Brooks Blog

Monday • September 25, 2017

Where ACO’s are Headed

 

Accountable care organizations (ACOs), a subset of Alternative Payment Models (APMs), are the subject of a recently published study assessing the growth of ACOs and APMs in recent years. To understand what is driving that growth, first we need to understand why ACOs exist at all.

 

What is an ACO?

With the Centers for Medicare & Medicaid Services (CMS) driving the push toward ACOs, we’ll use CMS’s definition:

“Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.

 

The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.

 

Commercial ACOs Are Growing

Through the Affordable Care Act and MACRA, the federal push toward alternative models like ACOs has been surprisingly successful even outside of CMS’s purview.

The research findings showed that fully 10% of the US population is now covered within this model (whether they know it or not). Although there is often much press when groups leave ACOs, the growth has far outpaced the decline. While the number of contracts has increased evenly across payer types, the researchers found the commercial contracts covered many more lives than Medicare or Medicaid, averaging at over 26K lives per contract.

Source: Health Affairs blog downloaded 8/10/2017

 

Other Models Are Growing Too, But Providers Struggle

Outside of ACOs, other APMs (often financed by value-based contracts) include arrangements that encourage providers to coordinate care, such as patient-centered medical homes and disease-specific episode-based or bundled payments. The same study found that although there are many more contracts in these models, the number of lives covered by ACOs far outpaces these other APMs.

One of the challenges in ACO growth involves the mix of provider networks that actually treat patients. For instance, do you take the blame (or the credit) when a patient you saw once gets low value treatment outside your network? Should that provider get credit for your high value treatment? Managing this challenge of APMs that can lead to too much administrative burden on providers, especially providers that are newer to taking on risk and lack of the operational capacity to capture and act on data.

 

Brooks Group Insight: The Future of ACOs Seems Bright

Operational challenges have already pressured providers into larger integrated delivery networks (IDNs) which in turn puts pressure on other stakeholders at the same bargaining table as these giants. That could mean more providers being willing to engage in ACOs as their chances of success increase. That said, the promise of the Triple Aim to deliver higher quality care at a lower cost through ACOs is yet to be realized, with much research showing the cost of measuring quality and care outweighing the savings. We expect to see ACOs continued growth but only at the expense of provider autonomy and increased pressure on other contracts. To ensure your team is topical on ACOs, check out The Brooks Group’s ACO primer on here.

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