What can we expect in the new ACO era?

Almost exactly two years ago, I wrote an article about what factors needed to be considered to create an accountable care organization. At the time, I was questioned by my editor if people would even know what an ACO was when I mentioned it in a headline.

It's almost a funny thought now considering ACOs were on many individuals' lips and minds March 31 when the Department of Health and Human Services released its 429-page proposed rule for ACOs, which was accompanied by policy statements, notices, and guidances from several departments and agencies outlining antitrust and tax-related issues.

The proposed rule, which is open for a 60-day comment period, carefully lays out the details. In a nutshell, ACOs are being designed to create incentives for healthcare providers to work together to treat Medicare patients across care settings. A shared savings program will reward those ACOs that decrease healthcare costs while efforts are made to meet quality performance standards. Patient and provider participation in ACOs will be voluntary. And, total savings anticipated: About $960 million over three years.

So, the next question is will it work? Will it be possible to save that amount of money by breaking down barriers within the healthcare arena while promoting what is considered quality care?

Maybe ACOs need to be viewed for what they represent. "This is going to be a powerful program because Medicare is a powerful buyer. But it does need to be looked at as a continuum of payment reform," says attorney Mark Lutes, a partner in the healthcare practice of Epstein, Becker & Green in Washington.

The idea is that this journey will be moving away from the Medicare fee-for-service form of payment. Instead, it will mean moving "into a mindset where we've got the financial incentive to think about the cost-effectiveness of the episode of care--and not particularly the service provider who is part of that effort," he said.

It will mean looking at new ways of delivering care such as creating primary care medical homes or implementing quality scorecards. It also will mean creating new relationships such as with care managers who will be needed to coordinate care as patients transition through varying levels of care within the ACO.

CMS Administrator Don Berwick, MD, writing this week in the New England Journal of Medicine, acknowledged that some early efforts by ACOs to develop method of shared savings "have not met expectations."

But each model will provide ongoing lessons on how to achieve quality improvement and cost savings. "The opportunities to refine new ACO models will be many."

"Accountable care is not a panacea but rather one of a number of complementary initiatives chartered by the [healthcare reform act] to help achieve the three-part goal of lower costs, improved care and better health," he wrote.

And so next time you see ACO in a headline, think of changes ahead from the old way of paying for and delivering healthcare. - Janice