In wake of ACO exits, Dartmouth leaders explain decision to scrap model

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In the wake of a series of high-profile exits from the accountable care organization program, leaders at Dartmouth-Hitchcock health system are speaking out about why the system left the very model that academics at Dartmouth designed.

Dartmouth’s ACO, according to an article in The New York Times, reduced Medicare costs on hospital stays, tests, imaging and other procedures. But despite the fact it met its goal for quality of care, Darmouth’s ACO was still penalized by the federal government for not reaching cost savings benchmarks, which prompted it to exit the program last fall.

There are now more than 400 ACOs operating under Medicare, according to the article, and the Obama administration maintains that they’re effective at cutting costs. Some independent experts, though, disagree. Ashish K. Jha, M.D., a professor at Harvard’s T. H. Chan School of Public, told the NYT that the results of the ACO model “have not been a home run.”

Robert A. Greene, M.D., an executive vice president in the Dartmouth-Hitchcock health system, told the publication that the cost-cutting in combination with federal penalties was not sustainable for the system. Elliot S. Fisher, M.D., director of Dartmouth Institute for Health Policy and Clinical Practice and one of the designers of the ACO model, said it was disappointing that Dartmouth could not make it work.

“It’s hard to achieve savings if, like Dartmouth, you are a low-cost provider to begin with,” Fisher told the NYT.

Figures released by the Centers for Medicare & Medicaid Services suggest that more ACOs are finding success, but both financial performance and health outcomes can vary widely across the country, according to a blog post from Health Affairs. In late August, CMS revealed that fewer than one-third of ACOs qualified for Medicare bonuses, FierceHealthcare has previously reported.

Smaller, physician-led ACOs performed better in 2015, according to the blog post, which should serve as a word of warning to hospitals and health systems in the recent trend of mergers and acquisitions. The blog stresses that healthcare payment reform must be done in tandem with delivery system reform.