- The Patient Protection and Affordable Care Act isn’t merely responsible for creating health insurance exchanges, eliminating pre-existing conditions or even expanding the Medicaid program. The Affordable Care Act also helped build the Medicare Shared Savings Program and the structure of accountable care organizations (ACOs). While the promise of accountable care organizations was meant to bring significant cost savings to the healthcare industry, experts seem to disagree on the benefits of the Medicare Shared Savings Program and ACOs.
For instance, two authors - one hailing from Massachusetts General Hospital and the other from the Dartmouth Institute for Health Policy and Clinical Practice - wrote an editorial arguing the advantages of accountable care organizations in the Journal of the American Medical Association. While these authors stressed the benefits, several other experts from Duke University School of Medicine and Harvard Business School wrote a different opinion piece in JAMA outlining the failures of accountable care organizations.
The positives of accountable care organizations
The way accountable care organizations work is by aligning financial incentives with quality performance benchmarks that strive to improve lives for patients. A number of hospitals and partnering medical facilities work together within an ACO to bring better outcomes for patients, wrote Zirui Song, MD, PhD; Elliott S. Fisher, MD, from Mass General and the Dartmouth Institute.
Accountable care organizations strive to reduce unnecessary healthcare services such as redundant testing while enhancing safety by reducing the likelihood of hospital-acquired infections and surgical complications. Most importantly, ACOs bring forward greater care coordination, argue Song and Fisher.
“There are now north of 700 of these organizations in the United States of America. If you think about where the industry has been for the last 100 years, it’s been a mom-and-pop fragmented industry. Now you have 700 organizations with folks at least talking to each other. It’s going to take a while,” Ted Schwab, Managing Director at Huron Healthcare, told HealthPayerIntelligence.com.
“We’re at the very beginning of this movement and I could not be any more encouraged.”
The two authors do admit that there have only been modest savings garnered from accountable care organizations, but stress that ACOs led by primary care groups are able to garner a greater reduction in healthcare spending when compared to those led by hospital networks.
One of the ways accountable care organizations were able to attain cost savings is by changing the referral process and pick lower-priced hospitals and specialists when referring patients.
Additionally, there have been fewer healthcare services used overall within the accountable care environment, which also reduces costs and wasteful spending. However, the researchers explain that besides the modest gains in savings, accountable care organizations have brought significant benefits toward improving the quality of care. For instance, screening rates for colorectal cancer and breast cancer have improved among Medicare beneficiaries.
“The ACOs have shown that, in the first three years, they’re able to improve the quality. They both provide higher quality and they’re quality-improving from year to year. That’s a home run. In some respects, that’s been the real success story of ACOs. That’s a great story for beneficiaries,” Clif Gaus, the President and CEO of the National Association of ACOs, told HealthPayerIntelligence.com in an interview.
The negatives of accountable care organizations
On the other side of the debate, experts Kevin A. Schulman, MD, and Barak D. Richman, JD, PhD, discuss how the accountable care experiment may not have been as successful as some may think. Their reasoning has to do with several studies that have found accountable care organizations have not achieved the efficiencies expected from this new healthcare delivery model.
To begin with, the authors outline that net savings at the Centers for Medicare & Medicaid Services (CMS) was only 0.4 percent, which points at the inability of ACOs to garner any significant cost reductions for the Medicare program.
Another problem the authors outline is the fact that four out of ten participating sites have declined to continue operating within accountable care organizations for a second year. There may be some challenges that providers are not able to overcome when operating through an ACO if so many are dropping out.
Additionally, despite the fact that multiple types of ACOs such as Pioneer ACOs have been implemented, none of these models have actually shown a true and significant cost savings for the medical industry, the authors argued.
Whether or not accountable care organizations are able to garner enough cost savings for the healthcare industry to become a mainstay of the field, one thing is clear - ACOs have brought meaningful transformations toward improving the quality of care for the patient community.