ACOs: The State of the Union

At the Becker's Hospital Review 4th Annual Meeting in Chicago on May 10, Ken Perez, senior vice president of marketing and director of healthcare policy at MedeAnalytics, laid out the context for accountable care organizations and what their progress is today.

ACOs are a major part of both the Patient Protection and Affordable Care Act and commercial payor strategies. Currently, there are 253 Medicare ACOs, most of which are located in the "usual suspect" states of Florida, California, Massachusetts, New York and Texas. Commercial ACOs, which began in 2008, are proliferating even more quickly than Medicare ACOs, as there are more than 300 commercial ACOs today, Mr. Perez said.

The number of patients within an ACO is anywhere from 30 million to 32 million people: 2.4 million patients in Medicare ACOs, 8 million to 14 million in commercial ACOs and 15 million non-Medicare patients who are receiving care from Medicare ACOs that have a medical practice.

However, there is a "cause for pause," Mr. Perez says. "I'm a big proponent of ACOs, but there are things we need to be aware of today."

First, the industry simply doesn't know what savings have or will occur from ACOs. Second, only 5 percent of Medicare beneficiaries are in Medicare ACOs today, meaning that even in the most aggressive savings projections, Medicare ACOs would only save 0.2 percent of Medicare spending over the next 10 years. "Over the next five to 10 years, most [savings] will come from commercial ACOs," Mr. Perez said.

Mr. Perez said the "end game" of ACOs fall in line with the "Triple Aim" of former CMS Administrator Don Berwick, MD: better care for individuals, better health for populations and slower growth in costs through care improvements. In addition, he believes multipayor ACOs — or those that have both public and private insurers — are the long-term goal, along with a heavy emphasis on data analytics to analyze health patterns. "[Multipayor ACOs] spread your costs, avoids cost shifting and helps you provide consistent care across your populations," Mr. Perez said.

"ACOs are an inexorable part of the 'fee-for-value train' that has left the station," Mr. Perez added. "They're here to stay, but it remains to be seen how successful they will be in achieving the dual aims of reducing cost and improving the quality of care."

More Articles on the Becker's Hospital Review 4th Annual Meeting:

Aligning Physicians: 2 Hospital CEOs' Stories
Developing a Regional Hospital Strategy: Key Lessons and Takeaways
Ties Between Non-Profit, For-Profit Hospital Systems: Trends and Observations

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