The Economics of Medicare Accountable Care Organizations

Background

Accountable care organizations (ACOs) have been created to improve patient care, enhance population health, and reduce costs. Medicare in particular has focused on ACOs as a primary device to improve quality and reduce costs.

Objective

To examine whether the current Medicare ACOs are likely to be successful.

Discussion

Patients receiving care in ACOs have little incentive to use low-cost quality providers. Furthermore, the start-up costs of ACOs for providers are high, contributing to the minimal financial success of ACOs. We review issues such as reducing readmissions, palliative care, and the difficulty in coordinating care, which are major cost drivers. There are mixed incentives facing hospital-controlled ACOs, whereas physician-controlled ACOs could play hospitals against each other to obtain high quality and cost reductions. This discussion also considers whether the current structure of ACOs is likely to be successful.

Conclusion

The question remains whether Medicare ACOs can achieve the Triple Aim of “improving the experience of care, improving the health of populations, and reducing per capita costs of health care.” Care coordination in ACOs and information technology are proving more complicated and expensive to implement than anticipated. Even if ACOs can decrease healthcare costs and increase quality, it is unclear if the current incentives system can achieve these objectives. A better public policy may be to implement a system that encompasses the best practices of successful private integrated systems rather than promoting ACOs.     

Interpretations of Integration in Early Accountable Care Organizations

Context

It is widely hoped that accountable care organizations (ACOs) will improve health care quality and reduce costs by fostering integration among diverse provider groups. But how do implementers actually envision integration, and what will integration mean in terms of managing the many social identities that ACOs bring together?

Methods

Using the lens of the social identity approach, this qualitative study examined how four nascent ACOs engaged with the concept of integration. During multiday site visits, we conducted interviews (114 managers and physicians), observations, and document reviews.

Findings

In no case was the ACO interpreted as a new, overarching entity uniting disparate groups; rather, each site offered a unique interpretation that flowed from its existing strategies for social-identity management: An independent practice association preserved members’ cherished value of autonomy by emphasizing coordination, not “integration”; a medical group promoted integration within its employed core, but not with affiliates; a hospital, engaging community physicians who mistrusted integrated systems, reimagined integration as an equal partnership; an integrated delivery system advanced its careful journey towards intergroup consensus by presenting the ACO as a cultural, not structural, change.

Conclusions

The ACO appears to be a model flexible enough to work in synchrony with whatever social strategies are most context appropriate, with the potential to promote alignment and functional integration without demanding common identification with a superordinate group. “Soft integration” may be a promising alternative to the vertically integrated model that, though widely assumed to be ideal, has remained unattainable for most organizations.     

Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations

BACKGROUNDThe accountable care organization (ACO) is a new organizational form to manage patients across the continuum of care. There are numerous questions about how ACOs should be optimally structured, including compensation arrangements with primary care physicians.METHODSUsing data from a national survey of physician practices, we compared primary care physicians’ compensation between practices in ACOs and practices that varied in their financial risk for primary care costs using 3 groups: practices not participating in a Medicare ACO and with no substantial risk for primary care costs; practices not participating in an ACO but with substantial risk for primary care costs; and practices participating in an ACO regardless of their risk for primary care costs. We measured physicians’ compensation as the percentage of compensation based on salary, productivity, clinical quality or patient experience, and other factors. Regression models estimated physician compensation as a function of ACO participation and risk for primary care costs while controlling for other practice characteristics.RESULTSPhysicians in ACO and non-ACO practices with no substantial risk for costs on average received nearly one-half of their compensation from salary, slightly less from productivity, and about 5% from quality and other factors. Physicians not in ACOs but with substantial risk for primary care costs received two-thirds of their compensation from salary, nearly one-third from productivity, and slightly more than 1% from quality and other factors. Participation in ACOs was associated with significantly higher physician compensation for quality; however, participation was not significantly associated with compensation from salary, whereas financial risk was associated with much greater compensation from salary.CONCLUSIONAlthough practices in ACOs provide higher compensation for quality, compared with practices at large, they provide a similar mix of compensation based on productivity and salary. Incentives for ACOs may not be sufficiently strong to encourage practices to change physician compensation policies for better patient experience, improved population health, and lower per capita costs.     

Accountable Communities for Health: Moving From Providing Accountable Care to Creating Health

Lessons from community-oriented primary care in the United States can offer insights into how we could improve population health by integrating the public health, social service, and health care sectors to form accountable communities for health (ACHs). Unlike traditional accountable care organizations (ACOs) that address population health from a health care perspective, ACHs address health from a community perspective and consider the total investment in health across all sectors. The approach embeds the ACO in a community context where multiple stakeholders come together to share responsibility for tackling multiple determinants of health. ACOs using the ACH model provide a roadmap for embedding health care in communities in a way that uniquely addresses local social determinants of health.     

Decision Making on Medical Innovations in a Changing Health Care Environment: Insights from Accountable Care Organizations and Payers on Personalized Medicine and Other Technologies

Background

New payment and care organization approaches, such as those of accountable care organizations (ACOs), are reshaping accountability and shifting risk, as well as decision making, from payers to providers, within the Triple Aim context of health reform. The Triple Aim calls for improving experience of care, improving health of populations, and reducing health care costs.

A Taxonomy of Accountable Care Organizations for Policy and Practice

ObjectiveTo develop an exploratory taxonomy of Accountable Care Organizations (ACOs) to describe and understand early ACO development and to provide a basis for technical assistance and future evaluation of performance.ConclusionsACOs can be characterized into three distinct clusters. The taxonomy provides a framework for assessing performance, for targeting technical assistance, and for diagnosing potential antitrust violations.     

