ACOs don't always reap the expected financial reward. Place-based care could help

a hospital corridor
An opinion piece in JAMA suggests place-based approaches to healthcare might offer some solutions to the challenges hampering value-based payment models. (Getty/sudok1)

Taking on the responsibility for patients based on a geographic region could help providers better generate financial savings, according to a new opinion piece in the Journal of the American Medical Association.

As federal legislation moves the system away from mandatory participation in payment reform, place-based partnerships may help accountable care organizations more efficiently provide value-based care, the authors from the Dartmouth Institute for Health Policy and Clinical Practice and the University of California, San Francisco's Center for Health and Community. 

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Place-based partnerships involve assigning responsibility for entire populations living within a specific area such as a hospital-referral region or a state. This creates a radical shift in incentives for providers to collaborate with other regional entities, rather than compete, the authors said.

It also offers a solution to conflicting incentives that encourage providers to shift costs among patients based upon their coverage types, according to the article. For example, a hospital might raise costs on non-ACO patients to balance cost reductions for ACO patients, allowing it to reap the incentives offered by the ACO plan without actually reducing the overall cost of care across the entire patient population.

The broader benefits of a plan that increases population health across a region include incentives to address nonclinical contributors to health at the community level. The authors suggested that might help to address problems with performance measures, which predominately target clinical measures and may not be as effective when it comes to improving health outcomes.

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The article points to global payment systems modeled on programs overseen by Vermont and Oregon as one possible route. The authors also note an opportunity to expand existing state regulation of hospital budgets to cover physician spending, though no states have pursued this plan.