California's ACOs: A model for the nation?

California's successful accountable care organizations (ACOs) could offer valuable lessons for rest of the nation, which has seen mixed results with ACOs, according to California Healthline.

The Golden State has more than 100 ACOs, according to the article, representing nearly 1 in 7 ACOs nationwide. California's healthcare landscape has numerous features that make it well-suited to payment pilots, such as extensive experience with major multispecialty medical groups and a history of payment reforms.

Not only have numerous California hospitals and physician groups joined Medicare ACOs, major commercial payers such as Blue Shield of California and Anthem Blue Cross also have been a major part of the state's ACO inroads. More than 8 in 10 private-payer ACOs in the state operate through one of the two companies, Stephen Shortell, a health policy management professor at UC-Berkeley and director of the Center for Healthcare Organizational and Innovation Research, told California Healthline.

Payer-led ACOs have been at the fore of California's success with the model; in 2010 and 2011, CalPERS saved $37 million through an ACO formed by Blue Shield, Dignity Health and Hill Physicians Medical Group, and last week Anthem announced admissions per 1,000 patients fell 7.3 percent through an ACO it formed with six medical groups. The insurer's California ACOs also saved $7.9 million in one year, Anthem announced last week.

In contrast, Medicare's ACOs are less popular with providers, who complain of one-size-fits-all terms for members, whereas in the private sector, ACOs have considerably more negotiating power, according to David Muhlestein, director of research for Leavitt Partners, a business management firm. The recently announced Next Generation ACO model is a step in the right direction, he said, and the organizations the Centers for Medicare & Medicaid Services accept into the program will create a clearer picture of which providers are prepared to assume more risk.  

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