In the last five years, the number of
Accountable Care Organizations (ACOs) has increased from 100 to 700, which now
serve 23 million Americans. These organizations are defined as they are formed,
when a group of provider join forces to assume responsibility for the financial
and quality ratio of services to a predesignated community, shifting
responsibility for financial risks from payers to providers to incentivize
value. (Tianna Tu, May 2015)
The creation of ACO’s is inextricably
tied to Medicare. The Centers for
Medicare and Medicare Services (CMS) forerunner of ACO’s for Medicare was the
Physician Group Practice Demonstration (PGP) pilot program that ran from 2005
to 2010 with mixed success.
Nevertheless, in December 2008, the Congressional Budget Office (CBO)
was the idea champion for including ACOs in the Affordable Care Act of 2010. Subsequently, CMS launched the Pioneer ACO
program with Medicare in January 2012, and the Medicare Shared Savings Program
(MSSP) in April 2012 (Tianna Tu, May 2015) .
The success of these ACOs and their
impact on Medicare are probably too new to show much results, make more
complicated by six different types of ACOs, albeit the majority are three
times: (1) physician group led (37%); (2) hospital led (28%); or, (3) both
(35%). (Tianna Tu, May 2015) Quantifying their efficacy or lack of
efficacy is also complicated by the fact that Medicare ACOs and Medicaid ACOs
are organized differently. The former
have value measurements, initially (Pioneer) are federal government sponsored,
and issue reward based on a complex rubric; however, the Medicaid ACO’s are run
by states by differing standards. (Tianna Tu, May 2015)
According to early indications, the
Medicare ACOs (Pioneer and PGP) allege they have realized $877 million in
medical expenses, with $460 million being the “cut” or share returned to the
provider organizations. Results were inconsistent though because only 22%, for
example, of the MSSP participants for Medicare ACOs qualified for any financial
rewards. In the same year, Medicare ACO’s claimed to have improved quality in
28 to 30 of 32 scoring areas. (Tianna Tu, May 2015)
Analysis of these early results by two
institutions, Leavitt Partners and the Brookings Institution indicate more
complexity. Specifically, they found
correlation between cost savings and quality improvement was minimal and,
Bayesian causal correlation was non-existent.
Moreover, they found that improving quality was substantially easier
than reducing costs. (Tianna Tu, May 2015)
Analyzing these findings from the
patient, provider, and payer view would suggest the following: (1) for
patients, there is insufficient information to show any positive or negative
impact on the patients because quality improvements could have dealt with ACOs
infrastructure and processes and not directly to patient care, and reduced
costs could have meant less services to the patients, which could be negative;
(2) for payers, their expenditures were ostensibly reduced by $877 million;
however, no information is given as to whether that savings was passed on to
patients to help them financially, or simply kept to increase medical insurers
profits, retained earnings, or reserves; and, (3) for providers, well, it
appears their getting the wool pulled over their eyes. Their billable services were reduced by $877
million in exchange for a $460 million refund. In other words, they swapped
$877 million for $460 million as a “reward” for nominal quality improvements,
quite possibly, short-changing their patients in the process by diluting
providers’ pure Hippocratic-oath patient focus to be tempted by dollars, and
reducing patient services. For the
providers, it’s like the old joke that first prize is a week in Toledo, and
second prize (less desirable) is two weeks in Toledo. CMS is not giving providers an “incentive,”
it’s punishing them by taking half their billings while possibly reducing
patient care. However, that’s not
terribly surprising given the model originated with accounts at the CBO and not
health care experts.
Works Cited
Tianna Tu, D. M. (May 2015). The Impact of
Accountable Care: Origins and Future of Accountable Care Organizations.
Washington, DC: Leavitt Partners.
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