Some of the biggest buzz in health reform lies in the potential that Accountable Care Organizations (ACOs) have to help to reduce costs, improve care, and move away from fee-for-service to population-based payment. But questions remain as to whether or not they will result in comprehensive delivery system and payment reform that is sustainable.
The Centers for Medicare and Medicaid Services anticipated that ACOs would be formed by groups of doctors, hospitals, and other health care providers, coming together to provide coordinated high quality care to their Medicare patients. Coordinated care helps to ensure that individuals, especially those with chronic conditions, get the right care at the right time in the right setting, while avoiding unnecessary repetition of services and unnecessary hospitalizations, with an eye toward meeting pre-determined quality targets. ACOs that are successful in both delivering high-quality care and effectively spending health care dollars will share in the savings that they achieve for Medicare.
Kaiser Permanente has been supportive of this movement since the concept was first introduced in 2009. While not technically an ACO, many elements of our care system – such as use of electronic health records, team-based care, and population management tools – ideally will be a part of ACOs.
A July 13th convening in Washington D.C., hosted by the National Health Policy Forum, highlighted some of the successes and challenges of early ACOs, with a focus on the Pioneer ACO model. On hand was Joy Lewis, MSW, MPH, of the Kaiser Permanente Institute for Health Policy. Titled, “Pioneer ACOs: The Frontier of Delivery System Reform,” presenters Stuart Lockman, president of Michigan Pioneer ACO, and Susan K. Thompson, president and CEO of UnityPoint Health of Iowa, discussed their experiences over the past year. Pioneer ACOs are one of the two predominant ACO models, which allow participants that meet quality and spending benchmarks to share in savings as well as losses.
Of the 32 organizations participating in the Pioneer ACO program in the first year, about 40 percent received a share of savings, whereas two organizations exceeding their spending targets had to return money to Medicare.
Increasing savings, Lewis reported, would take a greater number of beneficiaries being enrolled beyond the initial ACO demonstrations. Under the current structure, ACOs are responsible for a minimum of 15,000 lives in urban settings and 5,000 for ACOs operating in rural settings.
“The speakers recommended that between 50 and 100,000 beneficiaries would be required to make the ACO model sustainable,” Lewis said.
Another prominent theme was that a transition from a fee-for-service mindset to a population-based payment system will require dedicated effort that addresses issues such as value-based payments, sustainability, scalability, and program predictability.
Lewis’ presence at the conference is part of an ongoing Institute initiative to help impact ACOs by sharing information about best practices from Kaiser Permanente that can contribute to their success.