ACOs will bring more losses than savings, hospital CEOs say

Days after a major trade association representing medical groups voiced concerns over the proposed regulations governing accountable care organizations, a consortium of some of the most prominent healthcare CEOs in the country also voiced their qualms.

CEOs from 10 major health systems--including Dartmouth-Hitchcock Health, the Billings Clinic, Park Nicollet, the Geisinger Clinic, Marshfield Clinic and Novant--sent a letter to Centers for Medicare and Medicaid Services Administrator Donald M. Berwick. The May 12 correspondence expressed serious misgivings regarding the regulations.

"We ALL have serious reservations about the economics and the complexity of the Medicare Shared Savings Program (ACO)," the CEOs wrote. Among their concerns: a risk for significant losses during the first three years of ACO implementation, a tight threshold for measuring actual savings, attribution rules that make cost savings more challenging and challenging logistics for Medicare enrollees to opt out of an ACO.

"As currently proposed, ACOs have a greater potential for incurring losses under either track, than for generating savings. This risk-reward imbalance makes it difficult, if not impossible, for internal decision-makers to accept the financial design," said the CEOs.

Last week, the American Medical Group Association expressed similar concerns in a letter to Berwick.

The public comment period for the ACO regulations continues into June.

For more information:
- read the letter
- read Gail Wilensky's article on the ACO regulations
- read this Health Affairs blog post