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Healthcare Is Local. Why Aren't Accountable Care Benchmarks?

What hurricanes and floods reveal about the shortcomings in value-based care policy.
Policy makers don’t have to accept this as a given. CMS, in fact, has already taken a positive first step. Today, MSSP contracts move to a regional benchmark in their second and third contract years, which is progress over a permanent national benchmark. But it still means that practices in some areas will wait years to see the financial returns on their investments in better care, for no other reason than their zip code. And if a natural disaster hits, that runway to financial security could stretch even longer.

CMS should eliminate national benchmarks entirely, or such a proposal should take shape in federal legislation to improve the ACO program. ACOs in MSSP Track 1, which comprise 95% of all ACOs, should be able to use regional benchmarks from day 1. Medicare Advantage has already led the way on this—it uses regional benchmarking for its health plans. And many commercial value-based contracts already use exclusively regional benchmarks. Doing so in MSSP would be the best way to reward ACOs who are delivering on their promise to improve care and lower costs for the patients in their community.
 
The current benchmark fails to do that. A team of researchers recently took a close look at how to get the clearest picture of whether the ACO program is succeeding. In June, Michael Chernew, PhD, Christopher Barbey, BA, and J. Michael McWilliams, MD, PhD, all of Harvard Medical School, took a close look at claims that the ACO program had actually cost Medicare about $200 million. They found:

“…judging savings by comparing spending to the benchmark arbitrarily favors ACOs in areas where healthcare spending grew slower than the national average. ACOs in low-spending growth rate areas could ‘save’ simply by maintaining the status quo trend in the region because benchmark growth will outpace spending growth in that region by definition. Similarly, ACOs in high-spending growth regions will appear to fail, even if they saved money relative to their non-ACO neighbors.”
 
By looking more closely at actual counterfactuals, researchers found that the ACO program on the whole saved Medicare nearly half a billion dollars more than the current benchmarks would indicate. The benchmark system is not an accurate picture of the savings ACOs provide to Medicare, nor does it induce high-performing practices in high-spending growth areas to join the program. It fails at both. That is why policy makers should look to their own example in Medicare Advantage and leaders in the commercial sector to make the benchmark work for practices everywhere by making the benchmark regional.
 
When the floodwaters recede and the storms subside, the community—just like a patient—starts to heal. We patch up holes, clean out the sediment, and fix or replace the furniture. We rebuild and recover. And often, we get better. We build floodwalls and levees and warning systems so that next time will be different. We can do the same with policy. We can learn from today’s crises, and make our policy framework stronger for tomorrow.


 
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