Can regulatory neutrality save ACOs?

A neutral regulatory environment that doesn't favor one kind of provider or payer over another is key to the success of accountable care organizations (ACOs), according to an analysis published in the August issue of Health Affairs.

Regulatory favoritism "could drive efficient organizations from the market and thus increase costs or reduce quality of and access to care," the authors argue in their analysis and commentary. Instead, they say, the idea should be to "preserve a level playing field among different kinds of organizations seeking the same cost, quality, and access objectives."

For example, they say, if health plans are better equipped to provide patients with a wide range of healthcare choices, regulations that favor provider-based ACOs would limit options for consumers--and vice versa.

The concept of neutrality favors less regulation over more regulation; functional over institutional regulations; and the freedom to decide when it's a good idea to take a more activist approach and violate either of the first two rules, the authors say.

The analysis, led by Gary E. Bacher, director of the Institute for Health Systems Solutions at the AHIP Foundation, in Washington, D.C., looks at antitrust regulation, financial solvency regulation, Medicare governance requirements and Medicare payment models. Bacher and his team write that ACO-related regulations in all four arenas must be coordinated "so that different models of care and those seeking to offer them are permitted to stand or fall on the cost and quality of care each provides."

Accountable care organizations have gotten off to a rocky start. Nine of the 32 Pioneer ACOs quit the Center for Medicare & Medicaid Services' Pioneer program, with seven of the nine saying they were unable to produce savings and electing instead to apply to the Medicare Shared Savings Program.

But two health policy experts subsequently argued in a Health Affairs blog post that while results were mixed, the Pioneer program did achieve successes, including meeting quality performance metrics. Most reduced hospital readmission rates, while one-third reduced costs.

For more:
-here's the abstract in Health Affairs