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Transform Care April 27, 2015

ACO Buzz: Program Reforms Needed to Encourage Expansion

CFO, Mount Sinai Health System

Oliver Wyman’s latest ACO Update report found that almost 70 percent of Americans now have access to accountable care organizations. The next step in the evolution of the model, says report author Niyum Gandhi, are program reforms that allow the best ACOs to invest in expanding. More on his take on accountable care trends below:

  • How do you interpret the latest ACO figures?
    The slowdown we’re seeing in the growth of ACOs was almost inevitable, given the pace of change of the past two years. I expect the next advance will be characterized more by increased sophistication than by increased numbers. A handful of the best ACOs are likely to find themselves with the data to prove that they really do deliver superior, lower-cost care—and will have the capital to invest in expansion. Traditional healthcare doesn’t provide very good value. It’ll be interesting to see what happens when patients have a compelling alternative.
  • Isn’t this taking longer than it was supposed to?
    Not really. People often fail to understand that payment reform only takes you so far. There are organizations out there that are trying to hit their cost reduction targets entirely by shifting sites of service or limiting expensive diagnostics. While that is important in the short run, in the long run, you need more. You need care models designed to meet the needs of specific patient populations—diabetics, frail elders, patients with multiple chronic diseases—and it takes time and money to build them.
  • Medicare has announced that it wants to change the rules for ACOs. How does that fit in?
    CMS has been learning along the way, much as ACOs themselves have been. Many people—including the most effective ACOs—believe CMS erred too much on the side of rewarding improvement rather than efficiency, while simultaneously structuring the program in a way that made knowing your improvement target difficult. The new rules make the program more sustainable and add some balance so strong ACOs can realize shared savings.

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