基于竞争的合作:美国责任制医疗组织发展中的利益协调与启示

医疗资源的整合是利益重新调整的过程,只有平衡好各方利益,才能实现医疗资源的有效整合。责任制医疗组织(ACOs)是美国最热门的医疗模式。ACOs组建和运行中,在发挥市场配置资源的基础上,政府发挥了管理与引导作用。政府通过共享节余和风险分担来激励医疗服务提供者加强合作,强化对医疗质量的监控并赋予患者就医的自由选择权,加强对患者的保护,并开展反垄断调查,赋予ACOs竞争压力。借鉴ACOs的发展经验,我国建立整合型医疗服务体系,应在发挥市场配置资源的基础性功能基础上,有效发挥社会医疗保险的购买功能,强化对医疗机构和医务人员的激励、引导、约束和监督。     

Cost Savings from Palliative Care Teams and Guidance for a Financially Viable Palliative Care Program

Objectives

To quantify the cost savings of palliative care (PC) and identify differences in savings according to team structure, patient diagnosis, and timing of consult.

Data Sources

Hospital administrative records on all inpatient stays at five hospital campuses from January 2009 through June 2012.

Study Design

The analysis matched PC patients to non-PC patients (separately by discharge status) using propensity score methods. Weighted generalized linear model regressions of hospital costs were estimated for the matched groups.

Data Collection

Data were restricted to patients at least 18 years old with inpatient stays of between 7 and 30 days. Variables available included patient demographics, primary and secondary diagnoses, hospital costs incurred for the inpatient stay, and when/if the patient had a PC consult.

Principal Findings

We found overall cost savings from PC of $3,426 per patient for those dying in the hospital. No significant cost savings were found for patients discharged alive; however, significant cost savings for patients discharged alive could be achieved for certain diagnoses, PC team structures, or if consults occurred within 10 days of admission.

Conclusions

Appropriately selected and timed PC consults with physician and RN involvement can help ensure a financially viable PC program via cost savings to the hospital.     

Governance Issues in the Transition to Accountable Care: A Case Study of Silver Cross Hospital

Recent developments in healthcare reform legislation and in the private-payer marketplace have increased impetus toward clinical integration. Industry changes require that healthcare delivery institutions confront fundamental scope and scale structural issues that may lead to increased vertical integration. To accomplish integration, firms must decide the organizational form of integration (alliance or merger/acquisition). One form of integration, accountable care organizations (ACOs), has featured prominently in recent legislation. Clinical integration and ACOs present significant shared-governance challenges that must be understood by hospital boards. The author outlines these governance issues using a case study of Silver Cross Hospital's governance structure for its ACO.     

Physician Practice Participation in Accountable Care Organizations: The Emergence of the Unicorn

Objective

To provide the first nationally based information on physician practice involvement in ACOs.

Data Sources/Study Setting

Primary data from the third National Survey of Physician Organizations (January 2012–May 2013).

Study Design

We conducted a 40-minute phone survey in a sample of physician practices. A nationally representative sample of practices was surveyed in order to provide estimates of organizational characteristics, care management processes, ACO participation, and related variables for four major chronic illnesses.

Data Collection/Extraction Methods

We evaluated the associations between ACO participation, organizational characteristics, and a 25-point index of patient-centered medical home processes.

Principal Findings

We found that 23.7 percent of physician practices (n = 280) reported joining an ACO; 15.7 percent (n = 186) were planning to become involved within the next 12 months and 60.6 percent (n = 717) reported no involvement and no plans to become involved. Larger practices, those receiving patients from an IPA and/or PHO, those that were physician-owned versus hospital/health system-owned, those located in New England, and those with greater patient-centered medical home (PCMH) care management processes were more likely to have joined an ACO.

Conclusions

Physician practices that are currently participating in ACOs appear to be relatively large, or to be members of an IPA or PHO, are less likely to be hospital-owned and are more likely to use more care management processes than nonparticipating practices.     

Accountable Care Organizations: roles and opportunities for hospitals

Federal health reform has established Medicare Accountable Care Organizations (ACOs) as a new program, and some states and private payers have been independently developing ACO pilot projects. The objective is to hold provider groups accountable for the quality and cost of care to a population. The financial models for providers generally build off of shared savings between the payers and providers or some type of global payment that includes the possibility of partial or full capitation. For ACOs to achieve the same outcomes with lower costs or, better yet, improved outcomes with the same or lower costs, the delivery system will need to become more oriented toward primary care and care coordination than is currently the case. Providers of clinical services, in order to be more effective, efficient, and coordinated, will need to be supported by a variety of shared services, such as off-hours care, easy access to specialties, and information exchanges. These services can be organized by an ACO as a medical neighborhood or community. Hospitals, because they have a management structure, history of developing programs and services, and accessibility 24/7/365, are logical leaders of this enhancement of health care delivery for populations and other providers.     

村庄经济、社区组织与村庄医疗保健事业 --东鲁村医疗保健事业案例分析

通过对山西省闻喜县东鲁村实施调查，分析了东鲁村经济、村组织与医疗保健事业的发展变化情况，提出了改革前农村医疗保健事业的发展是由于医疗卫生部成功地利用了当时的农村经济和社会组织。农村经济体制改革后，农村社区医疗合作的形式可能是多种多样的。作为外源力量的卫生行政部门或社会保障部门要善于利用各种新型合作关系，在有条件的村庄推动重建社区医疗保障则有可能是可行的，而不宜将合作医疗作为“运动”去大规模地“强制”推行。