ACO Payments May Hinge More on Geography than Quality
"Again this is all the consequence of using national growth factors to set the spending targets for the ACOs, which is essentially mean spending growth in the nation," he says. "There is going to be a distribution across areas in local spending growth and rural areas will tend to be further out to either end of that distribution than the densely populated areas."
In other words, rural ACOs could be big winners or losers, or break even based largely upon where they are. But they won’t really be able to predict it either way.
"That is one of the concerns of our findings," McWilliams says. "If the current payment methodology is presenting a sizeable gamble to these organizations then some may decide not to participate, which, if the program turns out to be successful, would be a real shame."
Any payment scheme that does not necessarily reflect the work—good, bad, or mediocre—of a particular healthcare organization could put the Medicare ACO experiment in jeopardy.
"If it is determined that some of the losses and gains have happened not because of something the organization did, that would raise a red flag that might limit expansion of the programs," McWilliams says. "Some of the organizations that participate and experience big losses because of this could leave the program and that may cause other organizations to be more reticent to join."
John Commins is a senior editor with HealthLeaders Media.
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