ACOs Could Complement Reform Initiatives, Suggests Report

HealthLeaders Media Staff, November 13, 2009

While accountable care organizations (ACOs) officially don't exist, the concept has been attracting attention as a new way to help reform the healthcare delivery system. They could encourage providers to work together to bend the cost curve and improve quality, according to a new analysis.

ACOs will not be "a real game changer in the short run," but are definitely worth "a concerted try—given longstanding problems" with the fee-for-service provider payment and delivery systems that can impede healthcare cost controls, said Robert Berenson, MD, and Kelly Devers, PhD, of the Urban Institute in a policy brief on ACOs prepared for the Robert Wood Johnson Foundation.

"ACOs can help overcome the impasse of where to start first—provider payment or delivery system reform—by coupling and 'co-evolving' them over time," the authors wrote. ACO also could "offer the opportunity to harness the tremendous purchasing power of the traditional Medicare program," they added.

ACOs can be developed in a variety of ways: For instance, existing organizations could either exclusively serve as an ACO in a local geographic area, or be part of an ACO led by another provider organization in the area. The existing provider organizations can include:

  • Various types of physician groups or physician centered organizations, namely multispecialty group practices and interdependent physician organizations.
  • Hospital-centered organizations, namely hospital medical staff organizations and physician hospital organizations.
  • Health plan provider organization or networks, which can already participate in Medicare as Medicare Advantage plans.

In addition, the ACO concept may avoid "a one size-fits all provider payment or delivery system reform approach," which is unlikely to work given the variation in local markets and provider organizations and their capabilities, the researchers said.

In the long run, ACOs could potentially complement other reform initiatives, including the patient-centered medical home, meaningful use of electronic medical records, and comparative effectiveness research.

Nevertheless, challenging implementation issues do exist that need to be recognized and addressed, they said. In order for ACOs to have an impact, the concept needs to move past the rosy scenario phase that "has become common for energetically endorsed new or reprised concepts."

Instead, lessons from previous experiences and ongoing demonstrations could help identify potential solutions to the complex financial, organizational, legal and regulatory issues, and provide insight into the trade offs between various program proposals and options, they noted.

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