Community Hospitals
e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

ACO Payments May Hinge More on Geography than Quality

John Commins, for HealthLeaders Media, May 2, 2012

"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.

1 | 2 | 3 | 4

Comments are moderated. Please be patient.

1 comments on "ACO Payments May Hinge More on Geography than Quality"


Mike Barrett (5/3/2012 at 12:32 PM)
So, why does one area expense grows faster than another? Iowa doesn't seem to be fatal for seniors yet the costs there are very low compared to other locations... why? At some point this needs to be answered - if we don't already know what the answer is. And the difficult confrontations be made and resolved. ACOs begin the process of having providers meet, face to face, and explain why their practice patterns are different (for good or bad) from the admittedly ever evolving standard or best evidence of care. That medicine must move from an "art" to a science for the vast majority of care. Medicine should, if not must, expand their vision of the "M" in E&M codes to beyond the office visit. We tell a lawyer they have a fool for client if they advocate for themselves in their specialty. Yet, we expect the patient to advocate for themselves in the far less mature world of healthcare. We can and simply must do better for patients. ACO are most likely not the endpoint, rather an important next step in the evolution of the health care system.