Why ACOs are still a hard sell

When the words accountable care organization (ACO) are uttered, the general reaction runs the gamut of rolled eyes to grinding teeth.

Even some attendees of this week's Second National Accountable Care Organization Summit in Washington, D.C., were skeptical, unsure of how accountable care would work at their organization and community and whether the financial and time investment of participating would really produce worthwhile results.

The tone of the conference was further reinforced with a new study released on Thursday that concluded most hospital executives are hesitant of ACO participation in the Medicare Shared Savings Program.

According to a poll by KPMG, LLP, EpsteinBeckerGreen, and JHD Group, 39 percent of senior executives at hospitals, health systems, and payer organizations reported they didn't know what their organization's position was on shared savings participation, and another 25 percent will watch and wait and not meet the Jan. 1, 2012 effective date, as proposed by the Centers for Medicare & Medicaid (CMS).

Fifteen percent do expect to file later, and only 17 percent will participate and expect to be ready by the Jan. 1 deadline. Meanwhile, CMS has still not released a final rule.

"There are still important questions about how accountable care fits into an organization's current strategy and business model, along with competing investment decisions, such as those related to ICD-10 and upgrading information technology," said Brad Benton, KPMG Healthcare's national account leader in a press release.

One of the main reasons senior healthcare executives felt uncertain about ACOs was physician buy-in. Thirty-six percent of respondents saw buy-in as the greatest challenge. Similarly, another study by AMN Healthcare last month cited physician alignment as the biggest reason not to move forward in an ACO.

"Hospitals, health systems, and pay[e]rs seem to like the notion of accountable care's gain-sharing opportunities from reduced utilization and improved quality," said KPMG's National Sector Leader of Healthcare & Pharmaceuticals Ed Giniat in the KPMG press release. "But it's clear they are not jumping in with both feet."

Despite the lukewarm or negative--depending on who you talk to--reactions, the ACO Summit leaders appeared to remain hopeful. Why? Because there are organizations, few as they may be, who are already implementing ACOs. For example, among the ACO pilot sites are Monarch Healthcare in Irvine, Calif.; Healthcare Partners in Torrance, Calif.; and Tucson Medical Center in Arizona, according to the Accountable Care Organization Learning Network, an online resource for ACOs to share best practices, created by the Engelberg Center for Health Care Reform at Brookings and the Dartmouth Institute for Health Policy & Clinical Practice.

"We can feel good about what we have accomplished," said National Committee for Quality Assurance President Peggy O'Kane about collaborative quality measurement in ACOs, "but we have work ahead of us."

The only thing that is clear is time will tell how successful ACOs are. Will they really improve care and cut costs, as ACO leaders hope for with crossed fingers? It could take years to assess whether chronically ill patients are really managed better or whether the healthcare spending has been dramatically cut (but not at the cost of patients' health).

"There will be some [ACO] models that stay, and some models that will ultimately fall away," said O'Kane. - Karen