Value-based
care payment stimulates more preventive care and a reduction of hospital stays
as well as emergency room visits.
Accountable
care organizations (ACOs) are provider and payer arrangements established
to improve care coordination between primary care physicians, hospitals, specialists,
and public or private health payers.
The
Centers for Medicare & Medicaid Services (CMS), for instance, has created
the Medicare Shared Savings Program in which accountable care organizations
must meet quality performance benchmarks and reduce Medicare spending by a
certain percentage point in order to qualify for sharing in these cost savings.
It
is expected that ACOs will be capable of reaching quality improvement goals and
reducing the costs associated with medical services by bringing greater focus
to population health management.
However,
accountable care organizations operating within the Medicare Shared Savings
Program that do not immediately meet the quality performance benchmarks set up
within the program may not qualify for sharing in the savings.
WHAT ARE THE TOP CHALLENGES FOR ACCOUNTABLE CARE
ORGANIZATIONS?
Lower
reimbursement rates within the value-based care model including through the
operation of accountable care organizations are bringing greater obstacles for
healthcare providers. The traditional fee-for-service payment system brought in
more reimbursement and incentivized physicians to order more tests and
diagnostic procedures.
The
way value-based care payment works is by incentivizing more preventive care and
the reduction of hospital stays as well as emergency room visits. Additionally,
there may be lower reimbursement rates as well as a lack of rise in physician
revenue due to accountable care and value-based payments, according to
the Practice
Profitability Index report.
Even
though there may be certain challenges when it comes to operating accountable
care organizations, payers and providers are not letting that stand in their
way as they continue to invest in new alternative payment arrangements and move
away from traditional fee-for-service reimbursement.
HealthEdge’s State
of the Payer Industry Survey showed that nearly 55 percent of polled
medical establishments are looking to pursue ACO development over the next
three years. The results also illustrate that four out of five surveyed
organizations are looking to participate in value-based care reimbursement
within the following three years.
Payer interest in participating in various forms of care
delivery models
Source: HealthEdge
HOW CAN ACOS MEET QUALITY BENCHMARKS AND SHARE IN
COST SAVINGS?
The
first step that accountable care organizations can take in order to reach
quality performance benchmarks is to put their time and resources in sticking
with their investment. It is unlikely that ACO providers will immediately see
results and cost savings when implementing this care coordination platform.
CMS
has released results in the past showing that accountable care organizations which
stay longer in the Medicare Shared Savings Program tend to have better results
over time. Rome wasn’t built in a day and healthcare reform doesn’t happen
overnight.
As
such, it is imperative for ACOs to invest time and commitment in pursuing this
model of care in order to see cost savings from the program. Amy Oldenburg,
Vice President of Network and Product Strategy Accountable Care Solutions at
Aetna, explained in an interview that “true
transformation is a long-term endeavor.”
“We
know that it takes at least three years for motivated ACOs to make changes
necessary to impact real savings and quality improvements. We believe
transforming health care will help reduce waste, improve quality, improve
member/patient satisfaction, and improve overall employee health and productivity,”
Oldenburg added.
“So
we see this as well worth the commitment and investment of time and resources
to get there. Through our approach to move providers and hospitals toward full,
product-based risk-sharing ACOs and helping them
transform the way they do business, we know we can help build a healthier
world.”
Another
important point to remember is that ACOs that adopt risk-based payment contracts
are more likely to succeed in their endeavours because it brings more
responsibility and financial incentive for physicians to truly change their
best practices and improve quality performance in order to reduce healthcare
spending.
Additionally,
integrating risk-based contracts and value-based care reimbursement will
benefit the patient community, as it is likely to enhance the quality of
medical services. The Medicare Shared Savings Program, in particular, would
function more effectively if more accountable care organizations embrace
risk-based contracts.
HOW POPULAR ARE ACCOUNTABLE CARE ORGANIZATIONS?
The
results show that accountable care organizations keep proliferating throughout
the United States. A study conducted by Leavitt Partners and the Accountable
Care Learning Collaborative showed that the number of ACOs had grown 12.6 percent
from January 2015 to January 2016.
