ACOs Test Traditional Healthcare Delivery Models

Published Online: June 27, 2014
Katie Sullivan, MA
Providers recently reviewed the cost-effectiveness of accountable care organizations (ACOs).  While half of surveyed providers said value-based reimbursement had potential to improve population health management, as well as the patient experience, 80% said it would require more staff, more time, and greater financial investments.

“Providers are starting to get some real-world experience; it’s not speculative,” said Ryan Miller, senior vice president of strategy and corporate development at Availity, the organization that conducted the survey. “We’re starting to understand what it’s going to be like to move to these models. It’s harder to track progress, and you’re going to need more staff to do the work and be successful in the models. And that’s a really challenging proposition. It just makes it really clear why better solutions–more automated solutions–are needed to be successful.”

Leonard Schaeffer, CEO of WellPoint and former Medicare and Medicaid administrator, concurred with those sentiments, adding that running an ACO could be difficult. First, many participating providers need to align their company culture so that it centers care delivery around the patients they treat. Second, they need systems and tools that can gather and effectively manage meaningful data. Just simply having data does little to control costs or improve quality. With engaged stakeholders effectively utilizing data, they can truly be accountable for making better-informed decisions that will improve patient outcomes.

Mr Schaeffer suggested that while these solutions may work for ACOs, they still face some challenges with regulations under the Affordable Care Act (ACA). The law discourages risk-taking, and does little to disincentivize fee-for-service practices. He argued that shifting from fee-for-service payments to global payments is essential for accountable care.

"No matter how much lipstick you put on the fee for service, you still have 'the more you do the more you get paid,'" said Mr Schaeffer.

Under a global payment arrangement, a payer gives an ACO a fixed amount for a group of enrollees. The provider network is then held responsible for ensuring that those enrollees receive appropriate care. The global fee is paid monthly per patient over a year instead for the services an individual patient receives (fee-for-service). The global payment arrangement usually covers services, diagnostic testing, prescription medications, and other services such as follow-up care.

Kelly Conroy, executive director, Palm Beach ACO, CEO, Triple Aim Advisory Group, recently told The American Journal of Accountable Care that embracing change is necessary.

“Treating patients as consumers who are willing to pay for quality outcomes is the ultimate mission, which means that the reimbursement system must change. Yet, we believe that the concept of rewarding quality makes sense and can work,” said Ms Conroy. She agreed with Mr Schaeffer, saying that a culture shift is necessary for accountable care to succeed.

“Our physicians began to believe in the ACO model because it put them in the driver’s seat. Making doctors part of the solution is critical, as no one is better able to improve the delivery of healthcare and redefine population health management than doctors,” she explained. “With primary care physicians managing the process, medicine takes care of itself and the practice of medicine returns to what it was always meant to be. In turn, knowing and building close ties with everyone surrounding that physician can lead to better healthcare for the patient.”

Around the Web

80% of Providers Don’t Think Accountable Care is Worth It [EHR Intelligence]

Accountable Care Can Get More Out of Healthcare, Readers Say [EHR Intelligence]

Former CMS Chief: Quick Shift to Global Payments Will Make ACOs Work [Fierce HealthPayer]

Health Cost Containment and Efficiencies NCSL Briefs for State Legislators [National Conference of State Legislatures]