Throughout much of 2011, ambivalence plagued efforts by the Centers for Medicare & Medicaid Services (CMS) to expand the federal government’s reach into integrated care delivery to help improve patient outcomes while lowering costs. Critics panned the initial draft of regulations for a large accountable-care demonstration project called the Shared Savings Program, and prominent medical groups announced their intention to sit on the sidelines.
At the start of 2013, the atmosphere couldn’t be more different. CMS won over most of its critics with a well-received final version of the rules that provided more incentives for groups to form accountable-care organizations (ACOs), and the presidential election provided more clarity about the future of healthcare reform. Medical groups around the country are readily jumping on the ACO bandwagon, with its emphasis on shared responsibility among provider groups for a defined pool of patients.
Few medical groups have enough data to suggest whether their varied approaches to managing patient populations will lead to better-quality care that’s also more affordable; the first batch of Medicare ACO data isn’t expected until later this spring. And healthcare experts differ on which models and components are likely to make the biggest long-term impact; even the precise definition of an ACO remains a moving target. But industry observers say they’re surprised and encouraged not only by the speed with which the movement has taken off, but also by the breadth of models being investigated, the strong engagement of the private sector, and a spreading sense of cautious optimism.
“This is actually moving faster than I thought—faster than I think anybody thought,” says SHM Public Policy Committee chair Ron Greeno, MD, FCCP, MHM.
Although CMS still is in the beginning stages of its work and has focused most of its efforts on reviewing applications and providing feedback on organizations’ historical expenditure and utilization patterns, agency officials say the ACO initiative has not encountered any unexpected setbacks. “As with any new program, there are bumps along the way, but I don’t think we’ve experienced anything that is out of the ordinary,” says John Pilotte, director of Performance-Based Payment Policy in the Center for Medicare. “We’re pretty happy with where we are with the program.”
The Shared Savings Program, which Pilotte describes as “an easier on-ramp” to population management for providers and offers low financial risk in exchange for a modest level of shared cost savings, is proving especially popular. Combined, several hundred organizations submitted applications for the program’s second and third rounds, which began July 1, 2012, and Jan. 1, 2013, respectively.
“Two hundred twenty ACOs are currently up and running, and we expect to continue to add ACOs to the program annually,” Pilotte says.
Some people have said they haven’t had to make any major changes to their organization, while some people have had to drastically think how they provide care.
—David Muhlestein, analyst, Leavitt Partners
Last January, another 32 groups joined Medicare’s Pioneer ACO program, designed for more experienced organizations with more resources. The groups assume more risk, and in return are more handsomely rewarded if they meet benchmarks.
All told, the tally of confirmed ACOs in the U.S. reached 428 by the end of January, according to Leavitt Partners, a Salt Lake City-based healthcare consulting firm that is tracking the growth of accountable care (see “A Sampling of Significant ACO Programs,” below). David Muhlestein, an analyst with Leavitt Partners, says private ACOs now account for roughly half of that total, a trend driven by their ability to experiment with different approaches and more easily track costs through clearly defined patient populations.