At
the beginning of this year, there were 838 ACOs found throughout the country
while an additional 1,200 accountable care contracts are being created across
healthcare organizations. The study also stated that more than 28 million
patients are being treated by ACO providers today.
There
is clearly a strong proliferation of accountable care organizations as the
healthcare industry continues to reform and adopt value-based care
reimbursement practices.
Growth in
the number of ACOs since 2011
Source: Leavitt Partners and the Accountable
Care Learning Collaborative
Health
insurance companies are also seeking to partner with primary care providers and
hospitals through an accountable care organization. For example, in early 2016,
Aetna partnered with the Delaware Valley Accountable Care Organization and
signed an accountable care contract.
The
two parties hope to improve the patient experience and strengthen population
health management all in an effort to reduce medical cost. About 70,000 Aetna
members will be managed under the ACO umbrella due to this new partnership.
In
February 2016, CMS also introduced 121 new ACOs to the Next Generation
ACO Model and the Medicare Shared Savings Program. This shows that the number
of accountable care organizations is on the rise across the nation as more
medical providers and payers partner to reduce spending and improve the quality
of care among the patient community.
WHAT ARE THE BIGGEST BENEFITS OF ACCOUNTABLE CARE?
The
largest benefit that accountable care could bring for the healthcare industry
is to garner cost savings or reduce spending. Healthcare reforms and new
federal regulations whether it is the Affordable Care Act or the HITECH Act
have all brought more focus on decreasing spending throughout the medical
space.
The
Affordable Care Act passed in 2010 positioned the development of accountable
care organizations. Some healthcare experts find promise in ACOs and believe
their biggest benefit will be in reducing the costs of care.
“I
think that there has been some question to date because of the failure of
Pioneer ACOs and the regular MSSP ACOs to show much cost savings but what folks
have overlooked is that the ACO movement has been an organizing force
throughout the healthcare industry and it’s got hospitals and doctors for once
under the same umbrella talking about efficiencies, clinical protocols, and
ways to save costs,” Ted Schwab, Managing Director at Huron Healthcare,
told HealthPayerIntelligence.com.
“There
are now north of 700 of these organizations in the United States of America. If
you think about where the industry has been for the last 100 years, it’s been a
mom-and-pop fragmented industry. Now you have 700 organizations with folks at
least talking to each other. It’s going to take a while.”
“We’re
at the very beginning of this movement and I could not be any more encouraged.”
For
example, Blue Shield of California and its ACO provider were
able to save $325 million over the last five years. The program was first begun
in 2010 and has now expanded across 35 organizations treating as many as
325,000 patients in California. A key part of garnering these cost savings is
through reducing emergency room visits and hospital admissions.
The
number of hospital stays decreased by 13 percent and the number of days spent
in the hospital dropped by 27 percent for the Blue Shield of California
accountable care organization.
“We
have achieved solid results in the first five years of our ACO program, and we
are just getting started. We continue to deepen and refine the work we are
doing with our ACO providers to ensure our members receive the right care at
the right time and in the right setting, all the while helping to make
healthcare more sustainably affordable,” Kristen Miranda, Blue Shield's Senior
Vice President of Strategic Partnerships and Innovation, said in a public
statement.
Another
major benefit of ACOs is their ability to improve population health management and
patient outcomes. A brief from the Center for Health Care Strategies and the
Urban Health Research and Practice at Northeastern University shows that new
healthcare delivery models like ACOs offer innovative methods for payers and
providers to achieve better population health outcomes.
Medicaid
ACOs, for instance, have shown a greater focus on preventing disease and
promoting wellness, which leads to stronger population health improvements.
This reduces the likelihood that a disease would progress and lead to more
costly hospital stays.
The
benefits of ACOs are numerous and there are many stakeholders who obtain
advantages from this model of care. The patient community gains a wide number
of advantages including improved outcomes, better quality of care, greater
engagement with providers, and an overall reduction in out-of-pocket costs.
Health
payers see significant cost savings from the program once risk-based contracts
have been initiated. Healthcare providers are also bound to share in cost
savings and benefit from a more successful population health management
approach.
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