The Monetary Outcomes of the Accountable Care Organization
By - Now that the Affordable Care Act has been in place for five years, there is more evidence showing its overall impact on the healthcare industry. For instance, medical experts, stakeholders, and the patient community have a better understanding whether the Accountable Care Organization – a provision under the Affordable Care Act – truly reduces healthcare costs and improves quality of services.
In an October 20 article, the US News & World Report poses a question regarding whether an Accountable Care Organization can lead to lower costs and better care. At the 2015 US News Hospital of Tomorrow Conference, a number of experts and panelists discussed the true benefits of accountable care.
Unfortunately, experts at the conference including Alice Rivlin, director of the Health Policy Center at Brookings Institution, find that the Accountable Care Organization has not met the goals and expectations of providers who’ve adopted this model. It has not put a significant enough dent in the rising healthcare costs around the nation.
There are results that show developing an accountable care model has brought medical facilities to meet quality metrics. However, many find that it has not truly made a vital difference for patient care or for healthcare spending.
However, even though the Accountable Care Organization may not have lived up to the standards set forth for it, there may be other reasons that led to medical costs trending upwards. The aging population as well as new technologies and innovative treatment options could all bring high expenditures throughout the medical industry.
“An accountable care organization is a very appealing idea,” Rivlin said at the conference. “[However,] so far the results have been very disappointing.”
Rivlin spoke at the conference about ways to improve the development and maintenance of ACOs. First, it is beneficial for patients to understand what accountable care is and how to enroll in ACOs and other comparable models of care. Another method for ensuring the success of an ACO is to create incentives for physicians to implement these models and offer the best care possible to their patient base.
Another important point is the need to help providers and healthcare payers to work together to develop a system of coordinated care. There needs to be more push toward reducing hospital readmission rates and emergency room visits, which would play a role in lowering overall costs.
Kaiser Health News also reported on the goals of healthcare reform such as developing the Accountable Care Organization in an effort to reduce spending. The news source interviewed several ACO experts to see whether this model of care truly improved outcomes and decreased expenditure.
“The recent results on ACO performance indicate that it hasn’t been successful,” Robert Murray, President of Global Health Payment, told the news source. “A lot of people have characterized the results as lackluster at best, and I think things are even worse than that."
"Medicare’s performance data ignores the fact that each of these ACOs made very substantial investments in infrastructure: new data systems, care management and care coordination systems that probably run anywhere between 1 and 2 percent of their target budget. If you apply that to the results of the ACOs, you would find that even a significant proportion of those meeting Medicare’s goals would be underwater financially.”
“The problems are largely based on design flaws. Because the formation of an ACO requires substantial levels of risk and large up-front infrastructure costs, they have been largely dominated by deep-pocketed health systems, hospital networks, large multi-specialty physician groups or other combinations of specialists and hospitals."
"However, these providers are unlikely to make aggressive attempts to control costs because the hospital and specialists are still being reimbursed under traditional fee-for-service payment model,” Murray concluded. “Their incentives run directly counter to the goals of the ACO program, which are to reduce costs, to reduce unnecessary use of hospitals and high-priced professionals.”
