Are ACOs fulfilling expectations?

Many of the Medicare Shared Savings program ACOs are now in their second year of operation and some of the Pioneer ACOs are approaching year three. As a result, we are beginning to see published data on which of those ACOs are achieving shared savings. For those ACOs that began operating in 2012, (only ones for which any credible data is available), we know that of the 32 Pioneer ACOs only 23 continue to operate. We know that of those 23 operational Pioneers less than half generated shared savings. We also know that of the MSSP ACOs launched in 2012, about 25% shared in interim savings.

Based on those preliminary results, it is too early to pronounce the ACO program either a success or a failure. Additionally, success or failure should not be measured only in financial terms. Improved financial efficiency was only one of several objectives behind the ACO program. Others included better coordination of care, improved approach to the diagnosis of beneficiary medical problems and improved beneficiary access to care. ACOs that were able to impact practice and service delivery behavior patterns which led to improvement in coordination of care and patient access, I would argue had a successful year.

In debating the feasibility and sustainability of ACOs it is important to recognize that not all ACOs are alike, in fact, most are not. For example the Pioneer ACOs were selected by CMMI on the basis of their past experience in managing the financial risk for a defined patient population, either thorough capitation or percentage of premium contracts.

It is also important to note that for both the Pioneer and the MSSP program ACOs, participating members are not incentivized or obligated to seek medical care within the ACO. Thus the government sponsored ACOs are unable to manage the medical spend for each participating member thus impacting the ACOs ability to generate savings. Private ACOs can and do require participating members to seek care within the ACO or be subject to “out of network” restrictions.

ACOs may or may not survive long term as a discrete healthcare delivery structure. Irrespective, the long term contribution may be that the ACO program accelerated the recognition by providers and health plans that tools exist which, if implemented wisely, can positively impact patient outcomes while controlling costs. Doesn’t that seem worthwhile regardless of nomenclature?

Finally those organizations that were already doing a great job of controlling the medical spend prior to organizing as an ACO are having a more difficult time generating additional savings.

 

Resources

Join us on 4/11 for a FREE webinar as Gorman Health Group founder and executive chairman, John Gorman, financial expert and former health plan CFO, Bill MacBain, and former regulator and industry-renowned policy expert Jean LeMasurier offer insight on the Final Rate Announcement from CMS. Register today >>

Our team of veteran executives can help your ACO evaluate the options, manage the workflow to achieve either a Medicare Advantage contract with CMS or a risk contract with an existing MA plan, and continue to achieve improved outcomes. Learn more about how GHG can help >>

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