ACO Initiatives Test Pharma's Traditional Sales Model

The US healthcare system's shift from volume- to value-based reimbursement for treatment in order to lower costs and improve patient care is disrupting healthcare business models. The high-profile government—led accountable care organizations (ACOs), which put financial pressure on payers and providers to share responsibility for meeting quality and cost goals, is no exception.

The US healthcare system’s shift from volume- to value-based reimbursement for treatment in order to lower costs and improve patient care is disrupting healthcare business models. The high-profile government—led accountable care organizations (ACOs), which put financial pressure on payers and providers to share responsibility for meeting quality and cost goals, is no exception.

About 10% of the US population, or 34 million people, will be enrolled in either government-funded or commercial ACOs by 2015, according to consultants, up from 12 million in 2013. While the numbers are small some estimate that, for a variety of reasons, ACOs’ influence is much greater, with up to 170 million covered lives in the US affected either indirectly or directly.

The Centers for Medicare and Medicaid Services (CMS) established the ACO initiative, which essentially aim to improve coordination and management of patients while lowering the cost of care. Key to their effectiveness are financial rewards for meeting or exceeding pre-determined quality and cost metrics—or, in some models, penalties for falling short. The degree to which providers have a stake in the game and the kinds of goals they must meet vary depending on the model they follow and whether the organization is aligned with the CMS or a private insurer.

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Source: Forbes