... but there will be risk-rewards
How does an ACO make health care more patient-centered?
How does an ACO provide health-care services that are more effective?
How does an ACO encourage providers to start to address health rather than just sickness?
This blog hopes to explore these questions and more by publishing the writings of health-care professionals and thought leaders who possess valuable insight into the future of their industry. These insights are largely developed through the authors' past experiences.
Here is a collection of thoughts by Dr. Ben Miller, who holds a doctorate in clinical psychology and is an assistant professor in the Department of Family Medicine at the University of Colorado Denver School of Medicine, where he is the Director of the Office of Integrated Health-Care Research and Policy. His "Looking at What's to Come: Accountable Care Organizations" blog entry first appeared in Occupy Healthcare.
Accountable Care Organizations (ACO) take up only seven pages of the massive new health law, yet have become one hot topic in health-care circles. What are ACOs and what implications do they have on the community?
Well first, let’s define an ACO:
Accountable Care Organizations are partnerships between health-care providers designed to be accountable for the quality and cost of the health care they provide in return for financial incentives. How these partnerships are implemented may vary, with some focused purely on primary care, while others include sub-specialists and hospitals. In all cases, primary care is expected to form the core of these organizations, the center of the wheel, and base for the ACO.
As we have discussed before on this blog, primary care is so central to many health redesign efforts because it can help the system attain the triple aim (improve health-care quality and patient experience, as well as reduce overall health-care costs).
The promotion of ACOs is an exciting and innovative aspect of the Patient Protection and Affordable Care Act (PPACA). However, as with many things in health care, the devil is in the details. Much of the benefit and potential benefit for ACOs be found primarily through the Medicare Shared Savings Program (MSSP). MSSP is described in proposed regulations published by the Centers for Medicare & Medicaid Services (CMS) on April 7, 2011; however, the influence of the ACO regulations on the nation’s health system will extend beyond the MSSP.
ACOs are risk-bearing entities and require capitalization. To this end, hospitals and other health-care professionals like physician groups are partnering with insurers and company ventures associated with insurers (e.g., Rise Health, www.risehealth.com) to form these entities. The partnerships that participate in the MSSP will likely cross over into commercial plans, and Medicare will not be the only health insurer to benefit from the cost reductions realized by ACOs.
There appear to be some interesting opportunities within ACOs to deliver unique health-care innovation. It is important, as with most health-care initiatives, that the community be aware of what is happening at a macro level in order to be best informed on how to engage their health-care community. While ACOs can be confusing, the better we as a community understand the opportunities and implications, the more likely we are to have our voice heard. After all, someone outside of CMS is also going to need to say if this is working or not.
And of course, with any effort to change how health care is delivered, we must examine the payment mechanism.
There are three financial incentives models for ACOs: shared savings, savings bonus plus penalty, and capitation. Each of these tiers are characterized by increasing risk and benefit while decreasing the system and provider’s dependence on fee for service and with capitation, ultimately eliminated. This is a major step for health care as we can start to move away from fee for service.
Shared savings allows for organizations to receive a portion of the amount saved compared to predicted costs in addition to regular fee for service payments.
The savings bonus plus penalty model is similar to the shared savings model, with the addition that the organization must take responsibility for any excesses in spending, therefore increasing risk and potential reward.
What’s potentially very exciting is what happens when these savings are shared back into the community? Many interesting opportunities may unfold at this juncture, but how this will play out remains to be seen.
Dr. Miller has his doctorate in clinical psychology and is an Assistant Professor in the Department of Family Medicine at the University of Colorado Denver School of Medicine where he is the Director of the Office of Integrated Health-Care Research and Policy. His core task is to integrate mental health across all three of the department’s core mission areas: clinical, education, and research. Opinions expressed here are his own and not those of his employer.