 0.01; rating input score 1; 1st percentile among comparable filings
  • Liabilities to assets ratio: 0.49; rating input score 32; 32nd percentile among comparable filings
  • Officer compensation ratio: 9.7%; rating input score 20; 20th percentile among comparable filings

Growth

  • Program expense growth: -2.3% per year; rating input score 0; 8th percentile among comparable filings
  • Revenue growth: -3.2% per year; rating input score 0; 4th percentile among comparable filings
  • Asset growth: -17.5% per year; rating input score 0; 1st percentile among comparable filings

Details

  • Where the money goes: 100% of revenue deployed · 92.6% of spending went to programs
  • Governance: 5 of 10 board members independent · 7 of 9 filing controls reported
  • Programs: 1 filed program accomplishment · $12.6M in reported program spending
  • Leadership: top reported pay $4M · 16 people listed · 5 of 6 pay-setting controls reported
  • Consistency: 17 of 17 current checks pass
  • Schedules: 4 filed schedules · includes executive pay
  • Filing history: 4 filing years from 2018 to 2022
  • Contacts: How to reach this organization
  • Related organizations: 30 filed related-organization links
  • People: Everyone the filings name, and which of them the filings identify by more than a name.

Key Signals

Signals prioritize questions for review. They are not findings of misconduct.

  • Review — Accountability: Independent voting board scored 50/100.
  • High — Sustainability: Operating margin scored 6/100.
  • High — Growth: Program expense growth scored 0/100.
  • High — Growth: Revenue growth scored 0/100.
  • Review — Accountability: Governance controls: 2 of 9 not reported.
  • High — Sustainability: Total-asset coverage ratio scored 1/100.
  • High — Growth: Asset growth scored 0/100.
  • High — Sustainability: Officer compensation ratio scored 20/100.
  • Moderate — Sustainability: Liabilities to assets ratio scored 32/100.