ACOs changing economics

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Could health reform, and more specifically, accountable care organizations be slowing down healthcare spending? That's the hope, and for some, evidenced by recent data, Think Progress noted.

The Congressional Budget Office made a major revision to its 10-year Medicare spending projection by decreasing estimates by $69 billion, Paul Ginsburg and Chapin White at the Center for Studying Health System Change, in Washington, D.C., wrote in the New England of Journal of Medicine last week. "[W]e do not believe that the recent slowdown in Medicare spending growth is a fluke," they wrote. "There has been a long-term trend toward tighter Medicare payment policy, and policy changes that began in the middle of the 2000s have continued that tightening."

Part of the major change under health reform is ACOs, charged with changing the payment models for provider and payer reimbursements, as well as quality care outcomes.

ACOs are a "major game-changer," Karen Davis, president of the Commonwealth Fund, said in The Wall Street Journal.

The New York Times also highlighted the economic shift. However, some critics worry that the ACO change comes with too much risk and administrative burdens.

"The costs are going to accrue to the providers, but the benefits are going to accrue to everyone else," said Joseph Golbus, president of NorthShore University HealthSystem's medical group in Illinois. "What I think killed H.M.O.'s in the '90s was limiting access to patients and telling the doctor he is now worth 17 cents per member, per month. We don't want to see that again."

But ACO advocates insist that accountable care is not a repeat of HMO economics. For instance, ACO members can choose whatever provider they want to receive care from.

"This is not about restricting care, but to proactively coordinate care and to ensure that the patients' needs are met early in the process," Jonathan Blum, deputy administrator at the Centers for Medicare & Medicaid Services, told The Times.

Advocate Health Care, provider of the largest commercial ACO, located in Chicago, said the benefits of ACOs go beyond pure financials. For example, care managers who help patients with appointments, diet, exercise and meals address the ACO's 200,000 members insured by Illinois Blue Cross plans.

"A care manager may care for up to 150 patients, and the savings from keeping these patients healthy, and potentially out of the hospital, pays for their salary several times over," said Lee Sacks, chief medical officer at Advocate, in the article. "But it's more than just the economics. It's the right thing to do."

For more information:
- see the Think Progress blog post
- here's the NEJM article
 - read the NYT article
- here's the WSJ article (subscription required)

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