With the accelerated growth trajectory seen by Accountable Care Organizations (ACOs), fewer than 100 in mid-2011 to over 550 in 2014, market adjustments are bound to happen. It’s all part of a natural evolution where strategic shifts, reengineering, and entrants/exits are commonplace – corporate healthcare survival of the fittest. Smaller, less organized ACOs with weak infrastructure, inconsistent stakeholder buy-in, and a silo operating mentality will fade away. ACOs successfully juggling triple aim’s Holy Grail – care, health & cost – are thriving.
ACOs have changed care delivery and have redirected health policy forever. They’ve brought a national focus on improving patient outcomes and are moving away from misaligned fee-for-service payment models. A study released this past July estimates that $1 out of every $5 in reimbursements is now paid under an arrangement in which providers are rewarded for improving care and lowering costs. That’s not going away.
Providers of care are accepting the concept of putting skin in the game. Pay-for-performance (P4P) reimbursement, from basic risk sharing to episode of care or bundled payments, are rapidly moving healthcare toward a financing system grounded in outcomes and value based purchasing. We’re seeing the leverage of incentives and disincentives based on quality of care and patient clinical results take center stage. For Medicare, embracing principals of P4P meant ACOs generated over $372 million in total program savings, with ACOs qualifying for shared savings payments of $445 million. They must be doing something right.
The successful ACOs, particularly those owned by large health systems, have a new mantra: forget shared risk, let’s take it all and become a health insurance plan!
As mega-hospital systems continue to acquire physician practices (42% of doctors are practicing as salaried employees of hospitals) more will become licensed insurers to take control of the complete patient lifecycle. Coast-to-coast we’ve seen multiple examples of hospital system ACOs enter the fully insured markets by introducing Medicare Advantage and/or ACA Marketplace individual medical plans ready to sell directly to consumers.
Learning from ACO successes (and failures) is where a discussion about the future needs to turn. It means widening the circle of influence among providers to be “accountable” to patients for the quality, appropriateness, and efficiency of health care provided. This renewed commitment to more effective interactions with patients will inspire higher levels of engagement that invites consumers to be an active, confident participant on their care team. The result is a healthcare customer experience that serves to both attract new patients and retain them long enough to improve care, improve health outcomes, and lower costs.
For a deeper dive into the future of ACOs download ACO SUCCESS FACTORS